Mosier derailment’s costs adding up

Union Pacific estimates partial costs of near $9 million

By Lauren Dake, Columbian Political Writer

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Six months after a Union Pacific train hauling Bakken crude oil derailed in the Columbia River Gorge National Scenic Area, state agencies in Washington and Oregon, residents of the tiny town of Mosier, Ore., and others affected by the fiery crash are in the midst of tabulating a bill to send to the railroad.

Painting a comprehensive picture of the economic and environment toll of the derailment is a daunting task, in part because Union Pacific is not required to disclose costs associated with its cleanup efforts or even how much its insurance policy will cover.

So far, an email obtained by The Columbian revealed that Union Pacific has estimated its costs associated with the Mosier derailment at about $8.9 million. The railroad reported $1.7 million in equipment damage and $176,811 in track damage to the Federal Railroad Administration, with the remaining millions carved out as response and remediation costs.

By most accounts, the region narrowly avoided catastrophe that June afternoon. And although the numbers will likely increase, Union Pacific is expected to foot the bill.

But some, including Eric de Place, a policy director with the Sightline Institute, a Seattle-based nonprofit that supports sustainability issues, said the lack of transparency puts towns and cities along the rail line in a vulnerable position. He pointed to the 2013 derailment in Quebec, which killed 47 people and caused billions in damage. The railroad filed bankruptcy and the cost of rebuilding went to Canadian taxpayers.

“The railroads are able to move any number of dangerous substances. They don’t have to tell anyone when they are moving it or how much insurance they have or financial risk they are putting on communities,” he said. “Towns like Mosier and Vancouver and thousands of others across the country are left wondering if a meteor is going to fall out of the sky and hit them on the head.”

In a statement, Union Pacific said it is committed to absorbing all the costs incurred as a result of the derailment.

“Similar to other private companies, we do not release specific financial information related to our operations, including the amounts and details you are referencing in your inquiry in regard to the derailment,” Justin Jacobs, a spokesman for the company, wrote in an email.

An intergovernmental group calling itself Team Mosier — made up of the city, fire district and school foundation — is engaged in ongoing negotiations with the railroad.

“We are in a confidential mediation at the moment,” said William Gary, a Portland-based attorney working with the Mosier group. “We’re working with the railroad to resolve a host of fairly complicated issues.”

Gary declined to discuss the negotiations or say what kind of compensation the government agencies are seeking.

On the Friday afternoon the train derailed, the typically windy Columbia River Gorge, known for world-class wind surfing, was calm. The train had 94 rail tank cars, and 16 of them derailed, according to the after-action report from state agencies. One tanker burst into flames, spreading to an additional two cars. Crews from 19 different firefighting districts and agencies responded, and crews had control of the blaze within four hours. The 16 tanker cars that went off the tracks were holding 448,000 gallons of oil, but only 47,000 gallons leaked, much of it going into a wastewater treatment unit — avoiding a more difficult river cleanup. And finally, a nearby school was evacuated but nobody was injured.

“I think everyone there agreed there were all kinds of circumstances that could have made it more of a worst-case scenario,” said Suzanne Skadowski, with the Environmental Protection Agency.

Still, there are unanswered questions, such as the degree to which the river was impacted and what long-term effects there could be on the groundwater and soil.

“There are fairly technical questions that require experts to do studies and tests,” said Gary, the attorney with Team Mosier.

Time and money

For state agencies, the costs are more straightforward.

Washington’s Department of Ecology and the state’s Fish and Wildlife Department sent 23 people who worked a total of 726 hours at the site of the derailment. The two state agencies plan to send a bill to Union Pacific for $66,000 next month, according to Lisa Copeland with Ecology. Oregon’s Department of Environmental Quality is currently seeking $240,000 in reimbursement costs. That number could increase.

Oregon’s Department of Transportation has tabulated partial costs of about $53,497; the Oregon state fire marshal believes its time and effort was worth about $103,290; and the EPA’s bill is at $340,000. Other state agencies involved, such as the Oregon State Police, did not respond to a request from The Columbian for information before deadline. Other agencies involved, such as Oregon State Parks and Recreation Department and the Oregon Health Authority, are not billing Union Pacific for their time.

Following the Exxon Valdez oil spill, Congress passed the Oil Pollution Act in 1990, essentially ensuring the polluter is on the hook to pay the for cleanup, remediation and response costs. They must, of course, have insurance and the funds to cover the cleanup.

De Place has tried to determine how much oil spill costs and how much insurance railroads have to cover a catastrophe.

“They won’t tell you,” he said of the railroads. “And I think there is a major issue of transparency and public accountability that someone can introduce a large risk and not tell you whether they can pay for it or not. Maybe the taxpayers aren’t going to pay in Mosier. There’s no guarantee they won’t have to pay in another circumstance.”

De Place believes railroads are underinsured, pointing to testimony by rail executives who have stated that purchasing insurance proportional to their risk would make moving their products cost prohibitive.

“If it had derailed in town, destroyed the town and killed people the costs would be astronomically higher … All it had to do was be 100 yards down the track,” he said.

New rules in Washington

To address a dramatic increase in crude oil traveling through the state, Gov. Jay Inslee signed a new law that will soon require railroads hauling crude oil to demonstrate the ability to pay for a cleanup. They will also be required to share information about the type of oil and the volume with the state’s Department of Ecology and first responders.

The railroad lines hauling crude oil in Washington have until Jan. 30 to submit their plans to the ecology department. The plans will be available for public comment for the following month.

BNSF Railway, which hauls the bulk of crude through Washington, is self-insured and purchases additional coverage for accidents, according to spokesman Gus Melonas.

“We are developing a worst-case scenario and will meet the … timeline,” he wrote in an email.

California and Minnesota have similar laws for railroads hauling crude, according to Ecology. But Oregon does not.

Many more trains would likely travel through the Columbia River Gorge if Vancouver Energy’s plans to build the nation’s largest crude-by-rail oil terminal at the Vancouver Port are approved.