Archive for the ‘Oil spills’ Category

Deregulation Crashes and Burns

Thursday, July 11th, 2013

Canada’s Transportation Safety Board is far from reaching a conclusion on what caused an unattended train with 72 tanker cars filled with crude oil to roll downhill and crash into the Quebec town of Lac-Megantic, setting off a huge explosion that killed at least 15 people. But that hasn’t stopped Edward Burkhardt, the chief executive of the railroad, from pointing the finger at everyone in sight — except himself.

Burkhardt first tried to blame local firefighters who had extinguished a small blaze in the train before the larger accident, and now he is accusing his own employee — the person who was operating the train all by himself — for failing to apply all the hand brakes when he parked the train for the night and went to a hotel for some rest after his 12-hour shift.

Whatever were the immediate causes of the accident, Burkhardt and his company — Montreal, Maine & Atlantic (MMA) Railway and its parent Rail World Inc. — bear much of the responsibility.

Burkhardt is a living symbol of the pitfalls of deregulation, deunionization, privatization and the other features of laissez-faire capitalism. He first made his mark in the late 1980s, when his Wisconsin Central Railroad took advantage of federal railroad deregulation, via the 1980 Staggers Rail Act, to purchase 2,700 miles of track from the Soo Line and remake it into a supposedly dynamic and efficient carrier. That efficiency came largely from operating non-union and thus eliminating work rules that had promoted safety.

Wisconsin Central — which also took advantage of privatization to acquire rail operations in countries such as Britain, Australia and New Zealand — racked up a questionable safety record. Burkhardt was forced out of Wisconsin Central in a boardroom dispute in 2001, but he continued his risky practices after his new company, Rail World, took over the Bangor and Aroostook line in 2003 and renamed it MMA.

Faced with operating losses, Burkhardt and his colleague Robert Grindrod targeted labor costs with little concern about the safety consequences. In 2010 the Bangor Daily News reported that MMA was planning to reduce its crews to one person in Maine, which, amazingly, was allowed by state officials. Grindrod blithely told the newspaper: “Obviously, if you are running two men on a crew and switch to one man, you’re saving 50 percent of your labor component.” The company also succeeded in getting permission for one-man crews in Canada.

Inadequate staffing may have also played a role in a 2009 incident at an MMA maintenance facility in Maine in which more than 100,000 gallons of oil were spilled during a transfer in the facility’s boiler room. In 2011 the EPA fined the company $30,000 for Clean Water Act violations.

MMA continued to have safety problems even before the Lac-Megantic disaster. The Wall Street Journal reported that MMA had 23 accidents, injuries or other reportable mishaps from 2010 to 2012 and that on a per-mile basis the company’s rate was much higher than the U.S. national average.

The Lac-Megantic accident is prompting calls in Canada for a reconsideration of the policy of allowing a high degree of self-regulation on the part of the railroads. A review of lax regulation, including the elimination of work rules, should also occur in the United States. There’s also a scandal in the fact that railroads like MMA are still allowed to use outdated and unsafe tanker cars.

Yet some observers are seeking to exploit the deaths in Quebec by making the bizarre argument that the real lesson of the accident is the need to rely more on pipelines rather than railroads to carry the crude oil gushing out of the North Dakota Bakken fields (the content of the MMA tankers) and the tar sands of Canada. North Dakota Senator John Hoeven, for instance, is using the incident to argue the need for the controversial XL Pipeline.

How quickly these people forget that the safety record of pipelines is far from unblemished. Hoeven’s neighbors in Montana are still recovering from the 2011 rupture of an Exxon Mobil pipeline that spilled some 40,000 gallons of crude oil into the Yellowstone River.

The problem is not the particular delivery system by which hazardous substances are transported but the fact that too many of those systems are under the control of executives such as Burkhardt who put their profits before the safety of the public.

The Keystone Kop of Tar Sands Oil

Thursday, April 11th, 2013

KeystoneKopsEven if the Obama Administration decides against the Keystone XL pipeline, the rejection of that project would not put much of a dent in the output of environmentally destructive Alberta tar sands oil.  One reason is that tar sands producers are hedging their bets. They are also hoping to ship their product westward through another pipeline that will extend to the Pacific port of Kitimat in British Columbia.

