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August/September 2014

A Highly Flammable Situation: Crude Oil Rolls into the Region

By Leslie Stewart

On May 31, 2014, some 60 people gathered at the gates of a rail yard on Richmond’s industrial edge, protesting “bomb trains.” Trains handled there by energy company Kinder Morgan hold crude oil, not TNT, but their contents may still be both physically and politically explosive. Stretching over a mile, a train of 100 tank cars carries 600-700 barrels of crude oil, or up to 3 million gallons. These trains represent a controversial change in both the type of crude oil supplying the region’s refineries, and the way it gets here.

Crude-by-rail is a shipping trend that has grown exponentially across the country as more oil becomes available from North Dakota’s Bakken oilfields and Canada’s tar sands. Bay Area refineries appear intent on capitalizing on the trend. Historically, most have relied on heavy, sour crude, piped from the San Joaquin Valley and then blended with lighter crudes from Alaska and the Mideast, which arrive by ship or barge. As production in the San Joaquin oilfields drops, replacement sources may include light, sweet Bakken crude or heavy Canadian crude, as well as oil from Utah, Wyoming, and West Texas.

Although pipelines are the safest and usually the most economical transport mode, the only pipeline to the West Coast is Canadian, from Alberta to Vancouver, B.C., where oil can be transferred to ships or barges, some headed to California. For a number of reasons, rail shipment is now quite price-competitive and is likely to remain so. The California Energy Commission has predicted that in 2016 the state could be receiving more than 156 million barrels of crude oil by rail, representing 25 percent of all crude oil imports. In 2012, a mere one million barrels arrived via rail — just 0.3 percent of total imports.

No Bay Area refinery can currently handle the lengthy, single-commodity “unit trains” used for transporting high collective volume, although some can accommodate a few tank cars. Tesoro Corporation has been receiving Bakken crude-by-rail, but not directly at its refinery in Martinez. Instead, oil from unit trains has been off-loaded into tanker trucks at Kinder Morgan’s Richmond rail yard, the site of the May 31 protest. The facility was previously used for unloading ethanol unit trains, but in February it obtained a permit to transfer crude oil. Environmental groups responded with a lawsuit to suspend the permit and halt further crude oil operations.

Not surprisingly, however, other new crude-by-rail facilities are under development that would have an impact in the region. Valero’s Benicia refinery is going through environmental permitting to add facilities for two 50-car trains per day. In Pittsburg, the energy company WesPac is seeking to include a facility at the BNSF rail yard as part of a broader proposal to re-open a marine oil terminal that would move crude into an existing pipeline to local refineries. And a proposed rail facility in Southern California at the Phillips 66 Santa Maria refinery could bring shipments of crude through the heart of the Bay Area on Union Pacific tracks. Moreover, crude-by-rail reaches this region indirectly, arriving via ship, barge, and pipeline from various train terminals along the West Coast.

The prospect of crude-by-rail’s rapid growth has met with considerable opposition locally. In addition to joining the Kinder Morgan lawsuit, the environmental justice nonprofit Communities for a Better Environment has come out against the Valero and WesPac proposals, and more broadly condemns the technologies responsible for the oil import boom — hydraulic fracturing in North Dakota, and strip mining or steam injection in the Canadian tar sands. The organization’s Andrés Soto explained, “As a group, we’re against fracking, against strip mining the tar sands — but because of federal common carrier regulations, we can’t really say, ‘You can’t bring in Bakken, you can’t bring in the tar sands’.”

What can be addressed is that both are more hazardous to transport and handle. Worries over potential spills or fires from accidents have heightened with the prospect of such large volumes of fuel traveling so close to local communities. While railroads point out that accident rates involving oil trains have been quite low, U.S. Department of Transportation figures show they are increasing as crude-by-rail grows.

