I’m not one for taking scenic photos, but I saw this view driving home from Bacon’s Castle yesterday and couldn’t resist.
I’m not one for taking scenic photos, but I saw this view driving home from Bacon’s Castle yesterday and couldn’t resist.
The small town of Pembroke in southwest Virginia is used to seeing endlessly long unit trains of coal cars rumbling past. But last week, it got an unexpected surprise – trains of similar length hauling crude oil from North Dakota’s Bakken fields started going by.
According to Reuters, Pembroke is one of many Virginia towns that are being affected by CSX’s derailment and explosion of oil tank cars filled with Bakken oil a few miles east of Montgomery, W.Va. on Feb. 16. The massive blast sent fireballs hundreds of feet in the air and forced the evacuation of nearby residents including a college. It also stopped all rail traffic on a major, east-west CSX line for days.
A similar derailment involving a CSX oil train happened last April in Lynchburg on the same rail mainline. Several tank cars caught fire down causing a fire and a spill into the James River.
So, after the West Virginia incident, CSX got in touch with rival Norfolk Southern to see if it could reroute oil trains on some of its lines.
This brings up another issue – who should be informed when new railroad trains hauling potentially explosive or otherwise hazardous cargoes suddenly show up in your backyard? Do they have to tell you so you can get the flashlight, thermos and sleeping bag ready for your immediate evacuation if necessary?
CSX says it has informed appropriate public safety officials of such route changes, but is loath to let the general public in where it is sending unusual trains. Security and proprietary information, you understand.
CSX needs to keep its tank cars rolling to big oil terminal in Yorktown near the Chesapeake Bay. That site had been an Amoco refinery for years but the refinery shut down and was switched to an oil water terminal now owned by Houston-based Plains All-American.
The facility receives Bakken shale oil cars and loads the crude on barges that are then pushed or towed to East Coast refineries, notably in the Philadelphia area. Presumably, if petroleum exports from the U.S. start again, the Yorktown site would be excellent embarkation point.
So, instead of having tank cars with Bakken crude trundling from Charleston, W.Va. through the New River Gorge and on to Lynchburg, they will go on more southerly NS lines through places like Pembroke and Roanoke. Then they will be switched at Petersburg to CSX lines and go north to Richmond and east to Yorktown.
It looks like Richmond could potentially get it either way. On the usual route, oil trains pass by downtown on an elevated bridge which would be quite a mess if a derailment happened there. According to the Forest Ethics Website, all of downtown Richmond to about one half of a mile on either side would have to be evacuated if a major derailment with fires and explosions came.
With the temporary rerouting, Richmond would still be in serious jeopardy in case of a derailment. If I’m reading the map correctly, trains would still pass through the city.
So, you have to ask yourself – why does CSX get away with keeping all this secret? They claim they let “appropriate” public safety officials know, but the Richmond Times Dispatch last year quoted a Richmond fire officer in charge of hazardous situations as saying he had a hard time learning from CSX what a “worse case” scenario would be in the event of a Richmond derailment.
Part of the problem is PR. Bakken shale oil comes from controversial hydraulic fracturing. The uptick in production has turned America’s energy picture on its head. It has also made for big jumps in oil rail traffic. Another problem is that Bakken oil tends to be more explosive than other types.
According to the Association of American Railroads, oil shipments by rail jumped by 9,500 carloads in 2008 to 500,000 shipments last year. Accidents are way up. In 2013, tank cars carrying Bakken crude somehow got loose in Lac-Megantic, Quebec. They rolled through the small town, derailed and exploded. The blast killed 47 and wiped out half of downtown.
According to a recent probe by the Associated Press, a federal study predicts that oil shipments will rise to 900,000 shipments this year. The study predicts that trains hauling petroleum will derail 10 times a year over the next two decades. They could possibly cause $4 billion in damages and kill hundreds of people, the AP reports.
What to do? Build pipelines, I guess, but that’s been highly controversial as well as the experience with Dominion Transportation’s efforts with a $5 billion gas pipeline through the state and the controversy over the Keystone XL show.
Better, newer, safer tank cars? Maybe, but the West Virginia and Lynchburg derailments both involved new “1232” models. The same type also caught fire recently in Timmins, Ontario.
Federal rules require railroads to tell local officials where they are carrying Bakken crude, which is more explosive than other types. Railroads like CSX claim the information is proprietary, according to Reuters. That’s rather pointless. If the goal is to keep “proprietary” information from competitors, Norfolk Southern, CSX’s biggest competitor, already knows about it because it has agreed to let CSX use its rail lines.
And don’t ask some public officials. West Virginia officials have gone along with keeping much of the information secret. Mountain State officials responded to an Freedom of Information Act request by redacting much of the data they finally gave out.
