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Rail CEOs to Investors: “Bomb Trains” Safe At Almost Any Speed

1:04 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

 

A BNSF train engine heading north

Despite the dangers, BNSF is doubling down on it’s oil train shipments.

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 60MPH 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.

Time is Money

The position of the rail companies regarding speed and safety on their recent quarterly investor calls was consistent, coming just before the release of the new oil-by-rail regulations.

“I don’t know of any incidents with crude that’s being caused by speed. We keep slowing down in this North American network over the years. We don’t get better with speed. We get worse,” E. Hunter Harrison, CEO of Canadian Pacific, stated during the company’s investor call.

“Now you can’t get growing the country for example, growing the economy, growing the population, and continue to move stuff on rail, cutting the speed back, but don’t want to add any infrastructure. That doesn’t work. That’s a timetable to disaster.”

Charles “Wick” Moorman, CEO of Norfolk Southern and also on Chevron’s Board of Directors, sang a similar tune in response to a query about excessive train speeds potentially causing crude-by-rail accidents.

The question about whether that was the case came from analyst Jason Seidl of Cowen and Company.

“None to my knowledge,” Moorman stated bluntly.

Moorman also argued on the call for a much higher speed limit.

“We’ve had a lot of discussion with the regulators and I believe that we’ll be able to make our case that a minimum speed in the 40 to 45 mile an hour range is…safe,”Moorman continued. “[A]ny significant speed restriction would be in fact disruptive to the point of almost shutting down the North American rail network.”

CSX Corporation — whose oil-by-rail train exploded in Lynchburg, Va. in April — stood in solidarity with its rail industry colleagues on its recent investor call.

“We think [30 MPH speed limits] would…severely limit our ability to provide reliable freight service to our customers,” Michael Ward, chairman, president and CEO ofCSX, stated on the company’s call.

“I would hope as we look at this with the federal government, we can show them the modeling of how disastrous that could be to the entire fluidity of the U.S. rail system as well as the adverse impact that will have as trucks deliver on to the highway system. So our view is that it would be very bad, but our view is also that cooler heads will prevail when they see the facts behind it.”

Unmentioned by Ward: CSX’s oil train that exploded in Lynchburg and spilled into the James River was rolling along at 24 MPH, below the 30 MPH limit he advocated against on the call.

“Will Cooler Heads Prevail?”

Ward is not the only insider who thinks “cooler heads will prevail” on the issue of oil-by-rail speed limits going forward.

Read the rest of this entry →

Oil-By-Rail: A Battle Between “Right to Know” & “Need to Know”

11:35 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

BNSF Oil Train preparing to head north.

BNSF claims their oil train routes are secrets protected by law.

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.

Terry Wechsler, an environmental attorney in Washington, recently explained to Reuters why there was no opposition to the first three oil-by-rail facilities in the area.

“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.

Oil and rail companies know well that they can proceed with their planned expansions more easily if communities remain unaware of their plans.

And now that some states — including North Dakota — have defied their efforts to keep the public in the dark about the crude-carrying trains, the public will have a much clearer idea of what’s going on.

A case in point, DeSmogBlog recently revealed crude-by-rail giant Burlington Northern Santa Fe (BNSF) moves up to 45 trains a week in some North Dakota counties and up to three dozen in others.

Big Rail’s Big Bluff

The rail industry has enjoyed a long history of legal protections, allowing it to operate in secrecy with regards to carrying hazardous materials. Indeed, Big Rail pushed hard to fight the release of information to the public on the transportation of Bakken crude oil.

This time around, the rail industry said that information it was compelled to give the federal government on its Bakken oil shipments under the U.S. Department of Transportation’s (DOT) May 7 Emergency Order could not be released to the public under state-level open records laws.

Why? Because it fell under the category of “sensitive security information.”

In boilerplate letters and contract proposals sent to heads of State Emergency Response Commissions — one of which was obtained via Idaho’s Public Records Act by DeSmogBlog — BNSF deployed this argument.

This legal designation means BNSF and other companies could withhold information regarding the movements of Bakken crude from the public — by exempting it from state-level open records laws — and would only have to release it to the emergency response commissions.

“It is important to note that this information is subject to several restrictions on its release and exemptions from both state and federal applicable Freedom of Information laws and should only be provided to persons meeting with the appropriate need-to-knows discussed below,” BNSF wrote in its boilerplate letter.

BNSF considers this information commercial confidential and business confidential information and Security Sensitive Information pursuant to Federal law, and the documents have been marked accordingly.

But despite BNSF’s legal claims, some states have released this information in response to open records requests. And the federal government has also leaned toward advocating for greater transparency.

The U.S. Transportation Security Administration (TSA) confirmed by e-mail to the Sacramento Bee that the administration did not consider this information “security sensitive,” stating, “TSA has not made a finding as to whether or not information concerning the volume of crude oil train traffic or the routes used by these trains is considered security-sensitive information.

