Prepare yourself for a rare moment of honesty from the oil industry.
It happened on Sept. 23 at a hearing of the North Dakota Industrial Commission during a discussion on ways to make Bakken crude oil less flammable for transportation.
“The flammable characteristics of our product are actually a big piece of why this product is so valuable. That is why we can make these very valuable products like gasoline and jet fuel,” said Tony Lucero of oil producer Enerplus.
So, there you have it: making Bakken crude safer to transport by rail via oil stabilization, which removes flammable natural gas liquids such as butane, means making it less valuable to the refineries.
This profit motive is at least part of the reason why the American Petroleum Institute has made it clear it will not accept mandatory oil stabilization as part of the new oil-by-rail regulations.
On the final day of the public comment period for the new proposed oil-by-rail regulations, the oil industry came out swinging. At a press conference held by American Petroleum Institute (API) president Jack Gerard, Gerard said: “Overreacting creates more challenges than safety.”
One of the main “overreactions” Gerard and the API want to avoid is the discontinuation of the DOT-111 tank cars for transporting dangerous products like Bakken crude oil.
Based on that, you might think that banning DOT-111s is some kind of reactionary new idea, not something that’s been on the books for more than two decades.
Take this line from a 1991 National Transportation Safety Board document: “The inadequacy of the protection provided by DOT-111A tank cars for certain dangerous products has been evident for many years in accidents investigated by the Safety Board.”
Yet, here’s the American Petroleum Institute, 23 years later arguing that halting the shipment of explosive Bakken crude oil in DOT-111 tank cars is “overreacting.”
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?
“Railroads believe that federal tank car standards should be raised to ensure crude oil and other flammable liquids are moving in the safest car possible based on the product they are moving,” said Hamberg.
“The industry also wants the existing crude oil fleet upgraded through retrofits or older cars to be phased out as quickly as possible.”
Yet despite public declarations along these lines, proactive safety measures were off the table for all four of Big Rail's presentations to OIRA.
Though private discussions, the documents made public from the meeting show one consistent message from the rail industry: safety costs big bucks. And these are bucks industry is going to fight against having to spend.
Last year, Jeffrey Wiese, an official with the Pipeline and Hazardous Materials Safety Administration (PHMSA) told an industry conference that the regulatory process was “kind of dying.”
According to InsideClimate News, Wiese even mentioned that PHMSA was working on a YouTube channel to “persuade the industry to voluntarily improve its safety operations,” as this was one of the only ways it could attempt to improve safety.
PHMSA is the organization in charge of developing new regulations regarding the transportation of crude oil in rail tank cars.
This week, the Department of Transportation, along with PHMSA, announced its new safety advisory regarding the rail transport of Bakken crude oil. As another example of how the regulatory process is “kind of dying,” the advisory includes no new regulations regarding rail tank cars but “strongly urges” the oil and rail industry to use safer tank cars.
The advisory makes it clear that oil companies only have to be as safe as they can be while using the existing tank car “fleets” and that they should avoid using older DOT-111 cars to “the extent possible.”
The dangerous DOT-111 tank cars currently make up approximately 70 percent of the existing fleet of tank cars used for moving oil by rail.
This advisory is just the latest in a long stream of recent safety measures, both voluntary and regulatory.
Spurred by the shale drilling rush that has progressed at breakneck speed, the railroad industry has moved fast to help drillers transport petroleum and its byproducts to consumers. Last year, trains hauled over 400,000 carloads of crude oil, up from just 9,500 carloads in 2008, according to railroad industry estimates. Each carload represents roughly 30,000 gallons of flammable liquids, and some trains haul over 100 oil cars at a time.
But with this fast expansion has come some astounding risks — risks that have insurance companies and underwriters increasingly concerned.
A string of oil train explosions have highlighted the potential for harm. A train hauling 2.9 million gallons of Bakken oil derailed and exploded on November 8 in Aliceville, Alabama, and the oil that leaked but did not burn continues to foul the wetlands in the area.