Not only do the railroads need to clean up their act, they should be forced to be more forthcoming about where the next evacuation might be.
by James A. Bacon
If you were a manufacturing company contemplating an expansion to Hampton Roads, you would take into account traditional criteria such as proximity to customers and suppliers, access to a skilled workforce, transportation connections, prevailing wage levels, taxes and so on. But as corporations become increasingly sensitive to the issue of business continuity in the face of disruption or disaster, you also might consider the region’s vulnerability to flooding.
Outside of New Orleans, Hampton Roads is the lowest-lying metropolitan area in the country. It is notoriously prone to flooding now, and the region’s vulnerability will only get worse as the sea level rises. You may or may not believe the McAuliffe administration’s predictions that the sea level will be 1 1/2 feet higher by 2050, but the risk that the forecast might prove accurate would have to factor into your calculations. Logical questions would arise: Would flooding disrupt rail and highway access to your facility? Would it hamper the ability of employees to get to work?
Perhaps the most important question is this: Do state and local governments have a plan to cope with recurrent flooding that will likely only get worse in time? How resilient is the region — not just one particular jurisdiction but, given the connectedness of transportation arteries and commuter flows — the entire region?
The resiliency movement is gaining momentum around the country, driven mainly by worries about climate change. Whatever your views on that polarizing issue, however, there are sound reasons to engage in planning on how to make your community less vulnerable to natural or man-made catastrophes (see “The Non Global Warmist’s Case for Resiliency Planning.”) The fragility of Hampton Roads is obvious for all to see. But every community has vulnerabilities of some kind. The integrity of the electric grid and water supply, for instance, are things everyone should worry about.
Every community should know its risk profile. In Hampton Roads the big concern is flooding. Western towns and cities worry about forest fires. Plains localities lose sleep over tornadoes, while others fear blizzards or terrorist attacks.
The insurance industry pays close attention to some of those risks, which are reflected in insurance rates (unless government policy distorts the price signals by subsidizing rates, as it does with flood insurance.) But, as Cooper Martin, program director for the Sustainable Cities Institute, observed at the Resilient Virginia launch yesterday, insurance covers less than half of total losses. States and localities don’t have insurance for washed out roads and bridges, for instance. There’s no insurance policy that covers the aftermath of a forest fire when rain washes ash into the water supply. “Who pays for uninsured losses?” he asks.
Perhaps the most unappreciated risk of catastrophe is to is a region’s brand, Martin said. Increasingly, a willingness of communities to identify systemic risks, develop plans to deal with them and maintain the financial commitment to carry out the plans will be a big differentiating factor. Corporations that place a premium on business continuity will pay close attention.
by James A. Bacon
The key to building a strong resiliency movement — making communities more adaptable in the face of natural and man-made disasters — is finding common ground. So argued Steven McNulty, director of the U.S. Department of Agriculture Southeast Regional Climate Hub, in addressing the launch event of Resilient Virginia this morning.
Fear of rising temperatures, droughts and sea-level rise is a major impetus behind the increasing emphasis that all levels of government are placing on resiliency. But political views about climate change are highly polarized, McNulty said. “Are you a fear monger, or are you a denier? We need to get beyond that.”
Most climate scientists believe that man-made climate change is a cause for concern. But the forestry land managers McNulty deals with do not. In a recent survey, he said, “only 10% of Southeast foresters thought that climate change is man-made and real. The agricultural community is almost as disbelieving.” As it happens, their perceptions are not without basis, he added. Rising temperatures in the Southeastern U.S. have been far less pronounced than anywhere else in the country.
It’s hard to mobilize people who don’t believe in catastrophic man-made global warming to change the way they do business. “Don’t talk climate change; you’ll lose a lot of folks,” said McNulty. But flip the issue to climate variability, and the conversation takes on a different tone. Everyone acknowledges that temperatures and precipitation fluctuate, and everyone would like to protect themselves from those fluctuations. “You don’t need global warming to have big disasters.”
McNulty was one of several speakers Thursday morning who made the case for resiliency planning. The resiliency issue hasn’t made big inroads in Virginia but Resiliency Virginia, a non-profit group of state and local government officials, environmentalists and private companies, hopes to change that. The group has a mission of educating the public, sharing best practices and encouraging people to take action.
In Virginia, the most pressing resiliency issues are in the low-lying Tidewater region, especially the Hampton Roads metropolitan area where thousands of people and millions of dollars in private buildings and public infrastructure are exposed to flooding. As Brian Moran, secretary of public safety and homeland security, told the gathering, a one-and-a-half foot sea level rise would inundate 82 square miles of dry land in Virginia, 15 miles of interstate highway, miles of railroad track and significant port acreage.
While there is plenty of controversy over how rapidly the sea level is rising in Hampton Roads — not everyone accepts the prediction that the sea level will rise 18 inches by 2050 — few would deny that between subsidence (partly caused by the draw-down of aquifers, partly by the shift in tectonic plates) and the slow-but-steady sea level rise seen over the past century unrelated to man-made climate change, flooding will become increasingly severe.
