The new oil crisis: Exploding trains – Politico

The new oil crisis: Exploding trains

Communities throughout the U.S. and Canada are waking up to the dark side of North America’s energy boom: Trains hauling crude oil are crashing, exploding and spilling in record numbers as a fast-growing industry outpaces the federal government’s oversight.

In the 11 months since a runaway oil train derailed in the middle of a small town in Quebec, incinerating 47 people, the rolling virtual pipelines have unleashed crude oil into an Alabama swamp, forced more than 1,000 North Dakota residents to evacuatedangled from a bridge in Philadelphia and smashed into an industrial building near Pittsburgh. The latest serious accident was April’s fiery crash in Lynchburg, Virginia, where even the mayor had been unaware oil was rolling through his city.

Oil train spills since 2009

These dangerous moments on the rails raise questions about the safety of transporting increasing amounts of oil in mile-long chains of tank cars, some of them decades old. Community leaders and activists from Oregon to Alabama to Albany call the trains a disaster waiting to happen — despite the Department of Transportation’s efforts to play catchup through a series of emergency orders, agreements with industry and proposed regulations being reviewed by the White House.

(WATCH: News coverage of recent oil train spills)

A POLITICO analysis of federal data from more than 400 oil-train incidents since 1971 shows that a once-uncommon threat has escalated dramatically in the past five years:

  • This year has already shattered the record for property damage from U.S. oil-train accidents, with a toll exceeding $10 million through mid-May — nearly triple the damage for all of 2013. The number of incidents so far this year — 70 — is also on pace to set a record.
  • Almost every region of the U.S. has been touched by an oil-train incident. These episodes are spreading as more refineries take crude from production hot spots like North Dakota’s Bakken region and western Canada, while companies from California and Washington state to Missouri, Pennsylvania, Virginia and Florida build or expand terminals for moving oil from trains to barges, trucks or pipelines.
  • The voluntary reforms that DOT and industry have enacted so far might not have prevented the worst accidents. For example, the department announced a voluntary 40 mph speed limit this year for oil trains traveling through densely populated areas, but DOT’s hazardous-incident database shows only one accident in the past five years involving speeds exceeding that threshold. And unlike Canada’s transportation ministry, DOT has not yet set a mandatory deadline for companies to replace or upgrade their tank cars.

Starting this month, DOT is requiring railroads to share more timely information with state emergency managers about the trains’ cargoes and routes. But some railroads are demanding that states sign confidentiality agreements, citing security risks.

(Earlier on POLITICO: Gas prices to climb amid Iraq chaos)

Transportation Secretary Anthony Foxx says each step is a move in the right direction.

“There’s been such exponential growth in the excavation of this crude oil that it’s basically outrun our normal systems,” Foxx said in an interview. But Foxx, who became secretary four days before the Quebec disaster, added: “We’ve been focused on this since I came in. … We’re going to get this right.”

Defending the voluntary speed limits, Foxx said: “You have to understand that all these pieces fit together. So a stronger tank car with lower speeds is safer than a less strong tank car at higher speeds.”

(Also on POLITICO: Full energy and environment policy coverage)

Members of Congress are joining the call for more action.

“The boom in domestic oil production has turned many railways and small communities across our country into de facto oil pipelines, and the gold-rush-type phenomenon has unfortunately put our regulators behind the eight ball,” said Sen. Chuck Schumer (D-N.Y.), who has been pushing for stricter safety and disclosure rules. “It has become abundantly clear that there are a whole slew of freight rail safety measures that, while for many years have been moving through the gears of bureaucracy, must now be approved and implemented in haste.”

Sierra Club staff attorney Devorah Ancel said the rising damage toll should “ring alarm bells in the minds of our decision-makers, from cities all the way up to Congress and the president.”

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“Our fear is that the regulators are being pushed over by the industry,” she said.

Like the oil boom itself, the surge in oil-train traffic has come much faster than anyone expected. Meanwhile, the trains face less onerous regulations than other ways of moving oil, including pipelines like TransCanada’s Keystone XL project.

Keystone, which would carry oil from Alberta to the Gulf Coast, has waited more than five years for a permit from the Obama administration while provoking a national debate about climate change. But no White House approval was needed for all the trains carrying Canadian oil into the United States. In fact, freight railroads in the U.S. are considered “common carriers” for hazardous materials, meaning they can’t refuse to ship it as long as it meets federal guidelines.

