Since the tragic Bakken oil train accident that extinguished 47 lives in Lac-Megantic, Quebec in July 2013, seven more Bakken oil trains have derailed, resulting in accidents involving large fires and explosions. We now know that oil produced in North Dakota's Bakken Shale formation is extremely volatile due to its high natural gas liquid content — resulting in the “bomb train” phenomenon.

DeSmog’s new investigative video, written and produced by Justin Mikulka, details a coordinated effort by the oil industry, members of the U.S. Congress, regulators and the Department of Energy to challenge the known science of crude oil characteristics with the goal of delaying or avoiding any regulatory changes requiring Bakken crude oil stabilization, a safety measure that would protect the millions of people currently living in bomb train blast zones.

Stabilization is the process that removes the volatile natural gas liquids from the crude oil, resulting in a “stable” petroleum product with greatly reduced volatility and flammability.

DeSmog has reported extensively on the oil-by-rail policy battle, including an investigation that revealed the direct role of the White House in working with North Dakota regulators to avoid any requirements for oil stabilization for the Bakken crude. 

The success of their misdirection campaign is evident — the mainstream media is largely overlooking this critical issue when the public needs referees to ask the tough questions on this vulnerability in our crude oil by rail protocols. Yet a Wall Street Journal article this week on how to make oil safe to transport didn’t even mention stabilization.

The video uses archival information from American Petroleum Institute videos, Congressional hearing testimony, news clips and more to reveal how the oil industry has avoided regulation in order to continue transporting dangerous Bakken crude by rail at maximum profit.

Warning: This video contains science, humor and political theater all in one — a volatile mix indeed!

WATCH: DeSmogCAST: The Science of Bomb Trains

Image credit: Oil train passing through Seattle, by Brendan DeMelle

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The federal agency investigating the Lac-Megantic oil train derailment and explosion that killed forty-seven people released recommendations last week to improve the safety of shipping crude oil by rail. If the recommendations are implemented by the federal government they will serve as a strong step forward in protecting communities living along railway lines. 

“The federal transport minister has a clear choice: protect public safety or secure profits of oil companies,” says Keith Stewart, a climate and energy campaigner with Greenpeace Canada.

One of the country’s most active lobby groups – the Canadian Association of Petroleum Producers (CAPP) – responded to the recommendations earlier this week. CAPP asked the federal government “to ensure their implementation does not interrupt service and respects the competitiveness of transporting our products by rail.” In other words, new regulations should not interfere with business as usual for the oil industry.

“Companies have to pay the price for safety. Their profits cannot come before communities, the environment and general safety,” John Bennett, director of the Sierra Club Canada told DeSmog Canada.

The Transport Safety Board (TSB) made three recommendations to Transport Canada improve safety of oil-by-rail shipments: tougher standards for the susceptible-to-rupturing DOT 111 tank cars, strategic routing of oil trains that considers the environment and communities, and emergency response plans for rail lines transporting large volumes of oil.

Greenpeace and the Sierra Club welcome the recommendations. Both organizations have been pushing for stricter oil by rail transport rules since before disaster struck Lac-Megantic, Quebec on July 6th of last year. Rail company CN also supports the TSB’s recommendations. Rail tank cars are owned either by shipping companies or oil producers. Rail companies on the other hand own the rails, and are liable for derailments.

The recommendations focus on tank cars, not the rails themselves, which is one of the shortcomings of the recommendations. Improvements on both are needed.

Recommendations cannot protect the public if they are not implemented. Bennett is not very optimistic the recommendations will be applied by the federal government. Many TSB recommendations in the past, he says, have “just sat there” and were not adopted, like rail line improvement recommendations made after the Lake Wabamun derailment in Alberta in 2005.

Stewart speculates the federal government will wait to see what the U.S. does, something he thinks is very problematic.

“Lives are at risk. Canada should be taking a leadership role,” Stewart told DeSmog from Toronto.

The TSB and the U.S. National Transport Safety Board announced their safety recommendations for oil-by-rail intentionally at the same time. Transport Canada has ninety days to reply to the TSB’s findings. Upon release of the recommendations in Ottawa on January 23rd, TSB chair Wendy Tadros insisted “change must come and it must come now."

