LOS ANGELES — As recently as three years ago, communities in California didn’t really have to worry about the safety risks of transporting crude oil by rail.
In 2011, there were only three incidents involving oil-by-rail in California, reflecting low levels of oil-by-rail traffic. In 2012, only 1 million barrels, or 0.3. percent, of the oil imported by California refineries came by rail.
These days, the statistics paint a very different picture amid a dramatic increase in domestic oil production that is fueled by the exploitation of shale oil formations, such as the Bakken in western North Dakota. And safety concerns are rising in communities like Sacramento, California, which could soon be a crude-oil crossroads.
“This is a real issue,” Rep. Doris Matsui, whose district includes the city of Sacramento, said recently, pointing out that Sacramento’s downtown and many of its neighborhoods sit next to rail tracks.
According to a new report by the state’s Interagency Rail Safety Working Group, California crude oil imports by rail jumped 506 percent to 6.3 million barrels, or about 1 percent of total imports, in 2013. Experts including the California Energy Commission project that this number could increase by up to 150 million barrels, or 25 percent of total imports, by 2016.
The national trends are similar, with rail incidents rising from several per year prior to 2010 to 155 in 2013 and 90 so far in 2014. More crude oil by volume was spilled in rail incidents in 2013 than in the nearly four decades prior.
The rail industry insists that oil-by-rail has an excellent safety record — “better, in fact, than pipelines in recent years,” according to a 2013 report by the Association of American Railroads. But lawmakers and others fear that unless federal safety regulations are tightened and the industry takes proactive measures, something like the July 2013 explosion of 63 cars of Bakken crude oil in Lac-Mégantic, Quebec, that killed 47 people could happen again.
Citing safety concerns, the Department of Transportation last month issued an emergency order requiring operators of trains carrying large amounts of Bakken oil in a particular state to notify that state’s Emergency Response Commission about the estimated volume of the shipment and the route the train will take.
“There’s a clear link between the high volume of [rail] shipments and increased accidents due to derailments and other safety problems,” Tyson Slocum, energy program director for Public Citizen, a consumer advocacy group, told MintPress News in an interview.
That growth in volume “combined with the volatility of crude oil coming out of formations like the Bakken,” he added, “[means] you’ve got a recipe for disaster.”
“Horrific disasters”
The extraction of oil from shale deposits like the Bakken — made possible by the use of techniques like hydraulic fracturing, or “fracking,” and horizontal drilling — has revived the domestic industry. Since November 2012, production of crude oil has exceeded 7 million barrels a day, marking the first time it had reached that level in 20 years. North Dakota has become the second-largest oil-producing state after Texas, with output rising from an average of 81 barrels a day in 2003 to about 900,000 barrels a day by mid-2013.
Most U.S. refineries, however, are located in traditional production areas, such as Texas and Oklahoma, or on the coasts. And the existing pipeline network does not have the capacity to handle the increased production. As a result, producers have turned to railroads to ship crude oil to refineries.
“[S]ince 2009 the increase in rail crude oil movements has been enormous,” the Association of American Railroads reported.
As recently as 2008, the association says, U.S. Class I railroads originated just 9,500 carloads of crude oil, or 0.03 percent of total carloads. In the first three quarters of 2013, that number had increased to 299,652 carloads, or 1.4 percent of the total. That works out to about 784,000 barrels a day moving by rail, with a typical carload carrying around 30,000 gallons.
“We never thought we competed with pipeline until four years ago when we moved our first unit train of crude by rail,” Dean Wise, a vice president for BNSF Railway, said at a rail conference in January. “Now BNSF is moving eight trains a day.”
The Burlington Northern Santa Fe railroad plans to invest $400 million to expand rail capacity in North Dakota alone. In California, energy companies are planning at least half a dozen infrastructure projects to facilitate oil-by-rail shipments, including refinery expansions and retrofits or the expansion of rail terminal facilities.
