Tag Archives: North Dakota Department of Mineral Resources

First person account: New Bakken volatility standards are pointless

Repost from The Star Tribune, Minneapolis/St. Paul MN
[Editor: Author Lisa Westberg Peters writes with a personal style that is engaging and informative: “I’ve seen Bakken crude oil as it comes out of the ground. It was surprising in several ways: It was almost green, quite fluid and downright fizzy with natural gases. It’s the high gas content that makes Bakken shale oil so explosive.”  – RS]

New Bakken volatility standards are pointless

Lisa Westberg Peters, December 15, 2014
The explosion risk still exists, which emboldens pipeline supporters — but why must our choices be so dismal?
A large swath of Lac-Mégantic, Quebec, was destroyed and 47 people were killed in July 2013 when a train carrying Bakken crude oil derailed, sparking several explosions and forcing the evacuation of up to 1,000 people. Photo: Paul Chiasson • The Canadian Press/AP

I’ve seen Bakken crude oil as it comes out of the ground. It was surprising in several ways: It was almost green, quite fluid and downright fizzy with natural gases. It’s the high gas content that makes Bakken shale oil so explosive.

When the state of North Dakota established new limits on vapor pressure last week for the oil shipped out of the state, my first reaction was relief. Flammable liquids with lower vapor pressures are less volatile. We’ve seen several explosive rail accidents in recent years involving Bakken oil; an oil train derailment last year in the small Quebec town of Lac-Mégantic killed 47 people and flattened its downtown. I was pleased that regulators were addressing this problem.

But when I took a closer look at the numbers, I felt more dismay than relief. Even if oil producers exceed the regulators’ demands — and regulators say they often do — Bakken crude will still be explosive.

The appropriate comparison seems to be gasoline.

Lynn Helms, head of the North Dakota Department of Mineral Resources, said the new vapor pressure standard of 13.7 pounds per square inch (psi) would make Bakken crude no more volatile than the gasoline we put in our cars every day.

In March, an investigation by the Transportation Safety Board of Canada concluded that the Bakken oil in rail cars at Lac-Mégantic was “as volatile as gasoline,” but the vapor pressure was measured at 9 to around 9.5 psi. In other words, the Bakken crude that exploded in Lac-Mégantic was less volatile than what North Dakota regulators are demanding now, and it still exploded.

In a New York Times article last week [North Dakota Regulators Tell Producers to Filter Crude Oil of Flammable Liquids], Clifford Krauss reported: “Once the rules are in force early next year, transported North Dakota crude oil will have a similar volatility to that of automobile gasoline, which should decrease the risk and size of any fire that might occur once a rail car is punctured in an accident, according to state regulators.” His story never mentioned the findings of the Canadian government.

Why wasn’t this New York Times reporter more skeptical of the assurances of North Dakota oil regulators, especially after the recent New York Times revelations about the leniency of regulators toward the oil industry?

The new vapor pressure standard announced last week is pointless. We will still face danger from exploding oil trains.

This disturbing fact tends to encourage pipeline supporters. Pipelines are safer, they say. In the past, oil transported by pipelines has tended not to explode and kill people; instead it spills and contaminates streams, lakes and aquifers. If you value people’s lives over clean water supply, in the short term, pipelines seem better.

But why do we have to make such lousy choices to keep our domestic energy boom rolling — to keep workers working and our dream of energy independence alive? Let’s do everything we can to encourage the other domestic energy boom, the wind and solar boom, that has already begun and that survives today despite many obstacles, including national policies that still encourage fossil fuel, yesterday’s energy source. If we were to place a price on carbon tomorrow, we would not need as many pipelines and we would be able to reduce the number of oil trains passing through our neighborhoods.

Climate experts urge us to leave much of the world’s remaining fossil fuel, including Bakken crude, in the ground. If we do as they advise, we will disrupt job markets and be forced to rethink the way we do almost everything. Why should we voluntarily face such disruption? One very good reason: We already face the prospect of pervasive disruption posed by a changing climate. It’s far preferable to take well-designed and systematic measures to control disruption than let disruption control us.