Additionally, when crude-related accidents do occur, they can place extraordinary burdens on emergency responders. Rail accidents involving Bakken crude have caused several major fires and explosions over the past year. Retired refinery fire chief Tony Semenza, who now serves as executive director of Contra Costa Community Awareness and Emergency Response, told a recent meeting of the group that “Bakken crude has higher vapor pressure and a lower flash point than other crudes,” contributing to its greater volatility. Compounding the situation, this volatile substance often gets transported in older DOT-111 tank cars, which have a high rate of failure during accidents.

Of some encouragement, Semenza pointed out that the Bay Area constitutes one of California’s five “high-threat urban areas,” which translates into greater resources for dealing with possible derailments and rollovers. A Petrochemical Mutual Aid Organization of firefighters from industrial facilities and fire districts stands at the ready. However, questions remain over whether emergency responders can react fast enough to the demands of a unit train disaster.

A different problem is presented by Canadian tar sands oil, or bitumen, currently reaching the West Coast only by pipeline. It is so dense that it typically won’t burn easily; however, if it reaches water, it can’t be skimmed off, but instead sinks to the bottom and sticks there. This could pose a risk if tar sands oil started arriving here by train, for as the California Interagency Rail Safety Working Group noted in a recent report, “rail lines frequently operate near or over rivers and other sensitive waterways in the state.”

Government entities are responding at all levels, but local resolutions protesting crude-by-rail can only put pressure on federal regulators to act. Oil transfer terminals, such as the Valero refinery or the proposed WesPac facility in Pittsburg, may require local land use and regional air quality permits, but when crude is in transit, it is controlled only by federal railroad regulations.

Federal regulators are moving to require safer tank cars and more careful classification of their contents. Meanwhile, the rail industry is voluntarily shifting to a tank car with more safety features, and has also retrofitted some of the problematic DOT-111 tank cars while the safer ones are being built. However, even retrofits did not prevent a fire during a derailment in Lynchburg, Virginia this past April.

The rail safety working group made specific suggestions for increasing safety for crude-by-rail throughout the state, including increased rail inspections, emergency response improvements, and more information for local communities. Some of the suggestions are already being implemented. State legislation, Senate Bill 1319 (Pavley), would increase crude handling fees and use cleanup funds for land as well as water spills. Federal regulation now requires railroads to notify the state’s emergency response agency when moving more than 1 million gallons of Bakken crude-by-rail. However, railroads insist that the state agencies notify only local emergency responders, not the public, to avoid potentially dangerous terrorist or protest actions.

Rail operators have implemented voluntary safety measures, such as speed restrictions in urban areas. An even more cautious step would be to re-route crude-by-rail to avoid populated areas, but Contra Costa County Chief Environmental Health and Hazardous Materials Officer Randy Sawyer expressed doubts about the feasibility of such a move, because “they can’t route it around Contra Costa and still serve local refineries.” In any case, the rail safety working group concluded, “The state should press both the federal government and the railroad industry to take additional safety measures.” Soto also wondered, “Who’s going to hold the bag for economic damage, not to mention environmental?”

Refining newer crudes could also affect the region’s air quality. Emissions changes from a different crude oil mix, or “slate,” can be either positive or negative. The Bay Area Air Quality Management District is currently proposing a new rule on dealing with refinery air emissions “to enhance our understanding of what the refineries’ total emissions are,” according to Health and Science Officer Brian Bateman. It will do this with community fenceline monitoring and air emissions inventories from refineries; Bateman contended that “any changes — which would be mostly VOCs [volatile organic compounds] — are something that could be controlled by existing equipment at the refineries.”

The Bay Area may be wary of the changes, but short of the goal advocated by environmental groups — to switch away from fossil fuels — there is no way to totally reject crude-by-rail. Pipeline construction is expensive and controversial, and obtaining right-of-way is time-consuming; Kinder Morgan recently abandoned a pipeline plan to bring West Texas oil to the West Coast. “Moving pipelines” of oil trains are a flexible and attractive alternative. Community awareness and governmental preparedness will be essential in adapting to the new challenges. Semenza’s recipe? “Better tank cars, better maintenance and inspection, keep tank cars on the rails, keep the oil in the tank cars.”

Leslie Stewart is the former editor of the Bay Area Monitor.