How to Transport Oil More Safely

In the early days of the petroleum industry, transporting oil meant horse-drawn wagons carrying leaky wooden barrels over bumpy dirt roads—and lots of accidents.

Things have changed a lot since then. But the accidents haven’t gone away. In some ways, they’ve gotten worse.

The boom in domestic production in recent years has brought an ugly side effect: mishaps when transporting the fuel to refineries. These accidents have led to fatalities—one train crash in Canada in 2013 killed 47 people—as well as vast environmental damage, such as the pipeline burst in California this May that spilled as much as 143,000 gallons of crude into the Pacific Ocean and onto pristine beaches.
The growing sense of potential danger has prompted critics and industry officials to ask: What is the safest way to transport oil? And are there ways to make the current methods safer? Among other things, they’re proposing tougher safety regulations, and using technological fixes like machines that travel along pipelines, looking for weak spots.

One thing is certain: None of the existing methods of transport—rail, boats, trucks and pipelines—is going away. The oil industry believes the best thing to do, in terms of safety, profits and efficiency, is to keep all options on the table and make sure they are as safe as possible. “All four modes have always and will always be with us,” says Kenneth Green, who has spent years researching crude-oil transportation safety for the Canada-based Fraser Institute. “What institutions must ensure is that the most oil moves by the safest way, with the caveat of ensuring we protect the health of humans and the environment.”

Here’s a look at the four methods, and what’s being done to shore them up.

BARRELS DELIVERED (2014): 3.4 billion

Workers clean up a pipeline spill in Santa Barbara County, Calif. PHOTO: LUCY NICHOLSON/REUTERS
PROS: Pipelines are typically the cheapest, and in some cases quickest, way to move crude in the U.S., and they spill less often than other transport methods. In 2014, pipelines delivered 3.4 billion barrels of crude oil to U.S. refineries, according to Energy Information Administration data. The Association of Oil Pipe Lines says it has a 99.999% safe-delivery rate on these shipments. “On an apples-to-apples basis, pipelines have less accidents, cause less environmental damage and cause less harm to human health than do railcars moving comparable masses of oil and gas,” says Mr. Green. (The Energy Information Administration figures are based on U.S. refinery receipts of crude cargo. But crude shipments often combine several modes of transportation, so the numbers don’t give a complete picture.)

The industry seems to be banking on pipelines as the go-to transport of the future. Pipeline projects have added more than 3 million barrels a day of capacity since 2012, although construction has slowed recently.

CONS: Pipelines can corrode over time, leading to spills. And one positive aspect of pipelines—they’re often built underground and out of sight—can also be a problem. Companies have been accused of abandoning underground lines without cleaning them out, meaning they can leak while nobody is watching. In March 2014, a Los Angeles-area pipeline spilled about 1,200 gallons onto a residential street, destroying yards, damaging homes and stinking up the neighborhood. Phillips 66 had bought the pipeline in 2001 as part of an acquisition, but never used it or checked what was inside, until it finally corroded. Phillips 66 says it “cares for the communities where we live and work. We are committed to operating excellence, and we integrate health, occupational safety, process safety and environmental accountability into our organization and all of our operations, including pipeline integrity and maintenance.”

What’s more, even though pipelines don’t spill as often as other forms of transport, when they do spill, they can unleash a huge amount if not caught in time. In 2010, a pipeline owned by EnbridgeInc. ruptured and spilled 843,000 gallons into Michigan’s Kalamazoo River, the largest inland oil spill in U.S. history. Earlier this year, a pipeline owned by Plains All American Pipeline burst in California, spilling as much as 143,000 gallons into the ocean and onto beaches.

WHAT’S NEXT: Two months after the Plains All American spill, the American Petroleum Institute announced it was developing a comprehensive new set of standards for pipeline safety. One much-used method for monitoring safety involves sending torpedo-like robots called smart pigs through pipelines to collect data on potential risks from corrosion or stress. University of Houston Chief Energy Officer Ramanan Krishnamoorti believes the U.S. government should coordinate with industry to refurbish and modernize oil pipelines, some of which have been operating since the 1940s.


A crew tries to contain an oil spill from a tanker in the Delaware River near Philadelphia. PHOTO: TIM SHAFFER/REUTERS

PROS: Volume is the big advantage boats offer. A barge has a cargo capacity of around 1.3 million gallons—and there can be several barges per tow—while the largest transoceanic tankers can carry around 84 million gallons. A truck can move only about 9,000 gallons, and a train of 100 cars 3 million. What’s more, even with their great capacity, barges don’t face the same kind of traffic and other logistical issues as ground transport, says David Grzebinski,chief executive of tank barge operator Kirby Corp.

CONS: If boats have spills, the environmental damage can be much greater than that from other modes of transport. And while most spills dump very little oil, spills are frequent. Galveston Bay, an important oil-shipping channel near Houston, sees about 275 spills of oil and related liquids a year, according to the Houston Advanced Research Center. Another downside of boats is logistics: If the fuel isn’t delivered to refineries located along the water, it must be transferred—at great cost—to another mode of transportation.

