Bakken Crude, Crude By Rail, DOT-111, Federal Regulation (U.S.), Oil Industry, Oil producers, Oil stabilization, Pipeline transport, Rail Safety, Volatility

North Dakota will rely more on pipelines by 2018

Repost from UPI Business News
[Editor: Significant quote: “Dalrymple said rail traffic may drop off once new pipeline infrastructure comes online. Three pipelines — Sandpiper, Dakota Access and Upland — should be in service by 2018”  – RS]

North Dakota reviews oil-train safety

About half of the oil produced in the state is delivered by rail.

By Daniel J. Graeber   |   March 19, 2015 at 9:40 AM
North Dakota Gov. Jack Dalrymple calls for tighter rules to ensure safe transport of crude oil from state’s Bakken shale reserve. Photo by Steven Frame/Shutterstock

BISMARCK, N.D., March 19 (UPI) — There’s no way to offer a single solution that would allay concerns about the safety of crude oil transit by rail, North Dakota Gov. Jack Dalrymple said.

Dalrymple spoke with U.S. Transportation Secretary Anthony Foxx to discuss efforts to improve the safe transport of crude oil by rail from the state. The Republican governor said he called on the secretary to adopt new standards for rail cars carrying crude oil as soon as possible.

“Secretary Foxx and I agree that there is no single solution to improving the safety of rail transportation,” Dalrymple said in a statement Wednesday.

North Dakota crude oil production is more than existing pipeline capacity can handle, forcing many in the industry to use rail as an alternative transit method. The increase in rail traffic has in turn led to an increase in derailments involving trains carrying crude oil, a situation compounded by federal reports showing oil from the Bakken reserve area in North Dakota may be less stable than other types of crude oil.

A 200-page proposal from the Department of Transportation last year called for the elimination of older rail cars designated DOT 111 for shipment of flammable liquid, “including most Bakken crude oil.”

A February derailment in West Virginia involved a train carrying Bakken oil. At least 40 people were killed in Lac-Megantic, Quebec, in the 2013 derailment of a train carrying tankers of crude oil from North Dakota to Canadian refineries.

Dalrymple said rail traffic may drop off once new pipeline infrastructure comes online. Three pipelines — Sandpiper, Dakota Access and Upland — should be in service by 2018 and provide 895,000 barrels per day in new capacity.

North Dakota produces about 1.2 million bpd and about half of that is shipped by rail.

The state government in December approved a new measure that requires oil producers in North Dakota to install equipment at their facilities that would reduce the volatility of Bakken crude.