[Tanada]

$this->bbcode_second_pass_quote('ROCKMAN', 'H')eard an very interesting update on NPR this morning. And not from some would-be expert but an official spokesman for the MM&A railroad.

First, about the regs requiring conductors/engineers to been on the train for a limited period of time: from now on no MM&A train will be left unmanned while it is parked. Thus apparently cost is no longer a factor in this aspect of their protocol. Second, there were mechanical hand breaks the engineer was required to set AS PER COMPANY POLICY. These hand breaks would have prevented it from rolling. Thus no chocks required. The engineer simple failed to follow proper company safety regs.

Sorta like the BP blow out: can't wait to see what testimonies actually come out in the various court actions...both criminal and civil.

[Graeme]

Lawsuit over Lac-Megantic, Que., train derailment names more defendants

$this->bbcode_second_pass_quote('', 'A') motion to file a class-action lawsuit over the deadly train derailment in Lac-Megantic, Que., has been amended to include more defendants, including the New Brunswick refinery where the oil aboard the train was destined to go.

A team of lawyers leading the lawsuit said in a news release Thursday that the motion has been changed to include Irving Oil, which runs the refinery in Saint John, N.B., World Fuel Services and its subsidiary, Dakota Plains Holdings.
The train was carrying crude oil sold by Dakota Plains Holdings at the time of the July 6 derailment.

The lawyers allege that the newly named defendants failed to ensure the highly flammable contents in the tankers were properly contained and safely transported.

A spokeswoman for Irving Oil said the company sent personnel to the crash site and provided firefighting foam within hours of the disaster.
"We did not own or control the crude oil or its transportation at any time," Carolyn Van der Veen said in an email.

[ROCKMAN]

Graeme - That's pretty much SOP with oil patch accidents: everyone and their dog gets sued. Not sure how Canadians handle it but down here if the plaintiff wins the key factor is what percent of the liability is assessed to each defendant. Company A might get hit for 2% and Company B may have to pay 95% of the judgment

[pasttense]

Insufficient brake force blamed in Canada crash
Insufficient brake force was applied before an oil train came barreling out of nowhere in the middle of the night and slammed into a small town in Quebec, killing 47 people, officials said Friday.

Donald Ross, chief investigator for the Transportation Safety Board of Canada, said the insufficient brake force could have been due to mechanical problems with the handbrakes, or a problem with the way someone applied them.

"The train got out of control because it wasn't fully immobilized," said Transportation Safety Board investigator Ed Belkaloul. "The number of brakes (applied) is important, but the quality of the braking is also important."
http://news.yahoo.com/insufficient-brak ... 54486.html

[Graeme]

Will the Canadian Train Disaster Kill Oil by Rail?

$this->bbcode_second_pass_quote('', 'T')he recent derailment of the Montreal, Maine, and Atlantic Railway train in Lac Megantic, Quebec, caused irrevocable damage on a small town just 10 miles from the U.S.-Canada border. The primary cargo of that train, crude from the Bakken region, has led to many questions regarding the practice of moving oil by rail. A recent report from Moody's says this accident could lead to several new restrictions that could drastically hurt rail shipments. This probably isn't a revelation, but let'slook at where the oil-by-rail story started and who will see the worst effects of a slowdown.


What several oil companies realized, though, is that moving oil by rail did one thing that pipelines could not: reach the East Coast and West Coast markets. Less than six months ago, the price spread between Bakken crude and imported Brent crude -- the primary source for East Coast refiners -- was over $20. So despite the premium to move by rail versus by pipeline, it was still well worth it for the refineries. Refiners and producers from the Bakken region have thus begun to move massive amounts of oil by rail. Continental Resources , the largest producer of crude from the Bakken, now transports about 80% of all its crude by rail, and Phillips 66 signed on to a five-year contract to receive 50,000 barrels per day of Bakken crude that will get there mostly by rail.


No explanation or investigation into this recent accident will do justice to the tragedy that struck this small town, but this could be a monumental moment for the entire North American oil industry. If we were to see any regulations that alter the viability of oil by rail, it could fundamentally alter the prospects of North American energy production and the profitability of many companies.

[Graeme]

Oil On The Tracks: The Crude-by-Rail Boom By the Numbers

$this->bbcode_second_pass_quote('', 'T')he Bakken Oil Express is just one piece of a rapidly expanding network of North American oil tanker trains, but it's a particularly symbolic one, quickly brought online to handle the spiking production of North Dakota sweet crude.

