Posted on 07/10/2013 10:47:48 AM PDT by thackney
As the smoke clears (literally) in Lac-Megantic, Quebec, after a runaway train packed with crude oil tankers crashed July 6, the oil industry is coming to terms with a business that has perhaps grown too far too fast. The Lac-Megantic accident is shining an unwelcome spotlight on the lack of regulatory oversight on oil by rail in both the US and Canada. The fact that the rail cars (belonging to the Maine, Montreal & Atlantic rail company) that crashed and exploded were considered unfit to carry hazardous materials sharpens that focus.
Getting landlocked crude out of newer fields in North Dakota, Canada and other far flung parts of North America has become an obsession with producers, traders and refiners, the latter group looking lustfully at the cheaper feedstock.
The oil rush has changed the face of rail in North America. In a country where passenger and cargo-bearing rail was largely replaced by the car and large 18-wheel trucks half a century ago, the speed with which new railroad lines, railcars and loading facilities are being built is simply astonishing.
Today around one million barrels per day of crude oil is moved via rail across the US and Canada. To put that into perspective, it equates to more than the total daily output of the UK North Sea, which fell below 1.0m b/d last year. Or to roughly four VLCC’s worth of crude oil every week. In other words, it is a lot of oil.
And this is set to grow. In the US alone, crude by rail shipments are expected to reach to near 1.10 million b/d at the end of 2014, up from about 718,000 b/d this month and about 156,000 b/d in January of 2012, according to Bentek Energy, a unit of Platts.
The Railway Association of Canada estimated that as many as 140,000 carloads of crude, totaling about 91 million barrels, will be shipped on Canadian tracks this year, compared with 500 carloads, or about 325,000 barrels, in 2009.
But the headlong dive into crude by rail may have just been stopped short by the Lac-Megantic incident. And, just as the Exxon Valdez oil spill in Alaska in 1989 spelled the end of single-hull oil tankers coming to the US (and banned them worldwide in 2010), the Lac-Megantic crash would spell the end of using DOT-111A railcars. And it could herald a new rash of regulation for the rail industry.
A US National Transportation Safety Board study in 2012 said that 69% of tank cars are DOT-111A. In Canada, these are known as CTX-111A, and comprise 80% of the fleet, according to Canada Transportation Safety Board’s chief investigator Donald Ross.
Ross said that changes as a result of the MM&A investigation could include thicker steel or shields for the tank cars. The American NTSB had already changed the specifications of DOT-111 from October 2011 to include thicker shells and a ½ inch thick head shield. But there is no rule on retrofitting existing cars, which have a long service life.
Like the single-hull tanker post-Exxon Valdez, DOT-111As could be the next casualty of the oil rush in North America.
But there are other issues raising their ugly heads, including the state of some of the railroad tracks around both countries. While the oil industry is spending billions on railcars and loading/unloading facilities, who is spending the money to maintain and upgrade the railroads?
As Avrom Shtern, a rail-transport policy representative with Montreal-based Green Coalition, said in Platts Oilgram News July 9, Canadian government’s budget cuts have left the rail industry to police itself. “That’s unacceptable. You can’t just write rules and expect the railways to police themselves,” he said.
Also, questions are rife over the capital adequacy of smaller gathering and distribution companies such as World Fuel, which owned the oil on board the MM&A train. Will they have the financial stability to survive a lawsuit?
The crash was only a few days ago, so most of these questions will be answered over time. Crude by rail has come a long way in a short time. But the Quebec accident could slow the pace and the way in which the industry grows going forward, in both Canada and the US.
Corporate terrorism?
I never really thought about moving crude from land locked areas. The refinery where I work produces mostly jet fuel, and has pipelines to both STL and Ohare. The rest of the product (lubricants and coke, mostly)is moved by truck or barge, as we are right on the river..
No it won’t. Only people were killed, not birds and seals.
We need to put windmills and solar panels on trains.
That way we can move them when necessary to the best places for wind and sun.
The trains themselves will be run completely on the positive vibes of good intentions.
I doubt that that is true.
