Crude by Rail

Photo by Justin Franz | Flathead Beacon

Unbeknownst to many here in the United States, our nation ”will surpass Russia and Saudi Arabia as the world’s top oil producer by 2015, and be close to energy independence in the next two decades, according to the International Energy Agency (IEA), a Paris-based adviser to 28 energy-consuming nations,” so writes William C. Vantuono in Railway Age Magazine.  Largely this is due to increasing outputs of both crude oil and natural gas from shale formations in the United States. 

Enabling the Latent Production Capacity

Much of this new capacity is made possible by hydraulic fracturing (“fracking”).  The safety and environmental impacts of this process is worthy of its own lengthy consideration, so I will not digress to the discuss whether this is a good or bad path for the nation in this blog post.

The southern leg of the Keystone Pipeline
in construction while controversy swirls
around the norther segment.
Photo by Daniel Acker/Bloomberg

Nevertheless, while that discussion is ongoing, there is presently the dilemma of how to transport all this oil, while there is not sufficient pipeline capacity, with such proposals as the Keystone Pipeline raising its own environmental issues related to construction impacts as well as impacts of possible leaks once the pipeline is in service.

How is this gap between demand and transport capacity being met? 

The Growth of Crude by Rail (CBR) 

DOT-111 tank cars carry crude oil.
Photo by Harvey Henkelmann

The railroads have stepped in, allocating tank cars (typically of the DOT-111 specification).  This type of tank car is plentiful in North America, as it constitutes 69% of the US tank car fleet and 80% of the Canadian tank cars. The avail-ability of these cars positioned the railroads to step in where the pipelines remained underdevelop-ment and wrapped in controversy.

Compared to fixed pipelines, CBR presents many inherent advantages:

• More nimble in meeting immediate demands, compared to the development time for a pipeline, which includes design, permitting, financing, constructing, testing, and commissioning, which can take well over a decade.
• Whereas a pipeline is a fixed asset between a fixed Point A and a fixed Point B, the railroads can respond to shifting locations of Points A and B.

Nevertheless, this option is not without risk.  This is most vividly illustrated by the horrific runaway-train accident in Lac-Mégantic, Quebec, which resulted in a fire-ball that killed 47 and destroyed 30 buildings in the town.  While the causes of this accident are many (and worthy of a separate blog post), it is the death and destruction that point to the volatility of the cargo and the risks inherent in CBR.

Risk Comparison:  CBR and Pipelines

For CBR, the risks are both in leaks from railcars (without an accident) and in leaks and potential combustion resulting from an accident.  With pipelines, the principal risk is in leaks.

When it comes to leaks, it appears that CBR has a better track record, in terms of spills per ton-mile between 2002 and 2012:

• railroads spilled 2.2 gallons of oil per million ton-miles 
• pipelines spilled 6.3 gallons of oil per million ton-miles 

This is according to the Association of American Railroads, as reported in Railway Age, July 15, 2013.

Still, not all spills are equal.  To assess risk, one needs to consider how to define the risks and how well the risks can be mitigated.  

CBR travel on many rail routes and it is impossible to predict where the next spill will occur, be it at location where a spill is easily contained before damage to humans or the environment happens, or somewhere that the impacts are more significant.  With a fixed pipeline, the higher risk locations are more easily definable and additional accommodations can be made.  With railcars, in my opinion, you always have to consider a crash after a collision or derailment.

Double wall pipe

In both cases, a first line of risk mitigation is containment.  For a long time, fuel tanks and pipelines have been "doubled walled" or a pipe within a pipe.  So, if the pipe or inner tanks springs a leak, the outer pipe or tank can contain the spill.  Bot in both cases, there are other causes of spills that are more sudden and catastrophic.

Pipelines can be damaged by external forces, from a collision, accidental impact from construction equipment, earthquakes, or intentional damage from sabotage or terrorism.  Pipelines under pressure can experience pressure surges that potentially could open up a joint.  Various appurtenances (e.g., valves, branch connections, testing or sampling ports) are of differing construction and these items or the interface with the pipeline could be weak spot.  While pipeline designers know all these risks and consider them, sometimes something can go wrong that was not anticipated or is due to operating the line in an improper manner.

