Happy Days Are Here Again?
Gasoline prices have been falling steadily for months. Now a gallon may be purchased for substantially less than three dollars in many regions of the country. That’s welcome news for consumers, but environmentalists, regulators and first responders have been asking whether there are risks associated with this happy development that may not be obvious and which should be addressed.
Supply And Demand
Super-abundance of crude from newly-tapped shale oil fields in North Dakota is a major factor contributing to the downward pressure on retail gasoline prices. Six years ago, production from the Bakken formation was negligible. As a result of steady improvements in hydraulic fracturing and horizontal drilling techniques, however, “the Bakken shale has gone from close to nothing to a million barrels a day in a very short time,” according to U.S. Energy Secretary, Ernest Moniz.
Burgeoning demand, and the necessity to deliver the crude to ports and refineries cost-effectively, have exposed problems in the extraction and transportation industries and in local safety and preparedness systems. Major difficulties have arisen, and will continue to bedevil us, due to substandard transportation facilities. “[T]he infrastructure … just isn’t there, certainly in terms of pipelines, to manage [the volumes of crude coming out of North Dakota]” according to Secretary Moniz. The absence of adequate pipeline infrastructure has forced shippers to turn to the railroads to meet demand for crude at ports and refineries.
Currently, more than 60 percent of the Bakken production moves on “unit trains” … freight trains, often comprised of more than one hundred cars, all carrying a single commodity (in this instance, Bakken crude) and all bound for the same destination. The American Association of Railroads reports that there were 9,500 rail cars carrying crude in 2008. In 2013, that number jumped to more than 400,000.
Critics of transportation practices that have developed, or have been permitted to develop, refer to unit trains carrying Bakken crude oil as “bomb trains,” because, they say, Bakken crude is highly volatile and flammable and because the railcars used to transport it are aging and vulnerable to punctures, leaks and other integrity problems in standard use.
The epi-center of the United States’ freight rail system is Chicago. From there, each day, unit trains loaded with Bakken crude are directed south to the Gulf Coast; east to ports on the Hudson and refineries in Philadelphia, New Jersey and Delaware; and west to Washington, Oregon and California.
An Unscheduled Stop In Lac-Magantic
One such train, “the MMA 2,” owned and operated by the Montreal, Maine and Atlantic Railroad, departed Chicago on July 3, 2013. An hour before midnight on July 5, the 4,700 foot long train, consisting five locomotives and 72 tank cars, pulled into a designated crew change yard in Nantes, a small town in Quebec, Canada, 17 miles west of the Maine border. The engineer stopped on the main line, immediately adjacent to the highway, set brakes, shut down four of the five locomotives and left for the night. A new crew would take the MMA 2 to its final destination, the Irving Oil Refinery in Saint John, New Brunswick, in the morning.
The train was left on a slight downward grade. The running engine maintained air pressure in the brake lines and prevented it from moving. The adjacent siding, which was equipped with a device to stop accidental departures, was unavailable because it was being used to store boxcars.
Nantes is 354 feet higher than the next town down the line, Lac-Magantic, a bucolic lakeside resort with a year-round population of 6,500. Montreal, Maine & Atlantic Railroad’s line runs through the center of Lac-Magantic.
Thirty minutes after the engineer left MMA 2, a passerby’s windshield was splattered with oil droplets as he drove past the train. The driver stopped to investigate. His pique quickly turned to alarm when he saw that sparks, as well as oil, were spewing from the locomotive’s smokestack.
The Nantes Fire Department responded and quickly doused the fire. According to the Chief, “We shut down the engine. It’s the only way to stop fuel from circulating to the fire.” At midnight he confirmed to police and to MM&A’s rail traffic controller that the train was secure and all personnel were leaving the yard.
Shutting the locomotive’s engine disabled the compressor providing air to the brake lines. Gradually, air bled out of the lines, pressure dropped, the air brakes became inoperative, and the hand brakes began a losing battle to hold the train against the inexorable pull of gravity. Inevitably, the unattended train began to inch forward … haltingly at first, but gradually gaining momentum. It rolled downhill seven miles to Lac-Magantic. When it reached the curve in the center of town where the safe speed is 10 mph, the MMA 2 was travelling at 63 mph.
The MMA 2 was hauling relatively delicate tank cars, known as DOT 111s, sometimes derisively called “Pepsi-cans-on-wheels.” Each tank car contained 30,000 gallons of Bakken crude, which experts contend is about as volatile as butane and as flammable as gasoline.
The Musi-Café, a popular night spot in the center of Lac-Magantic, is located 150 feet from the tracks, just at the 10 mph curve. It was packed at 1:15 a.m. that night. One survivor described what he saw as he emerged from the club. “It was moving at a hellish speed … the wheels were smoking, lots of white smoke … no lights, no signals, nothing at all. There was no warning. It was a black blob that came out of nowhere. I realized they were oil tankers and they were going to blow up.”
