Three Questions: Bob Andrews, President and CEO of the Bob Andrews Group LLC

President & CEO Robert C. Andrews, Jr. BAG-ERS

President & CEO Robert C. Andrews, Jr

Fire-protection company Bob Andrews Group LLC this month launched a new subsidiary that offers emergency-response services for shippers moving crude oil by rail. The company’s fledgling BAG-Emergency Response Services unit will provide firefighting crews and specialized equipment for the petroleum industry, which increasingly uses trains to get crude from remote shale plays like the Eagle Ford to refining centers. We asked Andrews to discuss the potential dangers of the practice and what his new venture can do to abate the risks.

Q: Clearly the shipping of crude-oil-by-rail is a growing trend. Has the industry done enough to ensure the safety of this practice?

Statistically, shipping crude-oil-by-rail remains one of the safest means of transporting oil to market, especially when pipelines are not available.  Having said that, I don’t know anyone who predicted how fast the recent oil shale industry would grow throughout North America, nor especially predict its impact on railroads. Some have called it the “Oil-Shale Boom”, others the “21st  Century Gold Rush”.  And like the original Gold Rush, there are a lot of benefits, a lot of opportunities, and a lot of challenges.  I think that to some degree the industry is having to play catch-up regarding crude oil train safety, especially in light of the recent accident in Quebec.  However, I am confident that the industry is actively looking at numerous ways to improve the safety of crude-oil-by-rail, and the industry will be implementing those improvements in the future.

Q: Why did you form the new BAG-Emergency Response Services subsidiary to focus on this kind of specialized emergency response service?

The industry is taking a multi-targeted approach to crude oil rail safety.  That approach includes reviewing and improving operating procedures, as well as improving the strength and design of the rail tank cars themselves.  But there is also a need to increase the level of emergency preparedness and response in the unlikely event that a major emergency occur in the future.  I formed BAG-Emergency Response Services to provide an effective corporate structure from which I could combine my 30-years of specialized oil, refining, and chemical firefighting, fire protection engineering, and railroad experience, to meet this specialized emergency response challenge.

Q: Should people be worried about the movement of crude unit trains through their neighborhoods and towns?

I think the public should be aware, possibly concerned, but certainly not worried.  To put it in terms that most people would understand, we can look at the safety of the commercial aviation industry as a comparison.  Like crude oil rail transport,  flying commercially is a very safe way to travel.  Yet, from time-to-time we read about an accident involving a commercial airliner.  While we are ever aware that that risk exists, many of us, myself included, routinely fly.  We expect, however, that should a mishap occur, that a very dedicated, effective, and robust emergency response system will activate and respond to our airliner emergency.  BAG-Emergency Response Services will provide that specialized emergency response capability to the crude-oil-by-rail market, similar to what we expect from the commercial aviation industry.

San Antonio Business Journal
Sep 27, 2013, 5:00am CDT
by Sanford Nowlin

Three Questions: Bob Andrews, President and CEO of the Bob Andrews Group LLC (pdf version)

Fire-safety firm launches oil-by-rail service company

Fire-protection company Bob Andrews Group LLC will hire 25 additional workers in San Antonio with the launch of a new subsidiary that offers emergency-response services for shippers moving crude oil by rail.

The company’s new BAG-Emergency Response Services LLC unit will provide firefighting crews and specialized equipment for the petroleum industry, which increasingly transports crude by train.

Based on early interest, Bob Andrews Group will double the number of employees at its Alamo City headquarters over the next year and hire scores more workers nationwide, Vice President Samuel Goldwater says.

“This new venture is probably going to overshadow everything else we do in terms of size, scope and geography,” he adds.

As activities in U.S. shale plays such as South Texas’ Eagle Ford picks up, energy companies increasingly use rail to deliver crude from oilfield to refinery.

However, regulators and activists have raised safety concerns about the trend, especially in the wake of the July explosion of a crude train in Lac-Megantic Quebec, which left at least 42 people dead.

Goldwater says the new business unit not only addresses the trend but harnesses two of Bob Andrews Group’s core businesses— fire-protection engineering and installing fire systems for rail operators.

“We see this as an ideal fit,” Goldwater adds. “It’s kind of a combination of our rail entities and our fire protection entities.”

— Sanford Nowlin
San Antonio Business Journal

THE RAILROAD WEEK IN REVIEW

“Emergency Response Services will offer customized emergency preparedness and response solutions tailored to specific risk profiles” — Chief Robert C. Andrews, Bob Andrews Group

The recent Lac-Megantic tragedy has created an immediate need for a a pro-active railroad industry process to prevent a recurrence and limit the damage if there is another such incident. And there will be, even as crew sizes have come down to two from five while FRA injury and incident rates have come down markedly. Yet it still takes just one person not following Best Practices to get himself or somebody else hurt. Think Chatsworth, e.g.

Moreover, given the myriad reactions and responses to the Megantic event, one can only conclude that the best prevention comes from having the railroad industry offer its own solution and not wait for solutions to be forced upon the industry by well-meaning regulators, public officials, elected officials, concerned citizens, experts, and others.

Non-Class I railroads that are handling crude-oil unit trains are particularly vulnerable in any accident approaching the scale of what we saw in Quebec. Industry leaders and regulators have been very good about promptly issuing Best Practices guidelines to prevent such accidents, but not much has been said about containing the damage.

