Tag Archives: Oil stabilization

Bakken Crude, Blast zone, Crude By Rail, Federal Regulation (U.S.), Oil stabilization, State regulation

Safety of Citizens in Bomb Train Blast Zones in Hands of North Dakota Politicians

Repost from Desmogblog

Safety of Citizens in Bomb Train Blast Zones in Hands of North Dakota Politicians

2014-09-05, Justin Mikulka
Lac Megantic train explosion
Lac Megantic train explosion

When North Dakota Congressman Kevin Cramer was asked recently if it was scientifically possible to make Bakken crude oil safer by stripping out the explosive natural gas liquids with a process like oil stabilization, his response was quite telling.

“So scientifically can you do it? Sure, but you have to look at it holistically and consider all of the other elements including economics, and is the benefit of doing something like that does that trump other things like speed of trains, and what kind of cars,” he said.

This is very similar to the comments made by Lynn Helms of the North Dakota Department of Mineral Resources according to the July 29 meeting minutes provided to DeSmogBlog by the Industrial Commission of North Dakota.

“In response to a question regarding other mechanisms besides oil conditioning in the field, Mr. Helms stated there are other mechanisms — none of them without a significant downside….It makes sense to do the conditioning in the field. There are other options to do it downstream somewhere in a very large and very expensive operation.”

In a June 24 e-mail obtained by DeSmogBlog through a freedom of information request, Helms identified himself as “the primary contact for Governor Dalrymple’s team on the crude safety issue” in response to an inquiry from the Department of Energy about who would be working on the issue of Bakken crude oil safety.

As the point person on this issue for North Dakota, Helms’ opinions carry significant weight. And just like Congressman Cramer, Helms is pointing out the “significant downside” of stabilization, which is that it is an expensive operation.

It is well established that stabilization works and would make oil trains much safer. Not even North Dakota politicians are arguing that point anymore. But the industry doesn’t want to pay for it. And right now, the only ones who could mandate them to stabilize the oil via new regulations are the three members of the Industrial Commission of North Dakota.

What About The Feds’ Oil-By-Rail Regulations?

The reason North Dakota politicians are discussing this issue at all is because the federal government has essentially punted the question.

In the 200 pages of new proposed oil-by-rail regulations released in July, there is not a single line about requiring the oil or rail companies to stabilize the oil prior to shipping.

Stabilization is a process that removes the explosive natural gas liquids from the oil and is required by pipeline companies. This process would turn the current Bakken “bomb trains” into simple oil trains. They would still pose a threat of oil spills, but would no longer threaten to kill people in massive explosions like the one in Lac-Megantic, Quebec, or be a target for terrorism.

While the proposed regulations don’t require stabiliazation, they do include three questions that indicate lawmakers are aware that stabilizing or “degassifying” the crude makes it safer and that producers have the ability to reduce the volatility of crude oil prior to shipping it by rail.

Is the current exception for combustible liquids sufficient to incentivize producers to reduce the volatility of crude oil for continued use of existing tank cars?

Would an exception for all PG III flammable liquids further incentivize producers to reduce the volatility of crude oil prior to transportation?

What are the impacts on the costs and safety benefits of degasifying to these levels?

As previously reported by DeSmogBlog, the regulators in charge of finalizing the new proposed oil-by-rail regulations are big believers in cost-benefit analysis. And looking at their questions, it is clear they know the oil can be made less volatile. But they want to hear more from the industry about the costs of doing this before doing anything. And instead of requiring stabilization, they are looking for ways to “incentivize” the producers to do it.

Oil Conditioning vs. Oil Stabilization

The North Dakota Industrial Commission is holding a hearing on September 23rd during which it is requesting input on how to make the Bakken crude oil safer for transport. The headline of its press release, “Hearing set on oil conditioning practices,” almost ensures that oil stabilization will never be required in North Dakota.

