Feds Hit Three Oil Companies Over Crude Labeling

An oil drilling rig is seen September 29, 2010 near Stanley, North Dakota. The well is being drilled into the Bakken Formation, one of the largest contiguous deposits of oil and natural gas in the United States. It is an interbedded sequence of black shale, siltstone and sandstone that underlies large areas of northwestern North Dakota, northeastern Montana, southern Saskatchewan and southwestern Manitoba.
National Journal
Ben Geman
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Ben Geman
Feb. 4, 2014, 1:19 p.m.

Trans­port­a­tion De­part­ment reg­u­lat­ors are pro­pos­ing fines total­ing $93,000 against three oil com­pan­ies for al­leged im­prop­er clas­si­fic­a­tion of crude oil bound for ship­ment on rail­ways.

The vi­ol­a­tion no­tices an­nounced Tues­day ar­rive amid safety con­cerns about grow­ing use of rail­ways to trans­port oil from North Dakota’s Bakken re­gion, and fol­low sev­er­al rail trans­port ac­ci­dents in re­cent months.

“The fines we are pro­pos­ing today should send a mes­sage to every­one in­volved in the ship­ment of crude oil: You must test and clas­si­fy this ma­ter­i­al prop­erly if you want to use our trans­port­a­tion sys­tem to ship it,” Trans­port­a­tion Sec­ret­ary An­thony Foxx said in a state­ment Tues­day.

Ac­cord­ing to DOT, 11 of 18 samples taken from cargo tanks de­liv­er­ing crude oil to rail load­ing fa­cil­it­ies were not as­signed to the cor­rect “pack­ing group.” And that’s dan­ger­ous, reg­u­lat­ors said.

“Ship­ping crude oil — or any haz­ard­ous ma­ter­i­al — without prop­er test­ing and clas­si­fic­a­tion could res­ult in ma­ter­i­al be­ing shipped in con­tain­ers that are not de­signed to safely store it, or could lead first re­spon­ders to fol­low the wrong pro­tocol when re­spond­ing to a spill,” DOT’s Pipeline and Haz­ard­ous Ma­ter­i­als Safety Ad­min­is­tra­tion said in an­noun­cing the al­leged vioations.

PHMSA is is­su­ing the no­tices of pro­posed vi­ol­a­tions to Hess Cor­por­a­tion, Whit­ing Oil and Gas Cor­por­a­tion, and Mara­thon Oil Com­pany, the agency said Tues­day.

Reg­u­lat­ors have stepped up over­sight and last year launched an ef­fort called “Op­er­a­tion Clas­si­fic­a­tion” to boost in­spec­tions and sampling. The find­ings un­veiled Tues­day are the first an­nounced test res­ults of that probe.

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