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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.

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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 →

Dollarocracy: U.S. Congressmen Refuse to Address Keystone XL Southern Half Spill Concerns

2:00 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog  

What’s the U.S. congressional response to the safety issues with the 485-mile southern half of TransCanada‘s Keystone XL pipeline raised by Public Citizen‘s Texas office? Mostly what Simon & Garfunkel called “The Sound of Silence” in their famous song.

DeSmogBlog contacted more than three dozen members of the U.S. Congress representing both political parties to get their take on Public Citizen’s alarming findings in its November investigation (including dents, metal that had to be patched up and pipeline segments labeled “junk”), but got little in the way of substantive responses.

Set to open for business on January 22approved via an Executive Order by President Barack Obama in March 2012 and rebranded the “Gulf Coast Pipeline Project” by TransCanada, the southern half of the pipeline has garnered far less media coverage than its U.S.-Canada border-crossing brother to the north, Keystone XL‘s northern half.

Over two dozen members of the U.S. House of Representatives wrote a letter to President Obama on December 12 expressing concern over the conflicts-of-interest in the U.S. State Department’s environmental review process for the northern half of the line.

But none of them would comment on concerns with the southern half of the line raised in the Public Citizen report after multiple queries via e-mail from DeSmogBlog.

Two to Tango

Only two out the dozens contacted offered somewhat substantive comments.

And one of them, U.S. Rep. Ralph Hall (R-TX) (Left), did not respond to the meat and bones of the question at hand. He did offer some oft-used industry talking points, though.

“The Keystone pipeline will create jobs and help reduce dependence on oil supplies from unfriendly nations,” Hall told DeSmogBlog. ”The State of Texas has a proven track record of successful oversight of the oil and gas industry, including pipelines, and I am confident that they will be diligent in ensuring the pipeline’s safety.”

Hall — who took $59,500 from the oil and gas industry before the 2012 elections and has already taken $12,500 for the upcoming 2014 elections — is far from a neutral stakeholder in the debate over anything pertaining to the petroleum industry.

“Since 2010, Hall has earned as much as $1 million from a company that holds mineral rights along the Barnett Shale,” explained a March 2013 Sunlight Foundation article. “The money was disclosed as dividends from a company called North & East Trading Co. (N&E).”

On the other side of the aisle, U.S. Rep. Gene Green (D-TX) (Right) also responded toDeSmogBlog‘s request for comment, offering more cautious words of support for the southern half of the pipeline’s commencement.

“Over the past decades, our interstate and intrastate pipeline systems have had remarkable safety records, unmatched by rail or highway modes of transportation,” Green stated. Read the rest of this entry →

Pipeline Safety Agency Approves Startup of Keystone XL South

6:53 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

No Tar Sands banner

Despite serious safety concerns and months of protests, Keystone XL South is approved for tarsands.

DeSmogBlog has learned that TransCanada cleared the final hurdle for the southern half of its Keystone XL tar sands pipeline, receiving a green light last week from the Pipeline and Hazardous Materials Safety Administration (PHMSA) following a review of several safety concerns.

TransCanada announced this week that it has begun injecting oil into the southern half of its Keystone XL pipeline in preparation for commercial operations.

Leading up to PHMSA giving Keystone XL south the go-ahead to start up, Public Citizen raised several questions about the safety of the pipeline.

Will TransCanada respond to greivances raised about dents, faulty welding, pipeline material designated “junk” and other issues raised in the consumer advocacy group’s November investigation? And what about September 10 and September 26 warning letters obtained by Public Citizen raising similar concerns from PHMSA to TransCanada?

Both TransCanada and PHMSA have provided DeSmogBlog answers to these questions.

Rebranded the “Gulf Coast Pipeline Project” by TransCanada, the 485-mile Cushing, Oklahoma to Port Arthur, Texas Keystone XL southern half — approved via a March 2012 Executive Order from President Barack Obama — is set to open for business by mid- to late-January.

PHMSA’s Initial Concerns

In September, PHMSA drafted two letters to TransCanada expressing concerns over the integrity of the pipeline during its construction phase.