Lisa Westberg Peters is the author of “Fractured Land: The Price of Inheriting Oil” (Minnesota Historical Society Press, 2014). She lives in Minneapolis with her family.
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    The difference between oil “conditioning” and oil “stabilization”

    Repost from The Daily Yonder, Speak Your Piece
    [Editor: Ok, I knew North Dakota regulators were working on regulations to get rid of volatile gases in the crude they ship by train, but I didn’t pay attention: I missed understanding the difference between oil “conditioning” and oil “stabilization.”  If Ron Schalow is right, North Dakota officials are far from fixing the problem of volatile crude oil “bomb trains.”  This is an important distinction – read on….  – RS]

    North Dakota’s Other Oil Boom

    North Dakota regulators could lessen the danger of crude-oil explosions that have killed bystanders and damaged property. Instead, the state’s Industrial Commission is likely to allow oil producers to continue shipping dangerous crude across North America when a commonly used fix is possible.
    By Ron Schalow, 11/24/2014
    A train carrying crude oil killed 47 people when it derained and exploded in Lac-Mégantic, Quebec, in July 2013. | Photo by Paul Chiasson/The Canadian Press

    The safety of millions of Americans who live, work or play within a mile of tracks where Bakken oil trains run are in the hands of three mortal men.

    Unfortunately, these men make up the North Dakota Industrial Commission.

    “It’s a little like the Wild West up in the Bakken, where everybody gets to do what they want to do,” says Myron Goforth, president of Dew Point Control LLC, in Sugarland, Texas. “In the Eagle Ford (Texas shale play), you’ve got to play by the rules, which forces the oil companies to treat it (crude) differently.”

    Not in North Dakota, where oil regulators are finally feeling pressure to require the Bakken oil producers to render the trains non-explosive. The push comes six years after the first massive Bakken oil train explosion outside of Luther, Oklahoma, and seven months since the last, in downtown Lynchburg, Virginia, where a quirk of physics turned the exploding tanker cars towards the river, sparing many people and buildings.

    Making the trains safer has been possible all along. It seems that politicians in some states don’t want their citizens or towns incinerated, nor do they wish to watch property values drop in the meantime.

    Will the North Dakota Industrial Commission act?

    Spoiler alert: No.

    The Bakken crude needs to be “stabilized,” to remove all explosive “natural gas liquids” such as ethane, propane and butane. That requires billions of dollars in additional equipment and infrastructure, and the oil companies don’t want to pay for it.

    Stabilization is a standard practice in many other parts of the United States. And it’s a required part of preparing crude for shipment via pipelines. The explosion risk North Dakota’s lack of regulation imposes on railroad communities all over North America is completely unnecessary. And requiring stabilization would a further boost to the state’s economy. But that’s not enough for the commission.

    Instead, the commission is going to sell a different process called “conditioning,” which the oil companies have been doing all along. And conditioning doesn’t do the job, unless you think that job should include towering fireballs, mushroom clouds, charred buildings and graves.

    Railway Age explains the difference well:

    This conditioning lowers the ignition temperature of crude oil—but not by much. It leaves in solution most of the culprit gases, including butane and propane. Even the industry itself says conditioning would not make Bakken crude meaningfully safer for transportation, though it would make the state’s crude more consistent from one well to another.

    The only solution for safety is stabilization, which evaporates and re-liquefies nearly all of the petroleum gases for separate delivery to refiners. Stabilization is voluntarily and uniformly practiced in the Eagle Ford formation in Texas.

    And, right on cue, on November 13 North Dakota Department of Mineral Resources Director Lynn Helms presented the North Dakota Industrial Commission with proposed new standards (there never were any old standards) to “condition” the Bakken crude, supposedly for the purpose of making the Bakken oil trains non-explosive. Or somewhat less explosive, kinda not explosive, or to get the height of the fireballs down into double digits… I don’t know.

    A crude-oil train derailed and exploded in Lynchburg, Virginia, in the spring of 2014. Photo by Elyssa Ezmirly

    But, if the goal is to render the Bakken oil trains NON-explosive, the proposal to “condition” the crude isn’t going to cut it.

    I repeat, the producers have always “conditioned” the crude, but, evidently, now they’re going to be “forced” by the North Dakota Industrial Commission to turn the knob a few notches to the right, and everything will be peachy.

    If it was that simple, perhaps they should have done that before dozens of people got killed – maybe sometime shortly after the first Bakken oil train derailed and blew sky high in 2008.

    Commission Chair and North Dakota Governor Jack Dalrymple has so much faith in “conditioning” that his own emergency exercise of a Bakken oil train derailment and explosion estimated 60 casualties in Bismarck or Fargo, both medium-sized cities in North Dakota. One can only guess the number of deaths, if a Bakken train were to jump the rails in Minneapolis or Chicago.

