Following the Tragedy at Lac-Mégantic shipping Crude Oil by Train in Canada will be more Costly

Posted by PITHOCRATES - April 27th, 2014

Week in Review

On July 6, 2013, a 4,701 ft-long train weighing 10,287 tons carrying crude oil stopped for the night at Nantes, Quebec.  She stopped on the mainline as the siding was occupied.  The crew of one parked the train, set the manual handbrakes on all 5 locomotives and 10 of the 72 freight cars and shut down 4 of the 5 locomotives.  Leaving one on to supply air pressure for the air brakes.  Then caught a taxi and headed for a motel.

The running locomotive had a broken piston.  Causing the engine to puff out black smoke and sparks as it sat there idling.  Later that night someone called 911 and reported that there was a fire on that locomotive.  The fire department arrived and per their protocol shut down the running locomotive before putting out the fire.  Otherwise the running locomotive would only continue to feed the fire by pumping more fuel into it.  After they put out the fire they called the railroad who sent some personnel out to make sure the train was okay.  After they did they left, too.  But ever since the fire department had shut down that locomotive air pressure had been dropping in the train line.  Eventually this loss of air pressure released the air brakes.  Leaving only the manual handbrakes to hold the train.  Which they couldn’t.  The train started to coast downhill.  Picking up speed.  Reaching about 60 mph as it hit a slow curve with a speed limit of 10 mph in Lac-Mégantic and jumped the track.  Derailing 63 of the 72 tank cars.  Subsequent tank car punctures, oil spills and explosions killed some 47 people and destroyed over 30 buildings.

This is the danger of shipping crude oil in rail cars.  There’s a lot of potential and kinetic energy to control.  Especially at these weights.  For that puts a lot of mass in motion that can become impossible to stop.  Of course, adding safety features to prevent things like this from happening, such as making these tank cars puncture-proof, can add a lot of non-revenue weight.  Which takes more fuel to move.  And that costs more money.  Which will raise the cost of delivering this crude oil to refineries.  And increase the cost of the refined products they make from it.  Unless the railroads find other ways to cut costs.  Say by shortening delivery times by traveling faster.  Allowing them an extra revenue-producing delivery or two per year to make up for the additional costs.  But thanks to the tragedy at Lac-Mégantic, though, not only will they be adding additional non-revenue weight they will be slowing their trains down, too (see Rail safety improvements announced by Lisa Raitt in wake of Lac-Mégantic posted 4/23/2014 on CBC News).

Changes to improve rail safety were announced Wednesday by federal Transport Minister Lisa Raitt in response to recommendations made by the Transportation Safety Board in the aftermath of the tragedy in Lac-Mégantic, Que.

The federal government wants a three-year phase-out or retrofit of older tank cars that are used to transport crude oil or ethanol by rail, but will not implement a key TSB recommendation that rail companies conduct route planning when transporting dangerous goods…

There are 65,000 of the more robust Dot-111 cars in North America that must be phased out or retrofitted within three years if used in Canada, Raitt said, adding, “Officials have advised us three years is doable.”  She said she couldn’t calculate the cost of the retrofits, but told reporters, “industry will be footing the bill…”

The transport minister also announced that mandatory emergency response plans will be required for all crude oil shipments in Canada…

Raitt also said railway companies will be required to reduce the speed of trains carrying dangerous goods. The speed limit will be 80 kilometres an hour [about 49 mph] for key trains, she said. She added that risk assessments will be conducted in certain areas of the country about further speed restrictions, a request that came from the Canadian Federation of Municipalities…

Brian Stevens head of UNIFOR, which represents thousands of unionized rail car inspectors at CN, CP and other Canadian rail companies, called today’s announcement a disappointment.

“This announcement really falls short, and lets Canadians down,” he told CBC News.

“These DOT-11 cars, they should be banned from carrying crude oil immediately. They can still be used to carry vegetable oil, or diesel fuel, but for carrying this dangerous crude there should be an immediate moratorium and that should have been easy enough for the minister to do and she failed to do that.