(Also on POLITICO: Clinton keeps coy on Keystone)

The oil-trains issue is bringing a flurry of foot traffic to the White House Office of Management and Budget these days as railroad and oil industry representatives press their case on what any new regulations should look like. Representatives of the country’s leading hauler of Bakken crude, Warren Buffett’s BNSF Railway, met with OMB regulatory chief Howard Shelanski on June 3 and June 6, and joined people from railroads including CSX, Union Pacific and Norfolk Southern in another meeting June 10.

DOT says it has been working to address the problem since as far back as September 2012, and that efforts accelerated after Foxx took over in July. His chief of staff, Sarah Feinberg, holds a meeting each morning on the issue, and she and Foxx meet regularly with top leadership at the two key DOT agencies that oversee railroads and the transport of hazardous materials.

The voluntary agreements that Foxx’s department has worked out with the freight rail industry and shippers address issues like track inspections, speed limits, brakes and additional signaling equipment. Those are all “relevant when dealing with reducing risk” from oil train traffic, the freight rail industry’s main trade group said in a statement.

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“The number one and two causes of all main track accidents are track or equipment related,” the Association of American Railroads said. The statement added, “That is how the industry came up with the steps in the voluntary agreement in February aimed at reducing risks of these kinds of accidents when moving crude oil by rail.”

Meanwhile, the oil train business is primed to get bigger. Even TransCanada might start using rail to ship oil to the U.S. while waiting for Keystone to get the green light, CEO Russ Girling said in an interview in May — despite agreeing that trains are a costlier and potentially more dangerous option.

“If anybody thinks that is a better idea, that’s delusional,” Girling said.

In fact, the State Department estimated this month that because of the risks of rail compared with pipelines, an additional 189 injuries and 28 deaths would occur every year if trains end up carrying the oil intended for Keystone.

But environmentalists who warn about the dangers of crude-by-rail say it would be wrong to turn the issue into an excuse to approve Keystone. For one thing, the Texas-bound pipeline would replace only part of the train traffic, which has spread its tendrils all across the U.S. “There are no pipelines that run from North Dakota to the West Coast,” the Sierra Club’s Ancel said.

Fighting the ‘bomb trains’

Oil trains are causing political furors from coast to coast.

In Albany, New York, city and county leaders have balked at a state-approved storage project that would increase the region’s role as a major hub for crude from North Dakota and Canada. In California, environmental groups and Berkeley’s city council are fighting the influx of oil-carrying rail cars, which protesters label “bomb trains.”

The city council of Vancouver, Washington, voted this month to oppose plans for a major oil-by-rail project at the nearby port. In Washington, D.C., residents have even raised the oil-train specter while fighting CSX’s plans to replace and expand the Virginia Avenue Southeast rail tunnel. (The project’s environmental study says the expansion won’t bring additional oil shipments through D.C., which now are “very rare.” CSX spokeswoman Melanie Cost added, “There is no market for crude oil in or around the District, now or in the foreseeable future.”)

Even people who aren’t fighting to block the trains say the rise in oil traffic will require communities to prepare for the worst. Last week, a California state advisory report called for significant increases in rail inspectors, spill response plans and funding for emergency responders.

Paul Soglin, the mayor in Madison, Wisconsin, questioned how the problem got to this point.

“The day somebody showed up at DOT and said we don’t know what’s on the train — on all of these trains — let alone how to respond, someone should have started asking basic questions,” Soglin said in an interview. “Whether it’s Madison, Chicago or L.A., it means we’ve got tens of thousands of people who are vulnerable to an accident.”

DOT’s attempts to toughen the safety standards have prompted a flurry of finger-pointing. Oil companies dispute the department’s assertions that Bakken crude may be more flammable than typical oil, and say lab tests don’t show the need for additional regulations. The railroad industry wants DOT to stop oil shippers from using the older tank cars, but it also objects to calls for sharply lower speed limits. And the shippers — chiefly energy companies, which would pay for any tank car upgrades — say the focus should be on making sure trains don’t derail in the first place.

Swamp spills and prairie fires

Pipelines and oceangoing tankers still deliver the vast bulk of crude oil to U.S. refineries, accounting for about 93 percent in 2012, the Congressional Research Service says. But rail transport has soared from almost nothing as pipeline construction failed to keep up with the boom in oil production.

Last year, more than 400,000 carloads of crude oil originated in the United States, the railroad industry estimates — up 42-fold from 2008. The first three months of this year saw shipments reach a record 110,000-plus carloads, equivalent to 3.2 billion gallons, according to the Association of American Railroads.

“The amount of crude oil now being shipped by rail in North America is staggering,” Canada’s Transportation Safety Board said in January.

