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Washington Considering New Safety Rules as Crude-By-Rail Traffic Spikes

The issue of oil train safety in Washington state will have another turn in the public spotlight Thursday night in Olympia, when the public is invited to weigh in on recommendations that the state ramp up spending to respond to a potential oil train derailment.

A study released earlier this month calls for the Legislature to authorize $13.4 million in new spending for the Department of Ecology and the Utilities and Transportation Commission to expand risk assessments and planning efforts, purchase oil-spill containment equipment, conduct more inspections of crude oil-carrying rail cars, and other steps.

The study’s findings will be discussed Thursday night, from 5 to 10 p.m., at the Red Lion Inn, 2300 Evergreen Park Dr. in Olympia.

The report comes as crude-by-rail shipments in Washington are increasing dramatically, from barely any three years ago to 714 million gallons last year, according to the report. It will come close to 3 billion gallons by the end of this year or in 2015, according to projections. It could increase even more, to 17 billion gallons annually by 2035, according to the study.

Yet, the total amount of crude oil imported into Washington has remained flat over the last decade, at about 8.5 billion gallons annually, according to the study. Crude-by-rail shipments or oil transported via pipelines has supplanted drop offs in the amount imported by tankers from Alaska.

Ten years ago, the state’s five oil refineries took 91 percent of the oil imported by tankers; now 67 percent come in that way. Pipelines account for a little less than a quarter of oil shipments, and rail makes up the rest, with 8.4 percent of the total.

That reflects broader shifts in the U.S. energy economy, with major oil production now focused in North Dakota on the Bakken shale, and north of there in the oil sands in Alberta, Canada. Shipments of North Dakota crude oil have jumped from 3.4 million gallons every day to 37.8 million gallons daily over the last 10 years, according to the study.

Extraction of crude oil in Alberta has doubled over the last decade to 73.5 million gallons daily. Nationally, that’s led to a huge jump in the amount transported by railway – going from 9,500 railcar-loads six years ago to 415,000 carloads last year, according to the study.

Existing pipelines in that region can’t handle the new loads, so railways have stepped in to fill the gap, the Association of American Railways said in a report last month.

Washington state, with oil refineries and the necessary rail lines already built, stands to reap economic benefits from this increase in oil production, with two new terminal projects planned in Clark County at the Port of Vancouver, on the Columbia River, and in Grays Harbors County.

Those terminals would allow more crude oil to be shipped to West Coast refineries, particularly in California, while six other facilities in the Puget Sound region or on the Olympic Peninsula have changes planned or already under construction, according to the study.

The Vancouver and Grays Harbor projects are currently under environmental review, which will continue into 2015. Proponents behind the Vancouver project, which is spearheaded by Tesoro and Savage Cos., say it would generate $2 billion in economic benefit, create more than 1,000 jobs and $22 million in tax revenue, with a capacity of 360,000 barrels daily bound for U.S. refineries. Building trades unions in Clark County and regionally recently added their endorsement to the project.

“Are we going to take advantage of this and continue our position as a world trade leader?” asked Kathryn Stenger, a spokeswoman for the Alliance for Northwest Jobs & Exports, a consortium of energy companies, building trades councils and business interests. “Or are we going to over-regulate and have Canada take our business from us?”

Stenger and other proponents of these projects have pointed to the fact that the state and local governments could keep the terminal projects from being constructed, but likely would be unable to stop the shipments from heading north to British Columbia because of the federal government’s authority to regulate railways under the interstate commerce clause.

“Clearly they’re happy to take the business,” Stenger said.

She said the ports in Vancouver and northwest of Bellingham, where a proposed coal-export facility is proposed, have deep enough water to make them ideal for large cargo ships. Other commodities such as grain or other agricultural products from eastern Washington and Idaho move out of the state via barges on the Columbia River with none of the scrutiny that’s been put on coal and oil shipments, she said.

“If we were talking about any other commodity we would not be talking about this (level of environmental review),” Stenger said. “It will be a long-term positive outlook for jobs and the tax revenue for the state of Washington.”

Environmental groups and others concerned about the safety of oil trains are quick to add a rebuttal, saying shipments of wheat aren’t in any danger of exploding, or causing widespread environmental damage if they derail and spill. Oil trains are. While Washington has never had such a calamity strike within its borders, it’s been a growing problem at the national and international level.

An oil train spilled more than 800,000 gallons of oil in Michigan in 2013, and a train in Quebec, Canada, derailed and exploded, killing 47 people, that same year.

Gov. Jay Inslee has called on the federal government to slow the trains’ speeds, while also using safer designs for the railcars transporting the crude oil shipments.

“The transportation of hazardous materials, like Bakken crude, poses a significant risk to public safety, the environment and areas of significant cultural heritage,” Inslee wrote in a letter last month to U.S. Transportation Secretary Anthony Foxx. “These risks are especially prevalent in Washington where we have seen an exponential increase in the transportation of crude oil by rail.”

In the letter, Inslee emphasized the need to get older model rail cars called T-111s off the tracks, and the U.S. Department of Transportation has proposed retiring that model entirely by the end of 2017, in addition to slowing them down and instituting better braking. The rail industry says it needs more time than that to upgrade its infrastructure, and replacing tens of thousands of the older tanks as well as making other improvements could cost $3 billion, according to the industry.

The Association of American Railroads said the industry is taking on new safety reviews, training emergency responders, and are voluntarily updating their operating procedures including routes, speeds and inspecting equipment. The association also calls for doing safety retrofits to the older models, and phasing them out entirely if they can’t be retrofitted.

“In light of the increased volumes, railroads have taken numerous steps to enhance crude oil safety,” the Association said in last month’s report. “Additional pipelines will be built in the years ahead, but the competitive advantages railroads offer will keep them in the crude oil transportation market long into the future.

Some states such as California have gone a step further, as its Legislature has passed new regulations requiring rail companies to develop plans preventing spills from happening, and responding to ones that do occur. The rules also forces the rail companies to pay a 6.5 cent fee on each barrel of crude that’s shipped within the state, which then pays for the prevention and emergency response preparation efforts.

Rail companies in California have sued to block implementation of the new laws, arguing they’re pre-empted by federal authority over interstate commerce. In Washington, the study’s recommendations hew closely to the California program.

Stenger said her group acknowledges the need to improve the railway infrastructure within Washington state.

“The rail industry is going to increase dramatically,” Stenger said. “There’s money to invest in infrastructure improvements.”


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