This Practice is Terrible

[Uccmal]

First Quebec - 47 Killed

now North Dakota.- Bnsf

 

This has to end.

 

http://www.bloomberg.com/news/2013-12-31/train-carrying-oil-in-north-dakota-ablaze-after-derailing.html

[Uccmal]

6 fire/explosions in 6 months.  All pipelines ever do is leak.

 

http://www.bloomberg.com/quicktake/oil-by-rail-and-by-pipeline/

 

 

[rogermunibond]

San Bruno California gas pipeline exploded killing 8 in 2010.

 

Qingdao China oil pipeline exploded killing 52 in 2013.

 

Care to qualify that?

[Kraven]

6 fire/explosions in 6 months.  All pipelines ever do is leak.

 

http://www.bloomberg.com/quicktake/oil-by-rail-and-by-pipeline/

 

Warren likes them, therefore they are fine and by definition the best possible option.  So you are wrong, sir.

[Guest longinvestor]

First Quebec - 47 Killed

now North Dakota.- Bnsf

 

This has to end.

 

http://www.bloomberg.com/news/2013-12-31/train-carrying-oil-in-north-dakota-ablaze-after-derailing.html

 

Remember Exxon Valdez, BP Gulf spill? Oil is messy to transport.

 

Any new safety regulations unlikely to hurt BNSF/railroad industry if the incremental costs get to be passed along as cost of doing business.

 

 

[Cardboard]

"San Bruno California gas pipeline exploded killing 8 in 2010.

 

Qingdao China oil pipeline exploded killing 52 in 2013.

 

Care to qualify that?"

 

San Bruno -> Gas transport, not oil.

 

Qingdao China -> Same safety standards as TransCanada and Enbridge? Yeah right!

 

The oil from North Dakota or the Bakken is not your standard oil. It is light and contains a ton of butane, propane. Moreover, some has been found to be highly corrosive. A key difference between pipeline owners and train owners is that standards on what can go into the pipeline and their storage vs trains is vastly different. See this article for example.

 

http://www.reuters.com/article/2013/05/29/column-kemp-bakken-pipelines-idUSL5N0EA3SU20130529

 

Cardboard

[Guest wellmont]

"Workin' on that great Alaska pipeline

Many men were lost in the pipe

They went to fuelin' cars

How smog might turn to stars

Someday

Smog might turn to stars

Someday."

 

neil young

[Uccmal]

First Quebec - 47 Killed

now North Dakota.- Bnsf

 

This has to end.

 

http://www.bloomberg.com/news/2013-12-31/train-carrying-oil-in-north-dakota-ablaze-after-derailing.html

 

Remember Exxon Valdez, BP Gulf spill? Oil is messy to transport.

 

Any new safety regulations unlikely to hurt BNSF/railroad industry if the incremental costs get to be passed along as cost of doing business.

 

 

 

No question.  Fossil fuels are a messy business. 

 

"San Bruno California gas pipeline exploded killing 8 in 2010.

 

Qingdao China oil pipeline exploded killing 52 in 2013.

 

Care to qualify that?"

 

San Bruno -> Gas transport, not oil.

 

Qingdao China -> Same safety standards as TransCanada and Enbridge? Yeah right!

 

The oil from North Dakota or the Bakken is not your standard oil. It is light and contains a ton of butane, propane. Moreover, some has been found to be highly corrosive. A key difference between pipeline owners and train owners is that standards on what can go into the pipeline and their storage vs trains is vastly different. See this article for example.

 

http://www.reuters.com/article/2013/05/29/column-kemp-bakken-pipelines-idUSL5N0EA3SU20130529

 

Cardboard

 

Thankyou.  Saved me the trouble. 

 

So rogermunibond, Is transporting explosive oil by rail a bad practice or not. 

 

 

[Uccmal]

The whole industry gets ever uglier as the product gets ever more inaccessible. 

[Guest ajc]

So rogermunibond, Is transporting explosive oil by rail a bad practice or not.

 

It's not addressed to me, but I don't mind playing devil's advocate if it's all the same to you.

 

I think it's a bad practice just like gaz guzzlers, coal powerstations, clothing factory sweatshops and a bunch of other things are.

But, people gotta eat!

 

Here would be my question for you:

If you went down - in person - to those oil fields and train warehouses and tried telling a bunch of workers about this great safety plan you have and how the only cost will be 10 000 jobs or whatever. How do you think they'd react?

Friendly pats on the back or would we maybe be talking something slightly less welcoming?

 

That to me is the primary issue here. It's all well and fine for civilized value investors like ourselves to hold forth and opine about the state of the world, but when it comes down to it a substantial proportion of the people on this earth will always be willing to risk death or injury if that is what it takes to put some food in their gut, a roof over their head and maybe buy something shiny.