If adopted, applying the recommendations may prove to be difficult. Rerouting oil tank cars away from densely populated or environmentally sensitive areas is difficult due to Canada's limited rail options.

Emergency response plans also require greater communication between shippers in the public, especially regarding large oil shipments. Shippers have been reluctant to do this in the past.

“Canadians need to ask themselves why are we doing this? Transporting oil more – whether by rail or pipeline – is a risk with little to no benefits for communities because it is going for export,” says Bennett, who is based in Ottawa.

“We already have enough infrastructure to meet our own oil consumption needs,” Bennett told DeSmog Canada.

Oil tank car shipments in Canada have dramatically jumped from five hundred carloads in 2009 to 160,000 last year, but Canada’s consumption of oil has declined during the same period. All of the recent pipeline proposals in Canada are destined to export oil out of the country with the exception of the Line 9 pipeline in Ontario and Quebec.

“The federal government would be more than happy for this debate to be rail versus pipeline oil shipments,” says Stewart.

“The debate should really be between dirty energy and clean energy and why we continue to invest billions in infrastructure for the fossil fuel industry when that money should be used to fight climate change and reduce our dependence on oil,” Stewart told DeSmog Canada.

The oilsands boom in Alberta and the Bakken shale oil boom in North Dakota coupled with stiff opposition to new pipeline approvals have been blamed for the massive increase in oil-by-rail transport in North America. In the US, oil tank carloads went from 10,800 in 2009 to 400,000 in 2013.

Image Credit: Transportation Safety Board

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The recent oil train derailment and subsequent explosion in North Dakota was yet another reminder tighter regulations and more independent research on transporting oil is needed — particularly where volatile shale oil is concerned. Last week another reminder hit close to home when a CN Rail train carrying crude oil derailed and caught fire in New Brunswick.

The responsibility of protecting Canadians from an oil transportation disaster has largely fallen to the provinces while the federal government has weakened or eliminated rules and regulations that get in the way of its priority to sell as much Canadian oil as possible. 

By the end of this month the federal pipeline regulator, the National Energy Board (NEB), is expected to approve Enbridge’s proposal for its 38-year old Line 9 oil pipeline in Ontario and Quebec, which would carry shale oil — known for its propensity to explode as it did in North Dakota.

The NEB is not in the habit of rejecting pipeline projects (see Northern Gateway’s approval). With that in mind, the province of Ontario must hold its ground on Line 9 and ensure its demands for a safer pipeline are met.

While the province could have gone further with its demands, two of the conditions — a hydrostatic test of Line 9 and a third-party independent review — have the greatest potential of reducing the risk of a Line 9 rupture.

The first, hydrostatic testing, is the gold standard for pipeline safety. By pumping water through Line 9 at a slightly higher pressure than its proposed maximum allowable operating pressure, the test can help establish if Line 9 can operate safely at the maximum pressure. It can also identify weak points in the pipeline that need replacing.

The third-party independent review would entail an independent expert looking over Enbridge’s data on Line 9 and would eliminate reliance on Enbridge’s conclusions without duplicating the NEB process.

The least Ontario can do is flex whatever legislative muscle it can muster to ensure compliance with its conditions. Enbridge would do best to adopt these conditions given the company’s reputation as the “Keystone Kops” of oil pipeline safety for their bungling of a 2010 oil spill in Michigan, resulting in three million litres of bitumen spilling over the course of 17 hours.

None of this is to say Ontarians should settle for the Line 9 pipeline. Opposition to transporting oilsands bitumen via Line 9 will continue. The jury is still out on whether bitumen is rougher on pipelines than conventional oil and the difficulties of cleaning up a bitumen spill are well known. Expansion of the greenhouse gas intensive Albertan oilsands completely overshadows Ontario’s efforts to reduce its own greenhouse gas emissions.

And while Ontario expressed how important proper consultations with Ontario’s First Nations on Line 9 are, this was not one of the province’s conditions. It would be hard to find a clearer case of the failure to consult with First Nations than that of Line 9.

Still, while the conditions are far from perfect, the province must not be allowed to make demands for pipeline safety they never intend on backing up. Ontario has not breathed a word about its conditions since it presented them to the NEB in a public hearing on Line 9 in October.