Oil conditioning is not the same as oil stabilization. Oil conditioning can be done with all of the existing equipment already in the field in North Dakota and thus the cost is minimal. However, in situations where the industry needs to ensure it strips out all the volatile natural gas liquids from the oil, as in the Eagle Ford formation in Texas, they use a different process called stabilization.

Helms and the members of the Industrial Commission like to cite the North Dakota Petroleum Council Study on Bakken Crude Properties when claiming that Bakken crude is no different than other crude oils and thus doesn’t require stabilization. However, that very report makes it clear that conditioning, done with the equipment currently available, is insufficient and was never designed to achieve the type of results expected from stabilization.

From the report, prepared by industry consultant Turner and Mason:

The data consistency [sic] indicates that field equipment is limited in its ability to significantly impact vapor pressure and light ends content.

This is consistent with the expected capabilities of the equipment.

The field equipment is designed to separate gas, remove water and break emulsions to prepare crude for transport, and not remove significant levels of dissolved light ends from the crude.

Meanwhile, at the August 26 meeting of the North Dakota Industrial Commission, Helms once again acknowledged the effectiveness of stabilization, as reported by Petroleum News: “This is very routinely done with high gravity condensate — oil that condenses out of a gas well as it is produced,” Helms said. “That has to be stabilized before it can move through the system.”

Helms word choice is telling. Oil that “has to be stabilized before it can move through the system.” Oil that is moved by pipeline has to be stabilized before it can be moved because pipeline companies require it. The rail companies do not.

Despite his acknowledgement of how stabilization is routine in the pipeline business, at the August meeting, Helms was also sure to point out that in North Dakota they expected to choose conditioning as their solution, as reported by Petroleum News.

Helms agreed, saying conditioning is likely more suitable for North Dakota since the equipment is already in place on well sites but he’d like to hear from others at the upcoming hearing.

“We haven’t closed the door to (stabilization),” Helms said. “We want to hear what people have to say.”

However, if the North Dakota Industrial Commission actually wanted to hear what people have to say about stabilization, the press release about the September 23rd hearing probably should have actually mentioned stabilization. It doesn’t.

The North Dakota Industrial Commission

If there is going to be any regulation requiring stabilization of the Bakken crude it will require the three members of the North Dakota Industrial Commission to make it happen.

Governor Jack Dalrymple is one member of the commission. And his point man on this issue, Helms, has already made it clear he supports conditioning over stabilization.

North Dakota Attorney General Wayne Stenehjem is another member. When a report by the Pipeline and Hazardous Safety Materials Administration recently concluded that Bakken oil was more flammable than most other crude oils, Stenehjem responded to the science by saying, “It seems like they are picking on us.”

The third member of the commission is Agricultural Commissioner Doug Goehring. At the August 26th meeting of the commission, Petroleum News reported that Goehring opposed stabilization for an unlikely reason for someone who helped oversee the massive expansion of the Bakken oil production.

Agriculture Commissioner Doug Goehring voiced his concern with dotting the landscape with stabilizer units.

“We’ve been trying hard to shrink that footprint out there on the landscape, and that’s going to make that awfully difficult.”

So in all likelihood, stabilization is off the table and conditioning will be the new regulation. Helms and others often say conditioning is already being done because the equipment is already in the field. Yet, according to the minutes from the July meeting of the Industrial Commission, Governor Dalrymple said: “Right now we are assuming producers are doing conditioning but we do not have a mechanism to verify that.”

So, let’s get this straight. It is more than a year after the explosion of a Bakken crude train in Lac-Megantic that killed 47 people. And it’s been more than eight months since a train of Bakken crude exploded in Casselton, ND. And the best the regulators can do is hold a hearing to talk about how to do regulate a practice that’s inadequate and they already assume is being done?

