BP taking next steps on rail project for crude oil

BP Cherry Point Refinery is moving ahead with a rail construction project to accommodate trainloads of crude oil from the booming Bakken oil fields in North Dakota and Montana.

BP spokesman Mike Abendhoff said the company has submitted an application for the project to Whatcom County planners and could begin construction in early 2013 on the $60 million rail loop. If that happens, the refinery would begin receiving crude shipments by rail in spring 2014. But Abendhoff also said corporate headquarters had not yet green-lighted the expenditure.

If the project does clear all of the public and corporate processes, BP would construct its own 10,200-foot rail loop on refinery property. The loop would be big enough to hold an entire train of crude-oil tank cars without obstructing an existing BNSF Railway Co. industrial rail spur. That BNSF spur leaves the railroad's mainline near Custer and serves Whatcom County's two refineries and the Alcoa Intalco Works aluminum smelter.

BNSF proposes to double-track that same spur if the Gateway Pacific Terminal project is approved for coal and other bulk cargo exports at SSA Marine's deep-water port site south of the BP refinery.

While Gateway Pacific could draw as many as nine loaded trains per day at maximum capacity, Abendhoff said the BP refinery expects one loaded oil train every two days, although the maximum capacity would be one train daily. The oil trains would get to Cherry Point via the rail line along the Bellingham waterfront.

The proposed new BP rail loop would be built on a 209-acre site between Grandview and Brown roads, west of Kickerville Road - the same site where BP once planned to build a large natural gas-fired power plant.

BP expects to continue to rely on Alaskan crude oil for most of its production, but North Dakota now produces more crude oil than Alaska, and West Coast refineries are getting a share. The Tesoro refinery in Anacortes and the U.S. Oil and Refining Co. facility in Tacoma are already taking rail shipments of Bakken crude.

Whatcom County Planning Manager Tyler Schroeder said the county has completed a preliminary review of BP's application for the project and has spelled out steps that must be taken to compensate for environmental impacts. The county has also notified BP that if rail traffic exceeds one inbound train per day, additional regulatory review would be required.

The project is on schedule to receive a county permit for excavation work in the next few weeks, but BP will need additional permits from state and federal agencies before the project is cleared for construction, Schroeder said.