Category Archives: Oil conditioning

Crude By Rail, Federal Regulation (U.S.), Oil conditioning, Oil industry lobby, Oil stabilization, Pipeline transport, State regulation

Rep. Jackie Speier (D-CA) Declares Pipeline and Oil-by-Rail Regulatory System “Fundamentally Broken”

Repost from DeSmogBlog
[Editor:  This excellent DeSmogBlog article is more about the power of the oil industry lobby than it is about Rep. Speier.  For video and transcript of Rep. Speier’s comments go to YouTube: “Congresswoman Speier calls PHMSA toothless kitten.” On her Facebook page, Speier recommends more about PHMSA’s pipeline regulatory failings at POLITICO Magazine.”  – RS]

Congresswoman Declares Pipeline and Oil-by-Rail Regulatory System “Fundamentally Broken”

By Justin Mikulka, April 23, 2015 – 04:58

“The system is fundamentally broken.”

Those were the words of Rep. Jackie Speier (D-CA) during an April 14th hearing on oil-by-rail and pipeline safety.

For anyone expecting the soon to be released oil-by-rail regulations to make any meaningful improvements to safety, it would be wise to review the full comments made by Rep. Speier.

It has been more than four years since a gas pipeline exploded in Speier’s district in San Bruno, California resulting in eight deaths, huge fires and destruction of a neighborhood. In her testimony she recounted how the state regulators were clearly in league with industry prior to this accident. And in the time since she has come to find that federal regulators, the Pipeline and Hazardous Materials Safety Administration (PHMSA), “does not have the teeth—or the will—to enforce pipeline safety in this country.”

PHMSA is the agency also in charge of the new oil-by-rail regulations as it is a division of the Federal Railroad Administration (FRA). One thing is certain — the new regulations won’t address the volatility of Bakken oil. The White House has already decided that the regulations will not deal with this issue and instead they left it up to North Dakota to deal with it.

North Dakota passed regulations that went into effect April 1 that require the oil to be “conditioned” prior to shipment by rail to address the volatility. However, as has been documented on DeSmogBlog before, conditioning doesn’t remove the volatile and explosive natural gas liquids from the oil. That requires a process known as stabilization.

So with no rules in place to require the oil to be stabilized, future train accidents involving Bakken oil will very likely be similar to the seven that have occurred since July 2013. Huge fires, exploding tank cars and the now all too familiar Bakken mushroom cloud of flame.

There have been seven accidents and it has been the same in all of them. But the White House has decided that the regulations don’t need to address this issue.

Recently the Department of Energy (DOE) got involved in the discussion about Bakken crude with the release of a document called Literature Survey of Crude Oil Properties Relevant to Handling and Fire Safety in Transport.

It is interesting that the DOE is commissioning reports on this topic since the department has no regulatory oversight of oil-by-rail. The report received little attention upon its release, although it was immediately touted by the American Petroleum Institute (API) as proving that the characteristics of crude oil had nothing to do with the fires occurring in the Bakken train accidents.

The API press release stated, “The Department of Energy found no data showing correlation between crude oil properties and the likelihood or severity of a fire caused by a derailment.”

During the recent hearing, this new DOE report was cited twice by two separate members of Congress. They both used the report to question a statement recently made by Federal Railroad Administration acting administrator Sarah Feinberg regarding the need for the oil companies to reduce the vapor pressure and volatility of oil for rail transport. Reducing the vapor pressure and volatility would require stabilization.

Early in the hearing, Rep. Lou Barletta (D-PA) read a question that contained the exact same description of the report’s conclusion as the API press release.

“You [Feinberg] have recently called on the energy industry to quote ‘do more to control the volatility of its cargo.’ You may have seen a recent report from the Department of Energy where the agency found no data showing correlation between crude oil properties and the likelihood or severity of a fire caused by a derailment.”

Rep. Barletta received $106,540 from big rail in the last election cycle.

Later in the hearing, Rep. Brian Babin (R-TX) read the exact same statement. It appeared even Feinberg was a bit surprised at being asked the exact same question by two different congressmen as she responded, “I’m happy to take that question again.”

Rep. Babin received $37,550 from the oil industry in the last election cycle with $7,500 coming from Exxon Mobil.

So, while the API wasn’t at this hearing, they had two members of Congress directly reading prepared questions that echoed their press release on the DOE report word for word.

Watch video of the two identical questions asked at the hearing:

The first important thing to note about the “no data” talking point is that it is true. The report did not find data on this because that isn’t what the report was designed to do. The report reviewed three field sampling studies on the characteristics of Bakken crude oil. None of these studies looked at “correlation between crude oil properties and the likelihood or severity of a fire caused by a derailment.”

It is easy to say you found “no data” when you know there is none in your source material to begin with.