“During the months of June and July 2013, a representative [from PHMSA]…inspected the construction of the Keystone Gulf Coast Project,” reads a September 10 warning letter from R.M. Seeley, Director of PHMSA’s Southwest Region Office to TransCanada’s Vice President Pipeline Safety and Compliance, Vern Meier. “As a result of the inspection, it appears you have probable violations of the Pipeline Safety Regulations, Title 49, Code of Federal Regulations.”

PHMSA’s September 10 warning letter said TransCanada had done a suboptimal job installing Keystone XL’s southern half, also writing that the coating utilized for Keystone XL’s southern half could easily degrade over time in the September 10 letter.

Two weeks later, PHMSA sent another warning letter to TransCanada on September 26, calling out TransCanada on its poor welding procedures. PHMSA could fine TransCanada up to $2 million, along with additional enforcement actions, if the company had failed to comply with PHMSA’s dictates outlined in both warning letters.

PHMSA Delays FOIA Response

After playing the “bad cop” role in its two September letters to TransCanada, PHMSA’s Southwest Office has backed off a bit.

In response to a FOIA request submitted by Public Citizen upon learning of the two September letters, PHMSA responded that, due to commercial reasons and the possibility of an ongoing investigation, Public Citizen will likely not be eligible for many of the records requested.

PHMSA Gives KXL South Green Light

TransCanada spokesman Shawn Howard told DeSmogBlog he believes all is safe and sound with Keystone XL’s southern half.

Read the rest of this entry →

Federal Pipeline Regulatory Agency Re-Opens Line Causing Biggest Fracked Oil Spill in US History

6:49 pm in Uncategorized by Steve Horn

Cross-Posted from DeSmogBlog

ND 1914 Tioga

Tioga, ND 1914

A month after over 865,200 gallons of oil spilled from Tesoro Logistics’ 6-inch pipeline near Tioga, North Dakota, the cause of the leak is still largely unknown to anyone but Tesoro. The pipeline resumed operations today.

Carrying oil obtained via hydraulic fracturing (“fracking”), the controversial horizontal drilling method used to capture oil and gas found embedded in shale rock basins worldwide, the Bakken Shale pipeline spill on September 29 was the largest fracked oil spill in U.S. history. Oil spill experts say the spill may be even bigger than originally estimated.

Yet few details of what caused the spill – and how to prevent it from happening again – have arisen in the month since it occurred.

The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) believes a lightning strike may have created the quarter inch hole in the pipeline, leading to the spill.

PHMSA says it will carry out a rigorous investigation into the cause of the spill, but allowed the restart after Tesoro agreed to the agency’s safety ordermandating aerial monitoring of the pipeline over the next three days during the restart and then weekly for the next year, along with 20 other things.

The safety order also mandates Tesoro provide a documented updated within six months indicating how it enhanced its control room monitoring, instructs Tesoro to finish the final mechanical and metallurgical testing report of the failed pipe within 30 days and dictates that within “90 days complet[ion of] a root cause failure analysis for the Line that contains a detailed timeline of events.”

Documents obtained by Greenpeace USA under North Dakota’s Open Records Statute show the oil has settled over 12 feet below the ground layer of the soil. The oil that settled on the surface was burned off.

“At 10-12 feet below surface, there is a extensive clay layer that underlies the entire hill top,” Kris Roberts, Environmental Response Team Leader for the North Department of Health’s Division of Water Quality, explained in an October 3 field report.

“Putting it to Bed for the Winter”

In an interview with DeSmogBlog, Roberts said studies to test the impacts of the massive amounts of oil on the area’s soil are forthcoming.

“There will be a lot of testing done after the process of cleaning it up,” he said. “For now, it’s kind of a moot point when you’ve got product moving through the soil, it’s kind of screwed up. So, there will be sampling that happens as we work toward different options toward remediating the contamination.”

Rather than rush to clean up the soil now, though, the North Dakota Department of Health plans on “putting it to bed for the winter” and finishing up in the spring, Roberts said.

“We’ll continue to recover any free oil, but essentially because winter is days away if not already there, they’re basically just putting it back to bed, ensuring it’s properly contained and monitored,” he said.

“They will hopefully get some natural remediation over the winter below the frost zone when the indigenous bacteria start flourishing, that’ll probably help a little bit cleaning up. But for the most part, everything is pretty much on hold and active remediation is going to be on hold until next spring.”
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