Flow Chart

By Jon Davis

The U.S. has become a major oil producer again, thanks to techniques that allow us to tap previously unreachable reserves in the Bakken formation shale fields of North Dakota, the Permian shale fields of Texas, and similar formations across the country.

While the current boom has created jobs and flooded states' coffers with badly needed revenue, it has also created major controversy: We are now facing the global consequences of burning hydrocarbon fuels and the local consequences when pipelines or railroad tanker cars fail.

The famous (or infamous) proposed fourth phase of the Keystone pipeline system, Keystone XL, awaits President Barack Obama's decision, but it is also the subject of lawsuits filed by those who object to its planned route from Hardisty, Alberta, to Steele City, Nebraska, through the Ogallala Aquifer, which underlies most of Nebraska and supplies needed water there and to seven other states.

One of those suits is making its way through the Nebraska state courts, where Lancaster County district judge Stephanie Stacy ruled in February that Gov. Dave Heineman's approval of the pipeline's route was invalid because a 2012 law transferring approval to him from the Nebraska Public Service Commission is unconstitutional. Nebraska attorney general Jon Bruning has appealed that decision, but a ruling from the state's supreme court isn't expected until later this year.

But Bakken oil is already flowing by rail — sometimes to the surprise of local communities. The New York Times reported in January that officials in Albany, New York, were alerted to the fact that their city is now a big East Coast oil port when a tanker ran aground in the Hudson River in December 2012. The Association of American Railroads notes that about 400,000 tank cars' worth of oil moved via U.S. Class 1 railroads in 2013, up from 9,500 in 2008.

The presence of Bakken oil trains is sometimes announced by their derailments and explosions, as happened to a CSX train this April in Lynchburg, Virginia (where between 20,000 and 25,000 gallons of crude oil spilled into the James River), or — in the worst case so far — the July 2013 derailment of a 74-car, runaway train carrying Bakken oil that blew half of downtown Lac-Mégantic, Quebec, off the map while killing at least 42 people and wiping out more than 30 buildings.

Challenge and response

The federal government provided some regulatory relief this May, when the U.S. Department of Transportation issued an emergency order requiring all railroads to notify state emergency response commissions if trains carrying one million or more gallons of Bakken crude — about 35 tanker cars — are operating in their states, the frequency of such trains, and the routes along which they'll roll. In these notices, railroads must also identify each county along those routes.

Concurrently, the Federal Railroad Administration and Pipeline and Hazardous Materials Safety Administration issued a safety advisory "in light of recent accidents involving the shipment of Bakken crude by rail," urging railroads transporting Bakken crude to use "tank cars with the highest level of integrity in their fleet" and "to the extent possible to avoid the use" of older tanker cars designated DOT Specification 111 or CTC 111 (see sidebar below for more).

AAR's same-day response: "Freight railroads have for years worked with emergency responders and personnel to educate and inform them about the hazardous materials moving through their communities. These open and transparent communications will continue as railroads do all they can to comply with the Department of Transportation's Emergency Order."

"Energy has never been an industry that promotes smooth and harmonious development. There's jobs created, but environmental destruction out of proportion to the jobs," according to Joseph Schwieterman, director of DePaul University's Chaddick Institute for Metropolitan Development, in Chicago. "People are nervous about oil trains moving through towns. They have memories of Quebec."

Where does this activity leave local and regional planners, who must take oil transportation infrastructure into account, but who may not realize the extent to which oil is already traversing their cities, counties, and states? Who must wrestle with oil terminal and rail yard expansion plans?

Two states already are dealing with the oil onslaught: Texas — where for more than a century, oil wells, refineries, and pipelines have been as much a part of the state's infrastructure as roads and railroads — and Washington, where local communities are vexed by plans to ship oil by rail to seashore or riverfront oil terminals seeking to expand their refining and shipping capacities.

Texas tale

Oil may be "Texas tea," but it's also puzzling state transportation officials who must deal with more truck traffic than many low-volume country roads can handle.

"Just to bring one well into production is about 1,200 truck trips," says Marc Williams, director of planning for the Texas Department of Transportation, "and it requires about 350 truck trips per year just to maintain, and another 1,000 truck trips every five years to re-frack the wells. That's the equivalent of about eight million cars per year to bring the well into production and two million cars per year to maintain it." He adds that low-volume county roads were never built to sustain that kind of traffic, but they have been forced to do so since the boom began about five years ago.

