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California Senate passes bill to boost response to oil train spills

By Rory Carroll

SAN FRANCISCO (Reuters) - California's Senate approved a bill on Wednesday to tap the state's $30 million a year oil spill fund to tackle any oil train derailments, as growing output in landlocked states leads to increased crude delivery to coastal refineries.

The bill dovetails with Governor Jerry Brown's January budget proposals calling for an additional $6.7 million for the oil spill fund and 38 new jobs to enhance the state's ability to prepare and respond to spills.

The fund currently only applies to marine oil spills.

"California is seeing a huge shift in the way we import oil, and we need to address the new and unique hazards of crude-by-rail transportation," said California Senate Democrat Fran Pavley, the bill's author.

The Senate bill passed by a vote of 22-11. The state Assembly will soon take up a similar measure.

"While we opposed some of the specific provisions of the bill we recognize it is necessary to change the current prevention and response program to reflect the increase role that rail is playing in crude transport," said Tupper Hull, spokesman for the Western States Petroleum Association which represents west coast oil refineries.

Last year, California imported four times as much crude by rail as it did in 2011, as new drilling techniques have boosted production in North Dakota and Montana.

Over the next few years, crude-by-rail imports into California are projected to increase as much as 25-fold to 150 million gallons per year, according to a state report. It would add a fee to be collected at refineries for shipments coming in by rail.

A string of train derailments has raised safety concerns about moving crude oil by rail across the country, including last month's fiery explosion of railcars in Lynchburg, Virginia, which set a river ablaze. 

(Reporting by Rory Carroll; Editing by Richard Chang)

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