Category Archives: Oil stabilization

The difference between oil “conditioning” and oil “stabilization”

Repost from The Daily Yonder, Speak Your Piece
[Editor: Ok, I knew North Dakota regulators were working on regulations to get rid of volatile gases in the crude they ship by train, but I didn’t pay attention: I missed understanding the difference between oil “conditioning” and oil “stabilization.”  If Ron Schalow is right, North Dakota officials are far from fixing the problem of volatile crude oil “bomb trains.”  This is an important distinction – read on….  – RS]

North Dakota’s Other Oil Boom

North Dakota regulators could lessen the danger of crude-oil explosions that have killed bystanders and damaged property. Instead, the state’s Industrial Commission is likely to allow oil producers to continue shipping dangerous crude across North America when a commonly used fix is possible.
By Ron Schalow, 11/24/2014
A train carrying crude oil killed 47 people when it derained and exploded in Lac-Mégantic, Quebec, in July 2013. | Photo by Paul Chiasson/The Canadian Press

The safety of millions of Americans who live, work or play within a mile of tracks where Bakken oil trains run are in the hands of three mortal men.

Unfortunately, these men make up the North Dakota Industrial Commission.

“It’s a little like the Wild West up in the Bakken, where everybody gets to do what they want to do,” says Myron Goforth, president of Dew Point Control LLC, in Sugarland, Texas. “In the Eagle Ford (Texas shale play), you’ve got to play by the rules, which forces the oil companies to treat it (crude) differently.”

Not in North Dakota, where oil regulators are finally feeling pressure to require the Bakken oil producers to render the trains non-explosive. The push comes six years after the first massive Bakken oil train explosion outside of Luther, Oklahoma, and seven months since the last, in downtown Lynchburg, Virginia, where a quirk of physics turned the exploding tanker cars towards the river, sparing many people and buildings.

Making the trains safer has been possible all along. It seems that politicians in some states don’t want their citizens or towns incinerated, nor do they wish to watch property values drop in the meantime.

Will the North Dakota Industrial Commission act?

Spoiler alert: No.

The Bakken crude needs to be “stabilized,” to remove all explosive “natural gas liquids” such as ethane, propane and butane. That requires billions of dollars in additional equipment and infrastructure, and the oil companies don’t want to pay for it.

Stabilization is a standard practice in many other parts of the United States. And it’s a required part of preparing crude for shipment via pipelines. The explosion risk North Dakota’s lack of regulation imposes on railroad communities all over North America is completely unnecessary. And requiring stabilization would a further boost to the state’s economy. But that’s not enough for the commission.

Instead, the commission is going to sell a different process called “conditioning,” which the oil companies have been doing all along. And conditioning doesn’t do the job, unless you think that job should include towering fireballs, mushroom clouds, charred buildings and graves.

Railway Age explains the difference well:

This conditioning lowers the ignition temperature of crude oil—but not by much. It leaves in solution most of the culprit gases, including butane and propane. Even the industry itself says conditioning would not make Bakken crude meaningfully safer for transportation, though it would make the state’s crude more consistent from one well to another.

The only solution for safety is stabilization, which evaporates and re-liquefies nearly all of the petroleum gases for separate delivery to refiners. Stabilization is voluntarily and uniformly practiced in the Eagle Ford formation in Texas.

And, right on cue, on November 13 North Dakota Department of Mineral Resources Director Lynn Helms presented the North Dakota Industrial Commission with proposed new standards (there never were any old standards) to “condition” the Bakken crude, supposedly for the purpose of making the Bakken oil trains non-explosive. Or somewhat less explosive, kinda not explosive, or to get the height of the fireballs down into double digits… I don’t know.

A crude-oil train derailed and exploded in Lynchburg, Virginia, in the spring of 2014. Photo by Elyssa Ezmirly

But, if the goal is to render the Bakken oil trains NON-explosive, the proposal to “condition” the crude isn’t going to cut it.

I repeat, the producers have always “conditioned” the crude, but, evidently, now they’re going to be “forced” by the North Dakota Industrial Commission to turn the knob a few notches to the right, and everything will be peachy.

If it was that simple, perhaps they should have done that before dozens of people got killed – maybe sometime shortly after the first Bakken oil train derailed and blew sky high in 2008.

Commission Chair and North Dakota Governor Jack Dalrymple has so much faith in “conditioning” that his own emergency exercise of a Bakken oil train derailment and explosion estimated 60 casualties in Bismarck or Fargo, both medium-sized cities in North Dakota. One can only guess the number of deaths, if a Bakken train were to jump the rails in Minneapolis or Chicago.

