California Warns of Oil-by-Rail While Keeping Data Secret

California’s government agencies aren’t ready to handle the safety risks accompanying a boom in oil shipments by train, the state said in a report this week.

The warning comes even as the most populous U.S. state declines to disclose oil-by-rail data handed over by Burlington Northern Santa Fe on June 9. The railroad company deemed the summary of its oil shipments “sensitive security information” containing trade secrets. It’s only available to public safety agencies until the Governor’s Office of Emergency Services determines whether it’s confidential.

“The report is spot on in highlighting the risks of crude-by-rail transport going through heavily populated areas,” Devorah Ancel, a San Francisco-based attorney for Sierra Club, an environmental group, said by telephone. “They need to take it a step further by disclosing this very important information. The fact that not all of it is coming out and that the public is not made aware of the actual contents of these cars also poses a serious risk.”

Crude on the Move: Over the Rails and Through the Pipes

The U.S. shale boom that has pushed oil production to the highest in more than 27 years is bringing new hazards to California and other states as growing volumes of crude are transported by rail. Federal regulators imposed rules for crude-by-rail shipments following a series of derailments and explosions and issued an order last month that required railroads to report such traffic to state emergency responders.

Seriously Inadequate

California’s staffing to handle inspections and investigations of railroad operations is “seriously inadequate,” according to the June 10 report prepared by state offices including the Public Utilities Commission and the Environmental Protection Agency.

The report shows that the volume of oil delivered by rail into California may rise by as much as 150 million barrels annually to account for 25 percent of the state’s imports by 2016. It recommends more state rail inspectors, emergency response program improvements and real-time data from railroads.

The state should “share this information with the public to the maximum extent” allowed by federal regulations and other laws, the report said.

BNSF’s 14-page correspondence to the state includes one page that’s blacked out and says the information is “pending legal review.” The rest of the letter consists of general emergency response and hazardous materials information from the Association of American Railroads, a Washington-based trade group. The redacted copy of the document was e-mailed to Bloomberg News by the Governor’s Office of Emergency Services.

Security Reasons

“We can’t just release it to the general public,” Kelly Huston, a spokesman for the state emergency services office based in Mather, California, said by telephone yesterday. “We need to figure out if we would be violating some federal law by doing that.”

The information that BNSF asked not to disclosed has been provided to local public safety agencies along the routes used to transport oil, Huston said.

“Officials requesting the information are asked to agree to use the information solely for emergency response planning purposes and not to make the information public for security reasons,” Lena Kent, a California-based BNSF spokeswoman, said in an e-mail.

Defending Rail

Kent described rail as one of the safest ways to transport oil and said BNSF had the fewest mainline derailments ever in 2013.

“The rail industry as a whole is also very safe and has reduced employee injury rates, train accident rates, and grade crossing collision rates by 80 percent or more since 1980,” she said.

Washington Governor Jay Inslee ordered agencies including the Transportation Department and the Utilities & Transportation Commission to prepare by Oct. 1 a report on how much oil is shipped through the state by rail and at what risk, according to an e-mailed statement from his office today.

Washington’s Military Department received data from BNSF, Genesee & Wyoming Inc. (GWR)’s Portland & Western Railroad Inc. and Tacoma Rail on their oil-by-rail traffic and has given them 10 business days to seek a court injunction preventing the information from being disclosed, Chris Barnes, the agency’s public records officer, said yesterday by telephone. Barring an injunction, the data could be released as soon as June 25, he said.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net Charlotte Porter, Stephen Cunningham

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