Governor Was Mulling Ethanol Shipments by Rail When Along Came That Train in Quebec

Saturday, July 20, 2013

Part 1 of 2 Parts
Governor Deval Patrick was trying to do the right thing on July 12 when he vetoed a section of the newly enacted state budget that would block the transport of ethanol by freight railroads.  And the governor was heading in the right direction when he urged the legislature to: (a) consider a two-year moratorium on ethanol shipments by rail, and (b) direct the Massachusetts Emergency Management Agency to “develop a comprehensive ethanol transport response plan for all municipalities that accommodate the transport of ethanol by rail.”
But Patrick’s effort was probably doomed from the start by what had transpired six days earlier, hundreds of miles away, in the small Quebec town of Lac-Megantic. 
Late on Saturday night, July 6, the brakes gave way on an untended freight train parked on a hill outside the town.  There were 71 tanker cars in the train, each containing an estimated 30,000 gallons of crude oil.  If that figure is correct, there were more than 2 million gallons of crude on that train.  The oil came from wells in North Dakota and, after the train crew rested in Lac-Megantic, it would have traveled across the state of Maine to a coastal oil refinery in New Brunswick, Canada.
As it moved downhill, the driverless train picked up speed.  Within a minute or two, it reached the center of Lac-Megantic.  Travelling then at over 60 miles per hour, it jumped the tracks, exploded and burst into flames.  At least 50 townspeople were killed and 30 buildings destroyed in the resulting conflagration. The bodies of some victims, having been vaporized in the explosion or cremated in the fire, will never be recovered.  
Ethanol, the common name for ethyl alcohol, is used as a motor fuel when added to gasoline. It is the same kind of alcohol found in beer, wine and cocktails. Since it can be produced from crops such as corn and sugar cane, ethanol is a form of renewable energy.  Most vehicles in the United States now run on a gasoline-ethanol fuel mix. 
Over two years ago, the Global Petroleum Corp. started talking about bringing rail tanker cars filled with ethanol from the Midwest to its terminal on the Chelsea River, at the Revere-East Boston line.  The tankers would have to travel to Global via long-established rail lines in Cambridge, Somerville, Chelsea, Everett, Revere and East Boston, all heavily populated cities.  Federal law requires Global and other gasoline wholesalers to blend ethanol in the fuel they sell to gas stations, which in turn sell it to motorists.
Some citizens expressed immediate opposition to the Global plan, asserting that ethanol trains presented an intolerable risk of explosion and fire in the event of a derailment or a terrorist attack.  The opposition grew, eventually coalescing in a group called Stop Ethanol Train.
[Full Disclosure: Our firm, Preti Minahan Strategies, represents the trade group for freight railroads, the Massachusetts Railroad Association.  We are the freight railroads’ registered lobbyist in Massachusetts.]
This spring, both the Massachusetts House of Representatives and the Massachusetts Senate added outside sections to their respective versions of the state budget for Fiscal Year 2014 addressing the concerns of Stop Ethanol Train.  As it happened, the Senate language was much tougher on Global than the House’s. 
When a House-Senate conference committee took up the job of resolving the differences between the two budgets and producing a unified budget document for adoption by both branches, it had to choose either the House section on ethanol rail shipments or the Senate section.  It opted for the Senate section, which says in its entirety: 
Section 81.  Section 14 of Chapter 91 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by adding the following paragraph:  An ethanol storage or blending facility that stores or blends or is intended to store or blend more than an average of 5,000 gallons of ethanol per day and is located within 1 mile of a census block that has a population density of greater than 4,000 people per square mile shall not be granted a license under this chapter.  For the purposes of this section, ethanol shall be defined as any mixture composed of not less than 30 percent alcohol.”
Global was the specific target, the only fuel company with a pending application for a Chapter 91 tidelands construction permit.  Global needed the permit before it could adapt its facility to accommodate ethanol shipments by rail.
If Section 81 becomes law, it will become in effect a permanent ban on delivering ethanol by rail to fuel terminals with ocean access.  That, of course, is the intent of the current legislature.
Right after the conference committee released its unified budget in late-June, Global announced it was withdrawing its Chapter 91 license application and abandoning the plan to bring ethanol to its local terminal by rail. 
There was no single reason why Global dropped the proposal, according to Edward Faneuil, who serves as the company’s executive vice president and general counsel.   “We’ve heard the input of the community and others,” Faneuil told the State House News Service on July 2.  “I think we elected to withdraw for a variety of reasons.”
I thought Global should have stayed in the game and appealed publicly to Governor Patrick to veto Section 81.  But when that runaway train incinerated the center of Lac-Meganntic, I thought Global’s decision to withdraw was perspicacious.  And when Patrick decided, post-incineration, to veto Section 81 and offer a more nuanced course of action to the legislature, I thought the governor was courageous.
In the part of his budget veto message dealing with ethanol, Patrick wrote:
“It is critical we ensure that ethanol and other hazardous materials are transported safely throughout the Commonwealth and that mitigation measures are in place in the event of an incident.  However, as currently drafted, Section 81 would interfere with marine terminal operations and potentially impact existing licenses throughout the state.  Consequently, I propose to amend the section to ensure it is more precisely tailored to effectuate its underlying purpose.  My amendment would prohibit for two years the addition of new routes of ethanol transport by rail in certain port areas, allowing time for the related safety issues to be more fully considered.”
Continuing on, the governor said that Section 81 “would not address the kinds of mitigation measures that are necessary in densely populated areas of the state, particularly environmental justice communities, through which ethanol passes by rail.”
Further, the governor said, “I propose to direct the Massachusetts Emergency Management Agency (MEMA) to develop a comprehensive ethanol transport response plan for all municipalities through which ethanol travels by rail.  Under my proposed amendment, MEMA would work with relevant local, state and federal officials to develop a comprehensive plan addressing areas such as safety, training, communications and essential infrastructure improvements, as well as any necessary mitigation measures.”
Given the way the legislature has been overriding the governor’s vetoes of late, there is little chance Patrick’s approach to ethanol trains will carry the day.
NEXT: The perception of risks has as much to do with setting policies as actual risks and actual events, if not more so.

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