Bakken Crude, Crude By Rail, Degasification, Federal Regulation (U.S.), Oil stabilization, State regulation, Volatility

MUST-READ: North Dakota seizes initiative in CBR degasification

Repost from Railway Age

North Dakota seizes initiative in CBR degasification

By  David Thomas, Sept. 4, 2014
North Dakota seizes initiative in CBR degasification

The vital other shoe in crude by rail reform will drop not in Ottawa or Washington, but in Bismark, N.Dak., where, in the void created by federal inaction, officials are preparing to use state jurisdiction over natural resources to order the degasification of petroleum at the wellhead.

The initiative follows months of opaque pronouncements by federal regulators in both Canada and the U.S. with respect to the need to render volatile crude oil safe before transport by rail.

A spokesman for Pipeline and Hazardous Materials Safety Administration (PHMSA) told Railway Age that rules for the pre-loading treatment of crude oil for shipment by rail are not on its reform agenda, despite earlier, apparently overly enthusiastic, pronouncements.

While Transport Canada and the U.S. Department of Transportation have responded to the succession of oil train explosions this year and last by focusing on railroad operations, hazmat classification, and tank car design, some have been muddled on the need to treat the volatile cargo itself before its loading into railcars—this despite their own warnings that crude, fracked from the mid-continent Baaken shale formation, has the explosivity of gasoline.

Some oil producers and shippers have resisted any new regulatory requirement that they process crude for transport by rail the way they already must for delivery by pipeline.

Removal of toxic, explosive, and corrosive gases from crude for transport by pipeline has been required for years under the regulatory authority of the PHMSA. But neither PHMSA nor its DOT sibling Federal Railroad Administration have seen fit to require similar treatment—variously termed “degasification”, “conditioning”, “stabilization”, or “normalization”—for crude, destined for shipment by rail.

Crude shippers have complained since the first oil train calamity in July 2013 at Lac-Mégantic, Quebec, that PHMSA regulations for testing and classifying oil for transport by rail were imprecise. Such confusion is only augmented by PHSMA’s twice-stated reference to a purported “requirement” that dangerous gases be removed before crude is loaded into railcars.

The most recent such PHMSA pronouncement in a June 11, 2014 letter to the National Transportation Safety Board reiterated an earlier safety alert:

“On Jan. 2, 2014, PHMSA also issued a safety alert warning of the flammability of the crude oil extracted from the Bakken Shale region in the United States. PHMSA noted that the alert reinforces the requirement to properly test, characterize, classify, and where appropriate, sufficiently degasify hazardous materials prior to transportation.”

Railway Age asked the PHMSA media relations office to clarify the requirement to “degasify,” and to cite the underlying legislative or regulatory authority. A PHMSA spokesperson researched the inquiry and responded that there was in fact no such legal basis in existence or under formal consideration. The PHMSA spokesman referred us to North Dakota, which was contemplating the introduction of compulsory degasification.

Indeed, the oil and gas division of the North Dakota Industrial Commission has announced a public hearing for Sept. 23, on the “oil conditioning practices” in the state’s three light-oil pools: Bakken, Three Forks, and Sanich. Oil producers are invited to propose “methods to effectively reduce the light hydrocarbons in crude oil.”

Division spokesperson Alison Ritter told Railway Age, “The hearing is a first step in conditioning the oil to make it as safe as possible for transport.” She said that gas/liquid separators are already required at all North Dakota wellheads. At issue is whether they are being effectively used to render so-called “hot crude” safe for rail transport.

Separators boil off light hydrocarbons such as ethane, butane, and propane from crude oil, reducing its vapor pressure and propensity to explode. Heavy and corrosive hydrogen sulfide is also removed for pipeline transport. None of this is compulsory for shipment by rail.

North Dakota had been an uncritical booster of CBR even after Lac-Mégantic, until the fourth of the conflagrations occurred Dec. 30, 2013, on the outskirts of Casselton, when a westbound BNSF grain train derailed in the path of an eastbound BNSF oil train.

North Dakota is also proceeding with the training and deployment of its own rail inspectors, who will enforce FRA and PHSMA regulations within the state.

Bakken Crude, Crude By Rail, Oil conditioning, Oil stabilization, Volatile gases

Big debate in North Dakota: stabilize the oil before shipping?

