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Are We Fully Understanding the Consequences of Oil Transit Accidents? | Nick Martyn
Are We Fully Understanding the Consequences of Oil Transit Accidents? | Nick Martyn.
Recent events in Canada’s rail transport network have prompted a much-needed national debate about the risks of energy transport and rail safety. No matter our personal stance regarding climate change, we all live in an oil dependant society and until we find another way to power the global economy and our civil society, oil and gas will have to move from where it is found to where it is used. In Canada that largely means it will move either via pipeline or rail. But when a pipeline leaks or oil tankers derail, the risks of oil transit are thrown into stark relief; especially for the residents of communities in the immediate vicinity and the ecosystems affected.
Broadly speaking, risk is thought of as the “possibility of loss.” It is generally viewed as the combination of the likelihood of loss and the consequences of that loss. Likelihood, otherwise known as the “probability of occurrence”, is the foundation of actuarial science; which underpins the insurance industry. Probability suggests that if historical trends continue and the future cooperates with the past, then the likelihood of something occurring can be calculated to a sufficient degree that insurance against the event could be issued with a reasonable chance that it would not have to be paid. In essence a bet is laid against the event. If the event occurs then the insurer has to pay out. If it does not then the insurer makes money.
The Insurance Bureau of Canada declared 2013 the worst year on record for insurance related payouts, meaning that insurers will pay out a lot of money because the future did not cooperate with the past and the unlikely happened. The object lesson here is that while likelihood is interesting, consequences are costly.
As we seek export markets for Canadian energy products, so the volume of those products in transit increases. Eric Sprott, the renowned Canadian resource investor notes in his January 27, 2014 newsletter that by the end of 2013 Canada’s rail industry was shipping 375,000 barrels of oil per day and that figure is expected to each 900,000 barrels per day by the end of 2014. As for a pipeline, Sprott believes the Energy East pipeline will get the go-ahead and will increase Canada’s export capacity by 800,000 barrels. Since Canada has not added significantly to its pipeline infrastructure in decades, there is little choice but to ship it via the rail network, which coincidentally has not been significantly increased in decades. When both the nature and the volume of rail traffic increases on a network that has not appreciably increased in size or capability the “likelihood” of failure events also increases, as do the consequences.
To date consequence has been considered somewhat subjective and therefore less quantifiable than likelihood, partly because each stakeholder sees consequence differently. For instance the Mayor of a community thinks of the consequence of a train derailment and spill in the community in a much different way than the CEO of the rail company or the owner of the shipment. The cold hard reality is that no matter how small the statistical likelihood that derailments will happen, the consequences when derailments happen are significant. As events increase in frequency and it seems severity, it is clearly time to rethink our evaluation of risk in rail transport.
While the probability that a train-load of inappropriately classified oil products would careen down a hill in rural Quebec and explode, killing 47 people and contaminating a fragile lake ecosystem was so infinitesimally small as to be almost incalculable, the consequences were devastating and will be felt for generations. The policies that drive rail system regulation (or any system for that matter) are driven by the likelihood of a failure not the consequences. In part this is because it is difficult to foresee every event and frame a regulation to prevent it, but also because the risk analysis techniques to quantify consequence in a useful way, to date, have not existed.
Risk analysis techniques have improved markedly in recent years, to the point that networked risk analysis tools can fathom the pathways of exposure to risk in models containing thousands of entities. Given the complexity and importance of the energy transport question in Canada and the severe and sometimes tragic consequences of failure, it seems time to revisit the question of energy transport risk with modern tools so that no matter which side of the energy debate we stand on, we have a safer, cleaner Canada to live in and to pass on to our children.
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Are We Fully Understanding the Consequences of Oil Transit Accidents? | Nick Martyn
Are We Fully Understanding the Consequences of Oil Transit Accidents? | Nick Martyn.
Recent events in Canada’s rail transport network have prompted a much-needed national debate about the risks of energy transport and rail safety. No matter our personal stance regarding climate change, we all live in an oil dependant society and until we find another way to power the global economy and our civil society, oil and gas will have to move from where it is found to where it is used. In Canada that largely means it will move either via pipeline or rail. But when a pipeline leaks or oil tankers derail, the risks of oil transit are thrown into stark relief; especially for the residents of communities in the immediate vicinity and the ecosystems affected.
