State denies permit for Baltimore crude oil terminal

State won't grant – for now – Houston firm's plan to ship crude oil through Baltimore terminal

The state Department of the Environment has denied, for now, a Houston-based company's application to permit crude oil to be shipped through its port of Baltimore terminal in Fairfield — a proposal that nearby residents say poses a safety threat.

The agency said it needs more information from Targa Resources, a Houston-based firm that handles and stores oil, natural gas and petroleum products.

MDE "is not moving forward with any further review of the crude oil related application submitted in February until the department receives additional information from the company," it said in a summary of its decision.

"Before any decision is made on a crude oil related project at the Targa facility, there will be additional public review opportunities beyond the public meeting already held," the agency said.

If MDE had approved the permit, Targa would have become the second Fairfield-area terminal to handle crude oil shipments. Axeon Specialty Products, based in Stamford, Conn., ships tens of millions of gallons of crude oil through its nearby terminal just north of Interstate 895.

Axeon brings crude oil in by rail from the west and ships it by barge to refineries in the Northeast. But even those shipments are relatively new. While it moved nearly 57 million gallons of crude through Baltimore in the fiscal year that ended June 30 and 53 million gallons the year before, it handled none the previous two years, according to data from MDE's Oil Control Program.

Substantially more crude oil passes through the state, much of it through Cecil County, but is not captured by the oil-control program because it is not unloaded.

Shipments of domestic crude oil have boomed in recent years because of the surge in production from the Bakken oil fields in North Dakota. So much oil is coming out of the ground there and from the Canadian oil sands that a global glut has suppressed prices.

Much of the domestic oil production is shipped by rail, and there have been several spectacular accidents and explosions. The Bakken crude is particularly volatile, stoking fears about such shipments across the country.

The derailment of a train carrying Bakken crude in Lac-Megantic, Quebec, in July 2013 caused a huge explosion and fire that killed 47 people, forced about 2,000 people to evacuate their homes, spilled nearly 1.6 million gallons of crude oil and destroyed much of the downtown area.

Another derailment of a train carrying Bakken crude in Lynchburg, Va., in April 2014 caused an explosion and an evacuation and spilled thousands of gallons of crude into the James River, but no one was injured.

Other incidents have occurred in West Virginia and North Dakota.

While it denied the crude oil permit, MDE did grant Targa an air-quality permit May 26 allowing other products to be transported through the terminal. The permit will enable the company to offload fuel oils, noncrude oils and distillates from rail cars onto tanker trucks.

At Targa's request, MDE considered the crude oil request separately. The agency said in its decision that Targa asked it to split the application "in order to meet current customer demand for storage and transport of the other types of fuel oils and distillates."

Vincent DiCosimo, Targa's senior vice president for petroleum logistics, did not respond to requests for comment Wednesday.

He has said previously that the company takes safety seriously and has the record to prove it.

"Targa is just as interested in safety as you are," he said in December at a public hearing hosted by the department and attended by about 25 residents and environmentalists.

But residents have expressed concerns and environmental advocacy organizations said the new facility would increase the threat crude oil shipments pose to the Chesapeake Bay's fragile ecosystem, since Targa would transfer the oil from trains onto barges for transport to East Coast refineries.

The company purchased the Fairfield terminal, previously owned by Chevron, in 2011.

"This decision by the Maryland Department of the Environment is good news," said Leah Kelly, attorney for the Environmental Integrity Project, in a statement Wednesday.

"Shipping crude oil through this terminal in Baltimore could have increased the risk of accidents and potentially explosions, such as have happened in Virginia, West Virginia and Canada," she said. "Targa Terminals' application for the crude oil permit was full of holes. MDE has said that it will not move forward with the crude oil permit unless the company provides more information about the air pollution that would be created by its operations."

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