Shipments of crude oil by rail have dropped in California, Gordon Schremp, California Energy Commission senior fuel specialist, said in Crockett on Thursday at a forum organized by the California Interagency Refinery Task Force.
In 2013, he said, refineries throughout the state received 6.3 million barrels of crude oil to process. That declined to 5.7 million barrels in 2014, he said.
The cost to move crude by rail car changes, too. Trains are employed “because there’s not enough pipeline,” Schremp said. But lately, many of the tanker cars San Francisco Bay Area residents see behind a locomotive contain other products such as butane and propane, not crude oil.
California production of oil hasn’t changed since January 2010, because the state has old oil fields, Schremp said. However, Alaskan production is dropping.
Particularly because of improved ways to extract oil that led to the boom in the North Dakota Bakken fields, American production overall is experiencing what he called “a renaissance.”
Still, the importing of oil from foreign countries — South and Central America and Canada as well as the Middle East — remains essential, he said.
Oddly enough, much of the Bakken crude that arrives in California comes by ship, Schremp told the audience.
“How does oil from North Dakota get to California by boat?” he asked, anticipating that many were asking the same question. The oil first is sent to Washington state, where it’s loaded onto ships.
Crude arriving by rail is received at Kinder-Morgan in Richmond; it also comes in from the Central Valley. A few other crude-by-rail projects already have permits, and one near Bakersfield is in operation.
Among those in the permitting process is the Valero Crude-By-Rail Project that is undergoing California Environmental Quality Act review, he noted.
Most of the 50,000 oil wells in California are land-based, though platforms are operating in federal waters off the Santa Barbara coastline and state-controlled waters also have some wells.
“But for 20 years, no more drilling is allowed,” Schremp said.
Offshore oil production was being considered more actively, particularly along the Eastern Seaboard, off the Florida coastline and in the Gulf of Mexico, until the drastic British Petroleum spill in the Gulf put most projects on hold until they could be examined more thoroughly, he said.
Eastern Seaboard wells may be built in the future, but such projects are out in California and Florida, he said.
Multiple agencies regulate crude oil deliveries, Schremp said. It depends on what’s being done.
Federal regulations govern most rail traffic operations, he said. But regional air quality management control districts regulate the movement of crude oil from rail cars to tanker trucks.
The Department of Transportation has set railroad safety standards. The American Petroleum Institute, a trade association, watches over all aspects of the oil and natural gas industry. State fire marshals monitor pipelines.
“If there is a leak, they are on point,” Schremp said.
The federal Environmental Protection Agency watches over any environmental impacts, including exploration for oil and natural gas as well as their production. But the Bureau of Land Management, Bureau of Indian Affairs and the Interstate Oil and Gas Compact Commission also may be required to oversee exploration and production.
In California, he said, species living in sensitive lands come under the authority of the California Department of Fish and Wildlife.
Schremp heard from the audience, many of whom weren’t convinced that all those regulatory agencies are keeping rail delivery and refinery operations safe.
While some suggested the Bay Area Air Quality Management District wasn’t doing enough to monitor Kinder Morgan’s Richmond operation, one resident pointed to multiple Proposition 65 reports about greater emissions caused by passing trains.
Others challenged the condition of railroad bridges, such as the one spanning the Carquinez Strait.
Several cited statistics about derailment, explosions and oil spills, and several others suggested that having multiple agencies, rather than a single overseer, contributed to their concerns.
One resident reminded Schremp and the audience that all the regulations in the world haven’t stopped trains from being damaged or derailed when they collide with vehicles that have become stalled on tracks, or whose drivers failed to obey devices that warned of an oncoming locomotive.
Several Rodeo residents, who said they live or work a few blocks from the tracks or even closer, questioned the sturdiness of train tanker cars, and worried about the volatility of Bakken crude in particular.
Schremp said regulations are getting tougher, and rail cars are, too. In addition, he said, North Dakota recently passed regulations requiring processes that would reduce its oil’s volatility.
