Pinning the Blame on Crude in Trains
Another train derailment and explosion, this time in West Virginia, is an unexpected reminder that although low oil prices might have taken the wind out of the shale boom’s sails, safety and security concerns linger. The accident comes as the White House is currently reviewing strengthened crude-by-rail safety standards, which the Department of Transportation is expected to finalize by May 12. The initial explosion was powerful enough to blow open doors to homes hundreds of feet away. Out of the train’s 109 tank cars, approximately 25 derailed, containing up to 30,000 gallons of oil. The fire, eventually brought under control, was expected to slowly burn out over the week. The incident was the latest in a spate of crude train derailments across the United States and Canada in recent years, and occurred on the same rail line as an accident in Lynchburg, Virginia, last year—the one which preceded the Obama administration’s decision to consider requiring upgrades to the nation’s fleet of tank cars. Both trains were full of crude from the Bakken formation bound for Yorktown, Virginia. The numerous derailments in recent years have called into question the ability of DOT-111 rail cars currently hauling the majority of oil rail shipments to safely transport volatile oil streams. Various independent examinations have found that Bakken crude has a higher combustion risk than other crude streams, with a vapor pressure almost double that of crude oil streams from Iraq, Saudi Arabia, and the Gulf of Mexico. Pending rules would require Bakken crude oil to be treated to filter out the gasses and other components understood to contribute to this high flammability—but it is not known if the crude oil in the train that recently exploded was treated. However, although treatment of Bakken crude could improve safety of crude-by-rail movements, it’s widely understood that improving the safety features of the crude oil trains themselves is a critical component of preventing future incidents. Unfortunately, phasing out the cars will be no small feat. DOT-111s currently make up 70 percent of the rail tank cars in the United States, and both the oil and railcar industries are concerned about their ability to comply with the pending rules, which would force any DOT-111 constructed before 2011 to be phased out by 2017. At the same time, safety advocates are concerned that the pending rules may not suffice. DOT-111s were redesigned in 2011 with improved safety features—the current industry-standard car, the CPC-1232, came into usage in October 2011. These cars have half inch thick shells (marginally thicker than the DOT-111 7/16 inch shells) and advanced valves that are more resilient in the event of an accident. However, these newer cars were involved in the derailments and explosions in Virginia and West Virginia within the past year, raising questions about the validity of replacing only the DOT-111s manufactured before 2011. At present, industry and regulators are jockeying over whether the post-2011 design should become the new standard for the fleet, or if requirements should be strengthened further, requiring replacement of the entire fleet, including cars constructed since 2011. However, the less stringent option currently under consideration, which involves phasing out all cars constructed pre-2011 by approximately 2017, is experiencing pushback from the oil and rail industries, which argue that tank car manufacturers would be unable to complete this number of cars in such a timeframe. Crude shipments by rail have increased 400 percent since 2005, sometimes creating delays that push staple agricultural goods off the tracks. Without serious logistical improvements, congestion is only likely to get worse, as the U.S. Energy Information Administration (EIA) predicts U.S. crude production will continue to climb for at least the next two years, from 8.63 million barrels per day in 2014 to 9.52 mbd in 2016.
Iran Deal Spurs Regional Rivalries
May 12, 2015
May 12, 2015