Tag Archives: Dakota Resource Council

Crude By Rail, Oil Industry, Oil stabilization, State regulation, Volatility

North Dakota oil reps say Bakken does not need more regulation

Repost from AP in The San Francisco Chronicle
[Editor: To paraphrase, ‘Bakken is no more volatile, we are already conditioning it, it would cost too much.’  …well, what did we expect them to say?  – RS]

Oil reps say ND has proper rail shipment rules

By James MacPherson, Associated Press, September 23, 2014
FILE - In this June 5, 2012 file photo provided by Rangeland Energy, LLC, a train leaves the company's crude oil loading terminal near Epping, ND. Oil industry representatives told North Dakota regulators Tuesday, Sept. 23, 2014, that the state has proper regulations in place to treat Bakken crude for shipment by rail. North Dakota's Industrial Commission is considering new rules that would remove extra hydrocarbons from Bakken crude, a process some say might make the oil more safe for rail transport. Bakken crude has been linked to fiery oil train crashes like one outside Casselton, N.D., last December that left an ominous cloud over the town and led some residents to evacuate. Photo: Courtesy Of Rangeland Energy, LLC, AP / Rangeland Energy, LLC
In this June 5, 2012 file photo provided by Rangeland Energy, LLC, a train leaves the company’s crude oil loading terminal near Epping, ND. Oil industry representatives told North Dakota regulators Tuesday, Sept. 23, 2014, that the state has proper regulations in place to treat Bakken crude for shipment by rail. North Dakota’s Industrial Commission is considering new rules that would remove extra hydrocarbons from Bakken crude, a process some say might make the oil more safe for rail transport. Bakken crude has been linked to fiery oil train crashes like one outside Casselton, N.D., last December that left an ominous cloud over the town and led some residents to evacuate. | Photo: Courtesy Of Rangeland Energy, LLC, AP

BISMARCK, N.D. (AP) — Oil producers in North Dakota are objecting to any new state regulations that would require them to reduce the volatility of crude before it’s loaded onto rail cars.

North Dakota’s Industrial Commission is considering new rules that would require companies to remove certain liquids and gasses from crude oil train shipments, a process some say would make such transport safer. But oil industry officials told the commission Tuesday that the state already has proper regulations in place.

“To date, no evidence has been presented to suggest that measureable safety improvements would result from processes beyond current oil conditioning,” Hess Corp. spokesman Brent Lohnes said.

Oil trains in the U.S. and Canada were involved in at least 10 major accidents during the last 18 months, including an explosion in Lac-Megantic, Quebec, that killed 47. Other trains carrying Bakken crude have since derailed and caught fire in Alabama, Virginia, North Dakota.

But Kari Cutting, vice president of the North Dakota Petroleum Council, said nine of the incidents involved derailments and one was due to a leaky valve.

“The material contained in these railcars was not the cause,” Cutting said.

A federal report released earlier this year by the Pipeline and Hazardous Materials Administration says oil from North Dakota’s prolific Bakken formation may be more flammable than other crudes. But a report funded by the North Dakota Petroleum Council says Bakken oil is no more dangerous to transport by rail than other crudes and fuels.

Oil from North Dakota began being shipped by trains in 2008 when the state reached capacity for pipeline shipments. The state is now the nation’s No. 2 oil producer, behind Texas.

Cutting, whose group represents more than 500 companies working in North Dakota’s oil patch, said the each of the more than 11,000 oil wells in the state already has equipment in place to stabilize or condition the oil before shipment.

“Requiring stabilization beyond current conditioning practices would be a costly, redundant process that would not yield any additional safety benefits,” she said.

Industry officials also pointed out that stripping liquids and gases from Bakken crude would result in even-more volatile products that would still have to be shipped by rail.

Outside the Bismarck building where the commission was meeting, members of an environmental-minded landowner group hoisted a large banner that read, “Stop Bomb Trains, Stabilize Bakken Crude.”

Theodora Bird Bear of Mandaree, a spokeswoman for the Dakota Resource Council, told reporters that oil companies are cutting corners to boost their bottoms lines.

“When they talk about saving money, what they are really talking about is reducing public safety,” Bird Bear said.

Members of the group said the issue of safer Bakken oil goes well beyond North Dakota’s border.

“No one in this country feels safe around these rail lines,” Scott Skokos said.

Minnesota Gov. Mark Dayton on Tuesday sent a letter to Gov. Jack Dalrymple, asking for additional safety measures for oil trains leaving North Dakota.

Alison Ritter, a spokeswoman for the regulatory panel, said a decision on whether to change state rules could come within 90 days.

Bakken Crude, DOT-111, Federal Regulation (U.S.), Light sweet crude, Oil stabilization, Volatility

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.”