“There’s a lot of other tank cars in the system that can carry crude,” Stevens explained. “There doesn’t need to be this reliance on these antiquated cars that are prone to puncture.”

Industry will not be footing the bill.  That industry’s customers will be footing the bill.  As all businesses pass on their costs to their customers.  As it is the only way a business can stay in business.  Because they need to make money to pay all of their employees as well as all of their bills.  So if their costs increase they will have to raise their prices to ensure they can pay all of their employees and all of their bills.

What will the cost of this retrofit be?  To make these 65,000 tank cars puncture-proof?  Well, adding weight to these cars will take labor and material.  That additional weight may require modifications to the springs, brakes and bearings.  Perhaps even requiring another axel or two per car.  Let’s assume that it will take a crew of 6 three days to complete this retrofit per tank car (disassemble, reinforce and reassemble as well as completing other modifications required because of the additional weight).  Assuming a union labor cost (including taxes and benefits) of $125/hour and non-labor costs equaling labor costs would bring the retrofit for these 65,000 tanks cars to approximately $2.34 billion.  Which they will, of course, pass on to their customers.  Who will pass it on all the way to the gas station where we fill up our cars.  They will also pass down the additional fuel costs to pull all that additional nonrevenue weight.

Making these trains safer will be costly.  Of course, it begs this burning question: Why not just build pipelines?  Like the Keystone XL pipeline?  Which can deliver more crude oil faster and safer than any train can deliver it.  And with a smaller environmental impact.  As pipelines don’t crash or puncture.  So why not be safer and build the Keystone XL pipeline in lieu of using a more dangerous mode of transportation that results in tragedies like that at Lac-Mégantic?  Why?  Because of politics.  To shore up the Democrat base President Obama would rather risk Lac-Mégantic tragedies.  Instead of doing what’s best for the American economy.  And the American people.  Namely, building the Keystone XL pipeline.

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Flying is Quicker and more Cost Efficient than Passenger Rail

Posted by PITHOCRATES - February 8th, 2014

Week in Review

Politicians everywhere want to build high-speed rail.  Why?  Because there are maybe only 2 high-speed rail lines in the world that operate at a profit.  All other passenger rail requires government subsidies.  Because the massive capital and operating costs for passenger rail are so great they cannot recover them via ticket prices.  And high-speed rail is the costliest of all.

So passenger rail requires new taxation to support it.  And politicians like new taxes.  Also, building passenger rail requires an enormous infrastructure.  Built and maintained by lots of people.  Union people.  Something else politicians love.  Rewarding their union friends with lots of new union jobs.  Which is why politicians love high-speed rail.  They get a lot ‘thank you’ votes for all that government spending.  No matter how costly or inefficient passenger rail is as a means of transportation.  As we can see here (see I Spent 28 Hours on a Bus. I Loved It. by Eric Holthaus posted 2/4/2014 on Slate).

traveling by plane car train bus R1

The infrastructure between point A and point B for cars and buses is already there.  Paid for with fuel taxes.  Planes need no infrastructure between point A and point B.  But trains do.  A very costly infrastructure.

Trains carry more people than buses.  But not as many as planes.  Which means the far greater cost of passenger rail is divided by fewer ticket purchasers.  Whereas the less costly flying is divided by more ticket purchasers.

Planes can fly around 500 mph.  Passenger rail can travel up to 100 mph on some sections of track.  While high-speed rail travels at speeds of just under 200 mph on dedicated (and very expensive) track.

You add these points together and it’s little wonder that traveling by train costs about 20% more than flying.  While taking 5.8 times as long.  Or a little less for high-speed rail. Making the plane the undisputed champion of long-distance travel.  And it works without massive government subsidies.  Which is the best kind of travel there is.  The kind where the people traveling pay for their travels.  And not everyone else.  As is the case with passenger rail.