Broadly speaking, risk is thought of as the “possibility of loss.” It is generally viewed as the combination of the likelihood of loss and the consequences of that loss. Likelihood, otherwise known as the “probability of occurrence”, is the foundation of actuarial science; which underpins the insurance industry. Probability suggests that if historical trends continue and the future cooperates with the past, then the likelihood of something occurring can be calculated to a sufficient degree that insurance against the event could be issued with a reasonable chance that it would not have to be paid. In essence a bet is laid against the event. If the event occurs then the insurer has to pay out. If it does not then the insurer makes money.
The Insurance Bureau of Canada declared 2013 the worst year on record for insurance related payouts, meaning that insurers will pay out a lot of money because the future did not cooperate with the past and the unlikely happened. The object lesson here is that while likelihood is interesting, consequences are costly.
As we seek export markets for Canadian energy products, so the volume of those products in transit increases. Eric Sprott, the renowned Canadian resource investor notes in his January 27, 2014 newsletter that by the end of 2013 Canada’s rail industry was shipping 375,000 barrels of oil per day and that figure is expected to each 900,000 barrels per day by the end of 2014. As for a pipeline, Sprott believes the Energy East pipeline will get the go-ahead and will increase Canada’s export capacity by 800,000 barrels. Since Canada has not added significantly to its pipeline infrastructure in decades, there is little choice but to ship it via the rail network, which coincidentally has not been significantly increased in decades. When both the nature and the volume of rail traffic increases on a network that has not appreciably increased in size or capability the “likelihood” of failure events also increases, as do the consequences.
To date consequence has been considered somewhat subjective and therefore less quantifiable than likelihood, partly because each stakeholder sees consequence differently. For instance the Mayor of a community thinks of the consequence of a train derailment and spill in the community in a much different way than the CEO of the rail company or the owner of the shipment. The cold hard reality is that no matter how small the statistical likelihood that derailments will happen, the consequences when derailments happen are significant. As events increase in frequency and it seems severity, it is clearly time to rethink our evaluation of risk in rail transport.
While the probability that a train-load of inappropriately classified oil products would careen down a hill in rural Quebec and explode, killing 47 people and contaminating a fragile lake ecosystem was so infinitesimally small as to be almost incalculable, the consequences were devastating and will be felt for generations. The policies that drive rail system regulation (or any system for that matter) are driven by the likelihood of a failure not the consequences. In part this is because it is difficult to foresee every event and frame a regulation to prevent it, but also because the risk analysis techniques to quantify consequence in a useful way, to date, have not existed.
Risk analysis techniques have improved markedly in recent years, to the point that networked risk analysis tools can fathom the pathways of exposure to risk in models containing thousands of entities. Given the complexity and importance of the energy transport question in Canada and the severe and sometimes tragic consequences of failure, it seems time to revisit the question of energy transport risk with modern tools so that no matter which side of the energy debate we stand on, we have a safer, cleaner Canada to live in and to pass on to our children.
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RIGZONE – Report: US Energy Secretary Favors Reducing Oil Shipped By Rail
RIGZONE – Report: US Energy Secretary Favors Reducing Oil Shipped By Rail.
Wednesday, February 19, 2014
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NEW YORK, Feb 19 (Reuters) – U.S. Energy Secretary Ernest Moniz supports reducing the amount of crude oil shipped by rail in favor of pipelines that are safer, cheaper and cleaner, Capital New York reported on Wednesday. “What we probably need is more of a pipeline infrastructure and to diminish the need for rail transport over time,” he said in an interview published on the Capital New York website. He said the infrastructure is “not there” to handle the surge in North Dakota Bakken oil production from near zero to 1 million barrels per day (bpd). “Frankly, I think pipeline transport overall probably has overall a better record in terms of cost, in terms of emissions and in terms of safety.” A Department of Energy spokesman was not immediately available to provide more detail on Moniz’s comments. His comments are among the first by a senior Obama Administration official to signal an apparent preference for shipping oil from places like the Bakken shale by means other than rail lines, in the wake of a series of explosive derailments that have alarmed the public. While pipelines are generally a much cheaper form of transport, shipping crude in mile-long trains has become a popular alternative since new terminals can be built more quickly than pipelines to serve booming remote shale patches, and offer greater flexibility for refiners. Moniz has bemoaned the lagging pace of infrastructure development before, but has not been so blunt in backing pipelines over rail shipments. President Barack Obama has been considering whether to greenlight construction of the Keystone XL pipeline from Canada, without which there could be a significant increase in crude moved by rail, according to a State Department report. U.S. regulators are considering imposing tougher standards on older models of oil tank cars. Moniz said the U.S. Department of Transportation could issue new regulations this year. “There’s been a handful of train accidents and that’s been quite troubling,” he said. “We have been transporting oil products by train with a decent safety record over time and there’s a lot of it.” (Reporting by Jonathan Leff; Editing by David Gregorio) |
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The Northern Gateway Pipeline Does Not Warrant Illegal Activism | Mark Milke
The Northern Gateway Pipeline Does Not Warrant Illegal Activism | Mark Milke.
