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Rail Oil Shipping Raises Safety Concerns

Stocks in this article: GLP CP CSX

By Mary Esch

ALBANY, N.Y. -- Opponents of a proposal to build boilers to liquefy heavy crude passing through Albany by rail are drawing attention to the capital's emergence as a major hub for the transport of oil that's widely considered risky from an environmental and safety standpoint.

Over the past two years, the Port of Albany has become a major shipping point for highly explosive crude oil from North Dakota's Bakken Shale region. Hundreds of tanker cars arrive daily on Canadian Pacific (CP) and CSX (CSX) rail lines and stretch for miles along highways and through neighborhoods. The trains pass through cities from Buffalo to Albany along the Thruway, and from the Canadian border south along Lake Champlain and the Hudson River.

Crude is stored at the port in tank farms and transferred to barges and trains that travel down the Hudson River to refineries.

"We're very nervous about this crude oil mixture coming to our neighborhood," said Lucille McKnight, an Albany County legislator and port-area resident. 

At the Port of Albany, Global Partners, (GLP) a fuel shipper based in Waltham, Mass., got a permit from the Department of Environmental Conservation in November 2012 to expand operations from 450 million gallons per year of gasoline, ethanol and oil combined to 1.8 billion gallons of crude oil, according to the department.

The huge expansion in crude oil shipments through Albany drew little opposition until a series of major accidents elsewhere. A July 2013 derailment and explosion in Quebec killed 47 people. That was followed by oil train explosions in Alabama and North Dakota that prompted a federal investigation of Bakken crude's high volatility and calls for tougher standards for rail tankers.

Opposition in Albany was galvanized when Global Partners applied to install seven boilers at its Albany terminal to heat rail cars to liquefy their cargo of heavy crude for easier transfer to barges. The presumption by opponents is that the oil is a thick type drilled in western Canada known as "tar sands" oil.

Tom Keefe, a Global official, said at the meeting that its terminal handles many grades of crude oil that don't flow well when cold, but he didn't say where the crude comes from. He said Global's facilities are regularly inspected by local, state and federal agencies and its spill response plans are approved by the EPA and Coast Guard.

State Sen. Neil Breslin, a Democrat who represents Albany, said the heating facility would make the port a prime shipping hub for tar sands oil, raising the potential for a catastrophic spill.

"I'm totally against this facility," he said at a community meeting Wednesday.

In November, the company held a drill on the Hudson River at Newburgh with the Department of Environmental Conservation, the Coast Guard and local emergency management teams. A derailment and oil spill were simulated. The company is required to hold drills at various intervals, but this was the largest in a decade, reflecting the increase in shipments.

A coalition of environmental groups, Albany residents and city officials have written to the environmental department requesting a full environmental impact study for Global's current application to install boilers as well as the November 2012 permit to expand.

"We're concerned about the safety and environmental challenges that could result from accidents or spills," said Peter Iwanowicz, director of Environmental Advocates of New York. "When accidents happen with this kind of fuel, the results can be catastrophic."

In response to demands from the community and environmental groups, the Department of Environmental Conservation has directed Global to develop a public participation plan to inform residents about its operations. That's required by the state's environmental justice policy when a project has the potential for disproportionately high adverse health and environmental affects on minority and low-income populations. A low-income public housing complex is located near the port.

"Our intent is to review all aspects of the facility's operations," said department Deputy Commissioner Mark Gerstman. He said he can't speculate on whether the agency will revoke Global's 2012 permit and require a full environmental impact study.

Gov. Andrew Cuomo issued a directive on Jan. 29 asking DEC and other state agencies to conduct a comprehensive review of the state's spill prevention, response and inspection programs governing rail, ship and barge transportation of crude oil and make recommendations for improvements. The agencies are to report their findings on April 30.

Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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