On December 30th, a train collision in Casselton, North Dakota 20 miles outside of Fargo, prompted a mass evacuation of over half the town’s residents after 18 cars exploded into fireballs visible for miles. 400,000 gallons of oil spilled after that accident, which involved two trains traveling well below local speed limits.
“Those crashes are all on the radar of the insurance industry,” attorney Dean Hansell recently told Law360.
All told, railcar accidents spilled more than 1.15 million gallons of crude oil in 2013, federal data shows, compared with an average of just 22,000 gallons a year from 1975 through 2012 — a fifty-fold spike.
In the past month, there have been numerous public relations efforts suggesting that much is being done to improve oil by rail safety. Unfortunately, it seems these efforts will not involve much more than press releases and hollow promises, as regulators have made no meaningful changes to a broken and ineffective regulatory system.
That approach, combined with the realities of the rail tank car industry, basically ensure that oil will be transported in the unsafe DOT-111 tank cars for many years to come, despite testimony at a recent congressional hearing from Robert Sumwalt of the National Transportation Safety Board (NTSB).
Sumwalt testified that, “multiple recent serious and fatal accidents reflect substantial shortcomings in tank car design that create an unacceptable public risk.”
Unacceptable to the public, but apparently perfectly acceptable to the industry.
On Wednesday February 26th, the long-awaited congressional hearing on oil-by-rail safety finally occurred. The main portion of the hearing featured representatives from the relevant government agencies as well as industry, such as the American Petroleum Institute’s President and CEO, Jack Gerard.
For those following crude-by-rail safety, there are several pressing issues, but the one question everyone wants to know the answer to is when will the government stop allowing the inferior and unsafe DOT-111 tank cars to be used to ship crude oil?
At the hearing, Robert Sumwalt of the National Transportation Safety Board (NTSB) testified that “multiple recent serious and fatal accidents reflect substantial shortcomings in tank car design that create an unacceptable public risk.”
Not much of substance was covered in the hours-long hearing but there was one exchange between Congressman Peter DeFazio of Oregon and Cynthia Quarterman, the Administrator of the Pipeline and Hazardous Materials Safety Administration (PHMSA), that shed light on where this all stands.
Congressman DeFazio asked the question about the DOT-111s several times — and Administrator Quarterman refused to answer several times. The video below highlights the heated exchange which ends with Congressman Defazio cutting off Adminstrator Quarterman mid-sentence as it is clear she is not going to answer, thus highlighting the extent of the problem.
The one official who can actually make something happen when it comes to improving rail car safety refuses to answer questions on when that might get done, despite the fact that the flaws in the existing DOT-111 tank cars have been known for over a decade and members of congress have been requesting this hearing for over six months.
Yesterday, New York Governor Andrew Cuomo issued an executive order directing several state agencies to review the risks posed by trasportation of crude oil by rail in New York. This issue has recently gained attention in Albany as the public has become aware of the large amounts of Bakken crude oil being shipped into Albany by rail, where it is then transferred to tankers that travel down the Hudson River.
The Governor’s order requests many relevant actions but also acknowledges that most of this is under federal jurisdiction and thus there isn’t much the state can do about it. Much of what the Governor is requesting has been suggested by the National Transportation Safety Board (NTSB) many times over the years, as the agency did again this past week.
The new suggested NTSB changes have the support of the American Association of Railroads. However, the companies that actually would be responsible for most of the costs associated with improving rail car safety are the oil companies themselves. The American Petroleum Institute responded to the new safety regulations by pointing the finger at the rail companies, stating that, “the first step is to prevent derailments by addressing track defects and other root causes of all rail accidents.”
And the dance that has gone on around this issue for years continues on, resulting in more press releases, but no action.
Here is a video I produced about the oil by rail issue in New York:
Democracy is utterly dependent upon an electorate that is accurately informed. In promoting climate change denial (and often denying their responsibility for doing so) industry has done more than endanger the environment. It has undermined democracy.
There is a vast difference between putting forth a point of view, honestly held, and intentionally sowing the seeds of confusion. Free speech does not include the right to deceive. Deception is not a point of view. And the right to disagree does not include a right to intentionally subvert the public awareness.