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President Obama’s opposition to the Keystone XL Pipeline puts more Oil on Trains like the one in Lac-Mégantic

Posted by PITHOCRATES - September 29th, 2013

Week in Review

Oil fuels the modern economy.  We use it everywhere.  And can’t live without it.  Even those people who hate it sipping their coffee while they surf the Internet and engage in social media in their favorite coffee shop.  None of which they could do if it were not for oil.  The coffee they drink crossed the ocean on a ship burning diesel refined from oil.  The smartphone they use contains plastic.  Made from oil.  And these smartphones crossed the ocean on a ship burning diesel before they could use them.  The cars in the drive-thru at the coffee shops are burning gasoline refined from oil.  The freight trains and trucks burn diesel that deliver the goods these coffee shops sell.

Oil makes everything better in our lives.  Without oil life expectancy would plummet.  As hospitals wouldn’t have any life-saving equipment made from plastic.  Ambulances couldn’t speed patients to the hospital.  And there would be no backup generators during a power outage.  As there would be no backup power available at our wastewater treatment plants.  Or at our freshwater pumping stations.  We would return to the 19th century.  Using steam and water power in our factories.  Horses in our cities.  Doing our business in an outhouse.  And drawing our water from a well.  Except for the rich, of course.  Who would be able to enjoy these luxuries.  Luxuries that most of us take for granted today.

Oil is so important in our lives that we should be doing everything within our power to make it as inexpensive and plentiful as possible.  Like building the Keystone XL pipeline.  So we can transport oil safely in large quantities.  Reducing the cost of transportation.  Thus lowering the price at the pump.  Which would also prevent things like this from happening (see What’s in rail tankers and why can’t we know? posted 9/27/2013 on CBC News).

Nearly three months after the  Lac-Mégantic disaster, rail safety remains at the top of the national agenda with a meeting of federal and provincial transport ministers this week focusing on the question of what is in tanker cars and why provinces and municipalities can’t get that information.​

After the conclusion of the meeting in Winnipeg, Manitoba’s transportation minister said the legacy of the Lac-Mégantic disaster in July must be safer rail system across Canada.

Steve Ashton said there is an urgent need to look comprehensively at rail safety at a time when more oil is being shipped by rail and the Lac Mégantic disaster is fresh in the public mind.

This is what happens when the environmentalists get their way.  And President Obama secures their support.  And their money.  President Obama opposes the Keystone XL pipeline.  And other pipelines where he can.  Because his liberal base hates oil.  Even though the lives they enjoy would not be possible without oil.  So their opposition to oil and pipelines forces oil onto trains.  That travel through our cities.  Sometimes derail.  And explode.  Killing 47 in Lac-Mégantic.  And destroying a part of that city.

With continued opposition to the Keystone XL pipeline more oil will travel by train.  More trains will derail.  And explode.  But the Democrats will secure the support of their liberal base.  And the environmentalists can claim a victory in the war against oil.  While they enjoy their coffee and smartphones in their favorite coffee shop.  That only oil makes possible.

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Elon Musk’s Hyperloop is Probably as Good an Idea as High-Speed Rail

Posted by PITHOCRATES - August 18th, 2013

Week in Review

We transport heavy freight over land by train.  And transport people over land by plane.  Have you ever wondered why we do this?  Especially you train enthusiasts who would love to travel by train more often?  Here’s why.  Cost.  Railroads are incredibly expensive to build, maintain and operate.  Because there is rail infrastructure from point A to point B.  And at their terminus points.    Whereas planes fly through the air between point A and point B.  Without the need for infrastructure.  Except at their terminus points.  Making railroading far more expensive than flying.

If planes are so much cheaper to operate than trains then why don’t we use planes to transport all our freight?  Here’s why.  Price.  Trains charge by the ton of freight they transport.  And they can carry a lot of tons.  An enormous amount of tons.  Which makes the per-ton price relatively inexpensive.  A plane can carry nowhere near the amount of freight a train can carry.  It’s not even close.  Which makes the per-ton price to ship by plane very, very expensive.  So only high priority freight that has to be somewhere fast will travel by plane.  Heavy bulk items all travel by train.