Perhaps the most insidious part of this is that no one at the hearing called them on their blatant mischaracterization of the report and their ignorance of the science of Bakken oil and volatility.

In a recent article about the volatility of oil in Al Jazeera, an actual petroleum engineer clearly stated what is widely known in the oil and rail industries but is “debated” by the API and congress and regulators to avoid having to regulate the Bakken crude.

“The notion that this requires significant research and development is a bunch of BS,” said Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston. “The science behind this has been revealed over 80 years ago, and developing a simple spreadsheet to calculate risk based on composition and vapor pressure is trivial. This can be done today.”

A bunch of BS. The oil industry, DOE, FRA and PHMSA want us to believe that the properties of oil aren’t currently understood. And as outrageous as that assertion is, multiple hearings and reports have been conducted on the matter. And many more will occur before anything is done.

The DOE report outlines all of the further research the department will be doing on this issue over the next couple of years.

And as previously reported on DeSmogBlog, the exact same thing is happening with tar sands oil and dilbit. Hearings, studies, reports. With many of the studies and reports being directly funded by the American Petroleum Institute and its members. All dragging on years after major incidents like the Kalamazoo River dilbit spill.

In her testimony, Rep. Speier didn’t hold back on her feelings about the failures of the regulatory system.

PHMSA is not only a toothless tiger, but one that has overdosed on Quaaludes and is passed out on the job.

But the reality is that PHMSA is just a small piece of the much larger puzzle that includes the Department of Energy, the White House, the Federal Railroad Administration and first and foremost, the American Petroleum Institute and their supporters at all levels.

A couple of days after the hearing, FRA acting administrator Sarah Feinberg appeared on Rachel Maddow’s show to discuss this problem and said the following regarding stabilization of oil.

“The science is still out. The verdict is still out on what the best way is to treat this product before placing it into transport.”

Watch FRA acting administrator Sarah Feinberg in this Maddow clip:

But the science isn’t still out. Even in the DOE report, it clearly states that the oil needs to be stabilized to reduce the vapor pressure and that conditioning the oil, as they currently require in North Dakota, does not accomplish this.

To add to the absurdity of this situation, Feinberg admitted to Maddow that the oil industry stabilizes the oil before it is transported in pipelines or on ships. Apparently the science is crystal clear in those cases.

So while Feinberg got beat up at the hearing by congressmen and their API talking points, there was Feinberg on Maddow’s show spouting other API talking points.

Rep. Speier is probably wrong. The system isn’t fundamentally broken. This would be true if the system was designed to keep the public safe, but it isn’t. The system is designed to keep corporate profits safe so the reality is that the system is working as designed. And the bomb trains continue to roll.

Bakken Crude, Crude By Rail, Derailment, Explosion, Federal Regulation (U.S.), Fire, Light ends, North Dakota, Oil conditioning, State regulation, Volatile gases

New vapor pressure rule in North Dakota fails to account for additional explosion risks

Repost from Reuters
[Editor:  Reference below is to an important new Energy Department study on the volatility of Bakken crude.  – RS]

North Dakota’s new oil train safety checks seen missing risks

By Patrick Rucker, Mar 31, 2015 4:14pm EDT

WASHINGTON, March 31 (Reuters) – New regulations to cap vapor pressure of North Dakota crude fail to account for how it behaves in transit, according to industry experts, raising doubts about whether the state’s much-anticipated rules will make oil train shipments safer.

High vapor pressure has been identified as a possible factor in the fireball explosions witnessed after oil train derailments in Illinois and West Virginia in recent weeks.

For over a year, federal officials have warned that crude from North Dakota’s Bakken shale oilfields contains a cocktail of explosive gas – known in the industry as ‘light ends.’

The new rules, which take effect on April 1, aim to contain dangers by spot-checking the vapor pressure of crude before loading and capping it at 13.7 pounds per square inch (psi) – about normal atmospheric conditions.

The plan relies on a widely-used test for measuring pressure at the wellhead, but safety experts say gas levels can climb inside the nearly-full tankers, so the checks are a poor indicator of explosion risks for rail shipments.

It is “well-understood, basic physics” that crude oil will exert more pressure in a full container than in the test conditions North Dakota will use, said Dennis Sutton, executive director of the Crude Oil Quality Association, which studies how to safely handle fossil fuels.

Ametek Inc, a leading manufacturer of testing equipment, has detected vapor pressure climbing from about 9 psi to over 30 psi – more than twice the new limit – while an oil tank is filled to near-capacity.

About 70 percent of the roughly 1.2 million barrels of oil produced in North Dakota every day moves by rail to distant refineries and passes through hundreds of cities and towns along the way.

The state controls matter to those communities because there is no federal standard to curb explosive gases in oil trains.

