American Oil and Gas Reporter - June 2015 - 38

Washington State OKs Rail Safety Bill
OLYMPIA, WA.-Washington Governor Jay Inslee has signed legislation
that stiffens safety regulations and increases notification requirements for moving crude oil through the state. The bill,
HB 1449, affects oil moved by rail,
pipeline and barge.
"This bill means our first responders
will get advance notification when oil
trains are coming through, and it also expands the barrel tax on crude oil and petroleum products to include both rail and
marine," Inslee said when signing the bill.
"This means that at a time when the
number of oil trains running through Washington is skyrocketing, oil companies will
be held accountable for playing a part in
preventing and responding to spills."
Sponsored by Representative Jessyn
Farrell, D-Seattle, HB 1449 requires
public disclosure of the amount and type
of oil being transported in the state.
Washington levies an oil spill administration tax, which pays for safety and
planning measures, on oil arriving on
ships of 4 cents a barrel and an oil spill
response tax of 1 cent a barrel. HB 1449
increases the administration tax to 10
cents, and extends that tax to crude transported by rail and pipelines.
No crude oil entered Washington by
rail in 2011, but the state website points
out that by June 2014, 19 trains with oil
cargos were passing through each week.
According to estimates by the state Department of Ecology, the amount of crude
oil passing through the state by train
could triple over the next five years,
hitting 9 billion gallons annually. In 2035,
it projects 113 trains could be moving
oil in the state every week.

Spill Planning
The Department of Ecology administers
the state's oil spill preparedness, prevention
and response program. Under state law,
facilities such as oil refineries, terminals,
pipelines and vessels involved in bulk
oil transfers must have spill contingency
plans covering containment and remediation. Railroad cars are not considered
facilities under Washington's spill contingency program, but the state legislative
website says federal law already requires
train operators to conduct oil spill response
planning.
In addition to revised regulatory requirements for barge and pipeline transport
of crude, HB 1449 imposes new burdens
for crude oil shipments:
* Railroads that transport oil as bulk
cargo must submit advance notice to the

38 THE AMERICAN OIL & GAS REPORTER

Department of Ecology of transfers between rail facilities, vessels and other facilities.
* Railroads moving oil must provide
the same financial assurances as facilities
such as oil refineries or terminals. The
department is required to determine the
amount necessary to demonstrate financial
responsibility, which will be calculated
by multiplying the reasonably anticipated
per-barrel cleanup costs by the estimated
worst-case spill volume in the facility's
oil spill contingency plan.
* Inspectors working for the state
Utilities and Transportation Commission
have authority to enter private property
to conduct hazardous materials inspections,

and railroad companies will be charged
regulatory fees based on their intrastate
operating revenues. The commission also
will adopt safety standards for private
road crossings of railroads used to transport
crude oil, and railroads will be responsible
for paying for necessary improvement
projects.
"This is a solid first step, but clearly
we have more work to do," Governor Inslee assesses. "While our state does its
part to bolster safe transport of crude oil
by rail and boat, I urge Congress and the
federal government to push for quick action on reduced speed limits and prohibition of outdated oil train cars (see story
page 124)."
❒

Maryland Legislature Advances
Two-Year Fracture Moratorium
ANNAPOLIS, MD.-Maryland legislators have approved a measure prohibiting
the state Department of Environment
(MDE) from issuing hydraulic fracturing
permits for two years, which supporters
say will provide more time to evaluate
the technique's health and economic
threats.
HB 449, sponsored by Delegate David
Fraser-Hidalgo, D-Montgomery County,
requires the MDE to delay issuing fracturing permits until Oct. 1, 2017, the
state's legislative website says. It adds
the department has not revised its oil and
gas regulations since 1993, before highvolume fracturing developed into a common industry practice.
According to media reports, the House
of Delegates approved the measure 10234 and the Senate passed it 45-2, both
veto-proof margins. News reports indicate
it was unclear whether Governor Larry
Hogan would sign HB 449, although he
has been quoted as saying fracturing
would increase employment opportunities
in western Maryland, as long as it was
done safely.
The Marcellus Shale Safe Drilling initiative established by then-Governor Martin O'Malley in 2011 directed MDE and
the Department of Natural Resources to
study fracturing and recommend ways to
protect public health, safety, natural resources and the environment, the bill
summary notes. The study concluded a
stringent regulatory regime based on best
practices was needed to manage risks.
"Current oil and gas exploration and

development regulations are generally
inconsistent, and in some cases, incompatible with modern industry practices,"
the summary says. "Thus, it is unlikely
that high-volume hydraulic fracturing occurs in Maryland until the regulations
are updated."
Even if the regulations are revised,
the summary says it is unclear whether
and when oil or gas development may
occur in the state, citing the relative stringency of the final regulatory provisions
and future commodity price levels as key
determinants. It points out that there are
no fracturing permit applications pending
before MDE.
Wendell Beitzel, a Republican delegate
from Garrett County, says he voted for
the moratorium because state laws already
impose such stringent requirements for a
permit that it takes about two years to
prepare the application. According to
media reports, Beitzel says it will take at
least that long to persuade oil and gas
companies to consider acquiring Maryland
leases, since most of them have been
getting the message that they are not
welcome in the state.
Fracturing Bills
Maryland legislators also are debating
two other measures to restrict hydraulic
fracturing. SB 29, introduced by Senator
James Brochin, D-Baltimore County, prohibits storing, treating or discharging
fluids generated by fracturing operations,
and bars fracturing for natural gas production in Maryland, while SB 458, in-
American Oil and Gas Reporter - June 2015

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