BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AJR 42|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AJR 42
Author: Dodd (D), et al.
Amended: 8/8/16 in Senate
Vote: 21
ASSEMBLY FLOOR: 78-0, 6/30/16 - See last page for vote
SUBJECT: Transport by rail of flammable and combustible
liquids
SOURCE: Author
DIGEST: This resolution urges the President, Congress, and
certain federal agencies to expedite rulemaking and to enact
federal laws related to safe rail transport of flammable and
combustible liquids, such as crude oil.
Senate Floor Amendments of 8/8/16 add a reference to federal
legislation and make several minor and technical changes.
ANALYSIS: Existing federal law governs most major aspects of
rail transport and pre-empts most state regulation. The
principal agency responsible for promulgating and enforcing the
safety of rail shipments of crude oil is the U.S. Department of
Transportation (DOT); specifically, the Federal Railroad
Administration and the Pipeline and Hazardous Materials Safety
Administration (PHMSA) within DOT. At the state level, the
California Public Utilities Commission shares authority with the
federal government to enforce federal rail safety requirements,
as well as enforcing state rail safety rules.
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This resolution:
1)Urges the President, DOT, the U.S. Department of Energy, and
the Office of Management and Budget to expedite the rulemaking
and implementation processes governing the transport of
flammable and combustible liquids by rail.
2)Urges the President and Congress to pass House Resolution (HR)
1804, which would set new safety and security standards to
address the risks of transporting crude oil by rail.
3)Urges the President and Congress to pass HR 1679, which would
authorize Bakken crude oil to be transported by rail only if
it has a specified vapor pressure.
Background
The transportation of oil by rail has increased significantly in
the past few years. In 2012, about 70% of oil imported by
California refineries came through marine terminals and only
about 3% arrived by rail. The following year, crude oil imports
by rail jumped approximately 500%, or about 1% of total imports.
This trend is similar to oil-by-rail shipments nationally,
particularly in response to increases in production of oil from
the Bakken shale formation.
Bakken oil is high-quality, light, sweet crude, making it more
valuable and economically competitive than some of the other
domestic crude oils. It is precisely because this crude oil is
so energy-dense that it is both valuable and hazardous. Its
light nature and high density, under the right circumstances,
makes it volatile, highly flammable, and toxic. While
transporting oil by rail costs about twice as much as
transporting it by pipeline, oil-by-rail is faster and offers
greater flexibility, allowing companies to take advantage of
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price differentials across the country.
As oil-by-rail transport has increased in recent years,
accidents involving these trains have increased dramatically.
According to a June 2014 report by the California Interagency
Rail Safety Working Group, more crude oil by volume was spilled
in rail incidents in 2013 than was spilled in the nearly four
decades prior. In addition, incidents involving oil-by-rail in
California increased from three in 2011 to 25 in 2013. Most
reported incidents involved a relatively small volume of oil
released, but the potential for high-consequences incidents will
increase as more oil is transported by rail. The largest and
most tragic accident to date occurred in July 2013 in
Lac-Megantic, Quebec, where 63 tank cars of crude oil exploded,
killing 47 people. In 2013 and 2014, there were eight major
accidents in North America; about a half dozen more have
occurred since then, including a derailment in Oregon's Columbia
River Gorge in June 2016. The causes of these accidents vary,
but have included track failures, inadequate rail car equipment,
and human error.
In California, trains transporting crude oil are expected to
travel via the Feather River or Donner Pass to the Bay Area, the
Tehachapi Pass to Bakersfield, or into Los Angeles - thus
traveling through both heavily populated areas and sensitive
ecosystems.
Comments
1)Purpose. The author states that in the past decade, there has
been a tremendous increase in the transportation of crude oil
by rail cars which, in combination with inadequate line
infrastructure, has compromised the safety of millions of
Americans who live near these rail lines. According to the
author, refining companies in California plan to increase
oil-by-rail shipping even more, including one plan to ship up
to 70,000 barrels of crude oil per day through Northern
California. The author states that a recent environmental
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impact report conducted in Northern California concluded that
such trains will present significant risks of oil spill,
environmental damage, and potential loss of human life if any
of these trains were to derail while traveling to the
refinery.
