Justin Mikulka's blog

Thu, 2014-08-21 09:32Justin Mikulka
Justin Mikulka's picture

All Aboard! Tar Sands Bitumen by Rail Set to Eclipse Pipelines Like Keystone XL

“Rail can get you just about anywhere. It's like the Harry Potter stairway. You get on the stairs at one end and they move to wherever you need to go. That's the beauty of the railway. You get on at one end here, with your bitumen or dilbit, and then you can end up in different places depending on what are the best markets.”

That quote is from Pete Sametz, president of Connacher Oil and Gas, speaking to the Daily Oil Bulletin about the appeal of moving tar sands oil by rail. And Sametz isn’t alone in his enthusiasm for rail transportation options for bitumen. 

At the Canadian Institute's North American Pipeline Symposium in June, Randy Meyer of Canadian National railway, told the conference how this situation appeared to him. 

“It's kind of amusing when I read in the paper that there's this angst and gnashing of teeth about Keystone and I'm going, 'My goodness, we're already there.' We can go there and we are. We are shipping product there.

The reality is that tar sands bitumen transport is so well-suited for rail over pipelines that it is now cheaper to move tar sands bitumen by rail than it is by pipeline. If you're a tar sands industry executive, this is your light-bulb moment: Who needs the Keystone XL headache when you can bypass the controversy entirely using existing rail lines? 

Aside from the magical Harry Potter flexibility of rail compared to pipelines, rail also offers the option of moving bitumen without having to dilute it, as is required for pipelines, which makes it cheaper as explained by Randy Meyer. 

“We did a study where we took the American Association of Railway's published rates, which averaged out all the traffic that moves and all its products. That average … is about 16 per cent less than pipeline costs.”

This reality and the recent revelations that the impact of the tar sands oil will be much greater than initially predicted, present a grim picture for the environment, although apparently an amusing and exciting one for oil and rail executives. Companies like Grizzly Oil Sands outline their plans on their website. 

Tue, 2014-08-19 12:32Justin Mikulka
Justin Mikulka's picture

Report Reveals Cost Cutting Measures At Heart Of Lac-Megantic Oil Train Disaster

Today the Transportation Safety Board of Canada (TSB) released its final report on the July 6th, 2013 train derailment in Lac-Megantic, Quebec. The report produced a strong reaction from Keith Stewart, Greenpeace Canada’s Climate and Energy Campaign coordinator.

This report is a searing indictment of Transport Canada’s failure to protect the public from a company that they knew was cutting corners on safety despite the fact that it was carrying increasing amounts of hazardous cargo. This lax approach to safety has allowed the unsafe transport of oil by rail to continue to grow even after the Lac Megantic disaster. It is time for the federal government to finally put community safety ahead of oil and rail company profits or we will see more tragedies, Stewart said.”

Throughout the report there is ample evidence to support Stewart’s position and plenty to show why the people of Lac-Megantic want the CEO of Montreal, Maine & Atlantic Railway (MMA), the rail company responsible for the accident, held accountable in place of the engineer and other low level employees currently facing charges.

At the press conference for the release of the report the TSB representatives often noted that they had found 18 factors that contributed to the actual crash and they were not willing to assign blame to anyone, claiming that wasn’t their role.

But several critical factors stand out and they are the result of MMA putting profits ahead of safety and Transport Canada (TC), the Canadian regulators responsible for overseeing rail safety, failing to do its job.

Thu, 2014-08-14 06:00Justin Mikulka
Justin Mikulka's picture

Oil Industry Study Claiming Bakken Crude Safe Contains Whopper of a Disclaimer

casselton bomb train explosion

On December 30, 2013, a train carrying Bakken crude oil crashed in Casselton, North Dakota resulting in a massive explosion. 

In January of 2014, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released their preliminary testing results stating that Bakken crude from North Dakota was more explosive than other crude oils. PHMSA is a part of the Department of Transportation (DOT), the regulatory agency that has ultimate responsibility for any new oil-by-rail regulations.

Then the Wall Street Journal published a study showing the same thing. And now PHMSA has released further data proving this fact — Bakken crude is more volatile and prone to explode. However, the North Dakota Petroleum Council has done a study of their own claiming Bakken crude oil is no different from any other crude oils. And yet, they also include the following disclaimer in their study.