We may be having an obesity problem but in the grand scheme of things people are very light.  But take up a lot of volume for their given weight.  The space their body physically occupies.  And the greater space around them containing the air they must breathe.  That holds the food and drink they must consume.  And the toilets they need to relieve themselves.  Now let’s look at a 747-400 with 450 passengers on board.  Let’s say the average weight of everyone comes to 195 pounds.  So the total flying weight of the people comes to 87,750 pounds.  Assuming flying costs for one trip at $125,000 that comes to $1.42 per pound.  If we add 15% for overhead and profit we get a $1.64 per-pound ticket price.  So a 275-pound man must pay $451 to fly.  While a 120-pound woman must pay $197 to fly.  Of course we don’t charge people by the pound to fly.  At least, not yet.  No, we charge per person.  So the per-person price is $224, where the lighter people subsidize the price of the heavier people.

The 747-400 is one of the most successful airplanes in the world because it can pack so many people on board.  Reducing the per-person cost.  Now let’s look at that same cost being distributed over only 28 passengers.  When we do the per-person cost comes to $4,464.  Adding 15% for overhead and markup brings the per-person price to $5,134.  A price so high that few people could afford to pay for it.  Or would choose to pay for it.  And this is why we transport people by plane.  That can carry a lot of people.  And we transport heavy freight by train.  That can carry a lot of tons.  And why this idea will probably not work (see Elon Musk Is Dead Wrong About The Cost Of The Hyperloop: In Reality It Would Be $100 Billion by Jim Edwards posted 8/16/2013 on Business Insider).

Tesla CEO Elon Musk’s plan for a space-age Hyperloop transport system between Los Angeles and San Francisco would cost only $7.5 billion, he said in the plans he published recently…

But the New York Times did us all a favor by calculating the true cost of the Hyperloop: It’s going to be ~$100 billion…

The Hyperloop is a pressurized tube system in which passenger cars zoom around on an air cushion, at up to 800 miles an hour.

There is no greater infrastructure cost between point A and point B than there is for high-speed rail.  Because these rails have to be dedicated rails.  With no grade crossings.  All other traffic either tunnels underneath or bridges overhead.  These tracks are electrified.  Adding more infrastructure than just the tracks.  All of which has to be maintained to exacting standards to allow high-speed trains to travel safely.  Which is why high-speed rail is the most costly form of transportation.  Why there are no private high-speed rail lines as only taxpayer subsidies can pay for these.  And for all these costs these trains just don’t transport a lot of people.  Making high-speed rail the most inefficient way to transport people.

The Hyperloop will be more costly than high-speed rail as this is an elevated tube system of exacting standards.  Requiring great costs to build, maintain and operate.  While transporting so few people per trip (28 per capsule).  Not to mention high-speed travel is very dangerous.  Unless it is up in the air separated by miles of open air.  But on the ground?  When a high-speed train crashes it is pretty catastrophic.  And it can tear up the infrastructure it travels on.  Shutting the line down.  So traveling 800 miles an hour inside a narrow tube is probably not the safest thing to do.

Of course the biggest fear in a system like this is some politician will pass legislation to build it.  Because of all the taxpayer-subsidized union jobs it will create.  As they are constantly trying to build high-speed rail for the same reasons.  For the politics.  Not because it’s a good idea.  For any idea requiring taxpayer subsidies is rarely a good idea.

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Dirigibles may do the Heavy Lifting in Alaska

Posted by PITHOCRATES - July 28th, 2013

Week in Review

If you’ve watched Ice Road Truckers you’ve learned that it isn’t easy to move freight in Arctic regions.  Like Alaska.  Because there aren’t a lot of roads or bridges in Arctic regions.  Hence the ice roads.  Crossing rivers, lakes and oceans in the winter when they’re frozen over.  But even these roads cover only a fraction of Alaska’s sprawling country.  Which is why the airplane dominates in Alaska.  To move freight.  And people.  Making for some really high transportation costs.  Raising the costs of everything the good people of Alaska buy (see Hometown U: Could blimps find a place in Alaska skies? by Kathleen McCoy, Hometown U, posted 7/27/2013 on Anchorage Daily News).