Texas is home not only to the Keystone pipeline's southern leg, which has been approved and is being built between Cushing, Oklahoma, and Houston and Port Arthur, but also to the Permian Basin shale "play" (as oil-laden shale formations are called in the energy business). The Permian is in the rural, western reaches of the state; the refineries and terminals are located along the Gulf Coast. Williams says that transporting Permian oil brought another problem: Urban residents and legislators had to be shown the problems and educated about the impacts of all that traffic on rural roads.

A state task force spent much of 2012 examining the problem and educating the public, and legislators last year approved a referendum for the November 2014 ballot asking voters whether to approve diverting $1.2 billion in oil and gas "separation" fees — known as extraction fees in other states — from the state's rainy-day fund to road maintenance and repairs.

Both Williams and Alan Clark, director of the Houston-Galveston Area Council (that region's metropolitan planning organization), say it's important for planners to meet with all stakeholders, from energy companies to local municipalities and residents, so everyone can learn about each other's needs. That's the first step toward securing the additional funding that will be needed to deal with drilling-related traffic, they say.

"The best thing the local governments can do is talk to the folks who are moving those products to find out what they're doing, where they want to go," so communities and regions can develop traffic management strategies, along with planning for impacts of population growth, Clark says.

For Harris County, Clark says that means diverting much of that truck traffic from urbanized areas and the region's inner-ring highways by building another ring, 40 miles to 50 miles out from downtown Houston, thus giving the truck traffic a less congested path to oil refineries and terminals along Galveston Bay.

In Baytown, Texas (pop. 72,418; motto: "Where oil and water really do mix"), just east of Houston, that means close coordination with oil and chemical companies whose myriad plants in and near the city are undergoing $7 billion worth of expansion.

Besides talking with those companies about their long-term plans, city officials hold quarterly meetings with local industries' design engineers and contractors to discuss their plans for the following quarter, and they meet to discuss standard three- to five-year plant unit refits, city manager Bob Leiper says.

This helps avoid situations like having two plants changing shifts at the same time, which would cause traffic jams, he says. Also, city traffic planners and engineers must take into account the fact that many plants operate around the clock. Ancillary traffic from construction workers is a larger issue for other parts of Baytown, which has seen traffic increasing on arterial roads between Interstate 10 and State Highway 146, Leiper says.

While the city is looking at light synchronization and additional turn lanes to handle that new traffic, "that's kind of the price of progress," Leiper adds.

"The key to all of this is to have the relationship with your industrial partners to know what they're even thinking about," Leiper adds. "The advice to everyone is it has to be a coordinated effort."

For example, the city and Chevron Phillips Company worked together to divert chemical plant traffic onto a road with an interstate interchange — via a new entrance that went into service in mid-March. Leiper says Chevron advanced $4.5 million in design and construction funds, and their engineers designed the new road, while Baytown established a tax increment reinvestment zone (i.e., a TIF district) for the plant, and Harris County will rebate the $4.5 million to Chevron Phillips over about seven years.

Nobody had that money available in their budgets, "so it would have been years without Chevron Phillips' participation," Leiper says.

"The real point is to work cooperatively with the business side to see what their needs are and how to mitigate the impacts," Clark adds. "One thing about this activity: It will quickly reveal the weak spots in your transportation network."

Washington rail

In the Evergreen State, concerns center less on truck traffic than transporting oil by rail from the Bakken fields in North Dakota and Montana to planned expansions of rail facilities and oil terminals along the Columbia River and Puget Sound.

In Bellingham, a new coal terminal is proposed for the Gateway Pacific Terminal at Cherry Point, which already has oil terminals that are themselves planning to accept Bakken oil. Refineries in Anacortes and Ferndale are also gearing up to expand rail capacity and take in Bakken oil.

In the southwestern part of the state, the Port of Vancouver is mulling whether to build a $110 million oil-by-rail terminal on the Columbia River to handle 380,000 barrels of Bakken oil a day. The project, proposed by Tesoro Corporation and Savage Companies, is facing fierce opposition from environmental groups, developer Barry Cain — whose proposed $1.3 billion mixed use redevelopment of a former mill site is two miles upriver — and, as of March, the Vancouver city council.

Also in March, Earthjustice, an environmental law organization, argued that a federal law known as the Magnuson Amendment bars the U.S. Army Corps of Engineers from approving dock reconstruction permits for the Vancouver terminal because it bans the federal government from approving permits to build or modify docks in Puget Sound or waters east of Port Angeles, Washington, in ways that would increase the oil that could be handled. Attorneys for Tesoro and Savage argue that the Magnuson Amendment doesn't apply to Vancouver.

