The battle over oil train regulation is heating up, as both the oil and gas industry and a coalition of environmental groups have now filed lawsuits challenging new Department of Transportation regulations this week.
Department of Transportation
On March 13, American Fuel & Petrochemical Manufacturers (AFPM) — the oil refiners' trade association — sued oil-by-rail carrying giant Burlington Northern Santa Fe (BNSF) for allegedly violating its common carrier obligation under federal law. A DeSmogBlog investigation has revealed there may be more to the lawsuit than initially meets the eye.
Filed in the U.S. District Court for the Southern District of Texas, Houston Division, AFPM sued BNSF “for violating its common carrier obligation by imposing a financial penalty” for those carrying oil obtained via hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin and other hazardous petroleum products in explosion-prone DOT-111 rail cars.
AFPM's beef centers around the fact that BNSF began imposing a $1,000 surcharge for companies carrying explosive Bakken fracked oil in DOT-111 cars, as opposed to “safer” CPC-1232 cars, at the beginning of 2015.
The Warren Buffett-owned BNSF did so, argues AFPM, illegally and without the authority of the federal government.
“This $1,000 surcharge on certain PHMSA-authorized rail cars breaches BNSF’s common carrier duty to ship hazardous materials under the auspices of PHMSA’s comprehensive regime governing hazardous materials transportation,” wrote AFPM's legal team, featuring a crew of Hogan Lovells attorneys. “Allowing railroads to penalize companies that ship crude oil in federally-authorized rail cars would circumvent PHMSA’s statutory and regulatory process for setting rail car standards for hazardous materials shipments.”
Upon a quick glance, it seems like a fairly straight-forward case of federal law and an intriguing example of an intra-industry dispute. But as recent history has proven, the devil is in the details.
In a new short documentary called “Pipeline Nation: America’s Broken Industry,” Vice News travels to Glendive, Montana, where a pipeline ruptured on January 17 of this year, spilling 50,000 gallons of crude oil into the Yellowstone River and contaminating the town’s drinking supply.
This was the second oil spill in the area in the past four years. An Exxon pipeline spilled over 60,000 gallons of crude into the Yellowstone River near Billings, Montana in 2011.
The spill near Glendive involved Bakken crude, which is lighter and more volatile than heavy crude and evaporates more quickly, making it difficult to clean up.
“Our recovery of oil out of the water, it’s just… we’re not really getting much,” Paul Peronard, On-Site Coordinator for the EPA, tells Vice’s Nilo Tabrizy in the film. “Three-hundred-something barrels out of the pipeline in this immediate area, less than a couple barrels actually out of the water. So pretty much what is in the water is there and gone. And we aren’t going to recover it.”
“We never — and I’ll be clear about that — we never recover all the oil. Somebody who tells you that is telling you stories. In good conditions, you get half of the oil that hits the water.”
A U.S. federal court has ordered a halt in proceedings until May in a case centering around oil-by-rail tankers pitting the Sierra Club and ForestEthics against the U.S. Department of Transportation (DOT). As a result, potentially explosive DOT-111 oil tank cars, dubbed “bomb trains” by activists, can continue to roll through towns and cities across the U.S. indefinitely.
“The briefing schedule previously established by the court is vacated,” wrote Chris Goelz, a mediator for the U.S. Court of Appeals for the Ninth Circuit. “This appeal is stayed until May 12, 2015, or pending publication in the Federal Register of the final tank car standards and phase out of DOT-111 tank cars, whichever occurs first.”
Image Credit: U.S. Court of Appeals for the Ninth Circuit
Filing its initial petition for review on December 2, the Sierra Club/ForestEthics lawsuit had barely gotten off the ground before being delayed.
Burlington Northern Santa Fe (BNSF) recently said it would proceed with plans to increase speeds for oil-by-rail unit trains in Devil’s Lake, N.D. to 60 MPH from 30 MPH, despite opposition from local officials.
BNSF’s announcement came merely a week after the Obama Administration announced its proposed regulations for trains carrying oil obtained via hydraulic fracturing (“fracking”) from North Dakota's Bakken Shale basin.
The rail industry’s position on speed limits for “bomb trains” is simple: they continuously claim velocity has nothing to do with oil-by-rail accidents or safety.
For example, Big Rail — as revealed by DeSmogBlog — lobbied against all proposed oil train speed reductions in its dozen or so private meetings at the Obama White House before the unveiling of the proposed oil-by-rail regulations.
