Why the California Coast May Soon Be Getting North Dakota Crude Trains

For years, California has gotten much of its crude oil via pipeline from its own oil patches, or via tankers from Alaska or abroad. But with local sources in decline and an abundant supply of crude coming out of Texas, Colorado and North Dakota, this may all soon change.


Phillips 66 (formerly ConocoPhillips), which operates refineries across California, recently submitted a draft Environmental Impact Statement for a rail terminal to be built at its Santa Maria Refinery in San Luis Obispo County.

While the terminal itself might have minimal direct impact, with just an additional 1.6 miles of track needing to be constructed on refinery property, it would connect the refinery to the Union Pacific coastal line that runs from downtown Los Angeles to the Bay Area. The terminal would essentially connect the Santa Maria refinery with the booming oil fields of the interior U.S. There are currently no pipelines with the capacity to transport meaningful quantities of oil to the West Coast.

The terminal is expected to accommodate trains of up to 80 tanker cars of crude, as often as 250 times per year. In addition to changing how, and from where, its Santa Maria refinery gets its crude, Phillips has also requested to increase the output of the refinery by 10 percent.

The Santa Maria site sends its partially refined oil to another Phillips refinery in the Bay Area via a 250 mile pipeline. The draft Environmental Impact Statement sites the main hazards of the project as “potential accidents at the [Santa Maria Refinery] and along the [Union Pacific] mainline that could result in oil spills, fires and explosions.”

“Operational pollutant emissions within San Luis Obispo County could be potentially significant and unavoidable,” the report also noted. The main air pollutant would be nitrogen oxides, which contribute to the formation of smog.

The Phillips project is just the latest effort by the refinery industry to increase crude imports via rail to California. Earlier, Valero Energy disclosed a plan to build a rail facility at its refinery in the Bay Area, and industry analysts expect that an oil rail facility will be built somewhere in the Central Valley.

Shipping oil by train has been increasing in recent years. in 2012, U.S. railroads carried 234,000 car loads of crude oil, up from 5,912 car loads in 2007. The move toward rail has been driven in part by growing controversy over pipeline construction projects, most famously the Keystone XL pipeline, which would transport oil from the Alberta tar sands to refineries on the Gulf Coast.

Oil by rail is hardly without its own controversy. In July, a train carrying oil derailed and exploded in the town of Lac-Mégantic, Quebec, killing 47 people. In November, a 90-car crude oil train met the same fate, although no one was injured in that accident.

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