    Furthermore, taxpayers are footing the bill for billions to outfit, equip and train firefighters and emergency personnel to deal with a Bakken oil derailment and explosion. Quebec is on the hook for the $2.7 billion disaster in Lac-Megantic, a village of 6,000. That explosion required responses from “more than 1,000 firefighters from 80 different municipalities in Quebec and from six counties in the state of Maine,” according to a report by the Transportation Safety Board of Canada.

    How much will it cost your community if tragedy strikes? Will North Dakota pay?

    But, there is a bright side. When the next, or the next, or the next Bakken oil train disaster kills more people and decimates a section of Albany or Sacramento or Missoula or Perham, North Dakota can quit worrying about how to spend all of the money piling up in the Bank of North Dakota from oil production revenues. It will be gone to the survivors and a long list of stakeholders.

    The loss will be due to willful negligence, disinterest or incompetence on the part of three men.

    Ron Schalow lives in Fargo, North Dakota, and is part of the Coalition for Bakken Crude Oil Stabilization.

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      New York Times: The Downside of the Boom (Part 1)

      Repost from The New York Times
      [Editor: This is an INCREDIBLE, intimate portrait of the lives and times of those living through the nightmare of the crude oil boom in North Dakota.  Due to it’s GORGEOUS and informative interactive imagery, the Benicia Independent can only repost a small portion of this lengthy and immersive article.  Get started here, then click on MORE.  – RS]

      The Downside of the Boom

      North Dakota took on the oversight of a multibillion-dollar oil industry with a regulatory system built on trust, warnings and second chances.
      By DEBORAH SONTAG and ROBERT GEBELOFF NOV. 22, 2014

      NYT The Downside of the BoomWILLISTON, N.D. — In early August 2013, Arlene Skurupey of Blacksburg, Va., got an animated call from the normally taciturn farmer who rents her family land in Billings County, N.D. There had been an accident at the Skurupey 1-9H oil well. “Oh, my gosh, the gold is blowing,” she said he told her. “Bakken gold.”

      It was the 11th blowout since 2006 at a North Dakota well operated by Continental Resources, the most prolific producer in the booming Bakken oil patch. Spewing some 173,250 gallons of potential pollutants, the eruption, undisclosed at the time, was serious enough to bring the Oklahoma-based company’s chairman and chief executive, Harold G. Hamm, to the remote scene.

      It was not the first or most catastrophic blowout visited by Mr. Hamm, a sharecropper’s son who became the wealthiest oilman in America and energy adviser to Mitt Romney during the 2012 presidential campaign. Two years earlier, a towering derrick in Golden Valley County had erupted into flames and toppled, leaving three workers badly burned. “I was a human torch,” said the driller, Andrew J. Rohr.

      Blowouts represent the riskiest failure in the oil business. Yet, despite these serious injuries and some 115,000 gallons spilled in those first 10 blowouts, the North Dakota Industrial Commission, which regulates the drilling and production of oil and gas, did not penalize Continental until the 11th.

      In 2011, Andrew J. Rohr and two other workers were badly burned when a towering derrick erupted into flames and toppled. “I was a human torch,” Mr. Rohr said. | Rich Addicks for The New York Times
       

      The commission — the governor, attorney general and agriculture commissioner — imposed a $75,000 penalty. Earlier this year, though, the commission, as it often does, suspended 90 percent of the fine, settling for $7,500 after Continental blamed “an irresponsible supervisor” — just as it had blamed Mr. Rohr and his crew, contract workers, for the blowout that left them traumatized.

      Since 2006, when advances in hydraulic fracturing — fracking — and horizontal drilling began unlocking a trove of sweet crude oil in the Bakken shale formation, North Dakota has shed its identity as an agricultural state in decline to become an oil powerhouse second only to Texas. A small state that believes in small government, it took on the oversight of a multibillion-dollar industry with a slender regulatory system built on neighborly trust, verbal warnings and second chances.

      In recent years, as the boom really exploded, the number of reported spills, leaks, fires and blowouts has soared, with an increase in spillage that outpaces the increase in oil production, an investigation by The New York Times found. Yet, even as the state has hired more oil field inspectors and imposed new regulations, forgiveness remains embedded in the Industrial Commission’s approach to an industry that has given North Dakota the fastest-growing economy and lowest jobless rate in the country.