Recent statements by rail industry CEOs during investor calls put the heads of many companies on record opposing oil-by-rail speed limits for the first time.
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.
Documents released to DeSmogBlog by the Washington State Military Department reveal that both the Department of Transportation (DOT) and rail companies attempted to pressure states including Washington to keep information about Bakken crude oil trains from the public.
As previously reported on DeSmogBlog, while rail companies have been asserting that information about the frequency and routes of Bakken oil trains was “security sensitive,” the Federal Railroad Administration and the Transportation Security Administration were saying the opposite.
However, that didn’t stop the Department of Transportation from pressuring states like Washington only to release information on a “need to know” basis. A document provided to the states by the department argues against the public’s right to know:
This data is intended for those persons with a need-to-know; that is, first responders at the state and local level, as well other appropriate emergency response planners. DOT expects the SERCs to treat this data as confidential, providing it only to those with a need-to-know, and with the understanding that recipients of the data will continue to treat it as confidential.
The Department of Transportation went on to explain why it thought it was “appropriate” to keep the oil train information from the public.
“How did it get missed for the last ten years?”
That was the question Deborah Hersman, chair of the National Transportation Safety Board (NTSB), posed to a panel of industry representatives back in April about how the rail industry had missed the fact that Bakken oil is more explosive than traditional crude oil.
“How do we move to an environment where commodities are classified in the right containers from the get go and not just put in until we figure out that there’s a problem,” Hersman asked during the two-day forum on transportation of crude oil and ethanol. “Is there a process for that?”
The first panelist to respond was Robert Fronczak, assistant vice president of environmental and hazardous materials for the Association of American Railroads (AAR). His response was telling.
“We’ve know about this long before Lac-Megantic and that is why we initiated the tank car committee activity and passed CPC-1232 in 2011,” Fronczak replied, “To ask why the standards are the way they are, you’d have to ask DOT that.”
So, now as the new oil-by-rail safety regulations have been sent from the Department of Transportation (DOT) to the White House’s Office of Information and Regulatory Affairs, it seems like a good time to review Hersman’s questions.
How did we miss this? Is there a process to properly classify commodities for the right container before they are ever shipped?
The release of the data comes on the heels of the ongoing oil-by-rail nationwide week of action launched by environmental groups.
For the 26th week of 2014 (the half year point) in the U.S., 18.5% more tank cars were on the tracks carrying petroleum and/or petroleum products than last year, a total of 15,894 cars.
Examined on a year-to-date basis, 7.0% more of those same tank cars were on the tracks in the U.S. this year than last, totaling 380,961 cars to date.
Table Credit: Association of American Railroads
Across the border in Canada, the same trend lines exist: for the 26th week of 2014, 6.9% more cars moved petroleum and/or petroleum products by rail than in the 26th week of 2013.
Looked at in terms of year-to-date compared to 2013, that totals a 7.7% increase in tank cars moving the commodity by rail.
Table Credit: Association of American Railroads
“Bomb trains,” as some critics call them, move oil obtained from hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin to terminals, holding facilities and markets both in the U.S. and Canada.
Hence the upsurge in unit cars carrying petroleum and/or petroleum products both north and south of the border.
Looked at through the lens of North America, 14.6% more tank cars carried petroleum and/or petroleum products during the 26th week of 2014 compared to the same time in 2013.
And 7.0% more of those tank cars have moved petroleum and/or petroleum products to market so far this year as compared to last year.
Table Credit: Association of American Railroads
Since the first major oil-by-rail explosion occurred on July 6, 2013, in Lac-Mégantic, Quebec, citizens in communities across the U.S. have risen up when they've learned their communities are destinations for volatile oil obtained from hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin.
As the old adage goes, ignorance is bliss. It's also one of the keys to how massive oil-by-rail infrastructure was built in just a few short years — the public simply didn't know about it.
Often, oil companies are only required to get state-level air quality permits to open a new oil-by-rail facility.
“There was no opposition to the other three proposals only because we weren't aware they were in formal permitting,” he said
The same thing unfolded in Albany, N.Y., where there is an ongoing battle over expansion of the major oil-by-rail facility set to process tar sands crude sent by rail from Alberta. The initial permits for the oil rail transfer facility, which would allow two companies to bring in billions of gallons of oil a year, were approved with no public comment.