What is particularly dismaying is that the company behind this Northern Gateway project is Canadian pipeline giant Enbridge, which has what is probably the worst safety record of any oil transportation company in the world. Among other things, it was responsible for the worst inland oil spill in U.S. history—the July 2010 accident that spewed more than 800,000 gallons of oil into Michigan’s Kalamazoo River, a major state waterway that flows into Lake Michigan.

The incident occurred only months after the company was warned that it was not properly monitoring corrosion on the pipeline.

The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) later imposed a record civil penalty of $3.7 million against Enbridge, which it said exhibited a “lack of a safety culture.”  This was echoed in the findings of the National Transportation Safety Board, which determined that it was not until 17 hours after the spill started that Enbridge began to take steps to address the problem. The safety board chair was quoted in an agency press release as saying: “This investigation identified a complete breakdown of safety at Enbridge. Their employees performed like Keystone Kops and failed to recognize their pipeline had ruptured and continued to pump crude into the environment.”

Enbridge’s lack of attention to safety can be seen in its record both before and after the Michigan spill.

For example, in 2001 a seam failure on a pipeline near Enbridge’s Hardisty Terminal in Alberta spilled more than 1 million gallons of oil. The following year, a 34-inch-diameter pipeline owned by its affiliate Enbridge Energy Partners ruptured in northern Minnesota, contaminating five acres of wetland with about 250,000 gallons of crude oil.

In 2003 about 189,000 gallons of crude oil spilled into the Nemadji River from the Enbridge Energy Terminal in Superior, Wisconsin. Fortunately, the river was frozen at the time, so damage to the waterway was limited.

In 2004 the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) proposed a fine of $11,500 against Enbridge for safety violations found during inspections of pipelines in Illinois, Indiana and Michigan. The penalty was later reduced to $5,000. In a parallel case involving Enbridge operations in Minnesota, an initial penalty of $30,000 was revised to $25,000.

In 2007 an Enbridge pipeline in Wisconsin spilled more than 50,000 gallons of crude oil onto a farmer’s field in Clark County. The following month another Enbridge spill in Wisconsin released 176,000 gallons of crude in Rusk County. That same year, two workers were killed in an explosion that occurred at an Enbridge pipeline in Clearbrook, Minnesota. The PHMSA later fined the company $2.4 million for safety violations connected to the incident.

In 2008 the Wisconsin Department of Natural Resources charged Enbridge with more than 100 environmental violations relating to the construction of a 320-mile pipeline across much of the state. The agency said that Enbridge workers illegally cleared and disrupted wooded wetlands and were responsible for other actions that resulted in discharging sediment into waterways. In January 2009 the company settled the charges by agreeing to pay $1.1 million in penalties.

In 2009 the PHMSA fined Enbridge $105,000 for a 2007 accident that released more than 9,000 gallons of crude oil. The following year, PHMSA proposed a fine of $28,800 against Enbridge for safety violations in Oklahoma.

Shortly after the Michigan accident, Enbridge experienced another spill at one of its pipelines in Romeoville, Illinois, a suburb of Chicago.

And in In July 2012, less than a month after the publication of the damning National Transportation Safety Board report on the Michigan accident, an Enbridge pipeline in Wisconsin ruptured and spilled some 50,000 gallons of oil. One member of the U.S. Congress responded by saying: “Enbridge is fast becoming to the Midwest what BP was to the Gulf of Mexico.”

These incidents are only the ones big enough to gain press attention and significant regulatory response. A profile of the company by the Polaris Institute put the number even higher—more than 800 spills between 1999 and 2010 in which some 6.8 million gallons of oil were spilled in the U.S. and Canada.

While Keystone XL and its sponsor TransCanada get the attention, Enbridge may be an even bigger threat.

Note: This piece draws from my new Corporate Rap Sheet on Enbridge, which can be found here.

Canada’s Other Tar Sands Villain

Thursday, April 4th, 2013

suncor_oil_sandsAs the Obama Administration nears its final decision on the Keystone XL pipeline, the oil industry should be on its best behavior. Yet the purveyors of petroleum can’t seem to help themselves. They keep having accidents that demonstrate the perils of Keystone.

