There have been 10 derailments in the last year involving Bakken crude and it’s got to stop
March 4, 2014
March 4, 2014
We’ve all had those, ‘uh-oh’ moments. The thud that the now locked car door makes as you peer inside the window to see that the keys are laying right there on the front seat. Or the moment you realized that escargots are… snails! And you could have had the Tarantula tempura!
The examples become sadly humorous or, better put, ‘pathetic’ when we take a look at the rules, regulations, and decisions being made recently by government officials on energy issues.
The crude by rail, crude by pipeline Game of Charades may become a Game of Jeopardy in the truest sense of the word. Those in jeopardy are the consumers, their lives and livelihoods.
There have been 10 derailments in the last year of varying magnitudes involving Bakken crude.
It has been concluded that Bakken crude is lighter and more volatile than normal crude and that the tank cars are easily ruptured upon a derail. The reason Bakken is being shipped by rail is that there is no pipeline alternative namely, the Keystone XL Pipeline.
Tank car units consist of 100 of these tank cars.
There are no rules in place that say the railroads have to tell us what a train is carrying at what time, from where to where, and on what routes – yet 600 tanks cars a day trundle right through Minneapolis carrying Bakken crude.
Let’s all put on some Neil Young music and sleep tight!
The U.S. Department of Transportation (DOT), which falls under the guidance of Barack Obama, just said, “uh oh,” and issued a Federal Emergency Restriction Order, which orders shippers to test each load of crude before shipping it, and to classify the shipments as high risk.
Somehow that doesn’t make me feel any safer.
A train unit of 100 tank cars may come from different sources within the Bakken so the chemical makeup may not be consistent.
What is the shipper testing for? Vapour pressure, flammability, corrosiveness, flash point, boiling point, and/or gas content, or all of above.
This will be time consuming and expensive – and what will the impact be on delivery of crude to refineries? You can be guaranteed that the cost of these tests will be borne by the voting consumer; and if the plan is to retrofit all 93,000 of the susceptible DOT-111 tank cars now in service, then it will add 9% or $1/bbl to the ship-by-rail costs with no guarantee of safety.
Another “uh oh” moment came when the U.S. Energy Secretary Ernest Moniz said in a recent interview referring to Bakken crude shipments by rail that, “the infrastructure certainly isn’t there in terms of pipelines… and what we probably need is more of a pipeline infrastructure to diminish the need for rail transport over time.”
Uh-oh Mr. Moniz, good luck at your next performance review with Mr. Obama.
Speaking of the president, he may want to have a chat with his Secretary of State John Kerry before he chokes on his own “uh oh” moment.
The Enbridge Alberta Clipper is a pipeline that brings Alberta oil sands crude from Edmonton to Superior, Wisconsin, which then ends up in Mr. Obama’s home state of Illinois. This line was approved by the president and completed in 2009. Enbridge has applied to gradually increase the capacity of this in-place active pipeline from 450,000 to 800,000 bpd but the State Department has put up road blocks saying it needs an amended environmental review.
If Mr. Kerry declines the Clipper expansion on environmental grounds then why did the boss approve it in the first place?
Uh-oh! The buck stops where again?
~ The Grouch
Roger McKnight is the Chief Petroleum Analyst with En-Pro International Inc.
Roger has over 25 years experience in the oil industry, and has held senior marketing management positions responsible for national and international accounts. He is the originator of the card lock concept of marketing on-road diesel that is now the predominant purchase method of diesel in Canada. Roger's knowledge of the oil industry in North America, and pricing structures has resulted in his expertise being sought as a commentator by local, national, and international media. Roger is a regular guest on radio and television programs, and he is quoted regularly in newspapers and magazines across Canada. All posts by Roger McKnight