The railroad industry largely agrees that the rules need to be tightened but says its safety record is strong overall, delivering nearly 2.5 million carloads of hazardous materials across North America in 2012, almost entirely free of spills caused by accidents.

Oil industry executive Charles Drevna agreed.

“If you look at the frequency rate of accidents, the frequency rate is no different today than it was in the last six or seven years ago,” said Drevna, president of the American Fuel & Petrochemical Manufacturers. “The difference is that we’re moving so much more.”

The vast majority of oil train incidents from the past five years didn’t involve derailments or large amounts of crude, POLITICO’s data analysis shows — in many, a few gallons or less leaked from loose plugs or malfunctioning valves, often while the train was stationary. Only 11 of last year’s U.S. spills exceeded 10 gallons, and just seven caused more than $10,000 in damage apiece.

Railroads typically bear the costs for damages like loss of oil, cleanup expenses and damage to railroad infrastructure, as well as paying property owners’ claims and reimbursing first responders, the railroad association said.

But a few incidents can cause a lot of havoc, and the toll is rising.

The data that POLITICO reviewed from DOT’s Pipeline and Hazardous Materials Safety Administration show just a handful of oil-train incidents per year for most of the past four decades, and few major spills. (One exception was a September 1980 derailment in Bradford, Pennsylvania, that forced more than 100 people to flee their homes. An explosion that occurred during cleanup from that crash later killed a worker, according to news reports from the period.)

But the toll has risen sharply since 2009, when the agency recorded only one oil-train incident: a derailment near Lodi, Ohio, in which a tank car rolled onto its side and spilled half a gallon or less. In 2013, the tally included 118 incidents spilling as much as 1.2 million gallons and inflicting up to $3.5 million in damage, based on a review of official and unofficial PHMSA data.

The 2013 totals carry a big asterisk: the agency’s newfound uncertainty about how much spilled when a 90-car oil train derailed and exploded Nov. 8 in a swamp near Aliceville, Alabama. PHMSA’s initial data indicated that the crash had released 748,800 gallons of oil — more gallons than spilled in the previous four decades combined.

But by late April, the agency had dropped the Alabama crash from its incident statistics, saying it needed to reexamine the estimates. For anybody looking at the database now, Aliceville just didn’t happen. (POLITICO’s totals still include that crash and the initial estimates, however.)

News of the deletion angered longtime Tuscaloosa environmentalist John Wathen, the “creekkeeper” for the group Friends of Hurricane Creek, who was already frustrated at how quickly the Aliceville crash faded from national memory. Wathen said the spill had a significant impact on the swamp, where oil is still “weeping” up out of newly laid soil. And it could have been far worse had the train derailed a few minutes earlier.

“People are so unaware of what happened here in Aliceville,” Wathen said in an interview. “It was in a swamp — it was out of sight, out of mind. Nobody got killed. Thank God for that. … But think about this: That train was four miles from Aliceville. It had just passed through the town of Aliceville. That’s pretty scary by itself.”

He scoffed at the idea that authorities have no idea how much oil spilled. “They know exactly how much oil left North Dakota,” he said. “They know how much got to the refinery. Whatever is missing is missing.”

Federal investigators have yet to pinpoint a cause for the crash.

No matter how much spilled in Alabama, last year would still rank as the worst so far in gallons lost from U.S. oil train accidents. That’s because of a Dec. 30 crash in which a BNSF oil train collided with a derailed grain train outside Casselton, North Dakota, setting off explosions and fires that led network newscasts for days. The collision released roughly 475,000 gallons, according to DOT records, while about 1,400 Casselton residents were forced to evacuate.

Much of the oil was allowed to burn to lessen the amount of pollution, Mayor Ed McConnell said in an interview.

The oil trains are still passing through Casselton, McConnell said — 10 full trains a day heading east and 10 empty ones headed west. While he credits DOT with taking “a good start” at addressing the hazards, he said, “I think it’s on the back of people’s mind there’s some bad stuff coming up and down that rail.”

Catastrophe in Quebec

The undoubted poster child for oil-train explosions is Lac-Mégantic, Quebec, a town of roughly 6,000 people just across the U.S. border from Maine.

The disaster that devastated the town on July 6 involved a series of factors that proved fatal, dozens of times over: A 74-car train left unattended on an incline around 1 a.m., shortly after the engineer had gone to a hotel for the night. A cargo of Bakken crude oil that Canadian authorities later said was more volatile than its shipping documents indicated. And a town at the bottom of the hill, with a sharp bend in the tracks.