Those perils are not limited to the disastrous contribution the pipeline would make to the climate crisis. Recent events show what a dangerous business it is to transport oil across vast distances, especially when that oil is of the exceedingly dirty variety produced in the tar sands of Canada.

Exxon Mobil has been the center of attention in recent days as the result of a leak of some 10,000 barrels of heavy Canadian crude in a residential area near Little Rock, Arkansas. The incident came only days after the federal Pipeline and Hazardous Materials Safety Administration proposed that the company be fined $1.7 million in connection with a 2011 pipeline rupture that spewed a large quantity of oil into the Yellowstone River in Montana.

The Arkansas spill came shortly after a Canadian Pacific freight train derailed, spilling some 30,000 barrels of tar sands oil in western Minnesota.

The U.S. press has paid less attention to yet another spill. This one took place right where tar sands oil is produced in Alberta, and the responsible party was Canadian oil giant Suncor Energy. And it turned out that the site of its toxic wastewater spill into the Athabasca River was the same place where a previously unreported spill occurred two years earlier.

Suncor, which is the subject of my latest Corporate Rap Sheet, tends to get less attention from U.S. tar sands activists than Transcanada, which is the company behind Keystone XL. Yet Suncor is one of a handful of operators that produce the tar sands oil that would flow through the pipeline.

It was Suncor, in its previous incarnation as a subsidiary of Sunoco, that pioneered tar sands production in the 1950s and went on to invest billions of dollars to develop the dirty business. Suncor has thus been a target of anti-tar sands protests by groups such as Greenpeace Canada.

The recent spill in Alberta and the belatedly reported 2011 incident are far from the only blemishes on the company’s safety and environmental record.

In 2008 there was a scandal over reports that a leak of nearly 1 million liters of waste water from a Suncor containment pond into the Athabasca River went unreported for up to eight months. Alberta Environment later charged the company with being out of compliance with its Water Act license but fined it only C$275,000.

In 2009 there was a bigger scandal over reports that a Suncor contractor, Compass Group Canada, had failed to properly treat human waste from a company work camp before dumping sewage into the same river. Suncor was fined C$175,000 for failing to properly supervise Compass, which was fined C$225,000 for failing to report the problem.

At the same time, Suncor was fined C$675,000 for failing to install pollution control equipment at its Firebag oil sands facility. In July 2009 Suncor was fined C$625,000 for excessive discharges of sulfur dioxide at its Sarnia oil refinery in Ontario.

In 2010 Environment Canada ordered Suncor to pay C$200,000 after it pleaded guilty to two violations of the Canadian Fisheries Act in connection with a 2008 incident in which wastewater overflowed from a containment pond into the Steepbank River in Alberta.

In December 2011 an accident at Suncor’s refinery in Commerce City, Colorado resulted in the seepage of hazardous waste into Sand Creek and the South Platte River. Tests by the U.S. Environmental Protection Agency found that the contamination included the carcinogenic substance benzene. The drinking water at the refinery was also found to contain high levels of benzene. Meanwhile, the refinery continued to spread contamination into surrounding groundwater sources. Six months after the spill, Colorado officials were saying that a complete clean-up could take years.

In April 2012 the Colorado Department of Public Health and Environment announced that Suncor would pay $2.2 million in negotiated fines in connection with airborne benzene releases at the Commerce City refinery unrelated to the accident.

In October 2012, the Canada-Newfoundland and Labrador Offshore Petroleum Board announced that Suncor had admitted to regulatory violations in connection with a spill of lubricating fluid at its drilling platform in the Jeanne d’Arc basin the year before; the company was ordered to pay C$130,000 in penalties.

Transcanada deserves all the criticism it gets for its Keystone plan, but companies like Suncor that actually produce the dirty oil that will travel through that system also need to feel the heat.

Read the full Corporate Rap Sheet on Suncor Energy here.

What the Shell?

Thursday, August 18th, 2011

United Nations Environment Program photo of oil contamination in Nigeria.

