Tag Archive for crude oil

SOURCE COMPETITION // Example from the North Sea

Falling oil prices could lead to the closure of 140 fields in the North Sea over the next five years.

Falling global prices and geographic and product source competition are the reasons.

Many North Sea operators are accelerate plans for decommissioning the ocean drilling rigs.

Wood MacKenzie, a consultant, says that the decommissioning of the fields could go ahead even if oil prices return to $85 per barrel, from their current price of around $49.

The impact of some European countries from job and related tax revenue losses will be staggering.

The report comes after Oil and Gas UK said that 65,000 jobs had been lost in the North Sea since the slump in oil prices began last November. The trade body has warned that with so few new projects gaining approval, capital investment is expected to drop from £14.8bn last year to between £2bn and £4bn in each of the next three years.

Decommissioning is already underway in more ageing fields in the North Sea. Royal Dutch Shell is planning the decommissioning of the Brent field. Four Brent platforms – Alpha, Bravo, Charlie and Delta – have generated £20bn of tax revenue since they were brought into production in 1976.

For the complete news report in the Telegraph, log onto: http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11853279/Clock-ticking-for-North-Sea-oil-as-low-prices-threaten-closure-of-140-fields.html

How to execute a world class solution to complex DOT tank cars rules

How to execute a world class solution to complex DOT tank cars rules.

Railway Age has a very important message about regulatory confusion. So many regulations. How do corporations cope?

http://www.railwayage.com/index.php/regulatory/survey- says-complex-hazmat-transport- regs-would-even-challenge-einstein.html

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Regulators tell you what to change or to do. They don’t tell you how to execute..

“They in fact seldom give advise about the myriad choices of how to comply”. They do not provide training either.

There is a company called STARS that can help you. Starting with training, like I received this past week.

From the RAILWAY AGE current issue :– here is added background discussion this week..

“Is complying with the multitude of regulations for the transport of hazardous materials—also known as dangerous goods (DG)—truly a challenge? According to 136 shipping executives surveyed online in April 2015 by Labelmaster , a provider of solutions for hazardous material transport compliance, even Albert Einstein would have had problems figuring out some of the rules.

More than half of the 136 executives polled—56%—said the brainy Einstein would have difficulties figuring out the 49 CFR, one of the government’s primary reference books that cover regulations, requirements and standards for U.S. hazmat transportation via highway, rail, air and water.

The survey also revealed a majority—59%—find it a challenge to keep with the ever- changing dangerous goods regulations.

As one example, 14% say that “the regulations are confusing—everyone has a different interpretation.” And the regulatory inspectors provide no or little help. Most DG professionals are looking for training and integrated solutions to simplify their role as to what to do now.


There is a real quandary as to “should we retrofit” or “should we abandon what migh be a suitable sunk capital fleet and switch to all new tank cars”?

Washington safety agencies lack the skills to give you guidance. Who pays for the retro fits? Washington has no idea. Why?

Because the thousands of already operating cars are subjects of complex lease agreements. Regulators don’t live in that complex world.

As a business example, if you use DOT type CPC-1232 tank cars, and your lease expires before the mandatory April Fools date of 4/1/2020, how do you handle the financial accounting for any improvements/modifications made between the lessor and the lessee? And exactly what technical modifications should you consider given the liability issues of a failure?

Who do you turn to to for such critical advise? The car manufacturers? Or a source of independent due diligence? Remember that on average you might pay around $60,000 a car for a retro-fit on a tank car with more than 20 years remaining life. But on a new tank car the cost might be more than $135,000.

As an insurance question to your broker, how would the insurance risk be perceived between the retro fit and the new car option? Do they calculate that value difference for you?

The economics are so complex that a special survey is being conducted with the results to be published in an upcoming Railway Age issue. You can contact dnahass@railfin.com for more about this. Or contact http://www.starsconsulting.org/ for a second professional opinion.

Are North American Freight Car Orders heading towards down cycle as crude oil production sags?

A previous near consensus 86,000 car forecast earlier for this year is dropping.

80,000 to 84,000 level may now be more more likely.  Or lower?

Tank cars, frack sand cars, and coal cars most likely to fall off the pace based on current spring railroad traffic reports.

From Bloomberg, 16 June

The agency reports that Greenbrier Cos. fell the most in almost seven months after Stifel Financial Corp. analysts estimated that railcar demand will be hurt by a decline in oil prices.

To read the entire article, go to http://bloom.bg/1FkFoDo

Stifel estimated production will be 84,000 railcars this year, less than transportation consultant FTR Associates’s outlook of 86,000.

History shows us how volatile the year to year North American rail car market can be as this SUPPLY SIDE changes to reflect DEMAND SIDE economics.

New mobile application for First Responders to crude oil trains accident could be INFO breakthrough

Under development since last fall, the AskRail mobile phone application gives local responders essential train commodity hazardous information even without train on board train information available from the train crew or if it is difficult to reach local BNSF train offices or train dispatchers.

Demo given by the BNSF railroad in Chicago.

A French language version to be released soon for Canada.

Other rail carriers can also use the software application developed in part with RailLinc technical assistance.

Software use will now become part of hazmat training provided by the rail companies.

Other carriers besides BNSF can choose to use the application.


