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Phillips 66 rail project – explosive risks far outweigh the benefits

March 24, 2014

rail oilOPINION By MESA REFINERY WATCH GROUP CHAIR PERSON LINDA REYNOLDS

In 1955, San Luis Obispo County approved a plan to bring crude oil to its Nipomo Mesa Santa Maria Refinery via pipeline. Over the years, the Nipomo refinery was operated by Conoco Phillips, without issue, under agreed-upon limitations and protections.

In 2012, Conoco Phillips spun off Phillips 66 as a separate company. On the cover of its very first annual report, that new company’s executives stated “We’re taking a classic in a new direction.” That direction has become painfully evident with the company’s proposed “rail terminal project” for the refinery in Nipomo, which, as far as its impact on SLO County, would be a dramatic transformation in Phillips’ business model and method of operation.

Their revamped corporate business model is to maximize profits by turning our nation’s rail lines into inherently unsafe “tank car pipelines” to take advantage of the new flood of lower-cost Canadian tar sands 1 and domestic fracked crude oils.

The scope of what Phillips intends:

And that’s the strategy Phillips intends to implement at their Nipomo refinery. Instead of bringing in crude by pipeline, they propose bringing in a half-billion gallons (488,000,000) of crude per year, via 20,800 rail tank cars. In addition, those cars may very well contain Bakken crude — the explosive crude that has destroyed lives, property and the environment in towns across the U.S. and Canada. Phillips has repeatedly refused to rule out the delivery of Bakken crude to its Nipomo refinery.

Plus, the crude would travel through SLO County via DOT-111 cars — tankers that federal officials have called “tragically flawed, causing potential damage and catastrophic loss of hazardous materials during derailments.”2

We suggest you view the devastating impact these trains have already had on communities. Go to this site – http://tinyurl.com/mmbotzu.

The mile-long trains would move from north to south through SLO County. Here are just some locations where citizens could almost reach out and touch the tank cars, and the approximate distances:

• The Fairgrounds in Paso Robles (500 feet).

• Paso Robles’ downtown City Park (500 feet).

• Templeton Park (1,000 feet).

• The Santa Margarita elementary school (500 feet).

• Cal Poly (across the street).

• SLO City Hall (2,000 feet).

• French Hospital (right next door).

• SLO County regional airport (3,000 feet).

• SLO’s Los Ranchos elementary school (in their backyard)

• Pismo Beach Premium Outlets (2,000 feet).

• Pismo Beach’s downtown restaurants (1,400 feet).

• Pismo Beach North Beach Campground (1,000 feet)

• Pismo Beach Monarch Butterfly Grove (across the street)

• Grover Beach’s busy junction of Highway 1 and Grand Ave. (right next door)

• Oceano Beach’s busy junction of Highway 1 and Pier Ave. (right next door)

• Arroyo Grande’s Lopez High School (1,300 feet)

We believe the vastly increased risks that this proposal brings to the citizens and businesses throughout SLO County and the Central Coast are unacceptable. The risks of massive explosions, fires, oil spills, and air, noise, odor and light pollution, enormously outweigh the benefits the plan bestows on an individual business entity — that is, Phillips 66. Any honest risk, benefit analysis would lead to that conclusion.

It’s not about “jobs,” it’s about implementing a crude-by-rail strategy:

Phillips is holding the specter of lost jobs (they employ 140 people) over the heads of the citizens and officials of SLO County, should the Nipomo rail terminal project be denied. Let’s look at the issues:

• Phillips has said they require the project because California crude oil sources to feed their pipeline have been in decline for more than 20 years, since 1987. This time-span was stated by Phillips at the February 24th South County Advisory Council meeting, so they’ve known about the decline for more than two decades.

• Yet, around 2009, Phillips applied for a 10 percent increase in production at their Nipomo refinery, all to be brought in via pipeline. So why, if they knew for two decades that there was a decline in their raw material, would they recently apply for an increase in production, specifically from pipeline sources?

• The reason — the entire “declining California crude” argument, accompanied by the potential loss of jobs, is a red herring. It’s designed to distract us from the real reason they have for bringing in crude oil by rail.

• In fact, while California crude oil production has declined somewhat as a source for their refinery, the amount of crude processed at Nipomo in 2012 was exactly the same as it was 10 years prior in 2003, and it all continued to come in via pipeline. In addition, applications now abound in SLO County for new crude oil drilling sites.

• The real reason for requesting a Nipomo RAIL terminal, is that Phillips “corporate” has changed their business model. And their executives have proudly called it their “crude-by-rail strategy 3.” Their desire is to take advantage of low-cost, high-profit, extremely volatile, fracked shale oil. And the only way to quickly implement it all is via “crude-by-rail.”

