Ruling by Little-Known Federal Agency Paves Way for Communities to Say No to Oil-by-Rail

http://www.desmogblog.com/2016/09/28/ruling-little-known-federal-agency-paves-way-communities-say-no-oil-trains

By Justin Mikulka • Wednesday, September 28, 2016 - 03:58

The community of Benicia, [California,] in the crosshairs of history, made one of those decisions that will make a difference for the country. They stood up and said the safety of our communities matters.” 

That was Yolo County Supervisor Don Saylor talking to The Sacramento Bee about the vote by the Benicia City Council to deny a new oil-by-rail facility that oil company Valero was seeking.

But that vote would have been meaningless if not for a recent decision on September 20 by the Surface Transportation Board (STB) that gave Benicia the legal authority to have some say over what happens within its borders. 

Created in 1996, the STB is a federal agency which serves as “an independent adjudicatory and economic-regulatory agency charged by Congress with resolving railroad rate and service disputes and reviewing proposed railroad mergers.” 

The STB decision helped clear up some of the gray areas around the issue of “pre-emption,” in which railroads are not subject to any local or state authorities or laws because local and state laws are “pre-empted” by federal law.

In 2013 the STB ruled in favor of Norfolk Southern Railway Company, saying once again that federal pre-emption of state laws protected the rail company from lawsuits filed in the state of Virginia. 

The basic idea of pre-emption is that for interstate commerce to work, the federal government needs to be the sole regulator of railroads. 

As we have reported previously on DeSmog, pre-emption can effectively place rail companies above local law. This has led to developments such as the case of Grafton, Massachusetts, where the construction of the largest propane transloading facility in the state occurred without the need for local approval, construction permits, or even environmental review. 

Regarding the Grafton facility, the New England Center for Investigative Reporting wrote that, “Residents were dumbfounded: The location was in the middle of a residential neighborhood, less than 2,000 feet from an elementary school and atop the town’s water supply.”

This above-the-law approach has served rail companies well. And until the recent STB decision, it also appeared to protect oil companies who were moving oil by rail.

But this latest decision about Benicia appears to deliver a real blow to oil companies when it comes to oil-by-rail transfer facilities. Since the companies who receive the oil from the rail cars aren’t railroads, the STB ruled that they are not protected by federal pre-emption. In the decision the STB refers to Valero as a “a noncarrier” which is why the STB ruled they are not able to claim pre-emption. 

This allowed Benicia to say no to an oil-by-rail facility in their community. And it has also changed the discussion about this industry as a whole.

San Luis Obispo County, California, has now delayed further the decision about a new oil-by-rail facility in order to consider the latest STB ruling. 

Ethan Buckner was one of the organizers for environmental advocacy group Stand, which was working to stop the Benicia facility.  

This is a victory for the right of communities to say no to refineries’ dangerous oil train projects. The federal government has said once and for all that there is nothing in federal law that prevents cities from denying these oil companies’ dangerous rail projects,” Buckner said. “The oil industry keeps telling communities they have no right to say no to oil trains, but this ruling once and for all refutes this.”

Jackie Prange was one of the lawyers working on the Benicia case for the Natural Resources Defense Council and explained the potential impact of the STB decision to the San Francisco Chronicle.  

We’re pleased with the decision and the implications it will have across the country,” said Prange. “This issue is live in a number of sites across the country. This is definitely a decision that I think cities in other states will be looking to.” 

They are definitely paying attention in San Luis Obispo County, as well as in Albany, New York.

Albany is the largest oil-by-rail hub on the East Coast.

Opponents of its oil trains recently had cause for celebration. On September 16, the state’s Department of Environmental Conservation announced that the two companies operating oil-by-rail facilities at the Port of Albany would now be required to undergo full environmental reviews before the agency would renew the companies' permits. 

Chris Amato is a lawyer for Earthjustice who has been working on this issue for years. He believes the STB decision supports what Earthjustice has been saying all along about Global Companies, which owns one of Albany's oil-by-rail facilities. 

The decision by the Surface Transportation Board confirms what we have been saying since 2014: that Global's claim that state regulation of their operations is pre-empted by federal railroad law is simply wrong,” Amato explained to DeSmog. “Global can no longer attempt to shield their operations from scrutiny under their flawed legal theory.”

Opponents of the Albany oil-by-rail operations have been asking the state to step in for years, but the state has also hidden behind the issue of federal pre-emption. In 2014 the Albany Times Union reported that “Gov. Andrew Cuomo has been deflecting calls for the state to block the trains, saying rail transportation is controlled by the federal government, not the state.”

It would appear that the STB ruling negates New York’s current position and offers an option for the state to have authority over oil-by-rail facilities in Albany. 

While the amount of oil moving by rail is roughly half of what it was two years ago, that is mostly due to the current low price of oil. And it hasn’t stopped oil companies' continued efforts to build out more oil-by-rail infrastructure. 

Meanwhile, oil trains continue to derail and explode, as happened in Mosier, Oregon, in June, and opposition to the oil-by-rail industry continues to grow.

This STB decision appears to be a game-changer in the oil-by-rail story. With it, perhaps now more politicians will agree that “the safety of our communities matter” — much more so than oil company profits.

Main image credit: Justin Mikulka

Oil tank care behind a fence with sign reading 'Think first'

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PAUSE, People of Albany United for Safe Energy
PAUSE works to promote safe, sustainable energy and environmental justice.  We aim to engage the greater public to stop the fossil fuel industry's assault on the people of Albany and our environment.