According to the Association of American Railroads (PDF), "In 2008, U.S. Class I railroads originated just 9,500 carloads of crude oil. In 2012, they originated nearly 234,000 carloads. Based on the more than 97,000 rail carloads of crude oil in the first quarter of this year, another big jump is expected in 2013."

That’s nearly a 2400-percent increase in five short years, and the upward trend looks to be growing even faster in 2013.

What's driving this staggering increase in rail shipments? Look no further than the enormous increase in domestic crude production, which spiked by nearly 1 million barrels-per-day in 2012. Most of this increase has come from the Bakken shale plays that have been rapidly developed under the Obama administration. And not coincidentally, North Dakota, ground zero of the Bakken boom, is the epicenter of the crude-by-rail phenomenon.

What about the pipelines? Yes, there are a couple of pipelines -- owned by Enbridge and Kinder Morgan -- that cross through the Bakken region, but as I wrote in that earlier post, those are maxed out. They've been operating at capacity for over five years now. Rather than sit on the oil and wait, the economists in the oil companies are happily tacking on the premium for rail shipment (in the neighborhood of $10-15-per-barrel) to get this bounty of crude to refineries on the East, West, and Gulf Coasts.

Here's how the EIA describes the basic economics:

[pasttense]

"Canadian transportation authorities banned one-man crews for trains with dangerous goods Tuesday, responding to calls for tougher regulations after an oil train derailment in Quebec killed 47 people.

Transport Canada also said trains with dangerous goods will not be allowed to be left unattended on a main track. Hand brakes must be applied to trains left one hour or more."
http://www.usatoday.com/story/news/worl ... s/2580585/

[Keith_McClary]

http://www.huffingtonpost.ca/jeffrey-ru ... 52800.html

Jeff Rubin on tar & trains.

[Tanada]

$this->bbcode_second_pass_quote('Keith_McClary', 'h')ttp://www.huffingtonpost.ca/jeffrey-rubin/bitumen-bubble-oil_b_3652800.html

Jeff Rubin on tar & trains.

[ROCKMAN]

I see some major inaccuracies in his article.

“By some measures, the environmental movement's opposition to the Keystone XL pipeline project has produced a win for a green agenda. Environmentalists, at minimum, have delayed Keystone from being built.” Nothing has been delayed. The construction of the KXL P/L hasn’t been delayed. It’s been under construction for some time and will be completed on schedule. What hasn’t started construction yet is that very short segment that crosses the US/Canadian border due to the lack of a fed permit. But even if that permit were granted tomorrow there’s no rush to build that section until the rest of the system is operational. And if the permit is never granted? The oil would be moved across the border via rail and truck (as is being down now), loaded into the completed KXL P/L and shipped to OK and the eastern terminus of the line.

”Ultimately, they may still manage to scuttle the project entirely. As the oil industry knows all too well, a lack of adequate pipeline infrastructure means oil from Alberta and the Bakken has piled up in the storage tanks in Cushing, Oklahoma, where West Texas Intermediate crude is priced.” Very confusing and contradictory to other points made. The choke point at Cushing has nothing to do with the KXL P/L. In fact, once completed the KXL P/L would only worsen the situation. The lack of adequate p/l infrastructure has been from Cushing to Gulf Coast refineries. That situation has been alleviated to a degree for over a year by the reversal of the Seaway P/L. From: http://www.marketwatch.com/story/revers ... 2011-12-07

“Reversing the flow of the Seaway pipeline is significant to the oil industry because it is seen unlocking value of the U.S. oil benchmark, West Texas Intermediate crude, or WTI. Prices have been depressed for months as a WTI glut has developed in landlocked Cushing, Okla., the delivery point for the WTI futures contract traded on the New York Mercantile Exchange. The lack of transportation infrastructure to move WTI crude out of Cushing has kept the crude undervalued against world market prices. Having the Seaway pipeline flow from Oklahoma to Texas will move WTI crude to the U.S. Gulf Coast's refining complexes.”

And the OK to Texas transport system will be expanded by more than 600,000 bopd in the next two years with construction of new lines along the same right of way. Recently President Obama publicly stated that this expansion was critical for the US economy and he would have his administration do what it can to expedite the matter.

“In one moment an environmental victory in Nebraska is protecting a critical underground aquifer from an incursion by a massive pipeline project. In the next instant, as I explain in my latest book, that apparent success is unloading that same risk on British Columbia's pristine Great Bear Rainforest.” No…it hasn’t. The risk has been moved to the new route in other states that have already approved the line. The new route will also allow picking up Bakken production and moving it to the Gulf Coast more efficiently. Such statements are very difficult to understand since all one has to do is pull up a couple of website on the KXL P/L and Sea Gate and the picture is very clear…very obvious.

