Repost from Reuters in The Jamestown Sun
‘Micro refineries’ a solution to oil-train woes, energy firm saysBy Reuters Media Today
WASHINGTON – A handful of small refineries in North Dakota could remove dangerous gas from oil train cargoes and make shipments from the state’s productive Bakken shale area safer on the tracks, according to a company which has pitched the idea to regulators.
“Our plan solves a couple of important problems,” said Smith, who earlier this month pitched the idea in meetings with White House officials and Transportation Department regulators mulling oil train safety.
Besides light fuels, Smith said, the Quantum facilities would also pull a stream of diesel gasoline from Bakken sources to help slake demand in the region. Executives hope to have permits and financing to break ground on at least one of the proposed refineries before year-end.
The company expects that each processing center would cost about $500 million.
In the coming weeks, though, officials are expected to outline measures to improve oil train safety such as demanding tougher tank cars, slower speeds and diversions around urban centers.
Regulators have homed in on the vapor pressure of Bakken fuel, one index of the explosion risk.
Industry-funded tests of Bakken fuel have returned vapor pressure readings of 15 pounds per square inch on the commonly-used Reid scale, while Quantum Energy believes it could bring that reading below 6 psi, similar to fuels like ethanol and heavy crude.
“The crude is much less volatile once you take these light tops off,” said Smith, referring to the gassy share of Bakken fuel.
Some oil industry officials, though, see little need to reduce vapor pressure in oil train cargoes and think Quantum might have misjudged demand for gas.
Smith said Quantum expects to find buyers that would welcome the portion of Bakken fuel not marketed close to the source. The Bakken field extends into Montana and Canada’s Saskatchewan and Manitoba provinces.