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Landon Hall

How should we transport oil, by pipeline or rail?

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The Obama administration on Friday issued new rules intended to make oil-by-rail safer. But environmental groups rejected the reforms, saying a methodical program to remove aging train cars from service all but guarantees further catastrophic accidents.

The Department of Transportation’s new rules would phase out the DOT-111 rail cars, still in use since the 1960s, by 2018. Newer CPC-1232 cars, which still aren’t perfect, would have to be replaced by 2020 with a new-and-improved DOT-117 model.

According to The New York Times:

All cars built under the DOT-117 standard after Oct. 1, 2015, will have a thicker nine-sixteenths-inch tank shell, a one-half-inch shield running the full height of the front and back of a tank car, thermal protection and improved pressure-relief valves and bottom outlet valves.

Last month DOT issued new standards designed to reduce speeds traveled by oil trains in residential areas.

A coalition of activist groups, including the Sierra Club and the NRDC, said Friday’s announcement didn’t go nearly far enough. Earthjustice released a statement saying:

The groups continue to call for an immediate ban on these cars, citing the federal agencies’ own projections that 15 derailments on mainlines are likely every year. DOT’s phase-out period allows the crude oil fleet to more than double before these tank cars are taken out of service, knowingly exposing communities daily to unacceptable risks.

As NRDC notes, the increase in U.S. oil production — mostly in shale-rock formations in Texas and North Dakota — has caused the oil industry to step up transport of its product by rail. In 2009, U.S. crude “filled a mere 8,000 rail tanker cars,” NRDC notes. In 2013, it filled 400,000.

A series of fiery accidents have spurred calls for increased safety: In July 2013, an oil train went out of control, crashed and exploded in the Quebec city of Lac-Megantic, killing 47 people. Earlier this year oil trains derailed in West Virginia, Illinois and Ontario.

It’s no coincidence that, when a train full of less volatile ethanol fuel derailed in North Dakota in February, the damage was much less severe.

The accidents have put the spotlight on how U.S. and Canadian-produced oil is transported around North America. Environmentalists also are strongly opposed to extending the Keystone XL pipeline through the U.S. to the Gulf of Mexico, and so far that project has been shelved as the State Department considers whether to approve it. President Obama has indicated his disapproval. But the debate hasn’t made Americans much more informed about it. The University of Texas at Austin conducted a poll and found that only 42 percent of adults were even aware of the project.

What do you think is the safest, most efficient way to move oil around?

 

 

 

Fuel Freedom Staff

U.S. allows export of some oil, loosening four-decade ban

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The U.S. Department of Commerce has relaxed, somewhat, the nation’s four-decade-long ban on oil exports, put in place after the 1973 oil crisis that caused widespread shortages around the United States.

The Obama administration’s move will allow the sale of up to 1 million barrels a day of ultra-light crude. The decision likely will please U.S. drillers and many politicians who have said the U.S. export ban is a relic of an outdated policy.

Reuters reported specifics:

The latest measures were wrapped in regulatory jargon and couched by some as a basic clarification of existing rules, but analysts said the message was unambiguous: a green light for any company willing and able to process their light condensate crude through a distillation tower, a simple piece of oilfield kit.

“In practice this long-awaited move can open up the floodgates to substantial increases in exports by end 2015,” Ed Morse, global head of commodities research at Citigroup in New York said in a research note.

Fuel Freedom Staff

BusinessWeek: Ethanol just avoided a death blow

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BusinessWeek’s Matthew Phillips reflects on the EPA’s decision to delay proposed changes to the renewable fuel standard, a revision that was expected to reduce the amount of corn-based ethanol to be blended into the nation’s gasoline supply.

Now that the new RFS standards have been put off until sometime in 2015, ethanol producers have the chance to regroup and fight another day, Phillips writes.

The ethanol industry just avoided a death blow. Rather than deciding to permanently lower the amount of renewable fuels that have to be blended into the U.S. gasoline supply, as it first proposed a year ago, the Environmental Protection Agency last week opted to wait until next year to decide. The delay (official notice here) means this year’s ethanol quotas won’t be set until 2015 and ensures they will be lower than the original mandate envisioned. That’s not great news for ethanol producers, but it gives them more time to fight and avoids an outcome that could have been far worse.

…

Ethanol industry leaders pretended to be angry at the EPA’s decision to delay on Friday: “Deciding not to decide is not a decision,” Bob Dinneen, chief executive of the Renewable Fuels Association, said in a written statement. But the reality is that they’re relieved the White House didn’t choose a more aggressive plan pushed by refining and oil companies.