The train started to roll downhill, barreling at around 64 mph. Of the 47 people who died, many had been inside the Musi-Café, a bar in front of the curve where the cars flew off the track. The blasts went hundreds of feet into the air, and burning oil rolled down the streets — “like hot lava,” Tim Pellerin, a Maine fire chief who aided the response, told a U.S. Senate committee in April.

The chairman of the railroad company, Montreal, Maine & Atlantic Railway Ltd., later blamed the engineer for not properly setting the brakes. Canadian authorities have since filed criminal negligence charges against the engineer and two other employees, while the company declared bankruptcy and was sold off.

Eventually, oil trains may return to Lac-Mégantic, said the CEO of the Central Maine and Quebec Railway, which was buying the old railroad’s assets.

While Canadian transportation authorities haven’t finished their investigation, they have already mandated replacements or upgrades in the next three years for all older-model rail cars that haul Bakken crude. That spurred calls for U.S. DOT to follow suit.

Mayor Colette Roy-Laroche warned during a D.C. appearance in March that the accident “could have occurred anywhere.”

“Every press conference, every meeting, every question is put to me: ‘Why? Why here?’” she said in French through a translator. She added, “Action is required now, before it’s too late for other communities, other people, other grandparents, other parents, other brothers, other sisters and other children.”

Yards from disaster

In contrast, the damage in April’s crash in Lynchburg was contained to a single rail car that ruptured and caught fire. Almost all of the 17 derailed tank cars — including the one that exploded — were from a newer model, built with thicker walls and other safeguards against punctures and breaching. Nobody was injured, though that was a matter of geography and timing.

Still, the crash sent flames and smoke soaring more than 100 feet into the air.

“It was within yards of being a complete disaster,” Dave Poole, owner of a restaurant just a few feet from the crash site, said in an interview.

Investigators still haven’t determined the cause of the derailment but say the 105-car train was traveling just under the 25 mph speed limit when it went off the track, sending three cars tumbling down an embankment into the James River. Parked cars and businesses lay on the other side of the tracks.

Mayor Michael Gillette said in an interview that until the accident happened, he didn’t know the trains rolling through his city carried crude oil. Fire Chief Brad Ferguson told POLITICO he had known oil was riding that track because he had seen the placards on the trains, but he didn’t have an exact schedule.

Ferguson also thought the city had adequate preparation — including foam needed to fight petroleum fires — to handle this particular blaze. But had the problem had not been isolated to a handful of rail cars, he said, “it would have been a different story.”

The feds step in

Under Foxx, DOT’s reaction to the problem started with voluntary measures while it moved, gradually, toward a still-in-progress rule to strengthen tank car standards.

First, the department convened industry groups to agree on what they could do on their own. The voluntary steps include a 40 mph speed limit for trains hauling more than 20 tank cars of Bakken crude in “high-threat” urban areas, down from 50 mph. Railroads will also reroute some trains around particularly populated areas, and will no longer assign Bakken oil to the lowest hazard category allowed under current rules.

The agency also stepped up inspections of Bakken shipments, and has begun testing samples to try to determine whether the oil is more flammable than other types of crude. In May, DOT asked Bakken shippers to stop using the older models of railroad tank cars.

Those are “the right steps to be taking,” Foxx told POLITICO.

DOT’s mandatory measures include an emergency order requiring shippers to test the oil before sending it off, among other provisions. Another order requires railroads to inform state emergency managers about how much Bakken crude they’re transporting, how often the trains travel and the routes they follow. That information would then be available to firefighters and other first responders.

Until now, no regulations required communities to get such specific data on a regular basis, although rail companies voluntarily gave emergency agencies general information about what trains carried.

The department is also trying to craft a rule that would require even stronger tank cars for transporting crude. The proposal is expected to become public this summer, and may also address issues like speeds, routing and first responders.

The Association of American Railroads says rail companies have taken steps too, implementing nearly all the recommendations that an industry working group made in 2011, including moves toward a safer tank car standard with thicker walls and other protections. Still, as many as 228,000 older-model tank cars remain in use, with 92,000 used for hauling flammable liquids like oil. Only 14,000 of those cars are “built to the latest industry safety standards,” the AAR has estimated.

Just upgrading all the cars could cost around $1 billion, according to industry estimates. And Foxx held out the possibility that “we may have to go to a more stringent standard,” beyond what industry has agreed to.

Despite all those efforts, this past year’s oil train accidents probably won’t be the last, said Wathen, the Tuscaloosa environmentalist.

“I would be surprised if we didn’t have more of them in the very near future,” he said. “I’ve been in this environmental fight for a long, long time, man. I’ve never seen anything quite as scary as this stuff rolling through our communities.”

Talia Buford and Kevin Robillard contributed to this report.

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