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Diane Bailey’s Blog

Dirty Crude Oil By Rail: 2013 Closed With a Boom

Diane Bailey

Posted January 3, 2014 in Environmental Justice, Health and the Environment, Moving Beyond Oil

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Casselton ND derailment dec 30 2013.jpgWhile the Federal Rail Administration asserts that 2012 was the safest year in the industry's history and that hazardous material releases have gone down over the last decade, the boom in oil shipments by rail has led to a ka-boom of fiery derailments in 2013.  The year closed out with one of the worst oil train derailments to date on December 30th just narrowly missing the town of Casselton, North Dakota and prompting an evacuation of most of the 2,300 residents (see photo to the left). Casselton Mayor Ed McConnell said that at least 100 people could have been killed if the wreck had happened in town and that is just "too close for comfort."

Oil rail shipments are at an all-time high and rapidly growing. In the wake of one of the worst oil train accidents that killed 47 people in Quebec last summer (see an in depth overview of the incident here), newly proposed federal rail safety standards attempt to improve oil train performance.  But this rule cannot be implemented fast enough to address the serious public health and safety hazard posed by these 100 tanker car and longer oil trains travelling on old tracks through dozens of small towns.  (See NRDC comments here).  One expert notes not only that Bakken shale oil from North Dakota is separating in the tanker cars with the most volatile (and flammable) portion rising to the top, making it particularly accident prone, but that this is likely also the case with Canadian tar sands diluted with chemical solvents (so called DilBits). 

The U.S. Department of Transportation finally issued a safety alert yesterday, warning that the very light gasoline-like crude oil coming from the Bakken “poses a significant fire risk.”  The federal warning is a good acknowledgment of the problem but it doesn’t address the immediate safety risk to all of the communities around rail lines currently transporting oil trains or communities with planned new oil terminals.  Right now, communities lack even basic information about what is being transported through their communities.

In California, 2013 saw no less than seven separate proposals for new “crude by rail” oil terminals that could import much dirtier or more dangerous crude oils.  At least ten other “pipeline on wheels” crude by rail projects are slated for the West Coast and many others in the rest of the U.S.  Too many of these projects are slated to be in residential areas with homes and schools nearby putting those communities directly in harm’s way.

Residents in some towns faced with dangerous new oil rail terminal proposals are fighting these projects with an inspiring mix of grassroots activism and creativity.  In Pittsburg, California, residents held a toxic tour last month to alert their neighbors and city officials to the hazards of bringing dirty crude oil into their scenic and peaceful waterfront community.  Even the Governor’s Office of Policy and Regulation weighed in recently with questions and concern over that project’s potential to import vast quantities of dirty crude oil, including tar sands.  In advance of expected action over the next few months on the major oil terminal proposal for Pittsburg, the community is also planning a march and rally on January 11th.  See a list of additional events here as that community organizes to stop the WesPac oil terminal project.

With all of the fiery oil train derailments of 2013, does it make sense to bring the dirtiest, most dangerous crude oil into our communities with volatile, flammable tanker cars by the hundreds?  Here in the Bay Area, we’re asking our air district to evaluate the full suite of potential public health and safety impacts of these projects.  We extend this request to all officials throughout the nation who are considering new oil projects.  It’s not enough to issue warnings that oil trains are dangerous – we already know that.  We need to safeguard communities from these accident-prone oil trains, and right now that means no more new oil terminals at the very least.

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Comments

AnonymousJan 6 2014 03:18 AM

Despite the well explained points in this article that are perfectly valid, we live in an imperfect world and we as humans use chemicals for everything we do. I would wager this blogger used petrochemical derived products from morning to evening this very day. If the position is to dissuade crude by rail, that means the crude would be shipped by another means. I'm assuming this author does not support crude by pipeline which leaves me with the question: how do you propose to transport crude? The world will not stop refining crude overnight which means it will continue to be transported to refineries by some means. Pipelines are dangerous too. Tractor trailer clog our highways and pollute. Shouldn't the focus be on fundamental changes to how humans live or the source of chemicals? I challenge this blogger to look for realistic, tangible solutions to our problems, be a leader, and innovate instead of listing problems that cannot be solved easily.

Michael BerndtsonJan 6 2014 01:29 PM

Anonymous,

Your argument would make sense if Oil and Gas was nationalized and petroleum and petroleum derived products were heavily subsidized. There would be a "we" as the benefactors in your scenario. Since oil and gas are private companies with richly compensated executives, the "we" as all of us end users aren't enjoying the riches equally. Oil and gas is also heavily subsidizing the commodity exchanges, which produces billionaire hedge fund managers. If we were to nationalize oil and gas, executives salaries could be cut and commodity exchanges could be shuttered.

For what it's worth, the author of this post should rethink how she applies humor in a post. In the O&G and environmental businesses there's some things one doesn't make jokes about. Health and safety is one. Transportation of combustible product is another.

Abdul MJan 6 2014 11:00 PM

Michael,

You are mistaken in your assumptions.

Oil company executive compensation doesn't amount to a hill of beans in the grand scheme of things. And speculators' profits in commodity markets are generated by the transfer of price risk from hedgers (producers and consumers) to speculators.

Abdul MJan 6 2014 11:03 PM

Diane,

With all due respect, I suggest you look inward for an explanation as to why rail accidents are increasing. Pipelines are routinely opposed, even blocked, by the radical environmental movement.

Your actions, and those of your peers, are directly responsible for the rapid increase in rail shipments.

Michael BerndtsonJan 8 2014 11:08 AM

Abdul M,

Do you work for a commodity trading house or as an extremely large family's wealth manager? We're not talking about NYSE circa 1800 or CME circa 1890 here. Commodity trading stopped being just about commodities about 100 years ago. If a $10 million base and $100 million option for O&G exec compensation is a hill of beans, than we have differing perspectives on what a hill of beans is. My assumptions are almost always perfect.

Abdul MJan 8 2014 08:23 PM

I have no clue why you are making assumptions about who I am, so I will simply ignore your question.

Your implied that executives and "billionaire" hedge fund managers are taking the bulk of the profits in the oil and gas industry. You couldn't be farther from the truth.

Also, oil and gas executives are typically not the highest paid executives. And contrary to popular belief, the pay for the top executives relative to the average employee pay has been declining since the dot com bubble burst. (There are ups and downs, but the general trend is down. See the graph in figure A at :http://www.epi.org/publication/ceo-pay-2012-extraordinarily-high/)

Not only that, but the reason pay for top executives exploded in the 1990s is because Clinton demanded (and got) regulations that drove companies to tie executive pay more and more to stock price performance. Due to the dot com bubble, that caused pay to explode. Since it's tough to then later lower someone's pay, it is now taking a long time for pay to drop back to a more normal level.

So thank Clinton for the insane levels of pay.

Now to explain what I mean about it amounting to a hill of beans: Total executive pay at ExxonMobil in 2012 was $118M (that's all executives, not just the CEO). That amounts to about 0.0026% of total earnings. That's diddly squat compared to the stock and dividend earnings realized by investors like employee pension funds and retirement accounts that hold XOM stock for average people like you and me.

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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