Tag Archives: Dakota Resource Council

Oil Industry, Rail inspection, Rail Safety, Railroad workers, State regulation, Track maintenance

N.D. hires BNSF manager as inspector for state rail safety program

Repost from the Billings Gazette

N.D. hires BNSF manager as inspector for state rail safety program

By Mike Nowatzki, Forum News Service, August 10, 2015
Train derailment
Oil tank cars not damaged in a train derailment near Culbertson are removed from the area on July 17, 2015. Amy Dalrymple/Forum News Service

BISMARCK, N.D. – A manager for the railroad involved in two fiery oil train derailments in North Dakota during the past two years has been hired as the first track inspector for a new state-run rail safety program.

Karl Carson will go to work for the state Public Service Commission on Aug. 17, doing inspections to identify problems with track and worker safety.

A Minot native, Carson is a division engineer with BNSF Railway. He’s worked for the railroad since 1992, holding several positions including assistant director of maintenance production, in which he supervised maintenance and replacement of track and track components, according to the PSC. He’s worked in management for BNSF since 2004.

Commission chairwoman Julie Fedorchak said the PSC wanted an inspector with experience, and with only two major railroads operating in the state – BNSF and Canadian Pacific – hiring someone with connections to one of them was “just an unavoidable situation.”

She said she asked Carson during his interview “if he would have a hard time regulating his old friends, and he said, ‘Absolutely not.’”

“His experience helps him to understand where the strengths and the weaknesses are and will really help him engage directly with the railroad,” she said. “They know his experience and they know he knows what he’s talking about.”

North Dakota is the 31st state to partner with the Federal Railroad Administration on a state rail safety program. The FRA has primary responsibility for rail safety in every state.

The PSC began looking seriously at the need for a state program after the December 2013 derailment of a BNSF oil tanker train near Casselton, which caused a massive fireball and voluntary evacuation of the city. Six cars from a BNSF oil train derailed May 6 near Heimdal in east-central North Dakota. No one was hurt in either incident.

Carson’s new position is one of two approved by state lawmakers in April when they voted to spend $523,345 on the state rail safety program in 2015-17, with the intent of continuing the pilot program in 2017-19.

“We’re quite pleased with the caliber of the first inspector,” Fedorchak said. “He’s got more rail experience than I had hoped for, and I think in talking with other states, that was the key ingredient they emphasized.”

State Sen. Tyler Axness, D-Fargo, who first publicly suggested a state-run rail safety program in July 2014 during his unsuccessful campaign for the PSC, said he doesn’t necessarily disagree with Fedorchak that the pool of qualified applicants for the inspector job is probably limited in North Dakota, and he declined to make any judgments about the hire without seeing the pool of applicants.

But Axness and Wayde Schafer, conservation organizer for the Dacotah Chapter of the Sierra Club, both said it seems like the state has a pattern of hiring regulators with close ties to the industries they will oversee. Schafer said on such a contentious issue as rail safety, “it seems like they would want to hire somebody who was a little bit more neutral.”

“You’d think something this controversial, even the appearance of impropriety should be avoided whenever possible,” he said.

Don Morrison, executive director of the Dakota Resource Council, drew a comparison to the hiring of Lynn Helms, a former employee of Texaco and what is now Hess Corp. who now regulates and promotes the state’s oil and gas industry as director of the state Department of Mineral Resources.

“It certainly looks like business as usual, which is give the industry what they want,” he said. “Time will tell.”

Fedorchak said the PSC had 18 applicants for the job and interviewed the top five, with second interviews for the two finalists. She noted Carson was the “strong favorite” among the FRA inspectors on the interview panel.

Carson earned a certificate of completion in auto mechanics from Bismarck State College in 1990 and also served in the North Dakota Army National Guard from 1990 to 1994. He couldn’t immediately be reached for comment.

His annual salary with the PSC will be $90,000.