Similar risk issues exist with railcars, and railcar designers can design cars with that in mind.  

Making Tank Cars Safer

Admittedly, the DOT-111 is an old specification and needs to be updated.  Granted much of today's fleet has been upgraded, according to Railway Age, "to AAR [Association of American Railroads] standards implemented in 2011. These standards include double hulls, energy-absorbing head (end) shields, recessed top valves, and shelf-type couplers that are less prone to detaching vertically (and thus puncturing a car) in a derailment."  Nevertheless, the scene in Lac-Mégantic was so horrific, it would be impossible to stay the status-quo on tank car design.

In November, I was pleasant-ly surprised when the AAR, which is the association of the railroads, proactively came out in favor of stronger regulation of its own industry, specifically in regard to the design of tank cars.   As reported in Railway Age, "The Association of American Railroads (AAR) on Thursday, Nov. 14, 2013, urged the U.S. Department of Transportation 'to press for improved federal tank car regulations by requiring all tank cars used to transport flammable liquids to be retrofitted or phased out, and new cars built to more stringent standards.'  In comments filed with the Pipeline and Hazardous Materials Safety Administration (PHMSA), AAR said the safety upgrades it recommends will substantially decrease the likelihood of a release if a tank car is involved in an accident."

This is a positive step forward.

The Future of CBR

While I and many others would like to see more renewable and cleaner energy sources linked with energy conservation, we will not get to that future day magically and overnight.  In the interim, our nation runs on energy and the economics of domestic oil production will drive the demand for transporting crude oil from the wells to the refineries.

Will the energy industry wait for the pipeline capacity to be increased?

They simply can't wait that long.

Are the politicians that think the Keystone Pipeline is a key to our energy self-sufficiency about 10 years behind the times?

You bet!  (As are other fossils in DC who think there is any future in coal!)

Will better tank cars prevent any future spill?

No one can promise there won't be another oil spill, but safer tank cars is a good step for now.  Only when we move completely away from oil as a fuel will we end oils spills for good.

Is CBR here to stay?

Unlikely.  But count it in for the next decade, at least.

Obama on U.S. high speed rail: "Make no little plans"

As reported by Railway Age:

President Obama on Thursday, April 16, released an
unprecedented long-term strategic plan to advance
U.S. high speed rail development, beginning with
the $8 billion “down payment” provided through the
Administration’s recent American Recovery and
Reinvestment Act, augmented by $1 billion per year for five years in budget appropriations.

"Make no little plans," the President said at a nationally televised news
conference as he presented a plan—centered on rail—for the future of
U.S. transportation. It would begin with upgrading existing rail lines—a
foundation, so to speak—and then progress to building dedicated high
speed corridors, as has been done elsewhere in the world. In great detail
and with an almost startling breadth of knowledge about the high speed
industry, he talked about the many benefits of high speed rail, among them
the convenience of center city to center city travel and relief from highway
and air travel congestion.

Analysis

So, what does this all mean?

On the positive side, this is the most pro-rail announcement of any recent administration. National passenger rail advocates line the American Public Transit Association (APTA) and the National Association of Railroad Passengers (NARP) were falling over themselves in praise of the announcement.

And when you compare this announcement to the lean years of Reagan, Bush and Bush, a rail advocate would think they died and went to high speed rail heaven. In the Reagan years, even Amtrak was zeroed out in the administration's budget and there was no thought of high speed rail, unless it was paid for by the states or private sector. Even the Clinton years were no panacea for funding new intercity rail.

Putting the euphoria aside, what does this mean for funding? Well, it's a total of $13 billion over about 6 fiscal years:

• $8 billion in stimulus funding
  
• $1 billion per year for 5 years

Sound like a lot?

Again, it's a monumental amount compared to the past; I'm afraid it's a drop in the bucket compared to building a system that looks like real high speed rail, such as the TGV in France.