Provinces are still responsible for the land, the water and the people within their borders. Failing to act on a pipeline proposal that threatens all of the above would blatantly ignore that responsibility. Oil train explosions and pipeline ruptures cannot be considered the price of doing business.

Image Credits: Enbridge Line 9 Report, Enridge, Pipeline Observer

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A decision on the proposed northern half of the Keystone XL pipeline – under review since 2008 – hinges on a final environmental review by the State Department now taking into consideration the importance oil-by-rail transport might have on growth of Alberta's tar sands.

US officials are evaluating the impact Keystone XL will have on expansion of the tar sands and whether or not the pipeline will worsen climate change. According to a new report by Reuters the evaluation has created a balancing test, “zeroing in on the question of whether shipment by rail is a viable alternative to the controversial project.”

The test's crux: “if there is enough evidence that the oil sands region will quickly grow with or without the 1,200-mile line, that would undercut an argument from environmentalists that the pipeline would turbocharge expansion,” Reuters reports.

President Barack Obama's State Department is asking rail executives to report on logistics, market dynamics and what obstacles oil-by-rail alternatives face in delivering 830,000 barrels of Canadian oil to Cushing, Oklahoma – the "pipeline crossroads of the world" – where Keystone XL's northern half will link up with Keystone XL's southern half which is expected to be up and running by the end of October.

In other words, could rail realistically provide an alternative to the Keystone XL, aiding in the expansion of Canada's highly-polluting tar sands?

With numerous pipeline proposals facing opposition all across Canada and the US, oil-by-rail transport alternatives have picked up some slack. But the high costs associated with rail and the dangers associated with oil-by-rail transport suggest there are real limitations to a full scale tar sands-by-rail revolution.

As Reuters reports, even rail operators admit tanker trains can supplement but not substitute the movement of crude by pipeline.

“We can move large volumes, but it will always be a niche service,” Gary Kubera, owner of Caneuxs, a company expected to move 100,000 [barrels per day] by the end of 2014, told Reuters.

Stew Hanlon, president of Gibson Energy Inc., echoed the sentiment: “We remain very, very confident that rail is here to stay not as a replacement for pipelines, but as a supplement of pipelines.”

Within Canada the oil-by-rail sector has grown tremendously, with five new loading terminals in western Canada and an estimated national transport capacity of 450,000 bpd by next year.

North American Class 1 railways.

Life on the Rails?

Yet the rapid increase in rail transport of crude has led to a series of high-profile accidents in Canada, the most publicized being the Lac-Megantic disaster that saw 47 people incinerated in a small Quebec town after an unmanned tanker train derailed and crashed in a residential area. Fires from the accident burned for more than two days.

Just 10 days ago, another tanker train carrying propane and oil derailed outside of Edmonton, Alberta causing an explosion and the evacuation of a small community.

In September a Canada Pacific Railway train carrying oil products derailed in Calgary leading to an evacuation. In July another Canada Pacific Railway train carrying petroleum products slumped over a river after flooding caused a rail bridge to partially collapse.

Yet another Canada Pacific Railway train full of tanker cars carrying oil derailed in Saskatchewan leaking 575 barrels of oil on May 5. The company also had a derailment in Ontario that saw 400 barrels of oil spill, as well as a derailment in March in Minnesota that spilled 24 barrels of oil after 14 cars went off the tracks.

In 2008 trains carried less than 20,000 barrels of oil per day. They now carry roughly 500,000 barrels of oil per day, as of the end of 2012.

According to the State Department, trains have a death rate 3 times higher than pipelines and have a fire and explosion rate 9 times that of pipelines when carrying liquids.

Although groups are quick to point out pipeline disasters happen with less regularity they are often of high-consequence, such as the Enbridge Kalamazoo disaster in 2010 that leaked 20,082 barrels of oil into Michigan waterways. That spill has so far cost more than $1 billion, making it the most expensive onshore oil spill in US history.

Rail Costs Nearly Double Pipelines

According to the Environmental Protection Agency, high costs associated with oil-by-rail transport might pose the largest challenge to operators hoping to gain a larger share of the market. It costs roughly $10 to transport a barrel of oil in a pipeline while the same will cost about $17 via rail.

The industry also has a shortage of terminals capable of refining heavy crude, such as tar sands bitumen from Canada.

