Tar sands oil Albany-bound?

Times Union  |  September 23, 2014  |  Brian Nearing

Albany

A Houston-based oil company with a terminal at the Port of Albany is poised to open its rebuilt rail terminal in New Jersey — connected to Albany via rail — to shipments of Canadian tar sands oil.

This spring, the head of Buckeye Partners told investors that its rebuilt Perth Amboy terminal would be ready for incoming rail shipments of tar sands oil by the third quarter of this year. That schedule was confirmed during a company presentation at an industry conference in August.

To get to New Jersey, trains carrying the oil from the Canadian province of Alberta would have to use rail lines that pass through New York and either go past the Port of Albany or to CSX's Selkirk rail yard to the south and then continue down CSX lines along the western shore of the Hudson River to New Jersey.

It remains unclear which path potential tar sand shipments could take. Buckeye officials did not return several calls seeking comment. The company has run its terminal at the port since 2012.

The 1,250-acre Selkirk yard in Albany County is a major CSX switching center at which freight cars are sorted into various tracks for dispatching in trains headed to destinations throughout the Northeast. The yard is the largest of 11 owned nationally by CSX.

In May, Buckeye CEO Clark Smith said the rebuilt Perth Amboy terminal, which was purchased two years ago by the company and rebuilt at a cost of more than $200 million, would "facilitate exports of Canadian-sourced crude oil" and that Buckeye was working to "fast track the completion of new infrastructure to handle the heavy crude," according to a report in Platts, an energy industry trade journal.

Another Buckeye official, Khalid Muslih, told Platts that the company saw an "attractive opportunity to bring Canadian crude" eastward by rail for eventual shipment to a Buckeye terminal in the Bahamas and "to other global refining centers."

Buckeye describes its BORCO terminal in the Bahamas as one of the largest crude oil and petroleum products storage facilities in the world. The facility can handling the "blending" of crude oil, a processing involving the mixing of various grades of crude.

State Department of Environmental Conservation officials had no comment about Buckeye's plans. In May 2013, Buckeye got DEC permission to boost crude imports at the Port of Albany from 400 million gallons annually to 1 billion gallons.

"What is the Cuomo administration going to do about this burgeoning problem with crude oil shipments in the state?" said Chris Amato, staff attorney for the environmental group Earthjustice and a former DEC deputy commissioner. "Who knows what the DEC knows about this plan by Buckeye or what it has asked about it."

Tar sands oil is heavier than regular crude, and in water, sinks to the bottom, making cleanups expensive and difficult. In 2010, a pipeline spill of tar sands oil — also known as diluted bitumen — fouled the Kalamazoo River near Detroit. A cleanup has cost more than $1 billion so far and is not finished.

Buckeye and Massachusetts-based Global Partners have DEC permission to handle up to 2.8 billion gallons of crude oil annually at the port. So far, that oil has been coming into port from the Bakken fields of North Dakota in massive oil trains. Global has drawn community opposition over a proposal to build a facility to heat crude oil to make it easier to ship. Canadian tar sands is much thicker than Bakken crude and has to be heated to make it thin enough to pump out of rail cars for transfer into barges or tankers.

Opponents of the facility believe this shows Global wants to handle tar sands oil, something the company has neither confirmed nor denied. DEC is still reviewing the proposal.

Last spring in the Selkirk yard, 13 rail tankers carrying Bakken crude derailed. None ruptured or exploded. As many as 3,200 rail cars a day can be handled in Selkirk en route to up to 70 different destinations, according to a CSX online brochure. The receiving yard has 11 sets of tracks, each with an average capacity for 156 cars. Cars are then sorted onto one of 70 classification tracks, where cars are later joined together based on the destination.

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bnearing@timesunion.com • 518-454-5094 • @Bnearing10

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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.