Oil-by-Rail Issue Proving Volatile – But No One Seems to Know What the Legislature Can Do

By Erik Smith, January 23, 2014, Washington State Wire

Fast-rising shipments of mid-continent crude oil to northwestern ports are beginning to simmer as the next big environmental issue — dare we call it explosive? But as far as the Washington Legislature is concerned, it’s going to be a little hard getting this one to the ignition point. You might call it an issue in search of a bill.


Washington environmental groups are drawing a connection between last summer’s tank-train disaster in Quebec that killed 47 and a growing number of proposals for oil-by-rail shipping terminals along the Columbia and the Washington coast. Already the state’s environmental groups are sending out their call-to-action letters, and it seems clear that oil-by-rail will be the next big rallying cry. “Washington’s waters are at risk,” declares an email issued by the state’s Environmental Priorities Coalition on Jan. 2. “Tell your legislators that you are worried about this threat to our state.”


But here’s the funny part. The big oil-by-rail bill of the session has finally gotten its debut in the state House, and it turns out not really to be an oil-by-rail bill at all. It’s about shipping — or rather about oil-tanker regulation, an issue Washington lawmakers debated time and again from the ’70s until the early ’90s, until they finally laid it to rest by launching one of the most stringent tanker-shipping regulation programs anywhere. Even environmental groups call the state program robust. The problem appears to be that there really isn’t much the state can do about rail safety — that’s a federal matter — but it can do something about shipping. Just shows what a problem it can be, taking an issue tailor-made for political argument and turning it into legislation.


Legislation Looks for Target


House Bill 2347, which got its first hearing in the House Environment Committee Wednesday, is one of the top concerns this year for the Environmental Priorities Coalition, the umbrella organization of 24 environmental groups that keeps the green community marching in the same direction. Yet for all the hair-raising testimony about potential dangers and hazards, about tank trains that might turn cities into fireballs and reduce Main Street to cinders, the bill only actually makes two modest changes to crude-oil transportation practices. Neither have anything to do with rail safety.


The bill would require large tankers to be guided by two tugboats in Puget Sound waterways, rather than just one, as required at present, and it would allow the state to collect triple damages when waterborne oil spills occur due to recklessness. It also would require shippers to make information available to local-government authorities about the crude oil they send by rail, and it would launch a study.


‘Tell your legislators!’: Call-to-action letter from Environmental Priorities Coalition appears to link Midwestern derailments to the “safety of our waterways.”

‘Tell your legislators!’: Call-to-action letter from Environmental Priorities Coalition appears to link Midwestern derailments to the “safety of our waterways.”

It is hardly the kind of proposal over which demonstrations are staged and fund-raising efforts are launched, and it is difficult to see how the Democrat-controlled House and the largely-Republican-dominated Senate will be able to turn the matter into a major argument. In the upper chamber, Energy chairman Doug Ericksen, R-Ferndale, says he is trying to see what sort of legislation is really necessary. Given what happened in Quebec, he says the Legislature probably ought to ask a few questions. It’s just that he says it doesn’t make sense to pass a bill about ships when the issue involves trains. Ericksen says he expects to have a proposal out shortly, and promises that his will differ from the House bill in that it will deal with the subject of trains. The concern is legit, he says. “It is a real issue,” he says. “There are some made-up issues from those whose objectives are to shut down infrastructure development, and then there are real safety concerns that we need to address in the Legislature.”


For now headscratching may be the order of the day, but where there’s a will, there’s a bill.


‘Bombs Going Through Our Cities’


Hearing room is packed as House Environment Committee hears oil-by-rail bill.

Hearing room is packed as House Environment Committee gets first look at oil-shipping measure.

What the discussion really does is call attention to the fact that oil-by-rail shipments are on the rise, and rail lines have become the most important conduit for crude-oil shipments from the fast-growing Bakken field of the Midwest. For now the oil is headed to coastal refineries in this state and California, but if federal law is changed to permit the shipment of crude oil overseas it might become a major export commodity as well. Eric dePlace of the Sightline Institute, an environmental think-tank based in Washington state, told the House committee that the first “unit train” composed entirely of tank cars arrived in the Pacific Northwest in September 2012. But if you take all the shipping facilities currently in operation, and all the proposals for new port infrastructure, Oregon and Washington terminals might someday ship 800,000 barrels of oil a day.


That’s more oil than can be carried by any pipeline serving the region, and far beyond the region’s capacity to refine oil, dePlace said. “Suffice it to say that we think this represents a very serious fundamental transformation in the way that Washington has dealt with crude oil in the past, and it raises a lot of questions about whether we are adequately prepared to deal with spill response,” he said. “I think there’s a strong case to be made that we are not adequately prepared to deal with spill response, particularly in an inland environment.”