Bakken Crude, CPC-1232, Crude By Rail, Derailment, DOT-111, Explosion, Federal Regulation (U.S.), Oil conditioning, Oil stabilization, Tank car design, Tank car retrofit, Volatile gases

MN Public Radio: Critics press industry to make Bakken oil safer

Repost from Minnesota Public Radio, MPR.org/100.5 FM

Critics press industry to make Bakken oil safer

By Dan Gunderson, Mar 29, 2015 at 6:37 p.m.
WillistonND_AndrewBurtonGetty500
Oil containers sat at a train depot outside Williston, North Dakota. Andrew Burton | Getty Images 2013

MPR_Gunderson_Bakken_audio
MOORHEAD, Minn. — North Dakota environmentalists want oil companies to reduce volatile gasses in Bakken crude. Regulators, however, say they’re taking a different tack that’s cheaper for the industry and still improves safety.

The gasses remain a flashpoint for producers, environmental and safety groups concerned about transporting the highly flammable Bakken crude. Oil train shipments from the Bakken have skyrocketed in recent years, heightening the worries.

Environmental groups have been pushing the state to require that producers install equipment to stabilize the crude using a process that heats the oil to a higher temperature to release more gasses.

North Dakota officials, however, say the more stringent heating requirement would cost oil companies as much as $2 per barrel.

Instead, state inspectors starting April 1 will check oil at well sites to make sure the vapor pressure runs no greater than 13.7 pounds per square inch of Reid Vapor Pressure, the measurement standard of volatile gases in crude oil. Oil involved in a recent West Virginia derailment and explosion had a vapor pressure slightly higher, 13.9 psi.

The North Dakota standard is tougher than the 14.7 psi federal standard for crude oil, although it’s still more volatile than gasoline sold in Minnesota in the summer, which has a maximum vapor pressure of 9.

Regulators say their method will maintain safety but cost an estimated 10 cents a barrel, compared to the $2 per barrel for the stabilization gas removal process. Companies found violating the new regulation can be fined $12,500 per day.

The industry disputes that Bakken crude is more volatile, but says most North Dakota crude meets the new standard already.

“I think a lot of people have wondered, well, is this going to cure the problem. And our answer is that by itself, it is not the cure,” said Lynn Helms, director of North Dakota’s Department of Mineral Resources.

The new, lower vapor standard is a step in the right direction but safer rail cars are also a critical part of the solution, Helms added. The federal government is considering new rules for safer tank cars that might include thicker steel shells and larger pressure relief valves.

“If you combine our lower vapor pressure standard with the these high capacity relief valves we should be able to get away from these boiling liquid explosive vapor incidents which create the large explosions if and when we have a derailment,” Helms added.

Larger relief valves could allow rapidly expanding gases to escape, preventing rail tank cars from exploding. But critics point out those volatile gases could still catch fire. A newer tank car with improved safety features, the CPC 1232, has been involved in at least two recent oil train derailment and explosion incidents.

Environmentalists argue North Dakota could make the oil much safer.

“The bottom line profitability of the oil industry is trumping all the rest of us, our safety,” said Don Morrison with the North Dakota environmental group Dakota Resource Council.

Much of the light crude oil in Texas is stabilized before it’s shipped, he added. “To stabilize the oil so it is safer like they do in Texas, oil companies are going to have to spend some money. That is true. But isn’t that the cost of doing business?”

The North Dakota Petroleum Council, which represents the oil industry, did not respond to an interview request.

In December 2013, the potential for disaster became very real after train cars of Bakken oil derailed, caught fire and exploded outside Casselton, N.D., near the Minnesota state line. Derailments and fires involving Bakken crude since then have heightened the worry.

Fred Millar, a Washington-based lobbyist and consultant on hazardous materials transportation, contends the new North Dakota standards would not have changed the outcome of a deadly 2013 oil train explosion in Lac Megantic, Quebec in Canada.

Train cars of Bakken crude involved in the Lac Megantic explosion and fire had a vapor pressure of about 9 psi, according to Canadian investigators.

A search of public records and news reports identified 14 derailments involving crude oil trains in the past two years in North America. Fire was involved in nine of the accidents.

New regulations are unlikely to stop crude oil train accidents, Millar said.