Surprisingly, they’re not calling it Øbama’s exxon-valdez and all the drama it has caused to him, blah blah, blah, ‘we must act before its too late’, blah blah blah
yet
That's on the order of 4 trains/day starting their journey.
Ban tanker trains? The solution is in the pipe...
So, how did the “Greens” manage to sabotage the train?
Montreal, Maine & Atlantic Railway (MMA)
July 6, 2013 Derailment in Lac-Mégantic, Quebec (Update)
http://www.mmarail.com/sections/news/files/MMA_7.7.2013_Press%20Release_1415.EST.pdf
: Sunday, July 7, 2013: 1615 EST
Montreal, Maine & Atlantic Railway wishes to provide updated information on yesterday’s tragic train accident at Lac-Mégantic, Quebec. We are advised the fires are largely extinguished, and it appears the fire brigade will finish that part of their task shortly. Provincial and Federal authorities have taken control of the derailment area, and MMA personnel have not been able to enter to continue their investigation concerning cause and to plan recovery operations.
There are a dozen MMA representatives on hand in Lac-Mégantic, with more arriving continuously. Many have been there since yesterday afternoon, in spite of statements that MMA people have not been available. MMA has established a command center in the Municipal Building. On hand also is Yves Bourdon, MMA board member, who will be the “voice of the MMA” in dealing with municipal, provincial and Federal officials, emergency personnel, relief organizations and affected individuals and property owners. Also on hand is Robert Grindrod, MMA’s President and CEO.
More at:
http://www.mmarail.com/mma_news.php
By convincing the train company to put a oil train on a grade with no one in attendance and not set sufficient hand brakes to hold it in place?
They are busy creating what environmentalists love, a “you can’t get there from here” situation. Apparently, the lack of a fail safe breaking system is the core problem here. That’s a quite solvable problem. No, the bureaucrats will mandate an immediate replacement of 60+% of the tankers and massive rail upgrades. All horribly expensive which is right down Obama’s alley.
Now ten dollar a gallon gas is within our reach.
Nahh. The trains are self-powered by their own windmills.
I read that tanker railcars are leasing at $3,000/mo these days. All the more reason to keep them moving 24/7 rather than parking them at the "top of a hill" overnight.
Ed Burkhardt, the chairman of Maine, Montreal and Atlantic Railways...
Burkhardt arrived Wednesday morning in Lac Megantic, a Quebec town decimated after a runaway MMA train hurtled into downtown early Saturday morning, derailed and exploded. Burkhardt announced that Tom Harding, the engineer who left the train, has been suspended and will likely not work for the company again.
“I have never been involved in anything remotely approaching this in my whole life,” he said, as angry residents heckled from behind the media scrum on a Lac Megantic street.
Burkhardt said it now appears that Harding didn’t properly set the handbrakes on the rail cars.
“He’s not being paid, I don’t think he’ll be back working for us,” said Burkhardt.
Thanks, I had not seen that but found it with your lead.
I don’t think that will change the responsibility, unless the inadequate DOT-111 tank cars were claimed to be something stronger.
Criminal probe launched into Quebec rail disaster
http://www.upstreamonline.com/live/article1331824.ece
09 July 2013
MMA said it does not own the rail cars involved in the latest accident. Chairman Ed Burkhardt said the cars were leased by the same company that was shipping the crude, but he declined to identify it, Reuters reported.
World Fuel Services has confirmed it was shipping the crude, but did not respond to Reuters questions about the cars.
Interesting they haven’t taken this page down yet.
Risk Management
https://www.wfscorp.com/Risk_Management/index.jsp
In today’s global economy, risk and price volatility are urgent concerns of both customers and suppliers. The dedicated team of risk management experts at World Fuel Services provides solutions.
Uniquely positioned by our global presence, singular focus, and organizational expertise, our team designs comprehensive, creative and effective risk management programs customized to client needs.
(www.wfscorp.com => World Fuel Services Corporation)
Wouldn’t the MSM have at least mention the derailment, before it became a factor in the discussion?
oh....maybe even show the 10 min. video once?????
perhaps a 30 second excerpt????
I wouldn’t know. I quit getting news from such sources a long time ago.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.