It seems that the multinational oil giants are taking turns having spills. After BP’s big mess in the Gulf of Mexico last year and Exxon Mobil’s accident in Montana this year, it is now Royal Dutch Shell that is spewing oil where it should not be going.

More than 50,000 gallons have leaked from a Shell pipeline off the coast of Scotland in the worst North Sea oil spill in more than a decade. Shell has had difficulty locating the source of the leak and identifying its cause.

Just as the Exxon Mobil accident could be seen as a warning about the perils of the giant Keystone XL pipeline project extending from Canada to Texas, so can the Shell accident be viewed as a reminder about the dangers of another petroleum initiative: the proposal by Royal Dutch Shell’s U.S. subsidiary, Shell Oil, to begin drilling exploratory wells in the Chukchi Sea off the northern coast of Alaska. The North Sea accident occurred only days after the U.S. Interior Department gave Shell conditional approval for the Alaska project.

The gods seem to strike back each time the Obama Administration decides to give a green light to offshore oil activity. BP’s gulf disaster happened only days after Obama opened vast coastal areas to new drilling.

There are countless environmental reasons why Shell’s Alaska initiative is a bad idea. It should also be blocked for another reason: Shell cannot be trusted.

For the past three decades or more, Shell has been involved in a long series of accidents, spills and other mishaps at many of its offshore and onshore facilities around the world. It also has a checkered history with regard to human rights and was implicated in a scandal about false reporting about its oil reserves. Here are some of the more notorious features of the company’s track record, which I compiled for a profile on the Crocodyl wiki:

  • A 1988 explosion at a Shell refinery in Louisiana killed seven workers, whose families sued the company and collected more than $40 million in damages.
  • In 1989 Shell paid $19 million to settle federal charges relating to a spill at its refinery in Martinez, California that the company did not disclose for four weeks.
  • In 1995 Shell agreed to pay $3 million to settle a lawsuit brought by the California Public Interest Research Group charging that the company had dumped illegal amounts of selenium into San Francisco Bay and the Sacramento-San Joaquin River Delta.
  • In 1995 Royal Dutch Shell was also the target of a boycott and other protests in Europe over a plan by the company and its joint venture partner Exxon to sink an obsolete offshore oil storage facility known as Brent Spar in the North Sea rather than dismantling it. Environmental groups, led by Greenpeace, warned that the structure, which contained oil sludge, heavy metals and some low-grade radioactive waste, could damage the food chain for fish in the area. The company gave in the pressure and brought the Brent Spar to shore.
  • In 1998 Shell Oil agreed to pay $1.5 million to settle federal charges that its refinery in Roxanna, Illinois was responsible for illegal discharges of pollutants into the Mississippi River.
  • In 2001 Shell Oil and three other major petroleum companies settled a lawsuit filed in California by agreeing to clean up some 700 sites in the state that had been contaminated by the gasoline additive MTBE.
  • In 2005 Shell was fined £900,000 in connection with the 2003 deaths of two workers on a North Sea oil platform as the result of a major gas leak.
  • In the late 2000s, Royal Dutch Shell found itself facing increasing criticism for its huge liquefied natural gas project on the island of Sakhalin in the Russian Far East. Pacific Environment, a San Francisco-based advocacy group, collaborated with Russian activists to form Sakhalin Environment Watch, which challenged the offshore Sakhalin project because it threatened the survival of the world’s most endangered species of whales—Western Pacific Grays. In 2008 the British newspaper The Observer reported that it had obtained dozens of internal e-mails showing that Shell officials in London sought to influence the conclusions of a purportedly independent environmental review of the Sakhalin project.
  • Shell has also been heavily involved in the environmentally disastrous tar sands industry in Canada.

Shell’s tarnished human rights record dates back to the 1980s, when it was targeted for its investments in apartheid-era South Africa. In the early 1990s Shell began to face protests over its oil operations in Nigeria. In 1994 the Movement for the Survival of the Ogoni People, then led by Ken Saro-Wiwa, began blockading contractors working on Shell’s facilities to bring attention to the large number of pipeline ruptures, gas flaring and other forms of contamination that were occurring in the Ogoniland region. The group described Shell’s operations as “environmental terrorism.”