Our health and safety trumps Phillips’ new business model:

Phillips wants to introduce a “new normal” into SLO County. That new normal includes potential explosions, fires, pollution and health hazards that do not currently exist here.

If a company that had never conducted business in SLO County came to the supervisors and planning commissioners tomorrow, with the same new business model and associated risks, we’re certain it would be rejected. The safety and well-being of our citizens trumps the new direction in which Phillips intends to take us all. That’s why our planning commissioners must vote “no project.”

1 – http://www.mercurynews.com/ci_23366256/canadian-tar-sands-crude-heads-bay-area-refineries

2 – http://www.schumer.senate.gov/record.cfm?id=345384&

3 –Phillips 66 2012 Summary Annual Report; page 27

 


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I hear the train a comin’

It’s rollin’ ’round the bend,

And I ain’t seen the sunshine,

Since, I don’t know when,

I’m stuck in CMC Prison,

And time keeps draggin’ on,

But that train keeps a-rollin’,

On down to San Luis.


When I was just a baby,

My Mama told me, “Son,

Always be a good boy,

Don’t ever play with guns,”

But I shot a man in Reno,

Just to watch him die,

When I hear that whistle blowin’,

I hang my head and cry,

I see them oil tank cars

all lined up in a row

They’re probably gonna crash again

Just like they done before

But I know I had it comin’,

I know I can’t be free,

But them tank cars keep a-movin’,

And that’s what tortures me.


Well, if they freed me from this prison,

If that railroad train was mine,

I bet I’d move out over a little,

Farther down the line,

Far from CMC Prison,

That’s where I want to stay,

And I’d let that lonesome whistle,

Blow my Blues away.


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While there is no definitive agreement on whether railways or pipelines are environmentally safer, most concur rail accidents tend to pose a greater threat to human beings, certainly to railway employees. Energy companies report that rail transport also is more expensive, nearly double the cost of pipeline transport.

There’s also consensus around the notion that pipeline spills, in terms of volume, tend to be bigger, in part because they may go undetected for longer.

The truth is, both means of transport are imperfect and pose clear risks. They both will continue to be part of the landscape as long as people keep driving, traveling by airplane or relying for their livelihood on resource exports.

The question s less about whether rail or pipeline transport is superior, and more about whether maximum safety provisions are in place and being adequately enforced.


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Can we move the rails closer to SLO City Hall?


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Let’s be sure to add to the list, San Luis Obispo emergency command center (at station #1) is only 629 feet from the center set of rails.


Also a seriously large natural gas line runs along the tracks there.


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Does anyone notice the long line of tanker cars that go from the oil fields in San Ardo to So. Cal every week? This has been going on for years. Where’s the outrage for the exact same rail route? Whether the oil is coming to, or leaving SLO County, it’s the same journey. If you don’t argue against this existing practice, this new plan will sail right on through.


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Different kind of oil, the San Ardo fields are old and thick. The new oil still has propane and more still in it.


http://www.eastbayexpress.com/oakland/more-tar-sands-and-fracked-oil-headed-for-east-bay/Content?oid=3830079


http://www.cbc.ca/news/canada/montreal/1-dead-many-missing-after-quebec-train-blasts-1.1353009


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Another obvious competition between capitalists/public and enviro extremists. Let’s approve the rail plan. It is probably better to refine/consume/export the stuff from within our county and our job base and resultant pump price, rather than let enviros choke every bit of petrochemical growth that the enviros want to kill.


BTW, how is it that this Nipomo self-appointed watch group prefers pipeline over rail while the President is blocking the hugely-studied Keystone pipeline so he (Obama) functionally can shunt Canadian oil to the giant fume-smoking railroad (BNSF) which his buddy/role model Warren Buffett owns so much from? Hmmmm? (Capitalist Templeton Crocker would be pleased with the Prez BUT not this Nipomo rail blockade.)


Anybody notice that BNSF was just published as ordering THOUSANDS of new oil railcars? Phillips can see that pipelines are expensive and heavily delayed conveyances while rail lines are already in place.


Stop with the alarmism. Rail transportation of crude has proven overwhelming safe. Rail in the crude, baby. Capitalism will serve us well.


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I consider myself a member of the “public” and I don’t care to be grouped in with all “capitalists” (especially large corporations) as their interests often conflict with mine. I am not an “enviro extremist” either — maybe an “enviro moderate” at most.


The record of the rail industry for safety is not “overwhelmingly safe” — especially when there are long descents such as Cuesta Grade and road-rail crossings involved. However, it is not as dangerous as portrayed in Ms. Reynolds editorial either.


rOy has a more balanced view of the situation in his post prior to this one.