WHAT’S NEXT: The business of moving crude by water has taken on new life in recent years as producers in North Dakota and Canada look for safe, efficient ways to ship oil to refineries. The quantity of oil moving by barge on the Mississippi River and its tributaries increased tenfold from 2009 to 2013, according to a report from the Congressional Research Service.

Yet safety measures are still lagging behind the boom. “Barges are the workhorses in moving Bakken [region of North Dakota] and Texas oil by water,” the Congressional Research Service said last year. “However, the Coast Guard has just begun establishing a safety inspection regime for barges.”

Often, it takes a disaster to get tougher safety rules. After the 1989 Exxon Valdez spill, U.S. regulators began cracking down on single-hull ships, requiring that new ships have a double layer. But the law gave older ships a decadeslong grace period to continue operating, which led to a 2004 accident on the Delaware River that dumped 265,000 gallons of crude from a single-hull tanker.


The aftermath of the Lac-Mégantic, Quebec, rail disaster in 2013. PHOTO: MATHIEU BELANGER/REUTERS

PROS: Trains tend to spill a smaller amount of oil than other forms of transport. An International Energy Agency study said that from 2004-12 there were six times as many rail spills as pipeline spills, but “the average pipeline spill was far graver.” For instance, Ed Greenberg, spokesman for the Association of American Railroads, says that for trains last year “84% of the nonaccident releases involved spills of less than five gallons.”

Rail transport can be speedier, too. It takes about five to seven days to move oil by train from North Dakota to the Gulf Coast or Atlantic Coast, the CRS says, versus about 40 days by pipeline.

CONS: Rail accidents potentially threaten lives and can cause widespread property damage. Many people, in fact, use the term “bomb trains” to describe them, because of their potential to explode in an accident. Trains also travel straight through many cities at street level—as opposed to pipelines, which tend to be located underground and often far from populated areas.

What’s more, train routes and schedules often aren’t disclosed, in part to prevent possible terrorism. That leaves emergency responders less equipped to deal quickly with accidents that may occur.

Among the major crude-by-rail accidents that have occurred in recent years was a catastrophic fire that caused numerous fatalities and destroyed much of the town of Lac-Mégantic, Quebec, in 2013.

In Lynchburg, Va., in April of last year, a train going just 24 miles an hour—below the 25 mph speed limit—had 17 of its 104 tank cars derail, erupting into flames as some of the cars went into the James River. Some 350 residents were evacuated.


WHAT’S NEXT: Among other measures, railroads have ordered trains to slow down and forced shippers to use reinforced tank cars. The industry is also rolling out a mobile app called AskRail to first responders, which provides access to data about the contents of a train.

Meanwhile, more residents in areas with heavy crude-by-rail traffic are urging action. One such person is Dean Smith, a retired engineer who lives north of Seattle. Last year, he set up the Snohomish County Train Watch to monitor crude-tanker traffic. Several miles of railway in his town run below a bluff that has dozens of landslides each year, he says, adding that the area has no roads—so if a train exploded, firetrucks couldn’t reach it.

Mr. Smith says the efforts by the industry and the government aren’t enough. The most critical need, he says, is more information about train schedules and a workable early-warning evacuation plan for towns like his. “We need to warn people to get the hell out of there,” he says.


Cleanup after an oil tanker truck crash in Utah. PHOTO: AL HARTMANN/THE SALT LAKE TRIBUNE/AP PHOTO

PROS: Since they can go virtually anywhere on land, trucks are often used for the first leg of crude deliveries. Oil pumped from a well might go straight into a truck, which then delivers it to a central facility for loading onto a pipeline, boat or railcar. Trucks can also be called upon in a pinch, when other forms of transportations aren’t available.

CONS: Trucks tend to be the least preferred method in terms of safety, air quality, expense and other factors. More than any other mode of oil transport, they operate in proximity to the general public. In January of this year, five oil workers were killed in south Texas after their van crashed into a tanker truck that then exploded. Critics also contend that during oil boom times, truckers hurry to move crude, risking accidents. And roads near oil fields often were built before oil was discovered, meaning that they’re ill-equipped to handle large tanker trucks.

WHAT’S NEXT: David Bradley, CEO of the Canadian Trucking Alliance, says the industry aims to make crude-oil transport as safe as possible, and efforts are frequently made to improve areas such as driver training. But overall, he says, trucks play a relatively small role in crude transport, and so there isn’t a great need to improve methods.

Some critics argue that current measures don’t go far enough.

“Much more needs to be done in terms of safety when it comes to trucks and crude oil,” says Eric Brooks, area director for the Occupational Safety and Health Administration in Bismarck, N.D., a state that has seen a spike in vehicle-related deaths since its oil industry began to boom several years ago.

Mr. Brooks says adhering to “basic concepts” would prevent many accidents, such as making sure drivers wear orange vests when they step out of the vehicle at a well site and creating an organized well-site delivery and drop-off map for vehicles.

“We’re working with the industry and things are moving in the right direction,” he says. “Steps are being taken that are encouraging. But much more needs to be done.”

Mr. Molinski is a staff reporter in The Wall Street Journal’s Dallas bureau. He can be reached at
Source - WSJ


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