New York's Albany County seeks to limit crude oil processing

Reuters News
Posted: Mar 12, 2014 8:32 PM

NEW YORK (Reuters) - New York's Albany County issued a moratorium on Wednesday on the expansion of crude oil processing in the Port of Albany, pending a public health investigation.

Processing and storing crude oil at the port could pose health risks, said County Executive Daniel McCoy, who estimated that the health review could take "many months."

The moratorium targets a proposed expansion at an oil-processing facility operated by Global Partners LP. The company is seeking to build several boilers that would heat crude oil before it is off-loaded and shipped for refining.

Global Partners can transport by rail up to 160,000 barrels a day of crude to its Albany terminal, which includes some 50,000 bpd for Phillips 66 in a five-year commitment to ship North Dakotan Bakken crude by rail to its 238,000-bpd Bayway refinery in Linden, New Jersey.

Global Partners said it would review the order and work with officials who have concerns.

It added that "county officials had not previously voiced any concerns to Global about our operations, nor had they requested a meeting with us to discuss any questions or concerns."

The moratorium follows growing concerns about an increase in transporting and processing crude oil in the county, which has become an important supply hub for the region. Oil is shipped via rail from across the United States and Canada to Albany, where it is processed or barged farther south.

In January, New York Governor Andrew Cuomo directed a state safety review of crude rail shipments from the Bakken oil fields of North Dakota after a string of explosive derailments. Regulators have said that Bakken crude may be lighter and more volatile than other grades of crude.

Upstate New York has become a major shipping route for fuel from North Dakota - roughly 20 percent of all Bakken fuel is moved through Albany County, officials said.

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In the emergency order initiating the health study, Albany officials described Bakken oil as "extremely volatile and flammable and therefore more dangerous to ship by rail."

Lawmakers who represent communities along shipping routes have also raised alarms.

New York's Department of Environmental Conservation is examining the Global Partners project and has sought public input.

"We are aggressively reviewing this permit application and all crude oil operations around the state," said Basil Seggos, Cuomo's deputy secretary for the environment.

"All options are on the table."

Global Partners shares closed down 1.7 percent at $36.25 on Wednesday.

(Reporting by Edward McAllister, Joshua Schneyer in New York and Patrick Rucker in Washington; Editing by Leslie Adler, Lisa Von Ahn, Marguerita Choy and Peter Cooney)