In the meantime this almost maniacal focus on the KXL P/L apparently keeps folks from seeing the news of the Enbridge plan to increase delivery of oil sands production to the US by up to 800,000 bopd through an existing pipeline that already crosses the US border in Wisconsin.

Enbridge Inc. is seeking U.S. approval to pump more crude through an Alberta-to-Wisconsin pipeline — a process the company expects will be easier than the one TransCanada Corp. is facing with its Keystone XL pipeline. From Enbridge CEO Al Monaco: "We're talking about a relatively limited amount of work here from an environmental point of view and from an equipment point of view."

Enbridge won't be laying down any new pipe to boost the Alberta Clipper pipeline's capacity from 450,000 barrels per day to 800,000 barrels per day by 2015. Rather, capacity will be expanded by adding new pumping equipment to the existing line in two phases.

The border cross section was approved by the govt years ago and has already been put into operation. The key to getting those 800,000 bopd to Texas will be the construction of a new p/l from Illinois to Cushing, OK. That line has already been approved by the states and requires no fed permit.

I find it truly bizarre all the folks who keep trying to spin that the oil sands production and export to the US has somehow been hampered by the president not signing the border crossing permit of the KXL P/L. In the meantime Canadian exports, primarily from the oil sands, will reach all-time record levels in 2013...without the permit approved. It’s almost as if the “environmentalists” and there so called supporters are intentionally providing cover for the folks who are expanding the development of those reserves. Who, other than one Texas geologist, have you seen point out the dynamics of the expanding import of Canadian oil to the US? Most of the headlines give the impression that the process has been injured if not killed. Truly bizarre.

And the oil sands expansion hurts that same geologist financially and he would benefit greatly if not one bbl of Canadian oil ever made it across the border. Even more bizarro.

[Graeme]

Lac-Megantic train blast: Canada revokes rail firm licence

$this->bbcode_second_pass_quote('', 'C')anada has suspended the operating licence of the rail firm involved in last month's Quebec fuel train disaster, officials say.

The Canadian Transportation Agency (CTA) says the company did not have enough third-party liability insurance.

The CTA's order covers both Montreal, Maine and Atlantic Railway (MMA) and its Canadian subsidiary.

Forty-seven people were killed in Lac-Megantic after a train carrying crude oil derailed and exploded in the town.

The licence suspension becomes effective on 20 August.

The CTA said MMA did not have adequate third-party liability insurance, one of the requirements to operate Canada.

"This was not a decision made lightly, as it affects the economies of communities along the railway, employees of MMA and MMAC, as well as the shippers who depend on rail services," Geoff Hare, CTA chairman and CEO, said in a statement.

"It would not be prudent, given the risks associated with rail operations, to permit MMA and MMAC to continue to operate without adequate insurance coverage."

Bankruptcy
MMA filed for bankruptcy protection in Canada and the United States last week in the wake of the 6 July derailment.

[pasttense]

"Tests conducted by an environmental group suggest last month’s Lac-Mégantic, Que., train disaster had a devastating impact on water quality and soil in the affected area.

Extremely high concentrations of carcinogenic polycyclic aromatic hydrocarbons and arsenic, detected in surface water, have “confirmed the fears” of the Société pour vaincre la pollution, the group said.
The analysis, which was obtained by The Canadian Press, suggests the rate of carcinogenic polycyclic aromatic hydrocarbons is 394,444 times the standard acceptable for surface waters mandated by the provincial government.

As well, the concentration of arsenic detected on the water’s surface is said to exceed the government’s acceptable standard by 28 times. There was also “an extremely high level of petroleum hydrocarbons following the explosive derailment and oil spill,” the environmental group said."
http://www.theglobeandmail.com/news/nat ... e13749318/

[ROCKMAN]

The Bakken Blitz

From: http://www.downstreamtoday.com/news/art ... a_id=40525

Federal inspection teams have been conducting spot safety checks of rail shipments of crude oil from the booming Bakken oil region in Great Plains states in response to last month's rail disaster in Canada.

The official name of the inspections is "Operation Classification," although Cynthia Quarterman, head of the Pipeline and Hazardous Materials Safety Administration, said she prefers to call them the "Bakken Blitz." They are being carried out jointly with the Federal Railroad Administration and began last weekend, although they weren't publicly disclosed until Thursday.