August / Houston / USA. Rail Car Owners / Lessors and Manufacturers Working Together to Create a Safer Tomorrow

Transcription

1 August / Houston / USA Rail Car Owners / Lessors and Manufacturers Working Together to Create a Safer Tomorrow

2 What is Sunoco Logis/cs Partners, L.P.? Is the parent company of Sunoco LogisDcs Partners, L.P. Sunoco LogisDcs Partners L.P. (NYSE: SXL) is a master limited partnership that owns and operates a logisdcs business consisdng of a geographically diverse porrolio of complementary crude oil, refined products, and natural gas liquids pipeline, terminalling and acquisidon and markedng assets which are used to facilitate the purchase and sale of crude oil, refined products, and natural gas liquids The services offered by Sunoco LogisDcs are organized into four business units: Crude Oil Pipeline System, Crude Oil AcquisiDon and MarkeDng, Terminal FaciliDes, and Products Pipeline System. Included in our Terminals and Products Pipeline System is our Natural Gas Liquids (NGLs) business line.

3 What is Sunoco Logis/cs Partners, L.P.? Our Crude Oil Pipeline System transports crude oil in the southwest and mid- west United States, principally in Oklahoma and Texas. The segment contains approximately 5,300 miles of crude oil trunk pipelines for high- volume, long- distance transportadon, and approximately 500 miles of crude oil gathering lines that supply the trunk pipelines. Our Crude Oil AcquisiDon and MarkeDng business gathers, purchases, markets and sells crude oil, principally in the mid- condnent United States. The segment udlizes our proprietary fleet of approximately 335 crude oil transport trucks and approximately 135 crude oil truck unloading facilides, as well as third- party assets.

4 What is Sunoco Logis/cs Partners, L.P.? Our Terminal FaciliDes consist of crude oil, refined products and NGL terminals, as well as a refined products and NGL acquisidon and markedng business. The segment operates with an aggregate storage capacity of approximately 48 million barrels, including the 25 million barrel Nederland, Texas crude oil and NGL terminal; the 6 million barrel Eagle Point, New Jersey refined products and crude oil terminal; the 3 million barrel Marcus Hook, Pennsylvania refined products and NGL facility; 39 acdve refined products markedng terminals located in the northeast, mid- west and southwest United States; and refinery terminals located in the northeast United States. Our Products Pipeline System consist of approximately 2,400 miles of refined products and NGL pipelines, and joint venture interests in four products pipelines in several regions of the United States. The pipelines primarily transport refined products and NGLs in the northeast, mid- west and southwest United States to markets in these areas, as well as Ontario, Canada. These operadons include our controlling financial interest in Inland, which owns approximately 350 miles of products pipeline Visit hhp:// Lines/Asset- Map/241/ for an interacdve site map of Sunoco LogisDcs Partners, L.P. assets.

5 Who is Ed Pa8erson? Lead Specialist Rail Compliance past two years. Sr. Specialist Pipeline Compliance for two years. Manager, Regulatory Compliance and Emergency Response for twenty- five years. Past Chairperson of the NaDonal TransCAER (R] Task Group and Pennsylvania TransCAER (R). AcDve member of the NTTG and Pennsylvania and New Jersey TransCAER (R).

6 HM- 251 From a Shipper s Perspec/ve Balancing Safety and Economics Nobody EVER wants to see scenes like theses. NOT Railroads. NOT Shipper s. NOT Communi/es. NOT Regulators.

7 HM- 251 From a Shipper s Perspec/ve Balancing Safety and Economics Safety is a core value of the oil and natural gas industry, zero incidents is our goal Rail moves % of hazardous materials without incident but one incident is too many The oil and natural gas industry is on the leading edge of improving safety by addressing preven/on, mi/ga/on, and response We remain commihed to working with the regulators and the railroads to improve safety even further

8 HM- 251 From a Shipper s Perspec/ve Balancing Safety and Economics Increased energy producdon results in increased transport by all modes. The volume of crude oil moving by rail has quadrupled in less than a decade due to increased producdon. Rail volume has increased, but accidents have declined by 43 %. Accidents involving hazmats are down 16 %. Increased use of unit trains of 100+ cars of a single commodity.

9 HM- 251 From a Shipper s Perspec/ve Balancing Safety and Economics Significant Rise in Crude Oil Shipments by Rail Limited pipeline capacity and geography of refineries favoring light crude has increased use of rail. The increase in rail shipments is projected to condnue.

10 HM- 251 From a Shipper s Perspec/ve Balancing Safety and Economics Holistic Approach to Safety Focus on holisdc and systemic approach to safety improvements. SoluDons must be data- driven with measurable improvements to safety without creadng new risks or inadvertently shioing the risks to other businesses or operadons (i.e., CPR review, Integrated Risk Assessment and Management). CollaboraDon is needed among government, shippers, owners/lessors, railroads, and tank car builders.

11 HM- 251 From a Shipper s Perspec/ve Balancing Safety and Economics HM-251 Enhanced Tank Car Standards And Operational Controls for High-Hazard Flammable Liquid Trains

12 US Tank Car Service (1) PHMSA HM- 251 Retrofit Timeline Transport Canada Tank Car Service Retrofit Timeline NJ DOT- 111 in PG I NJ TC- 111 in CO Service DOT 1/1/18 (2) TC 5/1/17 J DOT- 111 in PG I J TC- 111 in CO Service 3/1/18 NJ CPC in PG I NJ CPC in CO Service 4/1/20 NJ DOT- 111 in PG II NJ TC- 111 in Ethanol Service 5/1/23 J DOT- 111 in PG II J TC- 111 in Ethanol Service 5/1/23 NJ CPC in PG III J CPC in PG I & PG II and all remaining PG III in HHFT (PRV and BH) NJ CPC in Ethanol Service J CPC in CO and Ethanol Service and all PG III (PRV and BH) 7/1/23 5/1/23 (1) DOT requirements are Ded to high- hazard flammable train service i.e. 20 or more tank car loads in a block or 35 or more in the train; (2) The 1/1/17 date triggers a repordng requirement for shippers to report the # of tank cars they own or lease that have or have not been retrofihed.

13 PHMSA Final Rule HM- 251 and CondiDonal Probability of Release (CBR) 25.00% 20.00% 15.00% 10.00% Improvement in Condi/onal Probability of Release 19.55% 10.35% 5.00% 4.57% 2.95% 0.00% DOT- 111 Non- Jacketed CPC Non- Jacketed CPC Jacketed with 7/16" Shell CPC Jacketed with 9/16" Shell This graph displays CPR>100 which represents the condidonal probability of release (CPR) for large releases, defined as those greater than 100 gallons. Note: The condidonal probability of release for each tank car was calculated by the RSI- AAR Railroad Tank Car Safety Research and Test Project, a cooperadve program by the Railway Supply InsDtute (RSI) and the AssociaDon of American Railroads (AAR).

14 Legacy DOT 111 Specification Tank Car CPC-1232 Non- Jacketed Tank Car CPC-1232 Jacketed Tank Car

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16 HM- 251 Final Rule Shake Out. HM- 251 From a Shipper s Perspec/ve Balancing Safety and Economics What s A Shipper To Do? Lease or Own Tank Cars. Economic Impact. Remember One Incident is One Too Many Incidents.

17 Any Questions Stupid or Otherwise?