Repost from Prairie Business

 Does ND crude need to be stabilized?

By April Baumgarten, Forum News Service, August 25, 2014 
image
A train carrying crude oil tankers travels on the railroad bridge over the Missouri River on Aug. 16 in Bismarck. Dustin Monke/Forum News Service

DICKINSON, N.D. – What can be done to keep trains from becoming “Bakken bombs?”

It’s a question on the minds of many North Dakota residents and leaders, so much that some are calling on the state Industrial Commission to require oil companies to use technology to reduce the crude’s volatility. The words are less than kind.

“Every public official in America who doesn’t want their citizens incinerated will be invited to Bismarck to chew on the commissioners of the NDIC for failing to regulate the industry they regulate,” Ron Schalow of Fargo wrote in a Facebook message.

A train carrying Bakken crude derailed and exploded July 6, 2013, in Lac-Megantic, Quebec, killing 47 people. Another oil train crashed into a derailed soybean train on Dec. 30 near Casselton, N.D. No one was killed.

Schalow has started a campaign to require oil companies that drill in North Dakota to use stabilizers, a technology used in Texas to take natural gas liquids off crude to make it safer to ship. His online petition demands the Industrial Commission to force oil companies to remove all explosive natural gas liquids from crude before shipping it by rail. More than 340 people have signed the petition as of Saturday.

Schalow declined an interview, referring instead to his petition and Facebook page titled “The Bomb Train Buck Stops With North Dakota.”

Throughout North Dakota, residents have called on the state’s government to prevent future disasters like these, but some leaders say implementing stabilizers could cause more problems.

“Now you have to pipe from every one of these wells or you have to find a way to get it to this centralized location to be refined,” state Agricultural Commissioner Doug Goehring said. “That creates huge problems in itself.”

There is a difference between conditioning and stabilization, said Lynn Helms, the state’s Department of Mineral Resources director.

Oil conditioning is typically done at well sites in North Dakota, he said. The gases are first removed from crude. Then the water and hydrocarbons are removed with a heater treater. The crude oil is then put into a storage tank below atmospheric pressure, which reduces the volatility. Those gases can then be flared or transported to a gas processing plant.

“If crude oil is properly conditioned at the wellsite, it is stable and safe for transportation,” Helms said.

Oil that hasn’t been properly conditioned at the wellsite can be stabilized, Helms said, but that would include an industrial system of pipelines and processing plants.

Valerus, a company based in Houston, manufactures stabilizers for oil companies across the country, including in Texas, West Virginia and Canada. It’s a technology Texas has used at the wellhead for drilling the Eagle Ford shale since the early 2000s, said Bill Bowers, vice president of production equipment at Valerus. Recently, a centralized system with pipelines has been developed to transport the natural gas liquid safely.

“Most of that stabilization takes place at a centralized facility now,” he said. “There could be 100 wells flowing into one facility.”

The Railroad Commission of Texas has one rule that Helms has found regarding stabilization, he said. Rule 3.36 of the Texas Oil and Gas Division states operators shall provide safeguards to protect the general public from the harmful effects of hydrogen sulfide. This can include stabilizing liquid hydrocarbons

.Helms added he could not find any other rule requiring companies to use stabilizers, but the rule had an impact indirectly, Bowers said.

“I think what was happening is these trucking companies, either for regulation or just safety purposes, would not transport the crude if it was not stabilized,” Bowers said.

The process is relatively simple, he added.

“All we are really talking about is heating the crude, getting some of the more volatile compounds to evaporate and leaving the crude less volatile,” Bowers said.

The Industrial Commission has asked for public input on 10 items that could be used to condition oil. Though stabilization is not directly listed, it could be discussed under “other field operation methods to effectively reduce the light hydrocarbons in crude.”

The commission will hear testimony on Tuesday, Sept. 23, at the Department of Mineral Resources’ office in Bismarck. Written comment may be submitted before 5 p.m. Monday, Sept. 22.