The Nigerian government, a partner with Shell in the operations, responded to the protests with a wave of repression, including the arrest of Saro-Wiwa, who was hanged in 1995. Shell denied it was involved, but critics pointed to the role played by the company in supporting the military dictatorship. A lawsuit charging Royal Dutch Shell with human rights violations in Nigeria was later filed in U.S. federal court under the Alien Tort Claims Act. In 2009, just before a trial was set to begin, the company announced that as a “humanitarian gesture” it would pay $15.5 million to the plaintiffs to settle the case.

A report recently released by the United Nations Environment Program estimates that a clean-up of oil industry contamination in Ogoniland will cost at least $1 billion and take up to 30 years.

On its corporate website, Shell insists that “we are qualified to do the job right — to explore for offshore oil and gas in Alaska in a very safe and careful way.” On the Other Earth, perhaps. But not on this one.

Perilous Pipelines

Thursday, July 7th, 2011

ExxonMobil's paper towel mobilization

At the height of the controversy last year over the BP oil spill in the Gulf of Mexico, top executives from four competing oil giants appeared before Congress and distanced themselves from their British rival.

“We would not have drilled the well the way they did,” smugly stated ExxonMobil CEO Rex Tillerson. “It certainly appears that not all the standards that we would recommend or that we would employ were in place,” chimed in Chevron chairman John Watson.

Now that ExxonMobil is at the center of an oil pipeline spill into Montana’s flooded Yellowstone River, Tillerson should be feeling somewhat less self-satisfied. And the rest of us have another reminder that poor safety practices in the petroleum industry are far from an anomaly.

It is also a reminder that companies professing concern about the environment can end up being major offenders. In 2008 the ExxonMobil refinery in Billings served by the Silvertip pipeline that just burst received certification from the Wildlife Habit Council for its efforts to conserve ecosystems and protect wildlife in and around company operations. Some of that wildlife is now covered in crude oil.

When people hear about oil spills, they tend to think of the large offshore incidents such as the BP mess in the gulf and ExxonMobil’s 1989 disaster in Alaska’s Prince William Sound. Equally dismal is the history of onshore spills caused by ruptures in the vast network of pipelines that carry crude oil from drilling sites to refineries.

A year ago this time, the news media were transmitting images very similar the ones now coming out of Montana. In July 2010 a burst pipeline released more than 800,000 gallons of oil into the Kalamazoo River in southern Michigan.

The company involved in the Michigan accident–Enbridge Inc., operator of the world’s largest crude oil pipeline system–had been warned by federal regulators that it was not properly monitoring corrosion on the pipeline. Over the past decade, Enbridge’s pipelines have been involved in a long list of ruptures and leaks in places such as Minnesota, North Dakota, Wisconsin and Alberta.

Enbridge, which is based in Canada, has annual revenues of more than $15 billion, has not felt much pain from the fines imposed by the U.S. regulators at the Pipeline and Hazardous Materials Safety Administration, which are often below $100,000. However, in response to a November 2007 explosion in Clearbrook, Minnesota that took two lives, Enbridge was fined $2.4 million.

What’s even more troubling than Enbridge’s past record is that the company is seeking to greatly expand its network, with a special focus on the environmentally disastrous tar sand fields of northern Alberta. Bringing the filthy oil output of the tar sands down to the United States is also the objective of the huge Keystone XL pipeline that would pass through eastern Montana (and the Yellowstone River) on its way to Texas.

Moreover, it would traverse the Ogallala Aquifer, which, NRDC points out, serves as the primary source of drinking water for millions of Americans and provides 30 percent of the nation’s ground water used for irrigation. Keystone XL, an expansion of an existing pipeline that opened last year, is awaiting federal approval. Earlier this year the existing pipeline was shut down for about a week after a series of a dozen leaks at pumping stations.

For companies such as TransCanada, Enbridge and ExxonMobil, the sky’s the limit when it comes to what they are willing to spend on projects such as Keystone XL (its price tag is $7 billion).  Yet when it comes to cleaning up their messes, things suddenly become austere. The main tools that ExxonMobil’s crews in Montana seem to be employing are glorified paper towels. If the fines for violations were more substantial, the pipeline companies might take safety more seriously.