State increases regulation of crude oil transportation

New York regulators have found 740 track and rail equipment defects, including 12 hazardous material violations, in increased inspections of the crude oil rail transportation industry in the state dating back to April.

A status report filed jointly by several state agencies Dec. 1 said the state Department of Transportation and other agencies have implemented a number of recommendations from a multiagency report in April that came after several high-profile crude oil train accidents in the U.S. and other countries.

Since then, the DOT has worked with the Federal Railroad Administration to inspect 6,664 rail cars, including 4,656 DOT-111 cars, one of the most commonly used tanker cars that many activists say should be phased out or at least brought up to modern safety standards.

Gov. Andrew Cuomo, a Democrat, charged state agencies with increasing inspections and evaluating New York”™s readiness in the event of a derailment. In April, on the day of a derailment in Lynchburg, Va., the governor wrote a letter to President Barack Obama to tighten regulations as petroleum production increases and the amount of crude oil shipped through the country booms.

“Over the past six months, our administration has taken swift and decisive action to increase the state”™s preparedness and better protect New Yorkers from the possibility of a crude oil disaster,” Cuomo said. “Now it is time for our federal partners to do the same. The federal government plays a vital role in regulating this industry, and Washington must step up in order to expedite the implementation of safer policies and rules for crude oil transport.”

U.S. crude oil production has skyrocketed in the last decade, due in part to the growth of hydraulic fracturing ”“ a method of mining gas deposits in underground rock formations. The Bakken Shale formation, which is underneath Montana, North Dakota and parts of Canada, is the source of large amounts of the crude. Activists say Bakken crude is more volatile than other oil forms, though industry advocates, including the 600-member American Petroleum Institute, say studies have been inconclusive.

Bakken crude is transported from mining facilities to refineries across the country. There is little pipeline infrastructure, according to the New York status report, so rail transportation is a leading method for moving the crude. Shipments have grown from 9,500 carloads in 2008 to 407,642 carloads in 2013, the report said, an increase of more than 4,000 percent. As many as 45 trains with crude travel through the Hudson Valley region each week. Crude oil trains move through 22 communities across the state, the report said, and as much as 1,000 miles of New York”™s 4,100-mile rail network is used by oil producers.

Cuomo”™s office said that out of 12 state recommendations, New York has undertaken five and begun implementing the remainder; a total 66 actions to increase inspections and improve safety have been undertaken, the office said. But the state is “disappointed with crude oil producers”™ unwillingness to invest in critical equipment that would reduce the volatility of Bakken crude.”

New York lobbied North Dakota, the main producer of Bakken crude, to require a gas-separation process to remove dissolved gas at the point of origin, before it is to be shipped. The North Dakota Industrial Commission proposed draft regulations to that effect Nov. 13.

Global Partners, which operates a terminal at the Port of Albany, has voluntarily phased out a majority of its old DOT-111 tankers, the state report said. The state agencies said, however, that the federal government needs to take more direct action to set higher safety standards for all tankers.

Charles Schumer, New York’s senior U.S. senator, called DOT-111s “ticking time bombs” and said he had been pushing federal regulators for stricter oversight since a July 2013 derailment and subsequent explosion in Lac-Mégantic in Canada”™s Quebec province that killed more than 45 people.

“As a result of our efforts, the federal Department of Transportation has put a proposal on the table that could start taking these cars off the tracks within two years, as well as restrict the speeds at which these trains operate,” Schumer said. “I am pushing DOT to commit to the strongest of these regulations as soon as possible. We can”™t afford any delay.”

The U.S. DOT proposed a package of new rules in July that would increase standards, including stricter requirements for braking controls and speed limits. Environmental groups, including Riverkeeper, have said those regulations do not go far enough to ensure safety or to prevent future derailments because they phase out DOT-111s rather than prohibit them. Also, proposed speed restrictions of 40 mph would not have prevented the Lynchburg derailment, where reports said the 105-car load, mostly DOT-111s, was traveling at only 25 mph.