Activists in British Columbia have responded to the National Energy Board’s approval of the Northern Gateway oil pipeline with threats of illegal activism reminiscent of the 1990s. Greenpeace spokesman Mike Hudema, for example, said his group will “do what it takes” to ensure the pipeline is never built (and he specifically mentioned civil disobedience).
Given the nature of the NEB’s process, such civil disobedience would be inappropriate, and detrimental to society. It would overturn the assumption that people are free to engage in lawful commerce if they obey the rules, without an endless process of protests, lawsuits, and smear campaigns.
Others, however, disagree. One Vancouver writer has argued that potential civil disobedience against the oil pipeline is akin to historical protests in favour of female suffrage, slavery, indentured servitude, and against clear-cutting forests.
Civil disobedience has an honourable history; the question is whether a particular group on a particular matter is justified in such actions. Such steps are, after all, violations of the law, whether property rights, trespassing, and so on.
Where people’s rights are systematically violated, where they are denied recourse to the courts, or to their elected representatives, the case for civil disobedience is clear.
But the Northern Gateway Pipeline proposal does not represent such a violation, and there has already been a rather extensive process of discussion and consultation.
The consultation and regulatory process conducted by the National Energy Board spanned four years, cost some $500 million, involved 180 days of hearings, worked through 9,400 submitted letters and took oral testimony from nearly 1,200 people. That process may not have been perfect but even perfection would not have satisfied those opposing the pipeline: their opposition is absolute. They are not interested in whether Northern Gateway is safe or not, or economically helpful to Canada; they oppose it, period.
Threatened civil disobedience over Northern Gateway rather trivializes the idea of civil disobedience. Another pipeline is hardly an existential threat to Canada’s (or B.C.’s) environment, much less anyone’s civil rights. Already, 825,000 kilometers of pipelines criss-cross Canada, with about 40,000 km in British Columbia (as of 2011). Another 1,200 km is hardly earth-shattering.
Then there is another other argument made by some activists: that civil disobedience in the early 1990s against the forest industry did not collapse B.C.’s economy the last time environmental activists upped the ante, so neither will it this time. But economies need not collapse to harm some people and kill off opportunities for others.
Consider one example. The 1990s-era decision to ban mining in the Tatshenshini-Alsek region of northern B.C. — the Windy Craggy deposit, a claim owned by Geddes Resources. The mine potential (in 1992 estimates) of $15 billion in copper, silver and gold extraction was at stake, with 500 direct jobs then valued at $78,000 each annually, along with another 1,500 indirect jobs.
Rather than accept a mine proposal that amounted to 1,100 square km out of 958,000 square km in total — barely more than one-tenth of one per cent of the Tatshenshini-Alsek region — a 1993 decision by the provincial government killed off the potential mine. Tourism jobs could have co-existed with mining jobs in the Tatshenshini; instead, the current tourism potential in a remote corner of the province has not and never will match the high-paying jobs of the long-scuttled $15 billion mine ($22 billion in current dollars).
This absolutist positioning is an ongoing problem in Canada. In his 2000 book on the conflict in B.C.’s forests in the 1990s, then-UBC Professor William Stanbury noted the vandalism, sabotage, ignored court injunctions, and international boycott campaigns organized by some green activists. As Stanbury wrote, “one of the more disturbing issues raised in the course of this study is that there appears to be declining respect for rationality in making major public decisions in B.C. relating to environmental issues.”