One speaker cited a BP report that said only 53.3 years of oil is still left to be removed and processed. The report, available on the company’s website, www.bp.com, states that worldwide oil reserves reached 1,687.9 billion barrels at the end of 2013, which the company said is “sufficient to meet 53.3 years of global production.”
It said the largest additions to reserves came from Russia, which added 900 million barrels, and Venezuela, which added 800 million barrels. Central and South American countries have the best reserves-to-production (R/P) ratios, the report said.
Organization of Petroleum Exporting Countries (OPEC) nations have 71.9 percent of the global total, and in the past 10 years global proven reserves have increased 27 percent, or more than 350 billion barrels, according to the report.
That last part of the report coincided with Schremp’s statement, that the amount of reserves “is a moving target” that depends on both the economy and changes in the methods of extraction.
He said the BP report is one of the best analyses of the current situation. However, he noted, starting in the 1980s American oil production hit a decline that kept continuing until the capability to extract oil from shale was developed, allowing for the opening of the Bakken fields.
Schremp said the demand for oil is declining, and that could change the number of years’ worth of oil left in reserve.
Refining companies such as Valero already are involved in renewable fuels production, and other large corporations are diversifying and may consolidate in the future, he said.
Some in the audience were still critical, saying that hydraulic fracturing, or “fracking,” requires water that should be conserved during the severe California drought. They blamed fracking for an increase in earthquakes reported in Oklahoma and Texas, which normally don’t experience temblors, and suggested such activity could precipitate even stronger quakes in earthquake-prone California.
Responding to a question about who would pay for a catastrophic spill and explosion, Schremp said sufficient insurance is a federal requirement.
On another regulatory level, he noted that the Office of Oil Spill Prevention and Response, under the California Department of Fish and Wildlife, has been expanded. “You need to see its site,” he said, referring to www.wildlife.ca.gov/OSPR. The site has a number, 800-852-7550, for reporting oil spills, information about drills, public meetings, technical and harbor safety committees and state and federal contingency plans.
But some in the audience weren’t convinced, with one resident saying, “The worst-case scenario is us dying.”
Several members of the audience asked for information about train contents, especially when flammable fuels are going past their doors.
Heather Tiernan, manager in the Contra Costa County Office of Emergency Services (OES), said her own office is trying to improve its transparency about multiple health threats so neighbors will know quickly whether an incident is no cause for alarm, or whether they should take such precautions as sheltering in place or evacuating their homes.
While the office deals with earthquakes, hazardous materials, fires and other health and safety concerns, she focused Thursday on crude-by-rail and other train matters.
The office has most of the county’s landline telephones mapped and is urging residents to register their cell phone numbers, in particular so emergency messages can be sent as texts, because that saves time.
Cell phone carriers also are helping, but send out their automatic notices on a countywide basis rather than to those living only in certain affected neighborhoods, Tiernan said.
The office still uses sirens, she said, which it tests the first Wednesday of each month.
She said her office is using its website, social media and other methods to get messages to the public.
And after each incident — from an odor-causing spill a few years ago in Rodeo to the fire at the Chevron refinery in Richmond — the OES reviews what worked and what didn’t.
For instance, after the Chevron fire, the office staff realized that its automated message sent to residents’ telephones was full of information but was confusing recipients, Tiernan said. She said the message has been reworded.
The OES recognizes that the area has speakers of multiple languages, she said, but is facing challenges in getting messages in those languages prepared in a form that allows them to be transmitted quickly.
A specific matrix is used to determine the severity of an incident, Tiernan said.
But that’s been reworked, too, she said, because an incident — such as the spill that led to a strong odor that lasted several days in Rodeo — may not be a threat, but may worry residents all the same.
She said because the incident wasn’t a threat, her office didn’t offer any explanation to residents. After reviewing the response, she said the office is becoming more active in reassuring residents by providing additional information.
“It may not be a shelter-in-place, but we tell them something,” Tiernan said. “It’s situation-specific. You need to know.”
“Treat us as adults,” one audience member requested, “even if it’s not a problem yet.”
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