Furthermore, taxpayers are footing the bill for billions to outfit, equip and train firefighters and emergency personnel to deal with a Bakken oil derailment and explosion. Quebec is on the hook for the $2.7 billion disaster in Lac-Megantic, a village of 6,000. That explosion required responses from “more than 1,000 firefighters from 80 different municipalities in Quebec and from six counties in the state of Maine,” according to a report by the Transportation Safety Board of Canada.

How much will it cost your community if tragedy strikes? Will North Dakota pay?

But, there is a bright side. When the next, or the next, or the next Bakken oil train disaster kills more people and decimates a section of Albany or Sacramento or Missoula or Perham, North Dakota can quit worrying about how to spend all of the money piling up in the Bank of North Dakota from oil production revenues. It will be gone to the survivors and a long list of stakeholders.

The loss will be due to willful negligence, disinterest or incompetence on the part of three men.

Ron Schalow lives in Fargo, North Dakota, and is part of the Coalition for Bakken Crude Oil Stabilization.

Sacramento Area leaders call for strong safety controls on oil trains headed west and south

Repost from The Sacramento Bee

Sacramento leaders call for more crude-oil train safety

By Tony Bizjak, 11/14/2014
A tanker truck is filled from railway cars containing crude oil at McClellan Park in March.
A tanker truck is filled from railway cars containing crude oil at McClellan Park in March. Randall Benton

Concerned about potential oil spills and fires, Sacramento leaders are calling for stronger safety controls on a Phillips 66 proposal to transport crude oil via trains through Sacramento neighborhoods to the oil company’s refinery in San Luis Obispo County.

In a letter approved Thursday by board members of the Sacramento Area Council of Governments, regional officials are asking San Luis Obispo County to require the oil company to notify local fire officials before any crude oil train comes through the area, limit the parking of crude-oil-laden trains in the urban area, provide funding for training on fighting oil fires, and require trains and tracks to have modern safety features.

SACOG officials said they are not taking a stance against rail shipments of crude oil in general.

“Our intent is not to prohibit any types of shipments, our intent is to ensure that where they are shipped that we impose the most reasonably feasible safety measures for our communities,” the agency’s attorney Kirk Trost said during a board briefing this week.

A boom in domestic oil production in North Dakota, Colorado, Texas and other Western states in recent years has prompted safety concerns after several high-profile oil-train explosions, including one in Canada that killed 47 people last year. The federal government is formulating new safety regulations, including a requirement for sturdier tank cars.

SACOG’s letter comes in response to a Phillips 66 proposal to ship oil via train five days a week to its Santa Maria Refinery in San Luis Obispo County. Many of those trains are likely to come through Northern California, via Roseville, and run through downtown Sacramento, West Sacramento, downtown Davis and East Bay cities. Some could take a route through Sacramento to Stockton, then west into the Bay Area. The route east of Roseville is unknown.

The Sacramento group, in its letter, also joined a growing national chorus of cities and states demanding that particularly flammable crude oil from the Bakken region of North Dakota be stripped of its more volatile elements before being loaded on trains.

In an email to The Sacramento Bee, Phillips 66 spokesman Dennis Nuss said Phillips does not plan to ship Bakken oil to its Santa Maria Refinery. He did not specify which types of crude oil the refinery will receive.

“Phillips 66 is working to ensure the long-term viability of the Santa Maria Refinery and the many jobs it provides,” he wrote. “Our plans for this project reflect our company’s commitment to operational excellence and safety while enhancing the competitiveness of the facility.”

SACOG, a transportation planning agency formed by the region’s six counties and 22 cities, previously called for similar safety measures on another oil company plan to transport oil, likely Bakken, through Sacramento to a Benicia refinery. Valero Refining Co. officials say they hope to start next year shipping two 50-car oil trains a day through Sacramento to that plant.

Railroads have long successfully argued that federal railroad regulations pre-empt states, counties and cities from imposing any rules on their operations. In their letter, Sacramento officials contend that San Luis Obispo County and Benicia can require the oil refineries to write safety measures into their contracts with the rail carrier companies. A rail law expert, Mike Conneran of the Hanson Bridgett law firm in San Francisco, said Sacramento’s argument might have legal merit, but likely will have to be tested in court.

Crude-oil trains have proliferated in recent years around the country as producers use newer fracking technologies to unearth previously trapped oil deposits in the West. California Energy Commission analysts say very little of that oil is being transported on rail into California currently, but they say as much as 22 percent of the state’s oil will arrive by train by 2016.

One such shipment comes through Sacramento, traveling on the rail line that cuts through North Sacramento, midtown, Land Park and Meadowview en route to Richmond in the Bay Area. The BNSF Railway company recently filed papers with state emergency officials indicating they are running up to two trains a week on that route, an increase from one train a week earlier this year.

Another major crude-by-rail facility, outside of Bakersfield, is expected to open before the end of this year and may take shipments of crude oil on rail that will come through Sacramento. A spokesman for Plains All American, owner of the facility, declined comment on the routes the trains will take, saying that will be a decision the railroad companies will make.

