Crude Rush Becoming an Explosive Issue

Volatility of oil from North Dakota eyed as key factor in recent fiery train crashes.

Investigators work at the train derailment site July 9, 2013 in Lac-megantic, Quebec, Canada. The death toll from the massive explosion caused by a runaway oil tanker train that derailed July 6 and flattened part of the small Canadian town has risen to 13, a coroner said Monday, and dozens more remain missing. Confirmation of eight further deaths in Lac-Megantic, in Quebec province, came as environmental officials warned that around 100,000 liters of oil spilled in the disaster was headed for the Saint Lawrence seaway. PHOTO STEEVE DUGUAY-AFP (Photo credit should read STEEVE DUGUAY/AFP/Getty Images)
National Journal
Clare Foran
Feb. 5, 2014, 4:50 p.m.

In the roil­ing de­bate over oil-by-rail safety, con­cern over the volat­il­ity of crude pulled from North Dakota’s Bakken Form­a­tion is in­creas­ingly tak­ing cen­ter stage.

A series of de­rail­ments in­volving tank cars car­ry­ing crude oil from the re­gion have sparked massive ex­plo­sions, in­clud­ing one in Lac-Megant­ic, Que­bec, in Ju­ly that res­ul­ted in dozens of fatal­it­ies and an­oth­er that forced the evac­u­ation of Cas­selton, N.D., in late Decem­ber. The ac­ci­dents sent shock waves across the coun­try, in part, be­cause while crude is flam­mable, it typ­ic­ally isn’t ex­plos­ive. In re­sponse, fed­er­al reg­u­lat­ors are sound­ing alarms.

“Re­cent rail crashes in­volving Bakken crude have in­dic­ated that the type of product moved in the re­gion may be more volat­ile than oth­er crude oil, which is why prop­erly clas­si­fy­ing haz­ard­ous ma­ter­i­als is a vi­tal first step in min­im­iz­ing risks,” said Cyn­thia Quarter­man, ad­min­is­trat­or of the Trans­port­a­tion De­part­ment’s Pipeline and Haz­ard­ous Ma­ter­i­als Safety Ad­min­is­tra­tion.

PHMSA wants its warn­ing to carry weight. And in a show of ser­i­ous­ness, reg­u­lat­ors an­nounced plans on Tues­day to fine a num­ber of oil and gas pro­du­cers, in­clud­ing Hess and Mara­thon Oil, for clas­si­fic­a­tion and ship­ping vi­ol­a­tions. The fines res­ult from an agency in­vest­ig­a­tion that in­dic­ates im­prop­er la­beling and clas­si­fic­a­tion of crude may be wide­spread.

PHMSA also is­sued a safety alert last month that Bakken crude, much of which is ex­trac­ted through hy­draul­ic frac­tur­ing, or frack­ing, may be more volat­ile than con­ven­tion­al crude.

“What we’re see­ing with Bakken crude is that it acts more like gas­ol­ine than heavy crude,” said the head of the Na­tion­al Trans­port­a­tion Safety Board, De­borah Hers­man.

Ship­pers are re­quired to de­term­ine the com­pos­i­tion of the crude be­fore load­ing it onto the rails. This de­term­ines what kind of tank car is used. But in the rush to bring the oil to mar­ket, pub­lic safety ad­voc­ates say ship­pers may not be prop­erly test­ing and clas­si­fy­ing the crude. And that could be deadly. In the case of the Lac-Megant­ic ac­ci­dent, for ex­ample, Ca­na­dian safety in­spect­ors later de­term­ined that the crude oil had not been prop­erly labeled and pack­aged.

“To trans­port it safely, you have to make sure that it’s been tested and ap­pro­pri­ately clas­si­fied, be­cause that’s the only way you can be sure that it’s be­ing put in the right kind of car,” Hers­man said. “And we’re not see­ing that hap­pen on a con­sist­ent basis.”