So far, so good. And certainly the Quebec disaster has given rise to concerns that the lighter, more volatile Bakken crude deserves special handling precautions – better designed tank cars, more attention to the prevention of derailments. Spokane city councilman Ben Stuckert showed up at the hearing with pictures of a 1991 downtown-Spokane derailment that left train cars dangling over I-90. “I think we’re talking bombs going through our cities,” he said. But the argumentation so far at the state level has a rather generic flavor.


Regulations Called Out of Date


Advancing the environmental agenda: Right to left, Eric dePlace of Sightline Institute, Bruce Wishart of Puget Soundkeepers Alliance, Clifford Traisman of the Washington Conservation Voters.

Advancing the environmental agenda: Right to left, Eric dePlace of Sightline Institute, Bruce Wishart of Puget Soundkeepers Alliance, Clifford Traisman of the Washington Conservation Voters.

If you discount the argument that has been raised at numerous environmental rallies over the last couple years – that fossil fuel consumption is inherently evil, and that proposals for new terminals should therefore be blocked during the environmental permitting process – potential state action is actually rather limited. The state can regulate what happens at terminals, but rail safety regs are a job for the feds. Environmental advocates say reporting requirements might solve a problem – as dePlace described it, in helping Washington residents “protect themselves when confronted with another incident like the one in Quebec.” But the legislation doesn’t appear to provide information that would be of use to hazmat teams. The reporting requirements imposed by the bill would be after the fact, for security and proprietary reasons, meaning that if there is any benefit to emergency response crews in knowing what particular type of oil is contained in an oil tank car, they would not know anything about its contents at the time of a potential incident.


“Because of federal preemption, there’s not a lot we can do to regulate the railroads,” acknowledged Jessyn Farrell, D-Seattle, sponsor of the House bill. “But we do want to make sure that we have a better understanding of what the transport does look like and what the emergency response is.”


The other main argument raised by environmental advocates is that state tanker and barge regulations were adopted years ago, and so the state ought to presume that they are inadequate. Increased tug-escort and staffing requirements might reduce the chance of accidents, they argue. While the version of the bill heard in the House Wednesday would specify rules for tugboat escorts in all state waterways, the environmental groups say they plan to propose a new version that would leave it to the state Department of Ecology to write rules governing areas outside Puget Sound. “We have existing law in the state that was written in 1975 during the Magnuson era; rules were adopted by the state pilotage commission in 1976 and really haven’t been updated since,” said Bruce Wishart of the Puget Soundkeeper Alliance. “The world has changed considerably during the past 39 or so years, and we now have a refinery in Grays Harbor, we have black oil on the Columbia River for the first time, [and] potentially huge expansion of existing transport of oil depending on if new facilities are built.”


Industry is Nonplussed


Industry panel features Frank Holmes of the Western States Petroleum Association and Johann Hellman of the Burlington Northern Santa Fe Railroad; also at table is Denise Clifford of the state Department of Ecology.

Industry panel features Frank Holmes of the Western States Petroleum Association and Johan Hellman of the Burlington Northern Santa Fe Railroad; also at table is Denise Clifford of the state Department of Ecology.

If the arguments for the bill are a bit generic, so are the arguments against it. And it might not even be fair to refer to it as opposition. At Wednesday’s hearing, representatives of the Western States Petroleum Association and the Burlington Northern Santa Fe Railway pledged their cooperation with lawmakers as they consider the issue. Frank Holmes of the refiners organization noted that the bill had been drafted without the participation of the oil industry, and said the industry would appreciate the opportunity to weigh in on any legislation. “Washington already has one of the most stringent spill [regulation] systems in the country,” he said.


Any reporting requirements must be drafted in such a way that proprietary information is protected, Holmes argued, as has been done in the state of California. Meanwhile, Johan Hellman of BNSF noted that the railroad is required to carry oil under federal common-carrier rules. He pointed out that the railroad already has an extensive hazardous material response program, with more than 200 workers stationed at strategic locations around the state. The railroad provides training to 4,000 local-agency hazmat responders every year, he said.


He pointed out that tank-car safety regulations are the purview of the federal Pipeline Hazardous Material Safety Administratration, which increased standards for tank-car construction in 2011. He noted that the rolling stock belongs to the shippers, not the railroads. “Along with the freight rail industry, we have called on the PHMSA to impose these more rigorous standards,” he said. “We would certainly be pleased to work with you in partnership to encourage the PHMSA’s swift transition to newer, safer tank cars,” he said.


After the hearing, House Environment Committee chairman Joe Fitzgibbon acknowledged that the final version of this year’s oil-shipping bill may look considerably different than the one heard by his committee Wednesday, and said he hopes to craft a proposal that might be accepted by the Senate.

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