“Anybody who’s kind of hoping that somehow there’s going to be this magic bullet or some new set of federal regulations that’s going to make this situation safe,” he said, “I have bridge in Brooklyn I’d like to sell you.”

Bakken Crude, Massive increase in crude-by-rail, Oil stabilization, State regulation, Volatile gases

North Dakota to Require Producers to Treat Crude Before Shipping

Repost from The Wall Street Journal

North Dakota to Require Producers to Treat Crude Before Shipping

Move Comes Amid Growing Safety Concerns About Oil-Laden Trains

By Chester Dawson, The Wall Street Journal, Nov. 13, 2014

Reuters
Reuters

North Dakota plans unprecedented steps to ensure crude pumped from the state’s Bakken Shale oil producing region is safe enough to be loaded into railroad tank cars and sent across the country.

In the first major move by regulators to address the role of gaseous, volatile crude in railroad accidents, the North Dakota Industrial Commission, which regulates energy production in the state, said it would require Bakken Shale well operators to strip gases from crudes that show high vapor pressures.

“We believe the vast majority of our Bakken oil will fall well below the standard,” Lynn Helms, director of the state’s Department of Mineral Resources, said at a news conference.

The proposed state rule will require all operators to run crude oil through equipment that heats up the crude and forces out gases from the liquid. An estimated 15% of current producers without such equipment will have to submit quarterly test results showing their wells don’t exceed the state’s proposed 13.7 pounds a square inch vapor pressure limit, Mr. Helms said.

Those changes could make the new rules more costly for the state’s smaller producers. Jack Ekstrom, vice president of government affairs for Whiting Petroleum Corp. said the rules don’t appear to be “a major material cost” he said. “This is perhaps more of a concern to a marginal or smaller operator.”

A representative for the North Dakota Petroleum Council, an industry lobbying group, criticized the proposed rules for “micromanaging the industry,” and said they could lead to unintended consequences such as increased burning of excess natural gas at well sites.

The proposal also would prohibit blending condensate or natural gas liquids back into crude and require rail loading terminals to inform state regulators of any oil received for shipment exceeding the vapor pressure limits, Mr. Helms said.

He said the new rules would cost industry, but not enough to make drilling Bakken oil uncompetitive.

Scott Skokos, an organizer with landowners’ group Dakota Resource Council, called the move by the regulator “a step in the right direction.”

The state’s decision follows months of officials’ playing down the possibility that Bakken crude was more volatile and could explode more readily than other North American crudes.

Several oil trains have derailed and exploded since 2013, spurring concern about the safety of growing numbers of oil-carrying trains delivering oil produced by the shale boom.

‘…a step in the right direction.’

—Scott Skokos, Dakota Resource Council

The Wall Street Journal reported in February that Bakken crude contained several times the amount of combustible gases as oil from elsewhere. Relying on an analysis of data collected at a pipeline in Louisiana, the Journal pointed out that oil from the Bakken Shale had a far higher vapor pressure, making it much more likely to emit combustible gases, than dozens of other crude oils.

The proposed rules specify how wells should treat the oil to ensure it is “in a stable state,” according to Mr. Helms.

Executives from the top oil companies working in the Bakken Shale told state regulators in a September hearing that their crude is safe to transport by train using existing treatment methods, opposing potentially costly requirements that they make the oil less volatile before shipping it.

But studies by the U.S. and Canada have indicated that Bakken crude is more volatile than other grades of oil. Industry-funded studies, including one commissioned by the NDPC, have said Bakken oil is no different than other types of light oil.

The state expects to issue final rules by December 11th.

Production of light shale 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 from Bakken Shale due to the area’s few pipelines.