      For those who champion fossil fuels as the key to America’s energy independence, North Dakota is an unrivaled success, a place where fracking has provoked little of the divisive environmental debate that takes place elsewhere. Its state leaders rarely mention the underside of the boom and do not release even summary statistics about environmental incidents and enforcement measures.

      Over the past nine months, using previously undisclosed and unanalyzed records, bolstered by scores of interviews in North Dakota, The Times has pieced together a detailed accounting of the industry’s environmental record and the state’s approach to managing the “carbon rush.”

      The Times found that the Industrial Commission wields its power to penalize the industry only as a last resort. It rarely pursues formal complaints and typically settles those for about 10 percent of the assessed penalties. Since 2006, the commission has collected an estimated $1.1 million in fines. This is a pittance compared with the $33 million (including some reimbursements for cleanups) collected by Texas’ equivalent authority over roughly the same period, when Texas produced four times the oil.

      “We’re spoiling the child by sparing the rod,” said Daryl Peterson, a farmer who has filed a complaint seeking to compel the state to punish oil companies for spills that contaminated his land. “We should be using the sword, not the feather.”

      North Dakota’s oil and gas regulatory setup is highly unusual in that it puts three top elected officials directly in charge of an industry that, through its executives and political action committees, can and does contribute to the officials’ campaigns. Mr. Hamm and other Continental officials, for instance, have contributed $39,900 to the commissioners since 2010. John B. Hess, chief executive of Hess Oil, the state’s second-biggest oil producer, contributed $25,000 to Gov. Jack Dalrymple in 2012.

      State regulators say they deliberately choose a collaborative rather than punitive approach because they view the large independent companies that dominate the Bakken as responsible and as their necessary allies in policing the oil fields. They prefer to work alongside industry to develop new guidelines or regulations when problems like overflowing waste, radioactive waste, leaking pipelines, and flaring gas become too glaring to ignore.

      Daryl Peterson taste-tests the residue left by a wastewater spill on land he farms. The highly saline spill rendered the land useless. | Jim Wilson/The New York Times

      Mr. Dalrymple’s office said in a statement: “The North Dakota Industrial Commission has adopted some of the most stringent oil and gas production regulations in the country to enhance protections for our water, air and land. At the same time, the state has significantly increased staffing to enforce environmental protections. Our track record is one of increased regulation and oversight.”

      Researchers who study government enforcement generally conclude that “the cooperative approach doesn’t seem to generate results” while “the evidence shows that increased monitoring and increased enforcement will reduce the incidence of oil spills,” said Mark A. Cohen, a Vanderbilt University professor who led a team advising the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

      With spills steadily rising in North Dakota, evidence gathered by The Times suggests that the cooperative approach is not working that well for the state, where the Industrial Commission shares industry oversight with the state’s Health Department and federal agencies.

      One environmental incident for every 11 wells in 2006, for instance, became one for every six last year, The Times found.

      Through early October of this year, companies reported 3.8 million gallons spilled, nearly as much as in 2011 and 2012 combined.

      Over all, more than 18.4 million gallons of oils and chemicals spilled, leaked or misted into the air, soil and waters of North Dakota from 2006 through early October 2014. (In addition, the oil industry reported spilling 5.2 million gallons of nontoxic substances, mostly fresh water, which can alter the environment and carry contaminants.)

      The spill numbers derive from estimates, and sometimes serious underestimates, reported to the state by the industry. State officials, who rarely discuss them publicly, sometimes use them to present a rosier image. Over the summer, speaking to farmers in the town of Antler, Lynn D. Helms, the director of the Department of Mineral Resources, announced “a little bit of good news”: The spill rate per well was “steady or down.” In fact, the rate has risen sharply since the early days of the boom.

      Presented with The Times’s data analysis, and asked if the state was doing an effective job at preventing spills, Mr. Helms struck a more sober note. “We’re doing O.K.,” he said. “We’re not doing great.”

      He noted it is a federal agency, the Pipeline and Hazardous Materials Safety Administration, that regulates oil transmission pipelines. “You can’t use the spills P.H.M.S.A. was responsible for and conclude my approach to regulation is not working,” he said.