2)Federal actions. In May 2015, the PHMSA promulgated new
regulations that establish a new tank-car standard and a
retrofit schedule for older tank cars carrying crude oil and
ethanol; require a new braking standard for certain trains;
designate new operational protocols for trains transporting
large volumes of flammable liquids, such as routing
requirements, speed restrictions, and information for local
government agencies; and provide new sampling and testing
requirements to improve classification of energy products
placed into transport.
The federal Fixing America's Surface Transportation (FAST)
Act, signed into law in December 2015, codifies the schedule
for the retrofit/phase-out of tank cars used to transport
crude oil and other hazardous materials. The FAST Act also
codifies portions of the regulations requiring all new and
retrofitted tank cars meeting the new specifications to be
equipped with "thermal blankets" (insulation technology
designed to better contain fires), protection for top fittings
(to prevent spills in the event of a crash), and pressure
relief valves (to reduce the risk of explosion). In addition,
the FAST Act requires DOT to issue regulations by the end of
2016 to provide state emergency response officials with
specified information regarding the transport of hazardous
materials.
3)Federal legislation. This resolution urges the President and
Congress to enact two federal bills: HR 1804, the
Crude-Oil-By-Rail Safety Act, authored by Representative Jim
McDermott and co-sponsored by Congressman Mike Thompson
(CA-5), and HR 1679, the Bakken Crude Stabilization Act of
2015, authored by Representative John Garamendi (CA-3).
Portions of these bills were included in the FAST Act, but
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outstanding provisions include establishing maximum volatility
standards for transporting crude oil by rail; increasing fines
for violating these standards; and requiring DOT to establish
regulations requiring rail carriers to establish a
confidential close-call reporting system.
4)The crux of the problem: DOT-111s. DOT-111 tank cars, which
have been in service for several decades, were originally
designed to carry liquids such as corn syrup. These tank cars
are now commonly used to transport crude oil, including Bakken
crude. DOT-111s are prone to puncture and spill their
contents; when they are involved in accidents while carrying
volatile liquids such as crude oil, they have a high tendency
to spill and explode. In response to repeated findings by
U.S. and Canadian regulators regarding the lack of safety of
the DOT-111s, the rail industry voluntarily adopted a more
robust standard (CPC-1232) for all new tank cars built after
October 2011. This new standard, however, has not proven to
protect sufficiently against the risks of crude oil. Thus,
the May 2015 regulations require retrofit or phase-out of both
the DOT-111s and CPC-1232s, albeit on different schedules; the
FAST Act codifies the schedules. The final retrofit/phase-out
deadline for DOT-111s transporting crude oil is March 1, 2018.
This resolution urges the federal government to move this
deadline up even further.
According to DOT, there are currently about 270,000 DOT-111s
in service, of which nearly two-thirds are used to transport
hazardous material; about 38,000 are used to transport crude
oil. Assuming an average modification cost of $88,700 per
tank car, the modification for cars in flammable liquid
service would total approximately $9 billion. The rail
industry estimates that it has the capacity to retrofit all
DOT-111s and CPC-1232s in crude oil service in about four
years.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
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SUPPORT: (Verified8/9/16)
City of Benicia
City of Davis
City of Fairfield
City of Suisun City
Congressman John Garamendi
Congressman Mike Thompson
Congresswoman Doris Matsui
County of Placer
County of Yolo
Sacramento Area Council of Governments
Linda Seifert, Supervisor, Solano County
OPPOSITION: (Verified8/9/16)
None received
ASSEMBLY FLOOR: 78-0, 6/30/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,
Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes,
McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron,
Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Mathis, Santiago
Prepared by:Erin Riches / T. & H. / (916) 651-4121
8/10/16 15:57:23
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