Plattsย confirmed CSX Corporation’s train that exploded in Lynchburg, Virginiaย was carrying sweetย crude obtained via hydraulic fracturing (โfrackingโ)ย in North Dakota’sย Bakken Shaleย basin. CSX CEOย Michael Ward has alsoย confirmed this to Bloomberg.
โTrade sources said the train was carrying Bakken crude from North Dakota and was headed to Plains All American’s terminal in Yorktown,โ Platts explained. โThe Yorktown facility can unload 130,000 b/d of crude and is located on the site of Plains oil productย terminal.โ
In January, theย U.S. Department of Transportation’sย Pipeline and Hazardous Materials Safety Administration issued a Safety Alert concluding Bakken crude is more flammable than heavier oils. Hence the term โbomb trains.โ
At least 50,000 gallons of the oil headed to Yorktown is now missing, according to ABC 13 in Lynchburg.ย Some of it has spilled into the James River, as previously reported onย DeSmogBlog.
A map available on CSX‘s websiteย displaying the routes for its crude-by-rail trains offers a clear indication of where the train wasย headed.
Map Credit: CSXย Corporation
Formerly a refinery owned by Standard Oil and then BP/Amoco, Plains All American has turned the Yorktown refinery into a mega holdingย facility.ย
Yorktown may become a key future site for crude oil exports if the ban on exports of oil produced domestically in the U.S. isย lifted.ย
Yorktown: Future Oil Exportย Mecca?
In February, Plains CEO Greg Armstrong said on the company’s quarter four earnings call thatย Yorktown is ideally situated geographically to become an oil export mecca if the ban isย lifted.ย
When asked by an analyst from Bank of America about the ongoing debate over lifting the crude oil export ban, Armstrong discussed how Plains could stand to profit fromย exports.
โUltimately weโre positioned, we think well for either answer if they allow blanket exports we have assets in the right places that can help build that market niche,โ said Anderson.
Harry Pefanis, President and COO for Plains, sang a similar tune toย Anderson.ย
โI guess if I also just add to that if there was exportโฆweโve got couple of locations that we could load ocean-going vessels. Yorktown is a location where we can rail-in and load out an ocean-going vessel,โ Pefanisย explained.ย
The industry lobbying effort to lift the U.S.-produced oil export ban has picked up major steam in 2014, with the geopolitical crisis in Ukraine and Russia serving as the hook.
Keystone XLย Connection
It’s only a matter of time until the familiar oil industry overture begins. That is, pointing to the Lynchburg disaster as the reason why the northern leg of TransCanada’s Keystone XL tar sands pipeline must beย built.
After all, the same thing happened after the Burlington Northern Santa Fe (BNSF) freight train carrying Bakken oil exploded in Casselton, North Dakotaย in Decemberย 2013.
What the industry and oil-soaked politicians are unlikely to discuss, though, is the Plains All American connection to Keystone XL. That connection comes in the form of Cushing, Oklahoma, home of another key Plains crude oil holdingย facility.
Founded in 1993, Plains’ โfirst major assetโ was its Cushing holding facility, according to the company’s website. At the time, it had a storage capacity of 2 million barrels per day, though the facility has grown immensely sinceย then.ย
In November 2010, Plains announced it would open an additional four million barrels of storage capacity at itsย Cushing Terminal Facility. That upped its capacity to 18 million barrels perย day.
Why the massive increase?
Enter the original TransCanada Keystone pipeline, or Phase 1 in industry lingo.ย The original TransCanada Keystone 1 runs from Alberta to Steele City,ย Nebraska.
But it now extends down to Cushing, Oklahoma, Port Arthur, Texas, and Houston because Keystone XL‘s southern leg (rebranded the Gulf Coast Pipeline Project and Houston Lateral Pipeline)ย opened for business in January 2014 thanks to anย Obama White House March 2012 Executive Order.ย
Image Credit: Wikimediaย Commons
The November 2010 expansion revolved around ingesting the glut of oil flooding Cushing from the Keystone Pipeline system into Plains’ holdingย facility.
โ[The] expansion consists of making a high-capacity connection to Keystone Pipeline,โ explains a Plains press release. โThe Partnership plans to be ready to accept Keystone deliveries in the first quarter ofย 2011.โย
Canadian tar sands crude traveling viaย Keystone XL, since it is extracted north of the border, is fair game for โย and likely headed to โย the global export market.
If things go Plains All American’s way, the Bakken fracked oil headed to its Yorktown facility will head to the global export market like the tar sands crude departing from its Cushing, Oklahoma holdingย facility.
But CSX‘s mega-explosion inย Lynchburg, Virginia may have put a damper on those dreams for the time being, as public attention is drawn to the risks of shipping oil in โbombย trains.โ
Photo Credit:ย Erin Ferrell – ABC 13 News | Twitter
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