First of all, the funding will be diluted among 10 politically-determined corridors:

Do the math, and it's a average of $1.3 billion per corridor. Somewhat impressive, but say the corridors are about 500 miles (most are longer), that's $2.6 million/mile which is a nice upgrade, but won't buy you a TGV system.

Second, look at what this is buying. Pres. Obama talks about upgrading first. And the press release also defines "high" speed rail at 110 mph, which sound high compared to 65 mph on the interstate, but not compared to TGV speeds over 200 mph.

Now, my background in intercity high speed rail includes working on the US Dept. of Transportation's "Commercial Feasibility Study" were we looked at what it would take to run rail operations with maximum speeds of 90, 110, 125, 150 and 200 mph on most of the same corridors listed above. My job involved looking at maps and track charts in great detail and "test driving" the corridors (using a spreadsheet-based simulation program) to see how fast you could go if you upgraded the tracks or if you built new tracks (for the 200 mph option). Then we estimated how much it would cost it would take to reach each of these top speeds.

In short, I know what you can get out of these corridors and how much it would cost to get there.

Here's a summary of my conclusions:

1. The selection of the 110 mph top speed actually proved to be the most cost-effective target in terms of capital cost compared to increased ridership and associated revenue. While 110 mph is modest compared to TGV (at 186 mph), it is a prudent first step.
   
2. Where the federal funds meet local funding (e.g., in California, they have voted $10 billion of state funds), it may kick start something more than the studies I've seen over the last 2 decades.
   
3. Portions of the Empire Corridor (near Albany, NY) and the Chicago-Detroit corridor have segments already at 110 mph, so this funding can incrementally piggy-back on existing improvements.
   
4. Though not listed as one of the 10 corridors, the Northeast Corridor (Boston-Washington) can compete for funds.
   
5. The funding still depends on local initiatives. This is working in California, but has been a start-stop process in Florida (depending on who the Governor is) and here in New England, the failure of New Hampshire to provide modest funding for the Boston-Montreal corridor has crippled the efforts. This intercity rail is really interstate commerce, and last time I looked, the Federal government was responsible for that!
   
6. Bottom line: other than California (where they may actually build a high speed line), don't count on much. Despite what the President's rhetoric, I say "Make no grand plans!"

A Failing Grade for the Nation's Infrastructure

Today, the American Society of Civil Engineers issued a report card on the nation's infrastructure. And it failed, miserably, with a D.

As a civil engineer myself, I’ve seen government on all levels fail to keep up with the needs to maintain infrastructure including roads and bridges, parks, municipal buildings, water and wastewater, and transit.

Well, there’s the report card on the right.

What’s most inexcusable is the situation with roads and bridges, where there is a dedicated user fee (the gas tax) on both the federal and state levels.

How did we get here? Is it underfunding? Is it incompetence in the agencies that manage infrastructure? Or is it the way infrastructure is owned, funded and managed in our nation?

Well, it’s a little of all of the above. Generally, the agencies blame the funding; the politicians blame the agencies. But, in the end, our national infrastructure ownership and management system is dysfunctional.

Part of the problem can be blamed on the complex nature of infrastructure ownership and management. If we listen to all the talk about the stimulus finding for infrastructure, from politicians, the media, the public, pundits, and the like, you might think it was all government-owned and funded, right?

Wrong!!!

Much of it is privately owned and operated. See the table below for some of the complexities of ownership, funding, maintenance and operation of our public infrastructure:

Take electrical power from generation to transmission lines to the distribution wires that feed your home and businesses. Almost all of the nation’s power system is privately owned. There are exceptions, such as the Tennessee Valley Authority and some local municipal power companies, but chances are those power lines are owned by a private utility.

We frequently hear of the failure of the power system (e.g., lines down in storms), but it’s not just something that the federal government can throw money at. Most of it is privately owned and funded, with the government’s role as regulator. And with the levels of regulation, constructing a new power plant or transmission lines is typically at least a 10-year long project!

In the end, there are no simple answers. I will address some of these issues in future blogs.