      [Editor:  MORE – click here to continue – GREAT INTERACTIVE GRAPHICS, DON’T MISS THIS – RS]

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        North Dakota debating new vapor pressure standards

        Repost from The Jamestown Sun, Jamestown, ND
        [Editor: The proposed ND vapor pressure standards seem rather lax to my inexpert eyes.  See comparative Reid Vapor Pressure (RVP) levels mentioned in an August 9 posting here on BenIndy: “On June 2nd Quantum Energy met with OIRA and presented a simple three-page presentation. The presentation explains how regular crude oil has a Reid Vapor Pressure (RVP) of 5-7 psi and Bakken crude has an RVP between 8-16 psi. To put that in perspective, gasoline typically has a RVP of 9 psi.”  The proposed new standard in North Dakota according to this article is a “vapor pressure limit of 13.7 pounds per square inch.”  – RS]

        Oil industry has ‘significant concerns’ about crude conditioning standards

        By STATE/REGION on Nov 14, 2014

        BISMARCK — North Dakota oil regulators said Thursday they want more input before approving new standards for removing volatile gases from crude oil before it’s shipped by rail, a proposal an industry representative warned could devalue Bakken crude and contribute to more flaring at well sites.

        Department of Mineral Resources Director Lynn Helms presented the state Industrial Commission with the proposed standards, part of a national effort to improve oil-by-rail safety in the wake of several explosive oil train derailments.

        Helms said the standards would result in Bakken crude “behaving even better than the unleaded gasoline that you put in your cars.”

        Attorney General Wayne Stenehjem, who serves on the commission with Gov. Jack Dalrymple and Agriculture Commissioner Doug Goehring, said the department is “on the right track” with the proposed order. But he wanted more time to sort through it and allow for public comment.

        Dalrymple agreed, called it “an excellent working draft” and a “very robust system of verification” for making sure Bakken crude falls within vapor pressure standards before it’s loaded onto the rails.

        The commission said it would accept comment on the proposed order until 5 p.m. Wednesday and hold a special meeting by Dec. 11 to consider approving it so the standards can take effect Feb. 1.

        Helms said the proposed order strengthens the existing rule by requiring well sites to use a gas-liquid separator and/or a heater-treater to remove so-called “light ends” like butane and propane from crude oil, and mandating the equipment be operated at certain temperatures and pressures.

        He estimated 80 percent of existing wells in the Bakken and Three Forks formations would be able to produce oil within the proposed vapor pressure limit of 13.7 pounds per square inch.

        National standards recognize oil with a vapor pressure of 14.7 psi or less to be stable, and winter blend gasoline has a vapor pressure of 13.5 psi, he said.

        Helms said the average vapor pressure of Bakken crude across several recent studies was 11.8 psi, though “there were significant outliers.”

        “We really believe that the vast majority of our Bakken crude oil will already fall well below the standard,” he said.

        The roughly 15 percent of wells that operate outside of the temperature and pressure standards would have to hire a third party to test their crude for vapor pressure and submit the results to the state within 15 days. Operators looking to use alternative methods for conditioning or stabilizing their crude would need commission approval after a hearing process.

        The proposed order also would ban the practice of blending crude oil with light ends or liquids recovered from gas pipelines before the oil is sold. Dalrymple noted violators can face fines as high as $12,500 per day.

        “I think we want to be sure that that’s clear for everybody,” he said.

        North Dakota Petroleum Council president Ron Ness cautioned that the standards could devalue Bakken crude by requiring it to be over-treated, at the same time contributing to natural gas flaring by removing more gas at the wellsite.

        “I think we have some pretty significant concerns,” he said, adding the Industrial Commission is “getting into the nitty-gritty details of how companies manage their commodities.”

        Helms said preliminary figures show 24 percent of the gas produced at North Dakota wells in September was burned off. Flaring reduction standards approved by the commission in July will lower the allowed flaring rate to 23 percent on Jan. 1, 15 percent by 2016 and 10 percent by Oct. 1, 2020.

        The proposed oil conditioning standards will make it more challenging for producers to meet those flaring goals, Helms said.

        “We’re pushing at both ends of the system, so we’re making life really difficult for these people right now. But it’s got to be safety first,” he said.

        A Wall Street Journal article on Wednesday questioned the accuracy of the testing method used in a Petroleum Council-funded study of Bakken crude’s volatility, and Stenehjem asked Thursday whether the Industrial Commission should conduct its own study.

        “It has been questioned, simply because it was the industry that conducted it,” he said.

        Helms urged the commission to support an ongoing U.S. Department of Energy study that could involve the Energy & Environmental Research Center in Grand Forks.

        Ness said it’s concerning that “the focus is all back on the commodity.”

        “The root of the issue is the trains and the train tracks and the accidents,” he said.

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