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Vol. 20, No. 8 Week of February 22, 2015
Providing coverage of Bakken oil and gas

More rail troubles

Two fiery crude-by-rail incidents in three days again draw attention to risks

Gary Park

For Petroleum News Bakken

Two North American derailments in three days have again put the spotlight on the dangers of using rail to haul crude oil, especially given that the Feb. 16 explosion and fire in West Virginia involved the use of newer version tank cars.

That incident occurred in a residential area 33 miles southeast of Charleston and where 26 cars of a CSX Corp. train left the tracks with as many as 19 erupting, shooting flames 100 yards into the sky.

No deaths or injuries were reported, although a mile-wide area was evacuated under a West Virginia state of emergency.

The train was carrying Bakken crude from North Dakota to a Plains All American Pipeline’s oil depot at Yorktown, Virginia.

The U.S. Department of Transportation and the Federal Railroad Administration are investigating the site.

A similar derailment occurred about 200 miles to the west on the same line in April 2014 when 15 CSX cars came off the tracks.

On Feb. 14, a Canadian National Railway train moving crude from the Alberta oil sands to Eastern Canadian markets derailed in a remote wooded area of northern Ontario. CN said 29 of 100 cars were involved and seven caught fire. No injuries were reported.

Because there is no road access to the site it will take time to determine whether the spill caused any damage to land or waterways.

New tank cars failed

The train in the latest CSX accident was pulling 109 of the new CPC-1232 cars which are rated as tougher than the DOT-111 cars which safety investigators say are prone to puncture and are being phased out.

The walls on both car types are 7/16ths of an inch thick, but new draft safety regulations being developed in Canada and the United States are expected to increase the minimum thickness to 9/16ths of an inch.

Changes coming

In the United States, government sources say the Obama administration is revising its proposal to limit the risks of oil trains from catching fire in a derailment.

The changes will reportedly give companies more time to upgrade their tank cars, but will not back down from requirements for thicker walls in the cars and better brakes.

Proposals were sent by DOT to the White House for review before they are released.

Companies that own tank cars have voiced opposition to the DOT’s aggressive schedule for modifying cars within two years, saying that would cost billions of dollars and reduce oil production.

Concerns over Bakken crude

The rapid increase in oil shipments by rail has led to a spate of derailments, culminating in mid-2013 when 47 people were killed in the Quebec town of Lac-Megantic after an unmanned train carrying Bakken crude to the Irving Oil refinery in New Brunswick derailed and exploded.

Subsequent investigations identified the volatile mix of Bakken crude as being responsible for the devastation caused at Lac-Megantic, with the Canadian government ordering “targeted” inspections to ensure that the labeling of hazardous materials matches the actual contents of a train, along with tighter safety rules.

The government has expressed its concern about the flammability of very light oil from the Bakken shale.

But, conceding that not enough is yet known about the “properties of crude” being carried on trains, the government is conducting more detailed research.



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Canadian Pacific workers end walkout

Until the two latest rail accidents involving explosions of crude oil tank cars (see story on page 1), the chief concern facing Canada’s two big railroads — CN and Canadian Pacific Railway — and the government was the prospect of system wide strikes.

But that prospect was swiftly snuffed out in the case of CP Rail, a major transporter of Bakken crude, when 3,300 engineers and conductors abruptly ended their two-day walkout on Feb. 16, opting for arbitration rather than federal legislation ordering them back to work.

Federal Labor Minister Kellie Leitch said the agreement between the Teamsters union and CP Rail “will bring an end to the work stoppage that could have seriously harmed the Canadian economy,” costing an estimated C$205 million a week in lost output.

However, labor relations experts said the government intervention will do more harm than good because research shows that approach is likely to “institutionalize” future strikes.

The government ordered an end to a nine-day strike by CP workers in 2012. Those same issues are still unresolved, including operator fatigue and minimum rest periods between shifts.

Next in line is CN which is negotiating with unions, though neither side has yet taken steps towards a strike or lockout.

Leitch said it would be “inappropriate” to speculate on what, if any, government action could be taken while CN negotiations continue.

—Gary Park