While transporting crude oil by pipeline is generally cheaper, rail offers such advantages as speed. Shipping oil from North Dakota’s Bakken shale fields to the Gulf Coast can take five to seven days by rail, compared to about 40 days by pipeline.
The problem facing the industry — and vexing lawmakers and regulators — is the increase in oil-by-rail accident rates. In Texas, 42 percent of the 62 crude oil spills from trains over the last decade have occurred since 2012. And the State Department has estimated that oil-by-rail transport could lead to 189 injuries and 28 deaths over a decade.
“While the economic benefits of shipping crude by rail may be immense, the safety shortcomings can become horrific disasters and heartbreaking tragedies,” Sen. Jay Rockefeller, chairman of the Senate Committee on Commerce, Science and Transportation, said in a statement in April.
Some oil-carrying trains, notes Slocum, are 100 to 130 rail cars in length. “All those cars are filled with oil,” he said. “That turns it into a mobile missile.”
Pipeline competition
On July 6, 2013, a Montreal, Maine and Atlantic Railway train that had been left unattended rolled down a steep, 7.5-mile grade and derailed just as it reached the downtown core of Lac-Mégantic, Quebec. About 30 of those killed in the resulting fire and explosion of oil-filled tank cars were inside a local bar, while most of the others had been in their homes. It was the fourth most deadly rail accident in Canadian history.
Since then, there have been eight major oil-by-rail accidents in the U.S. and Canada, including one in December that caused the evacuation of the small town of Casselton, North Dakota. In April, a CSX Corp. train derailed and burst into flames in Lynchburg, Virginia, spilling 30,000 gallons of oil into the James River and forcing hundreds of people to evacuate.
“Most reported incidents document a relatively small volume of oil released, but … the potential for high-consequence incidents will increase as more oil is transported by rail,” the California Working Group warned in its report.
Accidents have been attributed to track failures, inadequate rail car equipment and human error. But federal officials are concerned that the light, gasoline-like nature of the crude oil from Bakken and similar shale formations makes it inherently more flammable than other crude oil and increases the likelihood of rail car ruptures.
Public Citizen’s Slocum also suggests that corrosive agents such as hydrochloric acid may be incorporated into Bakken oil during the fracking process.
Officials at BNSF, Union Pacific and other major railroads say they are addressing safety concerns by, among other things, reducing train speeds in large cities and expanding inspections and real-time train tracking via track-side sensors.
“We take this very seriously,” a UP spokesman told the Sacramento Bee.
But BNSF has been criticized for refusing to publicly disclose shipment data it has provided to California regulators, saying disclosure would compromise “sensitive security information” including trade secrets.
“Clearly, the public has a right to know about harmful substances coming through their communities,” Slocum told MintPress. Shipment information, he added, “should be automatically provided by transport companies.”
Regulators and activists are calling on the railroad industry to take measures including upgrading tank cars, reducing the length of trains, and installing facilities at well-heads to remove the more volatile compounds from oil.
“There is growing evidence that [older model] cars are inadequate to protect against vapor explosions of highly flammable crude such as that from the Bakken shale formation,” the California Working Group noted in its report.
In California, a state assemblyman has introduced legislation that would require rail carriers to communicate information about the movement and characteristics of crude oil and other hazardous materials, and operate a 24-hours-a-day, seven-days-a-week communications center. In the coming fiscal year, the state will charge oil companies a fee for every barrel of crude that arrives in California on rail, with some of the resulting funds to be allocated to oil spill prevention work.
The rail industry certainly has a strong economic incentive to respond effectively to safety concerns. Its competitors in the pipeline industry, including those promoting the controversial Keystone XL project, have been quick to portray pipelines as a safer alternative to rail for oil transportation.
Pipelines are the “safest, most environmentally responsible and affordable” way to move oil to markets, a spokesman for TransCanada, the company that hopes to build the Keystone XL line, told The New York Times.