The MMA 2 derailed on the curve. Over 1.5 million gallons of Bakken crude gushed out of the 60 DOT 111s that ruptured as they jumped the tracks in a shower of sparks. Multiple explosions and a “tsunami of fire” ensued. Bakken crude poured into the storm sewer system causing flames to shoot out of culverts for a half mile over the lake “like a Saturn rocket”; lids were blown off manholes, creating giant blowtorches; plumbing systems filled with blazing oil, incinerating buildings from the inside out; people jumped from the upper stories of buildings to escape the inferno.
Forty-two people died. Remains of five were never recovered; they are believed to have been vaporized in the explosions. Thirty buildings, half the downtown area, were destroyed.
In an unfortunate coda to the tragedy, on August 7, MM&A filed for bankruptcy protection in both the Quebec Superior Court in Montreal and in the United States Bankruptcy Court in Bangor, Maine. MM&A’s bankruptcy petition disclosed an insurance policy valued at $25 million. Estimated cleanup costs, excluding damages in tort, exceed $200 million.
Oil train collisions and derailments have continued since the tragedy at Lac-Magantic. In November, 2013, a train carrying Bakken crude derailed near Aliceville, Alabama; in December, an oil unit train derailed near Casselton, North Dakota and in April, 2014, an oil train derailed in Lynchburg, Virginia. In each case, oil was released, explosions followed and people were evacuated. In January, 2014, an oil train derailed on a bridge in Philadelphia over the Schuylkill River. Fortunately, there were no releases, explosions or injuries.
Many observers are more concerned than ever that a derailment (accidental or otherwise) of a Bakken crude unit train will occur in a populated area and will result in a human and environmental disaster of epic proportions. Further, there is consensus among first responders that adequate preparations within potentially affected communities have not been made. Most troubling is the view, expressed by some experts, that local communities do not now have and never will have the required resources to deal with a major disaster associated with an oil train derailment.
A Largely Tepid Regulatory Response
The events in Lac-Magantic caused transportation authorities, environmental regulators and first responders in the United States to take notice of the risks posed by unit trains carrying Bakken crude. Regulators bestirred themselves and … promulgated regulations.
On August 2, 2013, the Federal Railroad Administration (“FRA”) issued Emergency Order No. 28, concerning securement of unattended trains; on the same day, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) issued Safety Advisory 2013-06, which included requirements for review of processes to ensure proper classification of hazardous materials being transported by rail (the shipping papers allegedly misclassified the crude that exploded in Lac-Magantic); on January 2, 2014, the PHMSA issued a Safety Alert advising first responders and others that Bakken crude “may be more flammable than traditional heavy crude oil”; and on May 7, the FRA issued Safety Advisory 2014-01, urging railroad operators to “use the railroad tank car designs with the highest level of integrity reasonably available within their fleet for shipment of [Bakken crude oil].”
Among the regulatory developments, perhaps the most important from the perspective of public safety, preparedness and environmental protection, was a May 7, 2014 Department of Transportation Emergency Order, No. 2014-0067, which required, within 30 days, all railroad carriers transporting one million gallons or more Bakken crude on a single train, to notify the Emergency Response Commission (first responders) within the state in which the trains operate: 1) the number of trains per week that pass through each county; 2) the classification of the crude on-board; 3) all emergency response information, for the hazards involved, required by DOT regulations; and 4) the routes over which the crude is transported.
Trains pass through myriad environments as they move toward their destination. As a practical matter, it is unrealistic to expect that a railroad will, at any given time and place, be capable of and prepared to respond completely and effectively to an emergency caused by derailment of a Bakken crude unit train. The intent of Emergency Order 2014-0067 is to provide state officials and local first responders with the information necessary to anticipate and immediately address potentially catastrophic events within their jurisdictions.
This Is How We Roll In Pennsylvania
Pennsylvania and Pennsylvanians are keenly interested in the amount and routes of Bakken crude rail traffic within the Commonwealth. After all, 20% of all Bakken production winds up in Philadelphia refineries.
Thus, it was surprising and disappointing to many that the Pennsylvania Emergency Management Agency (“PEMA”) refused to disclose publicly the information Norfolk Southern and CSX had provided in response to Emergency Order 2014-0067. Ostensibly, PEMA’s refusal was based on the fact that the railroads and PEMA had entered agreements to keep the information confidential, based on assertions that it comprised trade secrets and was security sensitive.
Finally, after months of appeals, the Pennsylvania Office of Open Records two weeks ago ordered disclosure of the information. Among other things, the information shows that trains hauling more than a million gallons of Bakken crude are routed one to five times weekly through 12 counties in the Commonwealth. All of the information made available by PEMA may be found at www.pema.pa.gov/Pages/Bakken-Crude-Information.aspx#.VDWlGI1dX5n.
There is continuing debate as to the question whether Bakken crude is more volatile than other North American light, sweet crudes. A summary of the status of that debate, which involves the United States and Canadian governments and the petroleum industry, may be found in an article entitled “Battle Brews Over Crude Rail Rules” that appeared in the Wall Street Journal on November 13, 2014.
(Sources for this blog note include: Hazardous Cargo: Shipping Highly Flammable Bakken Crude Oil by Rail, Earth Island Journal, Summer 2014 issue.)