New York state investment chief wants oil train answers

Times Union | June 7, 2015 | Column by Brian Nearing

With the state pension fund holding about $1.8 billion in stocks from energy companies involved in crude oil trains, Comptroller Tom DiNapoli wants answers from them about steps being taken to reduce the risk of derailments, explosions and fires.

Chuck Pedersen, left, emergency management director, Jo Daviess County-Galena, IL and Fred Millar, an independent rail safety expert, look out over the Selkirk Rail Yard during a tour of areas impacted by the transportation of crude oil on Sunday, June 7, 2015, in Selkirk, N.Y. On Monday at the College of St. Rose a crude oil transportation summit will be held that the two men will take part in. (Paul Buckowski / Times Union)

In letters written to 14 publicly traded companies, DiNapoli also asked how much insurance coverage they would have to pay for cleanups and damage if disasters struck. Last month, the Times Union reported that Canadian lawmakers are looking at imposing insurance requirements of up to $1 billion on rail companies that operate oil trains and that there are currently no such minimum insurance requirements in the U.S.

Letters from DiNapoli went out to oil giant Exxon Mobil, as well as a Miami-based energy financing company that owned oil carried on the train that blew up in Lac Megantic, Quebec, in July 2013. The explosion killed 47 people and incinerated much of the downtown.

That tragedy sparked a growing national debate over the safety of massive oil trains, which can include more than 100 tankers each carrying 50,000 gallons of highly flammable oil from the Bakken fields of North Dakota. There have been derailments and fires in North Dakota, Virginia and Alabama.

"We need to know what companies are doing to safeguard against future mishaps which can lead to serious legal liabilities for the companies. As trustee of the state pension fund, I am concerned that future liability claims may harm the interests of the retirement system's members, retirees and beneficiaries," said DiNapoli on Friday.

His letters also asked the companies to provide information on any efforts to reduce the flammability of oil before it is shipped, as well as to explain who owns the rail cars used to ship oil. Bakken crude is much more flammable than regular crude oil and federal officials recently adopted new rules to phase out the older, less-sturdy tanker cars.

The state pension fund holds about $1 billion in stock in Exxon Mobil. The fund also has $9.1 million in stock in World Fuel Services Corp., which owned the roughly 50,000 barrels of Bakken crude that damaged Lac Megantic in the derailment.

Last month, a Canadian judge ruled that three residents could sue both World Fuel and Canadian Pacific Railway Ltd., which had a subcontract with a smaller railroad to carry the crude, on a claim the two companies knew the oil was not properly identified as highly flammable, according to the Montreal Gazette.

World Fuel is preparing to defend itself in the class-action lawsuit. In March, the Associated Press reported that the company had declined to contribute to a proposed settlement fund for Lac Megantic victims. Other companies initially named in the lawsuit had pledged $270 million by late March, hoping to gain immunity, according to the Associated Press.

DiNapoli also wrote to the rail company CSX, which runs crude oil trains that travel through New York and the Port of Albany, where neighbors in the South End around the port have complained about a threat to community safety. The state holds about $96 million in CSX company stock.

Other letters went to oil producers Phillips 66 ($141.7 million in stock held), Hess ($46.5 million), ConocoPhillips ($214.8 million), EnerPlus Corp. ($3.8 million), EOG Resources ($157.9 million), Forestar Group ($1 million), Whiting Petroleum Corp. ($9.4 million), Marathon Oil Corp. ($53 million), MDU Resources Group ($8.3 million) and NewField Exploration Co. ($13 million.) All figures are based on current share prices and state pension fund holdings on March 31, the most current period provided by DiNapoli's office.

[email protected] • 518-454-5094 • @Bnearing10

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PAUSE, People of Albany United for Safe Energy
PAUSE is a grassroots group of individuals who have come together to promote safe, sustainable energy and fight for environmental justice. We engage the greater public to stop the fossil fuel industry’s assault on the people of Albany and our environment.