Try taking that away from them (even in the name of good intentions) and let's see how far you get? My guess is not very.

 

Not everyone in life can be an educated paper-pusher with consistently and fantastically rational points of view on all issues. What type of privileged world do you live in, if you genuinely think that that is the way things really are for the majority?

 

(Anyway, that - or something like it - is what I'd probably say if I was trying to argue the realities of the other side here. To be fair though, you didn't ask for my 2 cents worth at any point. So, yeah...)

[Uccmal]

So rogermunibond, Is transporting explosive oil by rail a bad practice or not.

 

It's not addressed to me, but I don't mind playing devil's advocate if it's all the same to you.

 

I think it's a bad practice just like gaz guzzlers, coal powerstations, clothing factory sweatshops and a bunch of other things are.

But, people gotta eat!

 

Here would be my question for you:

If you went down - in person - to those oil fields and train warehouses and tried telling a bunch of workers about this great safety plan you have and how the only cost will be 10 000 jobs or whatever. How do you think they'd react?

Friendly pats on the back or would we maybe be talking something slightly less welcoming?

 

That to me is the primary issue here. It's all well and fine for civilized value investors like ourselves to hold forth and opine about the state of the world, but when it comes down to it a substantial proportion of the people on this earth will always be willing to risk death or injury if that is what it takes to put some food in their gut, a roof over their head and maybe buy something shiny.

Try taking that away from them (even in the name of good intentions) and let's see how far you get? My guess is not very.

 

Not everyone in life can be an educated paper-pusher with consistently and fantastically rational points of view on all issues. What type of privileged world do you live in, if you genuinely think that that is the way things really are for the majority?

 

(Anyway, that - or something like it - is what I'd probably say if I was trying to argue the realities of the other side here. To be fair though, you didn't ask for my 2 cents worth at any point. So, yeah...)

 

What a load of crock.  Since when has working safely cost jobs? 

 

"Not everyone in life can be an educated paper-pusher with consistently and fantastically rational points of view on all issues. What type of privileged world do you live in, if you genuinely think that that is the way things really are for the majority?"

 

Did I just read this?  You have assumed you know all about what I do or have done for a living without ever knowing me.  I have worked in the environment health and safety business for 25 years from the dirtiest to the cleanest jobs, have been in hundreds of manufacturing, waste, and construction workplaces. 

 

There is no excuse for anyone to not come home from work or have their town blown up because of someone else's greed or incompetence.  Having major explosions on rail lines is not acceptable.  There is obviously something very wrong with the process of shipping oil by rail.  Same as there are major problems with making clothes in a substandard factory building in Bangladesh. 

[SmallCap]

Uccmal,

 

you say this practice has to stop... how would you go about stopping it?

[Guest ajc]

What a load of crock.  Since when has working safely cost jobs? 

 

"Not everyone in life can be an educated paper-pusher with consistently and fantastically rational points of view on all issues. What type of privileged world do you live in, if you genuinely think that that is the way things really are for the majority?"

 

Did I just read this?  You have assumed you know all about what I do or have done for a living without ever knowing me.  I have worked in the environment health and safety business for 25 years from the dirtiest to the cleanest jobs, have been in hundreds of manufacturing, waste, and construction workplaces. 

 

There is no excuse for anyone to not come home from work or have their town blown up because of someone else's greed or incompetence.  Having major explosions on rail lines is not acceptable.  There is obviously something very wrong with the process of shipping oil by rail.  Same as there are major problems with making clothes in a substandard factory building in Bangladesh.

 

Hi Al,

 

I think you're right, and I'm sorry if I caused any offense. However, I wasn't actually making those arguments because I believe them so much as I was making them because I was interested in showing what your opposition might come up with in their defense.

Also, the personal characterization was simply a generic usage that I thought might usually get brought into this type of debate.

Again, I apologize if that seemed insulting. It genuinely wasn't meant as a criticism of you personally (who I don't know), just as an example of a standard strategy that often gets used in these situations.

 

My personal view happens to be slightly more on your side of the argument than on the rail/oil industry side of the argument, but I'd say (inexpertly) that their case actually has some merit in my view.

I think there's a bottleneck right now regarding oil transport from the bit that I know, so anything goes within what is generally socially acceptable. Therefore, those lines must be working over time. This article in fact (http://www.theglobeandmail.com/news/world/town-dodged-a-bullet-in-oil-train-explosion-north-dakota-mayor-says/article16152184/) points out that "the number of crude oil carloads hauled by U.S. railroads surged from 10,840 in 2009 to a projected 400,000 this year. Despite the increase, the rate of accidents has stayed relatively steady. Railroads say 99.997 per cent of hazardous materials shipments reach destinations safely."