Fire fighters tell their side of resulting fire from oil train accidents

Cude Oil train in Interstate median in front of cntral Albany capital area Crude Oil Train passing adjacent capital area of Albany NY

From a TV report on 06/08/2015 6:59 PM by WNYT.com ALBANY NEW YORK
By: Samantha DiMascio

(DISCLOSURE: My Uncle Jim was a career fireman in Milwaukee)

Firefighters confronted by catastrophic oil train derailments shared their stories with people in Albany today. It was part of a summit put on by the Albany County Executive, and Sheriff at the College of St. Rose.

Over the last five years, the amount of crude oil traveling through Albany has tripled

One listener said that what we learned today is that you cannot fight the fire, you have to run away from the fire and let it burn out.  That is the same message I received when at a seminar in April in Easton PA.  Mostly we evacuate and let it burn out said the fire marshal in Easton.

A local Albany sheriff said warned that on a bigger scale “we didn’t think about the oil going into the sewer systems, taking out water systems, taking out infrastructure”.  Those are worst case scenarios that we might not be able to handle.

A Battalion Chief from Lynchburg, VA had an oil train derail in his city. He stressed to the audience in Albany the need for depth in the emergency response system. “You’ve got to have people in place to backfill positions, you have to have those command functions filled and people able to come in place of someone else’s absence. Because you cannot just ignore other possible fires and incidents happening in your town while you fight the train fire for multiple days.

To put manpower and equipment resources in perspective, Lac Megantic depleted resources from 85 different fire departments over the course of their three week disaster response. “That would wipe out all of Albany County’s 48 departments and put a sizeable dent in surrounding county services” said one Albany firefighter.  Imagine what that might do in an even larger urban area with more population both residential and working day time employees to possibly evacuate.

Who has calculated that catastrophic risk scenario and how recovery and claims would be paid?

For more go to: http://wnyt.com/article/stories/s3820216.shtml

Struggle to find how to pay July 2013 oil train derailment costs & claims in Canada


Report tonight says World Fuel Services (NYSE: INT ) agreed to provide an estimated  $110 Million to a compensation fund for victims of the 2013 Lac-Megantic, Quebec, oil train derailment as part of a settlement with the people trying to identify liability payment sources..

The report is that a subsidiary of INT sold the Bakken light crude oil that was on the train when it crashed and exploded, killing 47 people.

Canadian Pacific Railway, which transported the oil over some of the rail route but not over the track section where the train derailed has not yet settled with those parties seeking to put together a total compensation package say news reports,

The amount of funding found so far may still be about $200 million dollars short of the total liabilities identified in other news reports.

The public issue of how such catastrophic rail shipment risks are covered is still unresolved now almost at the two year date of this accident, And that may also be the public issue here in the United States if a multi billion accident occurred in a major US city.

Multiple causes.  Prime cause was run away train derailing in the middle of the small town

Multiple causes. Prime cause was run away train derailing in the middle of the small town


Rail Competition: “Always keep your eye on emerging competition vs. rail”

Competition for the Bakken crude by rail trains may change the pattern.

There is an interesting technical report today that shows how a possible Canadian crude new pipeline investment might within three or so years change the pattern of using crude oil trains to reach eastern seaboard US and Canadian refineries.

Read more

Oil-train safety kept secret is Headline News Business Report in Philadelphia

"Industrial" by woodleywonderworks from Flickr.com via Creative Commons License

Read the front page business section of the Philadelphia Inquirer Sunday. The railroad/hazardous materials secrecy theme is still being hammered by news media.

Is secrecy really possible with such huge train movements?

Ironically, by trying to play “the secret card” with responsible state and local emergency responders that would have keep that intelligence close, the story line about actual repeating train moves has been pretty much been fully vetted as to routes by the free press.

Read more

BNSF Customer Notifications – Customer Letters: Shale Crude Transportation Update on tank car safety

May 19th Progressive Railroading has provided direct access to BNSF revised decision on its previous year announced tank car acquisitions.

There are important leadership points in this announced BNSF revised business strategy.

Included are important facts on their provision of better emergency responder train movement information in the months ahead.

Their letter addresses a number of issues regarding the transportation of crude by rail.

See complete BNSF letter. Some excerpts follow.

Read more

MN lawmakers demand oil train disaster response plans in wake of Heimdal crash

"Industrial" by woodleywonderworks from Flickr.com via Creative Commons License

Not impressed by railroad explanations, on 8 May 2015.

Thirty nine state legislators want to know more about how BNSF insures against a catastrophic crude oil train accident

This is the URL for the full discussion. http://bringmethenews.com/2015/05/08/mn-lawmakers-demand-oil-train-disaster-response-plans-in-wake-of-heimdal-crash/#.VU2Uve_xj68.mailto

Here is a quick summary:

1) State lawmakers have called on rail operator BNSF to provide details of how it would respond to an oil train disaster in Minnesota. The notice came two days after this week’s BNSF crude oil train crash in North Dakota. A BNSF train carrying 107 cars of crude oil from the Bakken derailed in the town of Heimdal on Wednesday. About 10 cars caught fire in what was the second major oil train crash the state has seen in the past 18 months.

2) The 39 Minnesota lawmakers have written to BNSF demanding the information it had agreed to provide back in January, details describing the company’s emergency response procedures for “worst case scenario” oil train disasters should they occur in Minnesota.

3) The House and Senate lawmakers want the company to tell the legislature about the level of catastrophic insurance coverage the company maintains in the event of crude oil train accidents, spills and explosions.

4) They want BNSF to state how the company determines and analyzes the routes through Minnesota that trains carrying crude oil and other hazardous materials will take. This reflects a lack of community confidence in the carriers’ storyboard after multiple accidents and little evidence of improvement.