Repost from Reuters

Exclusive: White House mulled, then balked at curbing explosive gas on oil trains

By Patrick Rucker, Mar 5, 2015 5:59pm EST

(Reuters) – The Obama administration weighed national standards to control explosive gas in oil trains last year but rejected the move, deciding instead to leave new rules to North Dakota, where much of the fuel originates.

Current and former administration officials told Reuters they were unsure if they had the power to force the energy industry to drain volatile gas from crude oil originating in North Dakota’s fields.

Instead, they opted to back North Dakota’s effort to remove the cocktail of explosive gas – known in the industry as ‘light ends’ – and rely on the state to contain the risk.

North Dakota’s regulations come into force next month.

The administration’s internal debate shows that concern about the risks associated with oil trains reached the upper level of the White House. But the administration balked at addressing the problem in new regulations governing crude oil trains that it is preparing to introduce this spring.

When Transportation Department and White House officials convened on this issue last summer, the administration decided to back North Dakota’s plan to limit vapor pressure – a measure that was just taking shape at the time.

“The Department of Transportation supported North Dakota on treatment of crude oil in the field,” a White House official told Reuters.

But a growing number of safety advocates say relying on North Dakota is not insufficient to regulate a product that is hauled thousands of miles of track and across many state lines.

“These trains are going all across the country so it absolutely has to be the feds who are in charge,” said Karen Darch, mayor of Barrington, Illinois, where several oil and ethanol trains pass through her town weekly.

On Thursday afternoon, a BNSF oil train delivery including more than 100 tanker cars derailed in Illinois, according to local media.

Last summer, Transportation Secretary Anthony Foxx took his concerns about Bakken fuel to the White House and sought advice on what to do about the danger of light ends, according to sources familiar with the meeting who were not authorized to speak publicly about the matter.

By then, Foxx had spent more than 12 months weighing safety measures that would prevent oil train derailments from becoming fiery disasters like the 2013 Lac Megantic tragedy in Canada in which 47 people were killed by a runaway Bakken train delivery.

The Transportation Department was warning that Bakken fuel was uncommonly volatile and explosion-prone. Foxx’s agency conceived an oil train safety plan in July with an array of measures that aimed to make sure oil train cargo moved safely on the tracks.

Tankers would have toughened shells. Oil train deliveries would slow down. Advanced braking systems would be adopted.

But the rule would do nothing to limit volatile gas.

Foxx brought his concerns about the unresolved issue of dangerous gas, commonly measured as vapor pressure, and his agency’s limited power to curtail the problem to President Barack Obama‘s chief of staff, Denis McDonough. The administration decided to just let the existing oil train safety plan take root.

“Before the meeting, the department had already identified issues with the characteristics of the crude oil, including vapor pressure, and had developed potential strategies related to the overall improvement and safety of the transport of the product and how the industry could treat it,” the White House official said.

Suzanne Emmerling, spokeswoman for the Transportation Department, said on Thursday “neither the White House or anyone in any department has ever balked at improving the safety of this product in any way.”

“The Department looked closely at every aspect of the transportation of flammable products by rail, including vapor pressure, tank cars, and rail operations, and ultimately submitted a rule that we believe will raise the bar on the safe transport of this product.”

Emmerling declined to comment on why the Transportation Department did not include vapor pressure controls in its oil train proposal last year.

Officials may not comment on pending rules, she said, noting that the final rule may contain elements not included in the draft.

That approach is not good enough for many critics.

New York Senator Charles Schumer warned this week that oil train “disasters” could continue “until the stability of the crude being loaded into the tank cars themselves is improved.”

Of the roughly 1.2 million barrels of crude oil produced in North Dakota daily, more than 60 percent of that fuel reaches refineries by rail, typically in 100-tanker unit trains that can stretch a mile long.

A large share of that fuel moves through New York on the way to refineries in the mid-Atlantic.

In a letter to Secretary Foxx and Energy Secretary Ernest Moniz, Schumer encouraged the officials “to work together to develop new regulations that would require the stabilization of crude oil prior to shipment.”

An Energy Department official said the agency is in the early stages of developing a report on Bakken crude dangers that “may be of use to the Department of Transportation, which has regulatory authority over the transport of crude oil.”

(Reporting by Patrick Rucker; Additional reporting by Ernest Scheyder; Editing by Nick Zieminski and Richard Chang)