The high costs, lagging infrastructure, and dangers associated with rail make the industry an unlikely alternative to the Keystone XL, meaning tar sands transport is unlikely to meet industry expectations should the pipeline be turned down.

For oil producers operating in the tar sands, this inevitably means a shipping glut.

A Risky Investment

Increased oil production in the US has also contributed to dwindling prices for Canadian producers. In June the research firm Wood Mackenzie warned that falling oil prices would lead to break-even points for Canadian energy companies developing one of the costliest forms of oil in the world.

The tar sands are Canada’s fastest growing source of greenhouse gasses and have some investors concerned that the globe’s urgent need to reduce carbon pollution in the atmosphere might diminish the resource’s value.

Just last week a coalition of investors worth $3 trillion pressured 45 of the biggest oil and gas companies to deal with the real concern of "stranded assets," carbon pools that cannot be developed due to the threat of climate change.

A decision on Keystone XL's northern half is due in early 2014. President Obama – who approved the southern half via a March 2012 Executive Order – has indicated he will not approve the northern segment if found to significantly contribute to carbon pollution.

Given the access the pipeline will grant tar sands oil to overseas markets and the advantage pipelines have over rail, the Keystone XL will undoubtedly support tar sands production, promote continued tar sands investment, and contribute to Canada’s already-significant greenhouse gas output.

So, if the decision really comes down to the pipeline's climate impact – and not something else – the choice is clear.

Image Credit: Wavy1 via Flickr

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Internal memos (attached below) attained by Greenpeace under Access to Information legislation show that the federal government was focusing on the economic benefits of rail transport for crude oil while downplaying the safety hazards involved.

Three memos dated between May 28, 2012 and January 30, 2013, were addressed to Ed Fast, Minister for the Asia-Pacific Gateway and Denis Lebel, Minister of Transport, Infrastructure and Communities. They all outline the current state of oil transport via rail and possible ways to increase its use in the future, such as shipping to “niche markets” without pipeline access and returning diluent to its source once it has been removed from bitumen.

Each report comes to an identical conclusion:

“TC [Transport Canada] has identified no major safety concerns with the increased oil on rail capacity in Canada, nor with the safety of tank cars that are designed, maintained, qualified and used according to Canadian and US standards and regulations. Indeed, Canada and the US work collaboratively to ensure the harmonization of rail safety requirements. The transportation of oil by rail does not trigger the need for a federal environmental assessment under the Canadian Environmental Assessment Act (CEAA), however, proposals to construct new infrastructure to support the activity may be required to determine CEAA’s applicability.”

The fourth memo from this year proposes rail shipments as a way to reduce the price discount on Alberta’s oil industry. “NRCan is currently meeting with Transport Canada to mutually understand how rail can be part of a solution to current market access challenges.”

It makes no mention of safety concerns and only considers the impact of increased capacity on terminals.

Reports of safety concerns related to train cars that transport bitumen go as far back as 1994. The Transportation Safety Board (TSB) website states a number of defects in the DOT 111 series tankers that were involved in the recent Lac-Mégantic disaster.

“The susceptibility of 111A tank cars to release product at derailment and impact is well documented,” it says. “The transport of a variety of the most hazardous products in such cars continues.”

In 2012 the TSB highlighted safety concerns following a spill of 200,000 litres of gasoline near Saint-Henri-de-Lévis, Quebec.

“The damage sustained by the Class 111A tank cars involved in this occurrence and the risks posed by the subsequent product release are typical of that identified in previous TSB investigations. In this occurrence, there was a significant spill of hydrocarbons when the tank shells and heads were breached even though the derailment happened in a marshy area where the surrounding terrain was particularly soft. Other occurrences investigated by the TSB have also revealed the vulnerability of this type of car to puncture, even in low-speed accidents (TSB report R99D0159 (Cornwall) and TSB report R05H0011 (Maxville)).”

Meanwhile, the US National Transportation Safety Board has been even more critical. In a 2012 report citing safety studies going back to 1991, Cynthia L. Quarterman of the Pipeline and Hazardous Materials  Safety Administration wrote, “During a number of accident investigations over a period of years, the NTSB has noted that DOT-111 tank cars have a high incidence of tank failures during accidents.”

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