This is not surprising. With huge ports, in-state production, and tectonic activity that would make pipelines dangerous, it only makes sense that California shuns pipelines.
But California has three problems, sort of a "minor" perfect storm, if you will:
- in-state production is dropping off due to activist environmentalists;
- Alaska oil is diminishing; and,
- still no pipelines.
Yup. CBR. Highly volatile Bakken crude oil by rail.
And that's the headline at the linked article: California braces for a massive increase in oil-by-rail imports. [If you need a subscription to read that article, try this link.]
There are no pipelines that bring crude oil into California.Wow, toxic crude through mountain passes, over bridges, and to grandma's house we go. And did you note that for maximum effect, the writer converted bbls to gallons. CBR is traditionally measured in bbls, or in this case less than 65,000 bbls/unit train. Sixty-five thousand bbls sounds like a whole less than almost 3 million gallons. I'm surprised the writer didn't simply round it up to three million, or five million for that matter. Folks aren't going to fact-check this stuff.
For decades, the fuel that powers the state’s 32.3 million vehicles has come from one of two sources — 65 percent from tanker ships bringing in oil from Alaska and overseas, and 35 percent from in-state production.
That equation is changing dramatically.
As a result of the North American oil boom, crude will be rolling into the state over railroad tracks — hundreds of thousands of carloads carrying Bakken shale crude on trains from North Dakota, bound for California refineries and potentially to California ports for export.
The California Energy Commission estimates the increase will be massive, jumping from 9,000 carloads in 2011 to more than 200,000 carloads by 2016. Within a few years, analysts predict 25 percent of oil consumed in California will arrive at state refineries by rail.
The California Public Utilities Commission, the agency that partners with federal authorities to oversee railroad safety regulations, reports five California refineries have facilities either about to come online or in the planning stages that will let them offload crude oil deliveries from railcars.
With an anticipated surge in oil trains, each hauling as much as 2.7 million gallons of toxic crude through mountain passes, over bridges that cross nearly every major waterway and through the neighborhoods of millions of Californians, state and local agencies are reviewing and updating their plans for responding to hazardous materials spills and potential derailments.
In addition, Gov. Jerry Brown has asked lawmakers to approve a $6.7 million budget augmentation to beef up the state’s oil spill response capabilities. The additional money would go mostly to the Office of Oil Spill Prevention and Response to expand its responsibilities, now limited to coastal oil spills, to include inland areas.
Speaking of volatility, the link at the original source includes a highly inflammatory file photo of a torched Bakken oil tanker, Canada, July 8, 2013.
Of course, a lot of this rail traffic could be avoided if President Obama, by executive order, suspended the Jones Act citing national security. Like that's gonna happen. LOL. A reader wrote to tell me that the Jones Act is an incredibly sophisticated, confusing act laden with unintentional consequences if repealed. LOL.
On the other hand, by not suspending the Jones Act, one intentional consequence is guaranteed: Warren Buffett and Burlington Northern are huge winners. Remember: railroads are virtual regional monopolies. Permian and Eagle Ford oil will go by pipeline to the gulf. The only real source of crude oil for California is highly volatile Bakken crude oil creeping slowly along BNSF tracks all the way to California refineries.
This is simply rich. I can't make this stuff up. By the way, even if operators want to ship oil by sea-going vessels from Texas to California, they can't. There are no Jones Act vessels available; they are all tied up on the East Coast or otherwise occupied.
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Iraq's Water Problem
Minor note: from a message board -- Iraqi oil has ten times the amount of water in it than refineries can accept.