Rep­res­ent­at­ives from the oil and nat­ur­al-gas in­dustry who are eval­u­at­ing safe­guards for crude-by-rail ship­ments also say that over­sight of ship­ping and clas­si­fic­a­tion is at the top of their list.

“We’re hav­ing on­go­ing con­ver­sa­tions about how to make these ship­ments safer, and we spent the last couple of days in meet­ings talk­ing about test­ing and clas­si­fic­a­tion,” said Jack Ger­ard, pres­id­ent of the Amer­ic­an Pet­ro­leum In­sti­tute, the largest trade as­so­ci­ation for the oil and gas in­dustry.

En­force­ment may be in­ad­equate, however. 

“It’s one thing to have rules and reg­u­la­tions on the books, but the prob­lem right now is the fol­low-through. If there’s not con­tinu­ous, ef­fect­ive mon­it­or­ing, then there are go­ing to con­tin­ue to be ac­ci­dents,” said Lloyd Bur­ton, pro­fess­or of en­vir­on­ment­al policy at the Uni­versity of Col­or­ado (Den­ver).

There’s also the ques­tion of why Bakken crude is so volat­ile.

PHMSA is test­ing samples from the re­gion to find out more about its makeup. An in­vest­ig­a­tion cur­rently un­der­way by the Na­tion­al Trans­port­a­tion Safety Board look­ing in­to a de­rail­ment in North Dakota is also likely to provide some an­swers.

There is grow­ing con­sensus that the volat­il­ity is nat­ur­ally oc­cur­ring.

“What we’re see­ing is a lot of volat­ile chem­ic­als and ex­plos­ive gases mixed in with the crude that’s com­ing out of North Dakota,” said Scott Smith, chief sci­ent­ist at Wa­ter De­fense, a non­profit ded­ic­ated to pro­mot­ing clean wa­ter. “In my opin­ion, though, this has noth­ing to do with the chem­ic­als that get used in frack­ing. It’s just what’s com­ing out of the earth.”

All of this is im­port­ant be­cause a surge in U.S. oil and nat­ur­al-gas pro­duc­tion res­ult­ing from ad­vances in drilling tech­niques has led to an ex­po­nen­tial in­crease in the volume of crude be­ing moved by rail. North Dakota is now the second-largest oil-pro­du­cing state in the coun­try after Texas, and the vast ma­jor­ity of crude mov­ing out of the state is be­ing trans­por­ted by rail.

As reg­u­lat­ors and in­dustry stake­hold­ers drill down on clas­si­fic­a­tion and la­beling, they’re also en­gaged in a much lar­ger con­ver­sa­tion over how to stop de­rail­ments.

“Test­ing and clas­si­fic­a­tion is one of the is­sues that we’re look­ing at right now, but it’s just one piece of the puzzle,” Ger­ard said. “There’s pre­ven­tion, so you’ve got to make sure we keep the trains from go­ing off the tracks in the first place, then there’s mit­ig­a­tion that comes down to tank car design, test­ing, and pack­aging, and fi­nally there’s the re­sponse mech­an­ism. And we’ve got to make sure we’re get­ting all of it right.”

For now, crude-by-rail safety is sure to stay in the spot­light.

In ad­di­tion to the in­creased scru­tiny giv­en to the is­sue at DOT and with­in the in­dustry, law­makers are also clam­or­ing to talk about how to make ship­ments safer.

Both of North Dakota’s sen­at­ors, Demo­crat Heidi Heitkamp and Re­pub­lic­an John Ho­even, have put pres­sure on DOT to fi­nal­ize a rule that will strengthen safety stand­ards for tank cars com­monly used to trans­port crude.

Heitkamp said in an in­ter­view this week that Sens. Mark Warner, D-Va., and Roy Blunt, R-Mo., have prom­ised to hold a hear­ing on the is­sue in the Sen­ate sub­com­mit­tee over­see­ing rail safety.

“I an­ti­cip­ate no­tice of that soon,” Heitkamp said. “I ima­gine we will hear more about that in the next couple of weeks.”

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