Based upon what we are seeing in the aftermath of the Lac-Megantic accident, the non-Class I carriers appear to be more vulnerable than the Class Is:

  1. Most short lines do not have the financial resources, nor are of sufficient net worth, to pay for the potential costs and claims associated with a Lac-Megantic-type event.
  2. Many short lines are either under-insured or non-insured for such an event.
  3. Short lines do not typically participate in the American Chemical Council’s “Responsible Care Program”, as Class 1 railroads do, yielding as they do a much higher “level of care” in the handling of chemical, hazmat, and TIH commodities.
  4. Short lines do not as a rule have robust emergency planning, emergency preparedness, nor first-responder training programs. (This spreads to NIMBY concerns about ethanol terminals.)
  5. As we’ve seen with the MMA bankruptcy, unless significant procedures to reduce the risk of moving crude-oil unit trains by short lines are implemented, these short lines are betting the farm every time they move a crude-oil unit train.

A best-practices solution will significantly reduce the hazards, and the associated damage, should an accident similar to Lac-Magantic happen in the future. The overall goal is to respond quickly to a derailment or similar event where product is released, and contain the spill/damage/fire rapidly. The faster the emergency is mitigated, the smaller the impact is to the railroad, the public, and the environment, resulting in a much-reduced overall accident cost. Once implemented, a best-practices solution would address the following “hot ticket” items:

  1. The flammable risk inherent to crude oil unit trains will be mitigated by dramatically enhancing firefighting and emergency response.
  2. The training of public first responders will be dramatically increased over each unit train route.
  3. The enhanced firefighting and emergency response program will provide a counter-measure to the concerns related to the current design of DOT 111 tank cars.
  4. Such a program, as adopted by a shortline railroad, will show a pro-activeness by that short line equivalent to the ACC “Responsible Care” program.

The crude-by-rail phenomenon is not going away. According to the July 2013 AAR “Rail Time Indicators” report, oil-train traffic for July 2013 was up 24.9 percent over July of 2012, and July 2012 was up 86.2 percent over July 2011. Railroads remain cost-competitive versus truck and are only bested by pipelines (which are long lead solutions to build, and then are only effective if they run where they need to).

However, in order for railroads to enjoy this market, and not bet the farm on every move, they need to increase their emergency preparedness and response capability. While the costs of these necessary improvements would initially be borne by the railroad, they should then be passed on to the oil producer or shipper and ultimately passed on to the consumer. The economics of the crude-oil marketplace are such that there is enough room to bear these reasonably small incremental costs to increase emergency response capability.

The fact that governments are forcing railroads to accept hazardous shipments under their common carrier statutes, but then leaving the cost of an accident to the railroad, at the railroad’s extreme peril, has also been well illustrated post the Lac-Megantic accident. This situation must be resolved. Increasing emergency response capability, passing those costs on to the consumer, reducing the railroads’ risk while still allowing them to carry these dangerous goods while meeting their common carrier obligation will in combination present a win-win-win proposition.

Step One is coordinating handoffs and continued care with the Class Is. They all have supported short lines in hazmat training. I commented on the BNSF first-responder program being extended to short lines Aug 23 and last week I got assurances from Union Pacific that they will engage short lines even as spelled out for their own local customers in the 10-K:

“UPRR Security Measures – We maintain a comprehensive security plan designed to both deter and to respond to any potential or actual threats as they arise… Our employees undergo recurrent security and preparedness training, as well as federally-mandated hazardous materials and security training. We regularly review the sufficiency of our employee training programs. We maintain the capability to move critical operations to back-up facilities in different locations.”

Which is all to the good: train crews learn how to recognize different types of fires and what to do until the first responders arrive. That’s where the Bob Andrews Group comes in. Chief Andrews has been fighting oil fires around the world for some 30 years. He also knows railroads, too, and is in the process of rebuilding a set of PRR Broadway Limited cars, incorporating state-of-the-art fire suppression systems designed specifically for for excursion trains, Ed Ellis’ Colorado operation being Exhibit A.

Based — not surprisingly — in San Antonio, Bob originally hails from Philadelphia, ergo his Broadway Limited interest. We were first acquainted some years ago when he joined Philadelphia’s Union League and became active in the League’s Civil War Round Table Group. We first began talking about crude-oil train emergency preparedness when the Philadelphia area started seeing such trains heading for half a dozen refineries and other destinations. And when the MMA had its incident, Bob went into overdrive to find the best means to contain the inevitable damage that ensues when a trainload of crude oil comes off the rails.

This week he issued his first press release, excerpts of which follow, emphasis added:

The Bob Andrews Group, LLC (BAG) today [Sep 4] announced the formation of BAG – Emergency Response Services, LLC (BAG-ERS), a wholly-owned subsidiary that will focus on providing specialist emergency preparedness and response services to protect crude oil unit trains in North America as well as the communities in which they operate. The new company will provide industrial firefighting specialists as well as specially-designed firefighting equipment aimed at crude oil unit trains and their associated fixed loading and unloading facilities.

Andrews will create user-specific emergency preparedness plans to address the frequency and routes of unit train travel, the population density and any environmental sensitive areas along the route, and the current preparedness level of local first responders. The company will apply three emergency response deployment models, alone or in combination, in order to provide sufficient personnel and equipment to curtail the growth of an emergency in its earliest stages and within agreed-to response time parameters.

Location options include both wayside fixed emergency response facilities housing specially designed, hi-rail equipped, firefighting vehicles, as well as purpose-built firefighting railcars that will be part of the crude-oil unit train consist. Says Andrews, “Being able to interrupt the growth of the fire or emergency at its earliest phase is critical to preventing a Lac-Mégantic-type disaster in the future.” He has a point.

The Railroad Week in Review, a compendium of railroad industry news, analysis and comment, is sent as a PDF via e-mail 50 weeks a year. Individual subscriptions and subs for short lines with less than $12 mm annual revenues $150. Corporate subscriptions $550 per year. To subscribe click on the Week in Review tab at www.rblanchard.com. © 2013 The Blanchard Company.