Flooding in low-lying areas is not the only potential disruption to Virginia communities. Flash flooding is an issue in urban areas where the ground has been covered by asphalt and the ground has lost is capacity to absorb rain water. Ice storms, snow storms and drought are recurrent concerns. Some worry about the impact of massive solar flares that could overwhelm the electric grid. There are man-made issues as well, such as potential terrorist strikes against critical infrastructure, particularly the electric grid.
In Chicago urban flooding is a significant issue, said Cooper Martin, program director for the Sustainable Cities Institute. When city officials began mapping where the insurance claims were occurring, they expected them to cluster in the flood plains. The traditional response to flooding had been to bring in the engineers, build some levees and build some dams. But close analysis showed that many claims were occurring outside the flood plains. “All that concrete has created a new ecosystem, creating flash flood hazards,” said Martin. “The way we’ve built this community is fundamentally non-resilient. More concrete is not the answer. Taking out some of the pavement may be the most productive thing to do.”
Another problem is rampant developing in vulnerable coastal areas. An analysis of 77 counties along the Gulf Coast (not including Florida) showed $2 trillion in asset value. “Even without climate change,” said Martin, “the way we’re building our communities, we’re creating risks where we didn’t have them before.”
People have a lot of ideas of how to prepare for another Katrina-scale hurricane, said Martin. But which options offer the greatest protection for the least cost? Building up beaches offers a high payback, as do building codes mandating construction standards to withstand higher winds. (Sixty percent of Katrina’s damage came from winds, not flooding.) Mandating higher home elevations is on the borderline of being economically justified; other proposals offer a very low return. As long as coastal communities continue to permit development, they need to address these issues.
Bacon’s bottom line. As I’ve made clear repeatedly on this blog, I’m not convinced that human-caused climate change is a cause for alarm, much less an excuse to re-engineer the economy. But you don’t need to be an apocalyptic environmentalist to value resiliency. Disasters happen. They always have, always will. We don’t protect ourselves from disaster by burying our heads in the sand and pretending they can’t possibly happen. We protect ourselves by anticipating possibilities, weighing probabilities and setting priorities. That kind of thinking is making inroads in Virginia, but we have a long way to go. I applaud Resilient Virginia for highlighting the issue. Check out the Resilient Virginia blog here.
The the man described by Rolling Stone as the “The Dark Lord of the Coal Fields” is suing coal giant Alpha Natural Resources of Bristol for refusing to pay his legal bills as he approaches his criminal trial April 20 related to the worst coal-mine disaster in 40 years.
Donald L. Blankenship, the former head of Richmond-based Massey Energy, filed suit in Delaware against Alpha which said: “Going forward, we do not intend to pay any legal fees with regard to Don Blankenship’s defense.” Those fees are likely to run in the millions.
Blankenship was indicted in November on four felony counts related to safety violations at the Upper Big Branch mine where an explosion killed 29 miners on April 5, 2010. He is also accused of securities fraud.
Blankenship resigned from Massey in December 2010 with a parachute estimated at $86 million. Alpha bought Massey in 2011 for $7 billion.
Since then, Alpha has been retraining the hundreds of Massey workers it absorbed but has gone through severe layoffs as demand for coal has stumbled.
Alpha’s stock has slipped from about $5 a share a year ago to $1.19 a share now. The firm lost $875 million last year. Demand for thermal coal has been drying up as cheaper natural gas from fracking has flooded the market. Also, the rich steel-making coal reserves Alpha got with its buy of Massey have gone wanting as Asian nations, especially China, go through an economic slump.
Blankenship will go on trial in U.S. District Court in Beckley, W.Va.
I’m still trying to figure out the legislative deal that Dominion has struck with the General Assembly. The grand bargain moving through the legislature freezes base rates for five years and requires the utility, not customers, to bear the risk of power plant closures due to federal carbon regulations. The bill has accumulated a lot of extraneous ornamentation — rate cuts reflecting lower fuel costs, promises to build more solar power, assistance to low-income families to weatherize their homes — but the main piece is the rate freeze.
The bargain responds to new Environmental Protection Agency rules regulating carbon dioxide as a pollutant, which, if carried out, would shut down several of Dominion’s coal and oil fuel plants. According to a State Corporation Commission (SCC) staff report, the changes could cost Dominion Virginia Power customers between $5 billion to $6 billion. The same rules would impose tremendous costs on customers of Appalachian Power Co. as well.
On the face of it, the legislation looks like a good deal to Virginia electricity rate payers. They get to lock down low electric rates for five years, while Dominion absorbs the financial risk of power plants shutting down. During that time, the SCC would audit Dominion’s books but not engage in rate setting.