Bakken Crude, Crude By Rail, Derailment, Emergency Readiness & Response, Explosion, Federal Regulation (U.S.), Oil stabilization, State regulation, Volatility

National Public Radio: Fiery Oil-Train Derailments Prompt Calls For Less Flammable Oil

Repost from National Public Radio
[Editor: An excellent overview of efforts to regulate the volatility of Bakken Crude.  Audio appears first below, followed by text version.  Significant quote: “Energy economist Philip Verleger, says the resistance is about money. ‘The industry never wants to take steps which increase the cost of production, even if it’s in the best interests of everybody,’ he says. Verleger says the opposition to proposed safety rules is short-sighted, and that the industry could actually hurt itself if there’s another serious incident. ‘I think the movement of crude oil by rail is one accident away from being terminated,’ Verleger says.”  – RS]

Fiery Oil-Train Derailments Prompt Calls For Less Flammable Oil

by Emily Guerin,

A fireball goes up at the site of an oil train derailment in Casselton, N.D., in this Dec. 30 photo. The fiery crash left an ominous cloud over the town and led some residents to evacuate.
A fireball goes up at the site of an oil train derailment in Casselton, N.D., in this Dec. 30 photo. The fiery crash left an ominous cloud over the town and led some residents to evacuate. Bruce Crummy/AP

Once a day, a train carrying crude oil from North Dakota’s Bakken oil fields rumbles through Bismarck, N.D., just a stone’s throw from a downtown park.

The Bakken fields produce more than 1 million barrels of oil a day, making the state the nation’s second-largest oil producer after Texas. But a dearth of pipelines means that most of that oil leaves the state by train — trains that run next to homes and through downtowns.

After several fiery accidents, oil companies are under pressure to make their oil less explosive before loading it onto rail cars. But oil companies say rules requiring those modifications will create more problems than they solve.

The trains passing through Bismarck worry Lynn Wolff, an activist with the environmental group Dakota Resource Council. “Last December we got the wake-up call,” he says. “That was the explosion and derailment of an oil train in Casselton, N.D.”

Wolff is referring to a crash in farmland just outside the small town of Casselton. No one was hurt, but the crash could have been deadly had it happened in town.

This summer, Bismarck officials ran through a simulated oil train derailment, with responders operating on the assumption that some of the town’s buildings would be devastated or destroyed, says Gary Stockert, Bismarck’s emergency manager. “We exercised with the assumption that we had over 60 or 70 casualties.”

Around the country, other cities and towns with oil train traffic are preparing for similar disasters.

In neighboring Minnesota, Gov. Mark Dayton “is concerned primarily about the safety of people along oil train routes, and in particular about the fact that this is a very volatile oil,” says Dave Christianson, an official with the Minnesota Department of Transportation.

Dayton has joined activists in asking North Dakota to force oil companies to “stabilize” the oil — to make it less explosive by separating out the flammable liquids.

Last month, North Dakota Gov. Jack Dalrymple convened a public hearing on the idea. Keith Lilie, an operations and maintenance manager for Statoil, which has a big presence in the Bakken, testified in front of a room full of oilmen in suits and cowboy boots who came to the hearing from places like Oklahoma City and Houston.

Lilie said he opposes having to build expensive tanks to heat the oil and separate out flammable liquids, like butane.

“Statoil believes the current conditioning of crude oil is sufficient for safely transporting Bakken crude oil by truck, rail and pipeline,” he said.

Eric Bayes, general manager of Oasis Petroleum’s operations in the Bakken, also testified. He asked what companies are supposed to do with those explosive liquids once they’re separated from the oil.

The stabilization process, he says, would “create another product stream you have no infrastructure in place for.”

But energy economist Philip Verleger, says the resistance is about money. “The industry never wants to take steps which increase the cost of production, even if it’s in the best interests of everybody,” he says.

Verleger says the opposition to proposed safety rules is short-sighted, and that the industry could actually hurt itself if there’s another serious incident. “I think the movement of crude oil by rail is one accident away from being terminated,” Verleger says.

Activist Lynn Wolff supports new rules that would make the oil less explosive, and says such regulation would protect people beyond North Dakota. “These bomb trains have been in Virginia and Alabama and blown up there as well,” he says.

Federal officials in Washington are also considering ways to make oil trains safer, such as strengthening tank cars.

As for making the oil leaving the Bakken less flammable, officials in North Dakota say they’ll make a decision by the end of the year.

This story was reported with Inside Energy, a public media collaboration focusing on America’s energy issues.