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The problem with your statement is that this is not Capitalism


I’m all for growth, but not petrochemical growth. How much power do we really need? Since we distance ourselves from the source, it is very easy to forget that all this power we use comes at a price. Is it really worth it? While I think that some use of power is worth the price, do we really need to be lighting up giant empty retail parking lots all night long? Do we really need to have flood lamps lighting up our yards at night, or baseball stadium lights that are left on at night sometimes, or..well you get the point. It’s ridiculous, and it wouldn’t be possible under CAPITALISM.


In fact, the nature of the oil industry and the government is FAR closer to an economic form of Fascism…. or as it is often called, Corporatism.. Capitalism works because it follows patterns that reach equilibriums. This allows resources to be used efficiently and effectively, and the price is a product of the true cost. But when you start manipulating markets, providing subsidies, using public funding to build infrastructure that facilitates private industries, using the military to control supply, and so on then you throw supply and demand all out of wack. You remove the incentives for innovation and efficiency. To round that all out, when you provide limited liability for corporations, you remove the responsibility component.


When America returns to Capitalism, then I will say “let’s get out of the way!” But Corporatism is another thing altogether where the government picks the winners and losers and central planning becomes as important as it is in Communism. And when you sell me one thing and call it another and I become aware of it, then I am going to be in your way at every step :)


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“It’s not about “jobs,” it’s about implementing a crude-by-rail strategy”


Why do I have a feeling that if they wanted to do it via pipeline, we’d be seeing a piece opposing that, as well?


Not sure where I am on this, it is foolish to say no to oil, then turn around and use it in most products (plastics and other synthetics, fuel, etc) everyday uses. It would be great if there were some non-radical engineering input on increasing train safety (speeds, containment, etc). There always is a potential for risk, any given gas station could potentially explode; refineries burn, nukes melt down, etc.


The question becomes: what are we willing to risk to enjoy our great, comfortable lifestyles?


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Excellent piece Linda.


Don’t forget the close proximity the rail line has to the Men’s Colony? The thousands of soles that are incarcerated and the thousands more that work there are at extreme risk. all housed at the bottom of the Cuesta Grade, where runaway trains have killed before.


The proposal is INSANE!!!


The No Project Alternative is the Environmentally Preferred Project.


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Runaway trains that have killed by CMC?? Where did I miss that? Can you state a time frame and or amount killed???


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3 died, Sept. 25, 1969 derailment on Cuesta Grade. Another derailment happened on the grade in the 1920’s, killing more. Sure, trains are safer than they used to be, but the volatile crude is like carrying bombs.


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Thank you for reply, fair enough. Well I’ll discount the 1920 twenty one as, first the only 1920 one I know of happened just south of Santa Margarita. I know as I have an old picture of accident. Even if did, train safety up till the 1930’s was still iffy.


So that puts us with the one in 1969. One. Now how many daily trips have there been in last sixty years? I bet this works out to less than one percent. In life you won’t achieve perfect and at one percent that is darn near.


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I also would like a citation for where anyone has been killed by a runaway train near CMC, which is, by the way, miles away from the bottom of the Cuesta Grade. The Men’s Colony is located near the big Horseshoe section of the track which was engineered to provide a relatively safe descent. If you make a claim like you did, you need to back it up. We are not ready to do away with oil just yet, and I’m tired of the high prices. We should be ramping up our energy production, and exporting natural gas to Europe in order to counter Russia’s influence. I say let’s have a rational analysis of the gallons per mile of oil transported by rail every year in North America vs. the number of accidents and then go from there, but I don’t see that in this article. Yes, there have been accidents, but risk cannot be eliminated, only mitigated. We all of us use oil and oil products every day and we cannot eliminate oil from our economy.


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The horseshoe track is only 350 ft. from the CMC property line.


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First of all, thank you for responding. I did say that the Horseshoe is near CMC, while the bottom of Cuesta Grade is miles away. The railroad was there before the prison, so the State of California and the prisoners can take their chances with potential derailments and spills. You cite two examples, one from SEP 1969 and one from the 1920s. That’s two accidents in roughly one hundred years. That’s a pretty damn good safety record. I’ll live with that. As I said before, risk cannot be completely eliminated, only mitigated. Everyone posting on this site is using petroleum products in our computers, the wires carrying current to our computers, etc.. Like it or not, we NEED oil. That is the fact. Unicorn farts are not going to power our economy. One man’s opinion, which you and all others are free to take or leave as you see fit.


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if Shamu can’t hang out in San Diego any longer, surely Phillips will not get their “new normal”.


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