Oil Train Safety And Taxes On Lawmakers’ Agenda For 2015

SEATTLE — For the past few years, a growing number of trains have been bringing “rolling pipelines” of oil from North Dakota to ports and refineries in the Pacific Northwest.

And in that time, the Washington and Oregon legislatures have failed to come up with the money to pay for the cost of responding to the increasing risk of oil spills in their states. That could change in 2015.

Both states’ governors and legislators are talking about the need to enhance safety and preparedness in response to the uptick in oil train traffic in the region. But there are some sticking points when it comes to deciding what’s to be done, and more importantly, how to pay for it.

Here’s the old model in Washington: oil that arrives by ship (traditionally that was 90 percent of the oil that arrived at Washington refineries) is taxed a nickel per barrel. That money goes to spill response and preparedness. Fast forward to 2014: oil arriving by train and pipeline now makes up one third of the oil arriving at Washington refineries. And unless falling oil prices upend predictions, oil-train traffic in 2020 could be seven times what it is today.

A new funding model, which seems to be gaining support from Republican and Democratic lawmakers alike in Washington state, would extend the oil tax to petroleum carried by trains as well as by ships.

“We have to be getting those dollars into the system,” said Sen. Doug Ericksen, R-Ferndale, who chairs the Senate Energy, Environment and Telecommunications Committee. “We’ll be applying that [oil train barrel tax] to the current tax structure. We’ll be putting the money to local responders.”

Ericksen said Republican lawmakers will be introducing a legislation to address oil trains while “supporting energy independence.”

“There’s lots of places where we can come together in a bipartisan fashion to move these bills forward,” Ericksen said in an interview.

Washington Gov. Jay Inslee will introduce legislation on oil trains in the coming legislative session, which convenes Jan. 12. His legislation is based on recommendations from a report commissioned by the Legislature last session. Inslee’s legislation will call for an expansion of the barrel tax to include oil by rail and pipeline, but it could also raise the tax to more than 5 cents per barrel.

Rob Duff, Inslee’s senior policy advisor on natural resources and the environment, declined to comment specifically on how much the Washington governor thinks the barrel tax should be increased, but said that the key is that the revenue from that tax be sufficient to cover the increased costs of spill response and preparedness for a train or pipeline oil spill event.

“The changes that are happening is Bakken crude coming on our rails, so clearly it’s appropriate for the response to be funded out of the barrel tax in order to pay for the safety improvements that need to be made,” Duff said.

Inslee’s legislation will also call for an increase in state rail inspectors and an expansion of funding and authority of the state Utilities and Transportation Commission, which currently conducts inspections at public crossings but is prohibited from doing inspections on property owned by the railroads. The legislation also recommends mandatory tug escorts for oil tankers over 40,000 dead weight tons traveling through Puget Sound, a recommendation that is supported by environmentalists but opposed by Senator Ericksen and the oil industry.

Last session, Republicans introduced legislation that would have taken $9 million from the state toxics cleanup fund, and applied it to oil train spill response. Democrats and environmentalists strongly oppose that proposal.

“There’s been a tendency to dip into other state dedicated funds including the [cleanup fund] to cover oil spill protection,” said Darcy Nonemacher, legislative director for the Washington Environmental Council.

Oregon Gov. John Kitzhaber has also called for a barrel fee for oil trains. He plans to introduce a proposal for such a fee during Oregon’s legislative session starting Jan. 12. Kitzhaber’s office hasn’t released specifics, but the new fund would support three agencies with a documented need for more money.

The Oregon Department of Transportation currently inspects one percent of cars carrying hazardous materials. Many communities rely on the state’s hazardous material teams, funded by the state Fire Marshal, to respond to incidents like oil train derailments.

But those teams are undertrained, have little to no fire-fighting foam for crude oil fires and are sometimes two or three hours from oil train routes. Trains currently carry oil through Central Oregon and along the Deschutes River, but the Oregon Department of Environmental Quality lacks spill response plans and equipment there, said Bruce Gilles, manager of the Department of Environmental Quality’s spill planning and response. If Oregon institutes a barrel fee, Gilles hopes to fund two additional positions to address spill planning along rail lines.

“If we don’t have resources we can’t perform the work. It’s as simple as that,” Gilles said, adding that shifting existing resources means neglecting other risks of marine spills like marine vessels, which do pay fees. “We’ll respond and we’ll do the best we can to clean that up, but that might be delayed because there’s no front-end planning done.”

Local leaders and municipalities are currently in the dark about how much oil is moving through the region, though environmentalists and Democrats in the Northwest have been pushing for increased transparency on the part of rail and oil companies.

“We need to have a public disclosure system, or a community right to know, where there’s a website or information tool the public can access to understand exactly what is happening, what is moving through their communities,” Nonemacher said, arguing that local governments would then be able to better prioritize their oil spill and disaster response planning.

The issue of transparency could be a key sticking point between Democrats and Republicans in the upcoming session. Ericksen said that there will be more information made available to first responders and local governments but “if people are looking for real time notification of every train through their community, we won’t have that happen.” Ericksen also said any legislation should focus exclusively on oil trains and leave out oil tankers and pipelines.

Despite some potential hot spots in the negotiations around how much to tax, how much information to share and where to focus response money, the issue of oil train safety has clearly bubbled to the top of the priority list for environmentalists and politicians alike. Ericksen and Inslee expect to introduce legislation at the beginning of the session.

“I think this issue is so critical that action must be taken and there’s a real desire to take action,” Nonemacher said, noting that environmentalists may not have as much support as they would like in the newly Republican-held state Senate, “I think it will be difficult. It will be a difficult conversation but difficult conversations are worth having.”

Tony Schick contributed to this report.