 

To my mind, that's a pretty amazing record given the increases in carloads and pressure on the system, workers, etc. Clearly, you try aim for 100% but it's unlikely you'll ever get there given how the world is.

Megantic was a tragedy, obviously. However, I genuinely wonder what the jobs impact would be if say carload limits or some other restriction were imposed in immediate reaction.

From the sound of it, you know far more than I do on the subject so you might be able to answer that question better than most.

However, I think it's perhaps important to keep in mind that this wouldn't be the first time a corporation used a new regulation to lay off workers and tighten up.

What would happen to those workers and their families in the meantime?

Maybe sometimes the simplicity of knowing what is and isn't safe has to be weighed against the rough-and-tumble real world impact of corporate policy and how reactionary executive decisions end up hurting the same type of people that any new regulations are meant to protect.

I'm not saying that's definitely the case here, I'm just saying it might be.

 

To dramatise it for a second, how do you weigh 10 000 unemployed families (and the long-term impact that has on people) against a hypothetical future crash that might kill 1 or 2 or 50 or 100. I don't think it's completely insane to be asking these kind of morally uncomfortable questions here, even if they're no fun to entertain.

I know I don't have the answer, but I'm pretty sure it's more complicated than it looks on the surface.

 

Anyway, I hope that all this wasn't taken too personally. Like I said, it was only intended as some generic devil's advocating. I just think it's a complex and sensitive situation where huge, inadvertent losses might potentially have to be shouldered by the little people if it gets approached in an emotionally-charged way.

That said, I mostly agree with your view and if another Megantic is to be avoided then what you're saying seems to be important and totally sensible (even if I'm not qualified enough to know how all the moving parts are interconnected from a regulatory standpoint).

[Uccmal]

Uccmal,

 

you say this practice has to stop... how would you go about stopping it?

 

Interesting question.  First, fairly account for all the externalities that have gone or go into producing oil, gas, and coal.  This will give you an approximation of the total cost that goes into each BTU produced from fossil fuels.  If a proper accounting is done then solar, wind, geothermal, should be significantly cheaper in most of the world, than fossil fuels; probably all except Canada, Northern EU, and Asia. 

 

You then have the equation:

Fossil fuel cost (including all subsidies {military, transport, infrastructural} - alternates (which include said costs already) = D (large positive number)

 

Subsidize alternate development by D. 

 

In a significant part of the world the momentum appears to be against fossil fuels whether Anyone here likes it or not.  Fracking is perceived as dangerous, oil by rail and pipeline, is perceived as dangerous.  Getting and relying on fossil fuels from unstable regimes is dangerous.  Dealing with Putin is dangerous. 

 

its funny how Buffett has his hand in both sides of the energy pie.  Mid-America is growing its alternate energy supplies rapidly, and BNSF is serving the fossil side.

 

 

 

 

[Uccmal]

Ajc, sorry, I probably over reacted a bit...  al

 

Edit:

 

I did over react.

[LC]

 

its funny how Buffett has his hand in both sides of the energy pie.  Mid-America is growing its alternate energy supplies rapidly, and BNSF is serving the fossil side.

 

He's just so rich that the only thing he can put major money to work in (with good future prospects and economics) is energy. Demand for energy isn't going down, not in this lifetime or the next. Solar, fossil fuels, all will benefit from increased demand. Hell, he may be following Munger's logic...generating as much renewable energy in the US for sale within the US. 

[Guest ajc]

Ajc, sorry, I probably over reacted a bit...  al

 

Edit:

 

I did over react.

 

Meh.

 

That was mostly just some bullshit PR from my side, designed to undermine and censor.

A somewhat subtle ad hominem attack that evaded the issue, with some politeness and deference thrown in for the sake of respectability and maximum impact.

That's what I think may well happen in the media or behind closed doors over the coming weeks, as interested groups try to encourage inertia and stifle debate.

Times it by a good few factors though. Since these are heavyweights with a lot at stake here.

I'm not saying there's no jobs argument to be made, I just agree that it's kind of a flimsy one and quite far besides the point.

 

Frankly, you're in the right.

Unfortunately, I'm inclined to think that perhaps some American lives will actually have to be lost in order for something to be done about it.

That way, the political powers that be could generate sufficient social outrage and personal career success as a result of the situation.

At the moment, there just aren't any burned up carcasses to show off via an emotionally meaningful photo opportunity.

Hopefully I'm being a tad too cynical here...

 

Happy 2014. I guess.

[rogermunibond]

uccmal - I have no dog in this fight.  But my guess is that since we transport most if not all of our refined products like gasoline and diesel by truck and do it relatively safely, it is really just a matter of having the right safeguards and practices in place to make rail accidents with oil and NG products infrequent.

 

PS adding comments about politics and the Keystone pipeline simply make my question meter go off.  Maybe that was cardboard and not you.