For both Bellingham and Vancouver, the potential for more, and longer, trains passing through town at grade increases the likelihood that emergency responders could not access some areas quickly enough. Moreover, the reputation of Bakken oil trains is preceding them.

"Seeing things happen around North America recently is not doing anything to help people's opinions about it being a good thing," says Chris Comeau, AICP, a transportation planner with the city of Bellingham.

Who's in charge?

In Washington State, when a new energy facility is proposed (whether for crude-by-rail or not), the first step is a State Environmental Protection Act review, after which permits can be considered. If federal permits are required, then the U.S. EPA's environmental impact statement process is also triggered.

Usually a single agency takes the lead in looking at possible adverse environmental impacts and how they can be mitigated. But that lead agency is not necessarily the state, says Linda Kent, spokeswoman for the Washington Department of Ecology. Most often, it is a local government.

In the Port of Vancouver's case, the proposed expansion is so large that the lead agency is the state's Energy Facility Site Evaluation Council, which will make a recommendation to the governor's office. The governor has the final say.

The EFSEC recently finished setting parameters for an environmental impact statement, so a final decision is still a long way from the governor's desk, "and then everyone's expecting a couple years' worth of lawsuits," says Jon Wagner, AICP, a senior planner with Vancouver's Community and Economic Development Department.

The state's site certification process gave Vancouver's planners — and the city's zoning code — input into what the EIS should include, Wagner says. While the code's latest iteration dates from 2007, "we didn't have in mind a facility that could hold a million gallons of oil," he adds. The Burlington Northern Santa Fe Railroad's main line to the waterfront crosses 20 streets at grade, and parts of town "are literally isolated when trains go by," Wagner says.

While the potential for bigger trains carrying Bakken crude to the port raises questions of emergency access, "the big concerns are how volatile this stuff is," he says, adding that the Lac-Mégantic explosion "was a wake-up call."

Crude-by-rail wasn't an issue in Washington before 2012 because before then, most oil moved via pipeline or sea, Kent says.

Lisa Copeland, an Ecology Department communication manager, says the agency learned about the coming of oil-by-rail partly via its regular discussions with the state's existing refineries and oil companies, as part of its overall oil spill preparedness program. While plans are in place for potential oil spills along the Pacific coast, those plans must now also be drawn up for oil-bearing rail corridors, she adds.

"This is a new thing and increasing. It wasn't something that we had to be ready for or plan for before 2012," Kent adds.

Kent says the state's environmental review process will answer many questions that people have about the movement of oil by rail, adding that there are no answers yet because the process hasn't gotten that far. "But the mechanism to get those answers is in place," she says.

Residents of the affected cities and towns will have the ultimate say. "Throughout western Washington, there's this huge conversation going on" that is already influencing local elections, Comeau says, adding that the steady news of train derailments and pipeline leaks is raising both awareness and concern.

"The other thing we have here is a very educated and vocal populace, and this issue is definitely getting a lot of attention from the citizens and attention from the interest groups on both sides of the issue," he says. "It's not an issue that's going to be [resolved] quietly."

Jon Davis is a freelance journalist in Chicago.

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Resources

Images: Top — Map courtesy AAR.org. Bottom — Source: EIA.gov.

USDOT Emergency Order regarding Bakken crude shipments by rail: www.transportation.gov/briefing-room/emergency-order

FRA & PHMSA Safety Order about Bakken crude shipments by rail: www.fra.dot.gov/eLib/details/L05222

2014 National Climate Assessment: http://nca2014.globalchange.gov

Joint USGS/Oklahoma Geological Survey Statement: http://earthquake.usgs.gov/contactus/golden/newsrelease_05022014.php

Texas DOT's "Roads for Texas Energy" site: www.dot.state.tx.us/roads-for-texas-energy/default.htm

Washington Dept. of Ecology's Oil Transport page: www.ecy.wa.gov/programs/spills/OilMovement/index.html

For more information on tank cars, see the 2010 Field Guide to Tank Cars issued by the American Association of Railroads as an emergency guide: www.bnsfhazmat.com/wp-content/uploads/2015/06/4185_Field_Guide_To_Tank_Cars1-opt.pdf

Thompson v. Heineman, case number S-14-000158, is pending in the Nebraska Supreme Court.