BIZMOLOGY — On November 9, 2013, a 90-car train carrying ultra-light and combustible crude oil from North Dakota’s Bakken shale play derailed and exploded in western Alabama.
Some 20 of the Alabama & Gulf Coast Railway train’s derailed cars caught fire after the accident in Pickens County, although no injuries were reported. The train was headed to Genesis Energy‘s terminal in Walnut Hill, Florida, with final delivery to Shell’s 80,000-barrel-per-day refinery near Mobile, Alabama.
It could have been worse. The accident triggered memories of the major disaster that occurred in June this year when a train carrying Bakken crude derailed and exploded in Lac-Mégantic in Quebec, destroying the town center and killing 47 people.
Since then, Canadian and American government regulators have called for tighter standards on crude oil rail shipments, including the use of newer tanker rail cars designed for highly flammable liquids.
DOT-111 tank cars manufactured prior to 2011 have been determined by regulators as being too susceptible to puncture events. Following a 2009 Illinois derailment and explosion, the National Transportation Safety Board in the US recommended that tank cars used to carry ethanol and crude oil be reinforced. As a result, DOT-111 rail cars ordered after October 2011 have been made to be more robust. However, retrofitting 300,000 older cars has a price tag of $1 billion, and that retrofitting has not been implemented.
North America’s aging pipeline network is not faring much better. Recent pipeline leaks include one in Utah in March 2013 when seams of a Chevron pipeline eroded and spilled diesel near the Great Salt Lake, and a break along an Exxon Mobil crude oil pipeline in April 2013, which flooded an Arkansas neighborhood.
More than half of US pipelines were built before the 1970s. Older pipelines, known as low-frequency electric resistance welded pipe (ERW), do not meet today’s corrosion standards and are considered at high risk for leaks and dangerous ruptures. Replacing these old pipelines is a huge challenge for the industry, estimated to cost $1 million per mile.
Here’s a good question. With rail cars and crude oil pipelines running through major urban areas, should not more of the growing revenues being generated by oil and gas companies’ record production from North America’s energy basins be reinvested in upgrading the safety of its transportation infrastructure?