Read more here: http://www.sacbee.com/news/local/transportation/article3935260.html#storylink=cpy

 

North Dakota debating new vapor pressure standards

Repost from The Jamestown Sun, Jamestown, ND
[Editor: The proposed ND vapor pressure standards seem rather lax to my inexpert eyes.  See comparative Reid Vapor Pressure (RVP) levels mentioned in an August 9 posting here on BenIndy: “On June 2nd Quantum Energy met with OIRA and presented a simple three-page presentation. The presentation explains how regular crude oil has a Reid Vapor Pressure (RVP) of 5-7 psi and Bakken crude has an RVP between 8-16 psi. To put that in perspective, gasoline typically has a RVP of 9 psi.”  The proposed new standard in North Dakota according to this article is a “vapor pressure limit of 13.7 pounds per square inch.”  – RS]

Oil industry has ‘significant concerns’ about crude conditioning standards

By STATE/REGION on Nov 14, 2014

BISMARCK — North Dakota oil regulators said Thursday they want more input before approving new standards for removing volatile gases from crude oil before it’s shipped by rail, a proposal an industry representative warned could devalue Bakken crude and contribute to more flaring at well sites.

Department of Mineral Resources Director Lynn Helms presented the state Industrial Commission with the proposed standards, part of a national effort to improve oil-by-rail safety in the wake of several explosive oil train derailments.

Helms said the standards would result in Bakken crude “behaving even better than the unleaded gasoline that you put in your cars.”

Attorney General Wayne Stenehjem, who serves on the commission with Gov. Jack Dalrymple and Agriculture Commissioner Doug Goehring, said the department is “on the right track” with the proposed order. But he wanted more time to sort through it and allow for public comment.

Dalrymple agreed, called it “an excellent working draft” and a “very robust system of verification” for making sure Bakken crude falls within vapor pressure standards before it’s loaded onto the rails.

The commission said it would accept comment on the proposed order until 5 p.m. Wednesday and hold a special meeting by Dec. 11 to consider approving it so the standards can take effect Feb. 1.

Helms said the proposed order strengthens the existing rule by requiring well sites to use a gas-liquid separator and/or a heater-treater to remove so-called “light ends” like butane and propane from crude oil, and mandating the equipment be operated at certain temperatures and pressures.

He estimated 80 percent of existing wells in the Bakken and Three Forks formations would be able to produce oil within the proposed vapor pressure limit of 13.7 pounds per square inch.

National standards recognize oil with a vapor pressure of 14.7 psi or less to be stable, and winter blend gasoline has a vapor pressure of 13.5 psi, he said.

Helms said the average vapor pressure of Bakken crude across several recent studies was 11.8 psi, though “there were significant outliers.”

“We really believe that the vast majority of our Bakken crude oil will already fall well below the standard,” he said.

The roughly 15 percent of wells that operate outside of the temperature and pressure standards would have to hire a third party to test their crude for vapor pressure and submit the results to the state within 15 days. Operators looking to use alternative methods for conditioning or stabilizing their crude would need commission approval after a hearing process.

The proposed order also would ban the practice of blending crude oil with light ends or liquids recovered from gas pipelines before the oil is sold. Dalrymple noted violators can face fines as high as $12,500 per day.

“I think we want to be sure that that’s clear for everybody,” he said.

North Dakota Petroleum Council president Ron Ness cautioned that the standards could devalue Bakken crude by requiring it to be over-treated, at the same time contributing to natural gas flaring by removing more gas at the wellsite.

“I think we have some pretty significant concerns,” he said, adding the Industrial Commission is “getting into the nitty-gritty details of how companies manage their commodities.”

Helms said preliminary figures show 24 percent of the gas produced at North Dakota wells in September was burned off. Flaring reduction standards approved by the commission in July will lower the allowed flaring rate to 23 percent on Jan. 1, 15 percent by 2016 and 10 percent by Oct. 1, 2020.

The proposed oil conditioning standards will make it more challenging for producers to meet those flaring goals, Helms said.

“We’re pushing at both ends of the system, so we’re making life really difficult for these people right now. But it’s got to be safety first,” he said.

A Wall Street Journal article on Wednesday questioned the accuracy of the testing method used in a Petroleum Council-funded study of Bakken crude’s volatility, and Stenehjem asked Thursday whether the Industrial Commission should conduct its own study.

“It has been questioned, simply because it was the industry that conducted it,” he said.

Helms urged the commission to support an ongoing U.S. Department of Energy study that could involve the Energy & Environmental Research Center in Grand Forks.

Ness said it’s concerning that “the focus is all back on the commodity.”

“The root of the issue is the trains and the train tracks and the accidents,” he said.

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.