But is it a really good deal for rate payers? I don’t know. I have questions for which I have seen no answers in the press accounts I have read.
First question: How real is the threat of power-plant shutdowns in the next five years? For all I know, the threat may be very real. But, then, maybe, given the glacial pace at which the EPA moves, and the ability of Dominion (and other electric utilities) to stall through lobbying and lawsuits, perhaps Dominion has reasonable expectations of fending off the shutdowns during that time-frame. Similarly, Dominion could be taking a calculated gamble that, if the power-plant shutdowns can be delayed two years, a Republican will be occupying the White House in 2017. A Republican president likely would reverse the EPA regulations through executive action just as the current occupant imposed it through executive action.
Of one thing we can be sure, Dominion can better assess its risks than Virginia’s politicians can. There is a dramatic asymmetry of information. Dominion has access to legions of lobbyists, lawyers, engineers, accountants and energy economists who keep the top brass fully informed of the risks and rewards associated with every action. Virginia’s lawmakers can draw upon the expertise of the SCC, but even the SCC doesn’t have access to all the information that Dominion does — and there’s no assurance that lawmakers would appreciate the significance of that information anyway. One thing we can reasonably assume: Dominion would not back the legislation working its way through the General Assembly unless it were advantageous to Dominion.
Second question: What happens if power plants get shut down after five years? While the rate freeze would end in 2020, the next rate review for Dominion would not be held until 2023, reports the Richmond Times-Dispatch, which quotes Edward Petrini with Virginia Committee for Fair Utility Rates as saying that effectively means Dominion is getting an eight-year rate freeze. But Dominion would absorb the financial risk of power-plant shut-downs for only five years. Could the costs of shutdowns in years six through eight be dumped onto rate payers?
Third question: What would likely happen to electric rates in the absence of a freeze? Would they head up or down? It makes no sense for Dominion to take on added risk unless it benefits from a freeze in base rates. This logic implies that Dominion expects that base rates would decline over the short run in the absence of a freeze. (Over the longer-term, rates assuredly will rise as non-compliant power plants are phased out.) How much will a freeze on base rates benefit Dominion? We don’t know. Is that amount, whatever it is, reasonable compensation for Dominion’s extra risk? We don’t know.
These are all basic questions to which lawmakers should know the answers. Alas, if they do, they haven’t seen fit to inform the public, and Dominion’s Keep Rates Low web page doesn’t address the issues. I don’t share the knee-jerk antipathy to Dominion that many pundits have — the utility has done a good job of ensuring reliable, low cost power — but I also have no illusions that Dominion is doing anything other than looking out for Number One. I find it inconceivable that Dominion would voluntarily (a) agree to a rate freeze that lowers revenue and profits, (b) take on the financial risk of power-plant shutdowns, and (c) make costly commitments to build solar power and weatherize homes. Something doesn’t add up.
I’m not saying that the legislation is a bad deal for the public — I’m saying the public doesn’t understand the deal. We don’t know if it’s a good deal or not. Lawmakers are buying a pig in a poke.
Dominion Resources has been on a tear recently.
It’s been muscling through a dubious law in the General Assembly that would allow it to avoid State Corporation Commission rate audits for six years.
And, it has been throwing its weight around in less populated sections of the state. It is suing to force its way on the land of private property owners to survey its $5 billion Atlantic Coast Pipeline project that would take fracked natural gas from the Marcellus Shale formation in West Virginia and Pennsylvania on new routes to the southeast.
Property owners, particularly those in Nelson and Augusta Counties, are fighting in federal court in Harrisonburg.
What’s most interesting about this case is how the Commonwealth of Virginia, which swaddles itself in the ideals of the American Revolution of individual rights , somehow ignores the rights of small property owners when a big utility with deep pockets for political donations is involved. One wonders where all the conservatives are who were huffing and puffing over the Kelo case a few years back
And (bonus question) what do the two situations have in common? Republican State Sen. Frank Wagner of Virginia Beach, that’s who. He introduced the bill for Dominion to sidestep SCC oversight with the excuse that Dominion has deal with the impacts of a yet-to-be-finalized set of new federal carbon emission rules.
In 2004, Wagner also carried water for Dominion and other power companies by getting a law passed that would allow a “public service company” to survey private property without getting permission.
This is the basis of several hundred lawsuits Dominion has filed against small landowners. In the pipeline case, it will be interesting to see whether the natural gas is used for the common good of American customers or will end up being exported to foreign countries. Dominion insists it won’t, but time will tell.
Another oddity is that Dominion is demanding access to survey a pipeline route when it hasn’t formally applied for the project with the Federal Energy Energy Commission. Imagine if some private landowners showed up at the front door of Dominion’s downtown Richmond headquarters and demanded access to the building because they were thinking about building a natural gas pipeline? (Somebody call security!)
Here’s an opinion piece I wrote for this morning’s Washington Post.