The Federal Railroad Administration also concluded information about Bakken crude was not considered sensitive security information.

Community’s Right to Know

The U.S. Environmental Protection Agency’s website contains a section on right to know laws. That section opens by stating, “Every American has the right to know the chemicals to which they may be exposed in their daily living.”

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DeSmogBlog First to Publish North Dakota Oil-By-Rail Routes

9:40 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog 

A BNSF train engine heading north

Warren Buffett’s BNSF is a leader in moving fracked oil from North Dakota’s Bakken fields.

For the first time, DeSmogBlog has published dozens of documents obtained from the North Dakota government revealing routes and chemical composition data for oil-by-rail trains in the state carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale.

The information was initially submitted to the U.S. Department of Transportation (DOT) under the legal dictates of a May 7 Emergency Order, which both the federal government and the rail industry initially argued should only be released to those with a “need-to-know” and not the public at-large.

North Dakota’s Department of Emergency Services, working in consultation with the North Dakota Office of the Attorney General, made the documents public a couple weeks after DeSmogBlog filed a June 13 North Dakota Public Records Statute request.

“There is no legal basis to protect what they have provided us at this point,” North Dakota assistant attorney general Mary Kae Kelsch said during the June 25 Department of Emergency Service’s quarterly meeting, which DeSmogBlog attended via phone. “It doesn’t meet any criteria for our state law to protect this.”

Initially, oil-by-rail giant Burlington Northern Santa Fe (BNSF) and other rail companies sent boilerplate letters — one copy of which has been obtained by DeSmogBlog from the Idaho Bureau of Homeland Security through the state’s Public Records Act — to several State Emergency Response Commissions (SERCs), arguing train routes should be kept confidential.

BNSF also sent several SERCs a boilerplate contract proposal, requesting that they exempt the information rail companies were compelled to submit to the SERCs under the DOT Emergency Order from release under Freedom of Information Act. A snippet of the proposed contract can be seen below:

Dan Wilz, homeland security division director and state security advisor of the Department of Emergency Services, said the claims did not hold legal water.

“Joe can stand on a street corner and figure that out within a week’s period,” Wilz said at the quarterly meeting. “They watch the trains go through their community each and every day.”

BNSF, Canadian Pacific Railway (CP Rail) and Northern Plains Railroad all submitted information to the Department of Emergency Services.

CP Rail: 7 Trains/Week, “Highly Flammable”

In its submission to the North Dakota Department of Emergency Services, CP Rail revealed it sent seven oil-by-rail trains through 13 counties in North Dakota the week of June 9-15. CP Rail also estimated it generally sends 2-5 trains through those same counties during an average week.

Some oil-by-rail trains, dubbed “bomb trains” by some due to their propensity to explode, carry over 2,677,500 gallons of fracked oil. The trains are often over a mile in length and contain over 100 cars.

The company also released information on the chemical composition of the Bakken oil it sends on its rail cars, conceding that Bakken oil is “highly flammable” and “easily ignited by heat, sparks or flames.”

Further, CP Rail admitted that Bakken oil has “a very low flash point” and that “water spray when fighting [its] fire may be inefficient.”

BNSF: Bakken Oil-By-Rail King

BNSF, owned by Warren Buffett — a major campaign contributor to President Barack Obama both in 2008 and 2012 and one of the richest men on the planet — is widely considered the king of oil-by-rail in the U.S. The documents BNSF released to the Department of Emergency Services back up the notion.

One document shows BNSF sent 31 oil-by-rail trains through Cass County, North Dakota during the week of May 29 – June 4, also saying it sends between 30-45 trains per week on average through the County. That same week, 30 BNSF trains zoomed through Barnes County, North Dakota.

A document filed the next week, covering June 5 – June 11, shows 45 trains passed through Cass County that week. Another 37 passed through Ward County, North Dakota and another 33 through McHenryPierce and Mountrail counties.

Northern Plains: Chemical Composition Revealed

In its DOT submission, Northern Plains included an expansive Bakken crude oil sample chemical composition test submitted by Musket Corporation, which has a terminal and transload site in North Dakota.

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White House Meeting Logs: Big Rail Lobbying Against “Bomb Train” Regulations It Publicly Touts

10:21 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

The rail industry offers up claims about how much it cares about safety when speaking to the public. But behind closed doors, the public relations pitch goes by the wayside in favor of hard-nosed lobbying muscle to avoid accountability.

The Obama White House Office of Information and Regulatory Affairs (OIRA) has held the majority of its meetings on the proposed federal oil-by-rail safety regulations with oil and gas industry lobbyists and representatives.

But OIRA meeting logs reviewed by DeSmogBlog reveal that on June 10, theAmerican Association of Railroads (AAR) and many of its dues-paying members also had a chance to convene with OIRA.