New rules in North Dakota would regulate conditioning at well sites.

The hearing was brought on by a study from the North Dakota Petroleum Council and discussions held with U.S. Secretary of Transportation Anthony Foxx and Secretary of Energy Ernest Moniz regarding transportation issues.

Installing equipment at the wellhead for conditioning oil takes several weeks, Helms said. Stabilization, on the other hand, could take more than a year to install equipment – if not longer.

Helms said he couldn’t comment on the economic process.

“I do know that a large-scale industrial process would have a big imprint,” Helms said. “It would really exasperate our transportation problems because tens of thousands of barrels of oil would have to be trucked or piped to (a processing plant) and from it.”

Since there is a centralized system in Texas, companies can make a profit off the natural gas liquids. In North Dakota, companies would have to stabilize at the wellhead before pipelines are put in place.

“Given their preference, they won’t buy this equipment,” Bowers said. “They really don’t want to do it.”

There is no pipeline infrastructure to transport natural gas liquids from wellsites, meaning it would have to be trucked or shipped by rail. That could be more dangerous than shipping oil without stabilizing it, Goehring and Helms said.

“By themselves, they are more volatile and more dangerous than the crude oil with them in it,” Helms said. “The logical thing to do is to properly condition them at the wellsite.”

The crude could also shrink in volume, along with profits, Bowers said.

“It seems to me that in the Bakken people are quite happy with the arrangement,” he added. “They don’t believe necessarily that stabilization will change the safety picture.”

Schalow has criticized the Industrial Commission for not acting sooner, stating officials have had 10 years to address the issue.

Goehring said he was made aware of the process recently.

“I don’t believe anybody is withholding information or is aware of anything, nothing diabolical,” Goehring said.

Officials agreed that the process needs to be dealt with on multiple levels, including oversight on railroad safety. Public Service Commissioner Julie Fedorchak outlined a proposal on Thursday for a state-run rail safety program. If approved, the Public Service Commission would hire three staff members for the program.

The commission has been working on the proposal since before the Casselton derailment.

“I share (Schalow’s) concern about having a safe method of transportation, and I think everyone does,” Fedorchak said. “How we get there is the challenge and I think there is a number of different steps. I don’t think there is one solution.”

Many trains carrying Bakken crude travel through Fargo, where Schalow and Democratic Sen. Tim Mathern live.

Mathern follows Schalow’s Facebook page and said he did so out of his concern for transporting oil safely.

“My perspective is that we must preserve and protect our quality of life today and in the future,” Mathern said. “We must be careful that we don’t do kind of a wholesale of colonization of our resources in sending them out. … It’s almost like how do we make sure that we don’t have an industrial waste site as a state?

“In many of our larger cities, we have a section of town that is kind of an industrial waste site. Eventually, someone has to clean that up. Eventually, that is a cost to society, and I am concerned that we don’t let that happen to North Dakota.”

Mathern said safely transporting oil is no longer a western North Dakota or even a state issue; it’s a national issue that must be taken seriously because the oil is being transported throughout the country.

“There is enough responsibility to go around for everybody, including policy makers,” he said. “It’s not just one industry; it’s many industries. It includes the public sector. It includes governors and legislators, and people that are supposed to be attentive to citizens, and to be attentive to the future. We all have responsibility in this.

“This has worldwide consequences. This is an oil find that even affects the balance of power, even politically.”

Mathern said he doesn’t know what Schalow’s motivation is, but it isn’t just Schalow raising the questions.

“I don’t think this is a matter of blaming oil.” Mathern said. “This is a matter of being respectful for our citizens and being a good steward of this resource and a good steward of our future.”

Public comment

Residents unable to attend the North Dakota Industrial Commission on oil conditioning practices set for 9 a.m. on Tuesday, Sept. 23, in Bismarck may submit written comments to brkadrmas@nd.gov. Comments must be submitted by 5 p.m. CDT on Monday, Sept. 22.