Rob Harper at AUTC [Alaska University Transportation Center] pointed me to a new study the Center and UAA’s Institute for Social and Economic Research (ISER) partnered on, looking at the effect of higher transportation fuel prices. He called it a true eye-opener on the ever-rising cost of moving goods to and around Alaska. Every household and business is affected. No one thinks fuel prices will go down again.

ISER economists have often looked at spiking heat and electricity costs, but this was a first attempt to document higher transportation costs rippling through Alaska’s economy. In 2010, economist Ginny Fay and her study colleagues reported, Alaska’s per capita energy consumption was triple the national average.

Alaska fuel prices increased more than 25 percent between 2009 and 2010. Consumers responded by buying fewer cars and airplane tickets. They also paid higher prices for everything they did buy, from food to clothing…

Industries that use the most fuel are the hardest hit. In Alaska, that’s aviation, which uses 90 percent of it, Fay wrote.

And this in a state that exports oil.  But while they may be rich in oil reserves they have no refinery capacity.  Which means refined aviation fuel, diesel and gasoline has to be brought into Alaska.  And unlike the lower 48, that get their refined petroleum products via pipelines, Alaska must rely on more costly modes of transportation.  Shipping it over land or over water in smaller batches at greater prices.

Here’s where those slow, graceful dirigibles wedge their way back into our conversation. Being lighter than air thanks to nonflammable helium, and moving much slower than planes, they consume a lot less fuel. One research study for the military in 2009 compared an hour of flight time in an F-16 ($8,000) to an hour of flight time in a dirigible (less than $500).

Traditional air cargo is the most expensive way to move freight on a fuel-cost-per-ton-mile basis. Fay’s analysis showed that rail is cheapest, followed by trucks, then barge, ships and ferries. But Alaska only has 500 miles of rail. Our ships and barges often leave the state less than full, raising the cost per ton-mile. And we only have two roads, one north and one south. Most of Alaska is nowhere near a road or a coastline. So we’re back to air cargo.

Rail is the cheapest way to move heavy freight because of steel wheels on steel rails.  There’s very little friction so locomotives can pull a very long train consist full of heavy freight.  And they move fast.  Day or night.  In any kind of weather.  So they can quickly carry revenue-producing freight nearly around the clock.  Trucks are fast like trains but carry far less per load.  And whereas railroads change out train crews to keep trains rolling around the clock most long-haul trucks are privately owned.  And when the driver reaches his legal limit of driving time per day he or she has to park their rig and rest for a mandatory rest period.  Thus reducing the revenue-miles of trucks compared to trains.

Barges, ships and ferries can carry larger loads than trucks but loading and unloading takes time.  Time they can’t earn revenue.  Also, they travel slower than trains or trucks.  Limiting the amount of revenue-earning trips they can make.  Whereas air cargo is the fastest way to move cargo.  Allowing many revenue-earning trips.  But the planes flying in Alaska carry a fraction of the cargo trains, trucks, barges, ships and ferries can carry.  Greatly increasing the fuel-cost-per-ton-mile.  Which makes the dirigible such an attractive alternative in Arctic regions like Alaska.

The dirigible doesn’t need a road or waterway.  It can travel year round weather permitting.  It’s slow but because it burns so little fuel the cost per trip is nothing compared to an airplane.  It can’t carry as much as a train, barge or ship but it can go where a train, barge or ship can’t.  And it can travel as the crow flies.  A straight line between two points.  Something that only an airplane can do.  But it can do it for a far lower fuel-cost-per-ton-mile than an airplane.

There is little downside of using a dirigible to ship freight in these inhospitable Arctic regions.  Unless you’re a fan of Ice Road Trucking.  For a dirigible could probably carry anything a truck can carry.  And without a road, paved or ice, to boot.  Putting the ice road truckers out of business.

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