Big Rail has talked a big game to the public about its desire for increased safety measures for its trains carrying oil obtained via hydraulic fracturing (“fracking”) in the Bakken Shale. What happens behind closed doors, the meeting logs show, tells another story.

At the June 12-13 Railway Age Oil-by-Rail Conference, just two days after rail industry representatives met with OIRA, American Association of Railroads President Edward Hamberg, former assistant secretary for governmental affairs at the U.S. Department of Transportation (DOT), made the case for safety.

“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.

Massive War Room

Those present at the June 10 OIRA meeting included representatives from AAR, the American Short Line & Regional Railroad Association, Union PacificBurlington Northern Santa Fe (BNSF), CSX CorporationNorfolk Southern and the DOT.

Akin to the gargantuan war room in the film “Dr. Strangelove,” 26 people took part in the session.

Invitees included Meredith Kelsch, senior attorney for DOT; Orest Dachniwsky, associate general counsel for BNSF; Robert Schmidt, senior manager of operations and casualty analysis for Union Pacific; and Richard Theroux, who has worked at the Office of Management and Budget — parent of OIRA — for nearly three decades.

“19th Century Technology”

The heading on the first slide of CSX’s presentation for OIRA stated, “ECP brakes are expensive and do not offer material safety advantages.”

ECP is industry shorthand for Electronically Controlled Pneumatic brakes, currently considered the best available brakes in the business.

At a National Transportation Safety Board (NTSB) hearing in April, Richard Connor, safety specialist for DOT’s Federal Railroad Administration (FRA), gave a presentation comparing the conventional air brake system used on most freight trains to the ECP brakes passed over by CSX.

“I’m not sure with the audience if you all understand how the current air brake systems on our freight trains out there operate today, but it’s basically 19th century technology,” said Connor.

Connor also described the performance of the brakes in an emergency situation as “painfully slow” in comparing ECP’s response time to that of the conventional braking system.

“One of the biggest advantages of ECP is that signal to apply your brakes…is going at the speed of light…it’s a much quicker signal,” he said.

Connor also discussed how ECP would “offer material safety advantages” over current technology in an oil train accident, even if expensive.

“For the purpose of why we would want ECP on, say, a unit train like these oil trains, [it’s] to reduce the impact of a derailment or reduce the damages caused by a derailment of these types of trains,” explained Connor.

“[The purpose] is you get a much quicker application, you reduce that kinetic energy involved with that train.”

Speed-Racing

BNSF serves as the Queen Bee in the oil-by-rail world.

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Meeting Logs: Obama Quietly Coddling Big Oil on “Bomb Trains” Regulations

8:53 am in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

The exploding CSX Corporation oil-by-rail train in Lynchburg, Virginia owned by Plains All American was on its way to the Yorktown facility. Yorktown has been marked a potential export terminal if the ban on exporting U.S. oil is lifted.

When Richard Revesz, Dean Emeritus of New York University Law School, introduced Howard Shelanski at his only public appearance so far during his tenure as Administrator of the White House Office of Information and Regulatory Affairs (OIRA), Revesz described Shelanski as, “from our perspective, close to the most important official in the federal government.”

OIRA has recently reared its head in a big way because it is currently reviewing the newly-proposed oil-by-rail safety regulations rolled out by the Department of Transportation (DOT) and Pipeline and Hazardous Materials Safety Administration (PHMSA).

During his presentation at NYU, Shelanski spoke at length about how OIRA must use “cost-benefit analysis” with regards to regulations, stating, “Cost-benefit analysis is an essential tool for regulatory policy.”

But during his confirmation hearings, Shelanski made sure to state his position on how cost-benefit analysis should be used in practice. Shelanski let corporate interests know he was well aware of their position on the cost of regulations and what they stood to lose from stringent regulations.

“Regulatory objectives should be achieved at no higher cost than is absolutely necessary,” Shelanski said at the hearing.

With the “cost-benefit analysis” regarding environmental and safety issues for oil-by-rail in OIRA’s hands, it appears both the oil and rail industries will have their voices heard loudly and clearly by the White House.

A DeSmogBlog review of OIRA meeting logs confirms that in recent weeks, OIRAhas held at least ten meetings with officials from both industries on oil-by-rail regulations. On the flip side, it held no meetings with public interest groups.

“Cost-Benefit”: A Brief History

OIRA was created in 1980 by President Ronald Reagan with the goal of getting rid of “intrusive” regulations.

“By instructing agencies to clear drafts of regulations through OIRA, Presidents have made the agency…a virtual choke point for federal regulation,” explains theCenter for Progressive Reform, a think-tank critical of OIRA and its cost-benefit analysis.

Cost-benefit analysis was put on the map by Harvard Law School professor Cass Sunstein, “regulatory czar” and head of OIRA for President Barack Obama before Shelanski. Read the rest of this entry →