Indeed. And we see a replay of the irrational, absolutist problem now with violent protests over pipelines and violent protests over hydraulic fracturing. We will probably see more such protests should Northern Gateway receive federal approval.
Threatened protests over Northern Gateway are not your grandmother’s civil disobedience where great injustices were challenged by brave people willing to suffer jail, violence, and more to right those wrongs that afflicted the daily lives of millions.
The current and predicted protests are, instead, the reflex action of absolutists who would destroy opportunities for others regardless of how one of the world’s better-functioning democracies allows for companies to engage in lawful commerce. There is nothing noble about such “resistance.” It instead has the distinct whiff of unnecessarily severe Puritans in more modern, green attire.
This blog was co-written by Kenneth P. Green, Senior Director, Natural Resource Studies at the Fraser Institute.
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The secret to fixing a pollution problem: Do something about it | – Environmental Defence
The secret to fixing a pollution problem: Do something about it | – Environmental Defence.
Canada has a problem. Our greenhouse gas pollution is soaring. With climate impacts hitting harder and closer to home (ice storms, polar vortexes, floods…), our country is recklessly racking up a huge carbon bill that will saddle future generations with a debt impossible to pay off.
In a new report prepared for the United Nations, for the first time Environment Canada did the number crunching all the way to 2030. We’ve known for awhile that our 2020 target has become a mission impossible. But this report also paints a sorry picture of 2030, where Canada still doesn’t have its act together and climate pollution, specifically from the tar sands, continues to skyrocket (check out this detailed analysis by the Pembina Institute).
The report reaffirms that the growth in pollution from the tar sands – if the tar sands are allowed to continue expanding as projected – will wipe out any progress made to reduce emissions in any other sector, including Ontario’s coal phase-out, B.C.’s carbon tax, or other provinces’ energy efficiency and carbon reduction measures.
The result is while some pull up their bootstraps and clean up their acts, soaring pollution from the tar sands will cancel out everyone else’s hard work. And this means if Canada is to meet a national goal to cut emissions, some regions and sectors will need to do more than their fair share because one sector – oil – is getting off scott-free.
We hear a lot of talk these days about pipelines as “nation building projects” and being in the “national interest.” But if tar sands expansion is allowed, made possible by big new pipelines, this is a recipe for dividing our country, not uniting it.
Here’s why: At some point, Canada will need to get serious about reducing emissions, and how the carbon pie is divided between regions will become important. We can expect regions to speak up loudly if they’re asked to do more than their fare share to reduce carbon emissions because the oil industry is being irresponsible.
All provinces have a stake in major pipeline proposals like Enbridge’s Northern Gateway and TransCanada’s Energy East. There’s the tangible danger that these pipelines could spill tar sands oil into forests, farmland and drinking water sources. And then there’s the less tangible – but critical – impact they would have on the amount of carbon the country is pumping into the atmosphere and the impacts of climate change.
Will Ontario, British Columbia or Quebec be keen to do more than their fair share to cut carbon to make up for the impact of these pipelines? Doubtful. And they should not be asked to. All sectors and regions will need to reduce emissions. For the oil sector, that means keeping production at current levels and cleaning up existing operations – not expanding. It also means seeing the government put in place robust regulations on the oil sector that will see emissions go down, rather than up. Even the weak regulationsunder discussion now have just been punted ‘a couple of years’ further down the road by the Prime Minister.
The idea that Canada may fail to rein in soaring emissions by 2030 may not seem like the brightest news to kick off the New Year, but there is an important caveat to this story. It can only come true if industry and government get their way when it comes to rapid and reckless tar sands expansion.
The good news is that new pipelines and oil projects aren’t getting a free ride these days. With ever-growing public concern about moving oil (by tanker, rail, or pipeline), a world feeling the early impacts (and paying the price) of a changing climate, and new conversations in the financial sector about the risks of investing in high-carbon fuels, the tar sands are facing a serious uphill battle.
The world is waking up to climate change and the environmental devastation of projects like the tar sands, and while our current government chooses to leave their head in the sand, Canadians are also standing up to demand the safe, smart, clean energy future we deserve.
Olduvaiblog: Musings on the coming collapse 