Oil car storage plan in Adirondacks sparks foes

PHOTOGRAPHER: Patrick Dodson

Oil tanker cars sit at the Port of Albany on Jan. 31, 2014.

Those long lines of black railroad oil tankers rolling from Canada to Albany have become a common sight on the eastern edge of the Adirondacks, but empty tankers could soon be temporarily mothballed on railroad tracks deep in the mountain wilderness.

Iowa Pacific Holdings of Chicago, the parent company of the Saratoga & North Creek Railway, is developing a plan to store hundreds of the tankers that don’t meet updated federal safety standards on tracks it owns at the former titanium mine at Tahawus, in Essex County just south of the High Peaks.

The tankers would be stored there for a year or more while their owners decide whether to make costly retrofits to meet new safety standards.

Environmental groups don’t like the idea at all.

The tankers, known at DOT-111s, have proven subject to rupture and explosion during derailment. The new safety standards were established after accidents involving explosively volatile Bakken crude — including the 2013 explosion in a small Quebec town that killed 47 people. It’s the same kind of crude oil passing through the Port of Albany daily, coming on trains that in many cases pass through the Adirondacks and the Champlain Valley.

The tankers would be put into storage at Tahawus empty, though some oil residue could remain in them. Despite their being drained, some environmental groups say the plan raises questions about safety and whether the storage of such tankers is appropriate within the Adirondack Park.

The tracks, while privately owned, run through many miles of state Forest Preserve land, including five miles of the McIntyre East Tract, the state’s most recent acquisition, part of which is immediately south of the mining site. The tracks closely follow two wild rivers, including two different sections of the Hudson.

“Most of the places they plan to store these are within a stone’s throw of the Hudson or Boreas rivers,” said Peter Bauer, executive director of Protect the Adirondacks.

Bauer said the group is researching what options there may be to stop the project under state and federal law. “We have concerns,” he said. “There are issues around fumes, there are issues around leakage.”

“From what we’ve been able to learn so far, we’re concerned and we’re opposed to the idea, but we have a lot more research to do,” said John Sheehan, spokesman for The Adirondack Council.

Iowa Pacific has “common carrier” status for the line under federal law, which the railroad asserts exempts it from local regulation. It says no approvals are needed from either the state Department of Environmental Conservation or the Adirondack Park Agency. The APA has jurisdiction over new industrial uses in the park, but the agency did not respond to a request for comment last week.

The plan would give the Saratoga & North Creek Railway significant new revenue — potentially as much as $1 million, according to the railroad — to help support the 4-year-old scenic tourism train that runs between Saratoga Springs and North Creek. The tracks are owned by Warren County and the Saratoga County town of Corinth, which leases them to Iowa Pacific. The tracks, running north from Saratoga Springs, are the only way to reach Tahawus by rail.

Warren County’s Public Works Committee voted July 28 to support the Iowa Pacific plan, after hearing that it would financially support the scenic train.

“We’re looking for a revenue stream that will make the railroad sustainable for the long term,” said Ed Ellis, president of Iowa Pacific Holdings, said at that committee meeting.

He said the storage can be done safely, despite the volatility of the tankers’ former contents. “There’s no record ever of an empty car having a problem because of something inside it,” he said.

Ellis estimated 300 to 500 tank cars could be stored on the several miles of siding in Tahawus, though he didn’t rule out storing some cars on the main track between North Creek and the mine, which hasn’t be used for active mining in nearly 30 years. The vast site, located in the town of Newcomb, has been excavated for iron and later titanium since the early 19th century. It was used most recently for open-pit titanium mining from World War II until the 1980s. The roughly 1,100-acre site continues to be owned by NL Industries, the last company to mine there.

Iowa Pacific has been looking for ways to increase Saratoga & North Creek’s revenue for several years. It bought the 30 miles of rail line between North Creek and Tahawus from NL Industries in 2012, with plans to haul out crushed stone, huge piles of which are left over from the mining, for construction use. That is still the long-term plan, but so far little stone has been moved, and the railroad overall has been losing money.

Storing tank cars could change that. Ellis said the storage has “seven figure potential.”

“Anything we can do to get us a revenue stream to get through the next few years will be helpful,” he told Warren County officials.

Earlier this year, Iowa Pacific officials talked about using the line to haul away low-level radioactive waste from cleanup working being done at the Knolls Atomic Power Laboratory in Niskayuna, though those plans are no longer being pursued.

Underlying the storage plan are disruptions to the national oil tanker market as the federal Department of Transportation and Canadian government impose new safety standards that will require older DOT-111 tank cars to have $75,000- to $80,000-per-car retrofits, to improve their thermal protection and pressure relief, or be scrapped. The DOT-111 cars can remain in service for up to three more years. Both the petroleum industry and environmentalists, however, are challenging those standards in the courts, though for different reasons. That is creating uncertainty for tank car owners, Ellis said.

Of the roughly 80,000 DOT-111 cars now in service, as many as 60,000 may eventually be scrapped, Ellis said, but it makes sense that the owners to want to store them until the rules dispute is resolved. He said Iowa Pacific is already storing older tank cars at sites in Colorado and Mississippi, and he’s certain demand will exceed the storage that can be supplied in Tahawus.

Ellis said the cars will be inspected to insure they are empty, though those inspections may not happen until they reach Tahawus. The approval given by Warren County is conditional on the cars being inspected to be sure they are empty.

Cars could begin arriving for storage within the next couple of months, Ellis said.