North Dakota officials point out that the pressure limit is more stringent than the industry-accepted definition of “stable” crude oil. They also say that they lack jurisdiction over tank cars leaving the state and that the pressure tests are just one of the measures to make oil trains safer.

“We’re trying to achieve a set of operating practices that generates a safe, reliable crude oil,” Lynn Helms, director of the North Dakota Department of Mineral Resources, has said. Helms has also said that test readings for near-full containers were less reliable.

However, given different testing and transport conditions, industry officials say the pressure threshold may need to be lowered to reduce the risks.

Limiting vapor pressure to 13.7 psi in transit would require an operator to bring it to “something well below that” at the loading point, Sutton said.

The uncertainty about regulatory reach and safety has spurred calls for the White House to develop national standards to control explosive gas pressure.

“Let me be really clear,” Democratic Senator Maria Cantwell of Washington state told reporters last week. “They should set a standard on volatility.”

The National Transportation Safety Board, an independent safety agency, has already encouraged a federal standard for “setting vapor pressure thresholds” for oil trains citing Canadian findings linking such pressure and the size of explosions in train accidents.

Meanwhile, a leading voice for the oil industry is lobbying Congress to resist federal vapor pressure benchmarks.

Last week, the American Petroleum Institute urged lawmakers to oppose “a national volatility standard” and pointed to an Energy Department study that the severity of an oil train mishap may have more to do with the circumstances of the crash than the volatility of the cargo.

That same report said much more study was needed to understand volatility of crude oil from the Bakken. (For a link to the study: tinyurl.com/nvjqmxt)

The oil industry has said that wringing ‘light ends’ out of Bakken crude may keep a share of valuable fuel from reaching refineries.

Reuters reported early this month that Transportation Secretary Anthony Foxx took his concerns about Bakken oil volatility to the White House last summer and sought advice on what to do about the danger of explosive gases.

The administration decided that rather than assert federal authority it would allow the North Dakota rules to take root, according to sources familiar with the meeting.

(Reporting By Patrick Rucker; Additional reporting by Ernest Scheyder in North Dakota; Editing by Tomasz Janowski, Bernard Orr)
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, Flaring, Oil conditioning, Oil producers, State regulation

North Dakota legislators trying to gut recent new safety regulations

Repost from The Jamestown Sun, Jamestown, ND

Changes to energy taxes would be a blunder

By The Forum of Fargo-Moorhead, Jan 22, 2015

A group of North Dakota legislators have introduced legislation aimed at gutting two of the state’s most significant regulatory decisions involving oil and gas. A bill could nullify requirements to ratchet down the massive wasteful flaring of natural gas and to impose standards to make crude oil less volatile before shipment by rail. It also would risk forfeiting $112 million in revenues during a two-year budget period. The question is why?

House Bill 1187, whose primary sponsor is Rep. Keith Kempenich, R-Bowman, is a naked attempt by a handful of legislators to override the executive function of the North Dakota Industrial Commission, comprised of the governor, attorney general and agriculture commissioner, all elected by voters statewide. Members of the Industrial Commission — after lengthy consideration and input from industry and the public — imposed regulations that will force industry to curb the massive, wasteful flaring of natural gas and to make crude oil less explosive.

Kempenich, in trying to justify his sweeping bid to weaken executive authority, complains that the Legislature was “left out of the loop” in decisions that are squarely before the North Dakota Industrial Commission as ultimate overseers of oil and gas. He glibly dismissed the flaring reduction goals — standards based on lengthy testimony with considerable input from industry — as “arbitrary,” and wants to make them go through a rule-making process that would involve lawmakers.

Where is the public clamor to roll back gas flaring? Halting progress on reducing flaring would cost an estimated $18.8 million per biennium in lost revenues. The state’s top staff regulator has said reaching the next tier of flaring reduction goals will be a “real stretch,” but officials say the Industrial Commission has leeway to grant flexibility in implementing its order, if deemed reasonable.

Where is the public outcry for softening standards to reduce the volatility of explosive Bakken crude oil? Not in Casselton, which last year dodged a massive explosion after an oil train derailment near the town. The order to “condition” oil before shipment carries an estimated cost of just 10 cents per barrel. But failure by the state to make oil safer for shipment could trigger more costly federal regulations that also could deprive the state of $93 million in revenues over a two-year budget cycle.

There is, of course, no public outcry to reverse either of these orders and send them through a legislative sideshow. Instead, Kempenich and his legislative accomplices have their ears attuned to the oil industry, which wants to exploit the drop in oil prices as an excuse to roll back sound regulations. The stewardship of North Dakota’s natural resources — and especially the safety of its citizens — shouldn’t be put in jeopardy. Lawmakers should kill Kempenich’s boondoggle.