“making the claim that vapor pressure and light ends content correlates to increased ignitability and flammability is a broad statement that without extensive and complicated testing cannot be factually stated or supported”

So, while the industry group spent $400,000 on a study it claims proves Bakken is no different from other oil regarding its ignitability and flammability, they admit they didn’t do the work necessary to confirm their hypothesis is “factually stated or supported.”

Fri, 2014-08-08 11:09Justin Mikulka
Justin Mikulka's picture

Regulators Ignore One Proven Way to Eliminate Bakken Bomb Trains: Oil Stabilization

On the same day that the Obama administration released long-awaited new safety regulations for the oil-by-rail industry, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released another report with their testing results for Bakken crude oil. The conclusion reached by PHMSA is that Bakken crude oil “is more volatile than most other types of crude.” 

These results don’t come as a surprise since the five oil trains that have crashed and exploded in the last year all were carrying Bakken crude.  

Of course, the new regulations released imultaneously do not require the oil industry to do the one thing that would eliminate this problem: oil stabilization. A well known and proven method for removing the natural gas liquids from crude oil that makes the oil “stable” and non-explosive.

While the new regulations do not offer any proposals to require the oil industry to remove the volatile components of Bakken crude, on page 144 of the proposal they do acknowledge that this is possible. They request comments on the following question:

Is the current exception for combustible liquids sufficient to incentivize producers to reduce the volatility of crude oil for continued use of existing tank cars?

Essentially they are acknowledging that if the industry stabilized the oil it wouldn’t be explosive and thus they would be able to continue to use the existing DOT-111 rail cars to transport it. Just like those tank cars will be able to transport Alberta tar sands oil because it is not explosive.

The week before the release of the new regulations, the American Petroleum Institute and the American Association of Railroads released a joint statement stating that they were in agreement on two things that shouldn’t be part of the finalized new regulations — lower train speeds and mandatory stabilization. And while the proposed regulations do offer some requirements for lower trains speeds, they include nothing about mandatory stabilization.

Wed, 2014-07-23 10:51Justin Mikulka
Justin Mikulka's picture

Obama Administration Releases Weak Proposed Rules On Crude By Rail After Industry Lobbying Blitz

The Department of Transportation released its Notice of Proposed Rulemaking today for the transportation of crude oil and ethanol by rail. With the release of the proposed new regulations, a public comment period now begins before the rules will be finalized.

The proposed rules offer a wide variety of options for the public to comment on with the weakest proposals essentially being the status quo, as is the case for the rail tank car recommendations.

These proposed regulations have been under review for the past several months at the White House’s Office of Information of Regulatory Affairs where industry lobbyists have been hard at work to weaken and delay the regulations. An initial review of the proposal makes it clear their efforts have paid off and first reactions from advocates for increased safety reflect this.

Matt Krogh, of ForestEthics, the group which recently released a website where people can check if they are within the blast zone for the oil trains, released a statement telling the Obama administration to “go back to the drawing board and put public safety first.”

“Today the Obama administration announced weak new standards for high-hazard flammable trains that give the oil industry a license to threaten the safety of millions of Americans and leave communities and emergency responders holding the bag.

The administration seems to have carefully calculated and managed the inconvenience of these rules to the oil industry, but they’ve severely underestimated the threat of these trains to the American public.”

A review of the proposal reveals many things in the industry’s favor.

Mon, 2014-07-21 14:26Justin Mikulka
Justin Mikulka's picture

Maine Residents Fight American Petroleum Institute Lobbyists Over Ban on Tar Sands Shipments

Portland, Maine, has become the latest battleground in the fight against tar sands oil, with local residents facing off against energy industry forces in an attempt to ban tar sands oil from the city’s port.

The South Portland Clear Skies Ordinance, would ban tar sands oil from being loaded on to ships at the local port. City council will take a final vote on the measure today.

Three weeks ago, about 200 people attended a presentation on the proposed ordinance, many wearing blue “clear skies” t-shirts to show their support. Only three people spoke against the ordinance at that meeting.

But on July 7, when many of the same 200 people in blue t-shirts showed up at the meeting when the city council was set to vote on the ordinance, they were met with a surprise. The meeting room was packed with people in red shirts that read “American Energy” on the front and “SoPo Jobs” on the back.

Pages

Subscribe to RSS - Justin Mikulka's blog