Shippers Confused by New Federal Order on Oil Transport

Jack Gerard, API
National Journal
Clare Foran
Add to Briefcase
Clare Foran
Feb. 26, 2014, 11:50 a.m.

Oil in­dustry lead­er Jack Ger­ard said Wed­nes­day that a re­cently re­leased Trans­port­a­tion De­part­ment dir­ect­ive cre­ates con­fu­sion over how to prop­erly test and clas­si­fy crude oil be­fore rail trans­port.

“The emer­gency or­der says that we need to look at prop­er test­ing with suf­fi­cient fre­quency and qual­ity. We don’t know what that means,” Ger­ard, the pres­id­ent of the Amer­ic­an Pet­ro­leum In­sti­tute, said at a House Trans­port­a­tion and In­fra­struc­ture Sub­com­mit­tee hear­ing con­vened to ex­am­ine pas­sen­ger- and freight-rail safety.

The head of Trans­port­a­tion’s Pipeline and Haz­ard­ous Ma­ter­i­als Safety Ad­min­is­tra­tion, Cyn­thia Quarter­man, de­fen­ded the or­der, say­ing that am­bi­gu­ity was in­ten­tion­al so as not to force the in­dustry’s hand.

“We spe­cific­ally left those terms to be de­term­ined by the ship­pers,” Quarter­man said. “We did not want to say for each and every in­stance be­fore a ship­ment oc­curs that test­ing needed to oc­cur.”

When ship­pers handle large quant­it­ies of crude sourced from the same shale play, they are typ­ic­ally fa­mil­i­ar with its com­pos­i­tion and may not need to test and re­clas­si­fy the crude each time it’s loaded onto rail cars, Quarter­man ex­plained. In oth­er in­stances, she said, ship­pers may need to test the crude more fre­quently if its com­pos­i­tion is un­known or found not to be con­sist­ent.

“We are happy to talk with ship­pers that have ques­tions and need cla­ri­fic­a­tion,” Quarter­man said.

A spate of re­cent ac­ci­dents in­volving crude oil sourced from North Dakota’s Bakken form­a­tion and shipped by rail has put crude-by-rail safety un­der the mi­cro­scope. PHMSA in par­tic­u­lar has taken heat for fail­ing to fi­nal­ize a rule­mak­ing that would set re­vised tank-car stand­ards for rail cars used to haul crude.

In re­sponse, the ad­min­is­tra­tion has is­sued a series of emer­gency or­ders aimed at boost­ing crude rail safety, in­clud­ing an or­der re­leased on Tues­day man­dat­ing that ship­pers prop­erly test and clas­si­fy crude be­fore ship­ment.

Ger­ard in­dic­ated, however, that the spe­cif­ics of the or­der still need to be straightened out.

“The re­sponse we’ve got­ten has been one of con­fu­sion,” he said, re­fer­ring to how oil-in­dustry stake­hold­ers re­acted to the or­der. “I think in light of this we need to sit down with the ad­min­is­trat­or and oth­ers and seek cla­ri­fic­a­tion on ex­actly what it is they would like us to do in light of this or­der.”

What We're Following See More »
AS A CONTRIBUTOR
Chaffetz Joining Fox News
2 hours ago
THE DETAILS

Rep. Jason Chaffetz, who will resign from Congress on Friday, will contribute to Fox News Channel and the Fox Business Channel starting July 1.

FOR BASTILLE DAY
Trump Will Visit France
4 hours ago
WHY WE CARE
TWO YEARS OF WORK FOR UKRAINE
Manafort Formally Registers as Foreign Agent
7 hours ago
THE LATEST

"A consulting firm led by Paul Manafort, who chaired Donald Trump’s presidential campaign for several months last year, retroactively filed forms Tuesday showing that his firm received $17.1 million over two years from a political party that dominated Ukraine before its leader fled to Russia in 2014."

Source:
HOUSE INTEL HEARING JULY 24
Roger Stone to Testify in Closed Session
7 hours ago
THE LATEST
UNTIL AFTER RECESS
Health Care Vote Delayed
1 days ago
WHY WE CARE
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login