Tag Archives: North Dakota Industrial Commission

Transp. secretary says ‘risk level is higher’ for Bakken crude transport

Repost from Dakota Resource Council
[Editor: Fascinating quotes from a variety of industry reps and North Dakota elected representatives, all scrambling to protect commercial interests.  They would like everyone to stop using the word “Bakken” to describe Bakken crude.  Wow, that should help a lot!  Secretary Foxx dances around the subject while maintaining the DOT’s finding that Bakken crude is more volatile and a higher risk.  – RS]

Transportation secretary says ‘risk level is higher’ for Bakken crude transport

By: Mike Nowatzki, Forum News Service, August 8, 2014

BISMARCK – U.S. Transportation Secretary Anthony Foxx said Friday that crude oil from North Dakota’s Bakken shale formation isn’t being singled out from other crudes in proposed new tank car standards, but he didn’t say definitively whether the Department of Transportation believes it’s more volatile than other light, sweet crudes.“

We’re seeing some light ends in the Bakken crude that suggests a higher level of volatility than we would see in typical crude,” Foxx said in a press conference after Friday’s meeting in Bismarck on national energy policy. “Of course, typical crude is a wide range of different, other types of crude.”

Earlier this week, industry representatives and members of the North Dakota Industrial Commission, including Gov. Jack Dalrymple, questioned why an analysis by the DOT’s Pipeline and Hazardous Materials Safety Administration singled out Bakken crude as being more volatile and riskier to transport than other U.S. crudes. A North Dakota Petroleum Council-commissioned study released Monday yielded similar data as the PHMSA study but found Bakken crude to be consistent with other types of light, sweet crude.

Dalrymple had said he planned to ask Foxx to explain, and the governor dove right into the topic when he took to the podium before Foxx during Friday’s Quadrennial Energy Review meeting at Bismarck State College.

“We are curious why the recent studies from the federal government have referred specifically to Bakken crude oil,” Dalrymple said to the crowd of more than 200 people at the National Energy Center of Excellence. “We think it’s important to classify crude oil by measurable characteristics” like vapor pressure and boiling point, “and not simply classify it by geographic source.”

Foxx told the audience that increased oil production in North Dakota — which now tops 1 million barrels per day — has led to a lot of DOT work on crude transportation. That work includes its crude testing program, Operation Classification, “which has showed us that the particular crude oil here finds itself on the higher end of volatility compared to other crude oils.”

“In addition to that, what we’re also finding is that because the oil is being transported over long distances, and in some cases in high numbers of trains back to back to back, that the risk level is higher than we have seen in some other parts of the country,” he said.

Last month, the DOT proposed enhanced tank car standards that would phase out the use of older DOT-111 tank cars for shipment of most crude oil within two years, Foxx said.

“And let me say specifically that we don’t single out Bakken oil from other oil,” he said.

Foxx said the DOT will continue researching crude characteristics.

Dalrymple said “we need to stop going around in this little circle about the word ‘Bakken,’” and noted the Industrial Commission will call a hearing, probably within the next month, to seek input on conditioning Bakken crude before storage and loading to try to lower its volatility.

Rep. Kevin Cramer, R-N.D., said a House oversight hearing is set for Sept. 9 in Washington, D.C., to review the industry report and “see just where Bakken crude falls in terms of characteristics.”

U.S. Energy Secretary Ernest Moniz also attended Friday’s meeting, the ninth of 11 meetings being held to help the Obama administration develop a national policy for energy infrastructure.

The administration is committed to an all-of-the-above energy strategy, and “North Dakota exemplifies that in so many ways,” Moniz said, noting he’d be driving by a wind-turbine farm on his way to tour the Great Plains Synfuels coal gasification plant near Beulah later in the day.

Moniz said it’s somewhat ironic that the nation is in an era of “energy plenty,” yet it’s developed so rapidly that infrastructure hasn’t had time to adjust, citing oil-by-rail challenges as one example.

U.S. Sen. John Hoeven, R-N.D., who sits on the Senate Committee on Energy and Natural Resources, said companies need regulatory certainty if they’re to invest in infrastructure such as pipelines and rail. He said U.S. oil production since 2009 is up 60 percent on private lands but down 7 percent on public lands.

“We’ve got to cut through these bottlenecks, the red tape,” he said, citing his proposed legislation to simplify regulations and give states primary responsibility to manage hydraulic fracturing, or fracking.

But among those who submitted public comments Friday were Dakota Resource Council members who called for a slowdown of oil permitting to allow natural gas gathering infrastructure to catch up and reduce flaring. North Dakota burned off 28 percent of its natural gas produced in May, according to a DOE memo.

Linda Weiss of Belfield, who serves as DRC board chairwoman and can see a gas flare about a quarter-mile from her home, said members also want more consideration given to landowners and planning to determine the best routes for pipelines and other infrastructure.

“They usually pit landowners against each other. They don’t do their due diligence to find the best route,” she said.

The volunteer ambulance service member also said more training is needed for emergency responders.

“What if something like Casselton or Quebec (happens)?” she said, referring to the derailment and explosion of train cars carrying Bakken crude that killed 47 people on July 6, 2013, in Lac-Megantic, Quebec, and the train derailment Dec. 30 near Casselton, N.D., that produced spectacular fireballs, but no injuries. “There is no way any of these small towns are prepared.”

North Dakota Considers Requiring Treatment of Bakken Crude to reduce volatility

Repost from The Wall Street Journal

North Dakota Considers Requiring Treatment of Bakken Crude

Hearing Is Planned on Whether Shale Oil Should Be Made Less Volatile Before Transport
By Chester Dawson, August 10, 2014

North Dakota officials are considering requiring energy companies to treat the crude they pump from the Bakken Shale to make it less volatile before it is loaded onto trains.

The North Dakota Industrial Commission plans to hold a public hearing in the coming weeks on possible steps to reduce volatility at a well site before oil is stored or transported, said a spokeswoman for North Dakota Gov. Jack Dalrymple.

The commission, the state’s chief energy regulator, is considering issuing new standards for treating crude as well as monitoring requirements, she said.

Several trains carrying Bakken crude have derailed since the summer of 2013, exploding violently and in one instance killing 47 people in Quebec.

As The Wall Street Journal has reported, light crude tapped from North Dakota shale is more combustible than many other grades of oil and, unlike in other places, seldom stabilized.

Production of this volatile oil through hydraulic fracturing has soared, accounting for most of the additional three million barrels a day of oil that the U.S. produces today compared with 2009. Much of that is shipped to refineries by railcars, especially crude produced in the Bakken where there are few oil pipelines.

Mr. Dalrymple, one of three members of the state commission, on Friday briefed visiting federal officials including Energy Secretary Ernest Moniz and Transportation Secretary Anthony Foxx on proposals for treating Bakken crude oil in the field. The federal government has been weighing whether to require stabilization.
Energy executives point out that neither federal nor state regulations require crude to be stabilized before it is transported. Some say stabilization is unnecessary.

Most oil producers in North Dakota haven’t installed stabilizing equipment designed to reduce crude volatility, which is commonplace in similar shale oil fields such as the Eagle Ford formation in South Texas.

Stabilizers use heat and pressure to force light hydrocarbon molecules—including ethane, butane and propane—to boil out of the liquid crude. The operation lowers the vapor pressure of crude oil, making it less volatile and therefore safer to transport by pipeline or rail tank car.

—Russell Gold contributed to this article.