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Oil-by-rail risks still in play

There was a collective sigh of relief in Columbia County last week when the U.S. Department of Transportation issued an emergency order modifying regulations for crude-by-rail shipments hailing from the Bakken oil fields.

But, as we are learning, the extent to which the emergency order made the shipments safer is not entirely clear.

A Reuters news report last week explored the emergency order and its tangible effect on crude-by-rail shipments. As the report (“New U.S. rail rules will not revamp old oil tank fleet,” Feb. 28) noted, the tougher standards will “affect less than 3 percent of the tank cars now hauling crude across the country, leaving older, flawed models on the tracks.”

USDOT revisions for how shippers must label the tank cars, another component of the emergency order, often is as simple as slapping a different label on the cars currently in use, which aid first-responders in the event of an emergency.

The principal prohibition is that tank car models AAR 203W or AAR 211W will no longer be used for shipments. In Columbia County, where unit trains of Bakken crude ship to Port Westward in tank cars of the DOT-111 dominant variety, the effect is likely minimal.

One aspect of the emergency order — testing for volatility prior to shipment — could result in a clearer picture of the crude oil product flowing in a fast rush to market from the Bakken region.

As we have seen time and again, emerging commodity markets trigger fast-paced action by enterprising capitalists. It can be as simple as racing competitors to shore up specific markets, as occurred when liquefied natural gas was been considered for importation to various ports in the Pacific Northwest, or racing regulators before any potential public harm — from environmental to physical safety — from the commodity is identified.

In the case of Bakken crude-by-rail through Columbia County to Port Westward, there have been industry and regulatory missteps we believe reflect this rushed approach. This week, we are reporting that Global Partners LP, which owns the Columbia Pacific Bio-Refinery at Port Westward where the oil shipments are transloaded, seemingly disregarded Oregon Department of Environmental Quality’s instructions in 2012 that the company was required to seek and receive a new permit when it substantially changed from an ethanol-based facility to a crude oil transloading plant. Since then, the company has been operating under a permit that considers the crude oil shipments as “incidental” to the former ethanol plant operations.

The Oregonian newspaper in a Feb. 20 article (“Oregon safety inspections lag behind huge increase in oil trains traveling through Northwest towns”) documented “dozens of issues” associated with the oil trains, from flammable gas escaping safety valves to loose valves intended to halt leaking oil in the event of a derailment.

Safety inspectors and regulators were simply outpaced, and outmatched, by the speed and sheer mass of the industry.

While the USDOT emergency order is a starting point toward elevating focus on the risks inherent in shipping the volatile, light crude from the Bakken region by rail, it is only a starting point. The risks emerging prior to the emergency order are still in place — not to mention unknown variables such as the Feb. 25 Deer Island crash of a pickup truck that sent it careening onto the railroad tracks, hence damaging the rails, or the mishap at Port Westward that resulted in a 300-ton engine for a Portland General Electric power plant colliding with and damaging a tank car.

In a community where residences and schools are little more than a stone’s throw from the tracks, the boom resulting from Bakken shale oil extraction carries its risks as well as its rewards, especially considering the huge volumes going by rail versus pipeline or barge.

We expect our local, state and federal regulators to place public safety above the industry’s desire for fast-made profits.