Repost from The Jamestown Sun, Jamestown, ND [Editor: Significant quote: “An oil conditioning standard must be framed in the broad context of public safety, not what might or might not inconvenience the industry. The ‘winners’ must be homeowners, businesspeople and others who live near oil train rail lines.” – RS
Flexibility in oil rule has limits
By Forum Editorial Board on Nov 5, 2014
“Flexibility” has emerged as the operative word in a proposed crude oil conditioning standard being developed by the North Dakota Department of Mineral Resources. Director Lynn Helms said he is summarizing some 1,200 pages of comment and testimony about how best to prepare volatile Bakken crude for transport. All well and good, but just how flexible “flexibility” will be should be a primary concern.
The drive to “condition” Bakken crude that is transported in rail tank cars accelerated following several derailments and explosions of oil trains, including a spectacular collision/derailment and explosion near Casselton, N.D., last December. Three reports about characteristics of Bakken crude are in the public record and will play a part in Helms’ work.
The aim is to remove certain volatile components of North Dakota’s light crude oil, thus making it less likely to flash to flame and explode in a train accident. Helms said his department will propose a standard to the Industrial Commission next month. The means by which the industry meets the standard likely will include various operating practices. The commission imposes the rule. Good, as far as it goes.
Helms added that his department’s flexibility approach is the best way to go because, “We certainly don’t want at this point … to pick a winner or loser in that discussion.” Really?
Once again, Helms and company are so focused on the industry’s priorities that his view of “winner or loser” is constricted. An oil conditioning standard must be framed in the broad context of public safety, not what might or might not inconvenience the industry. The “winners” must be homeowners, businesspeople and others who live near oil train rail lines. The means to achieve a meaningful oil safety standard could be flexible, but only if procedures can achieve the standard.
Transporting oil by rail can never be 100 percent safe. By its nature, oil on the rails entails risk. But if rail oil traffic is to be as safe as possible, anything that compromises that goal is unacceptable. North Dakota’s standard must be written with that in mind.
Repost from the Billings Gazette [Editor: This is not a fluffy human interest story, but an important offering on the oil industry and regulators in North Dakota. Significant quote: “‘If you want to fix a problem, you go to the source of the problem,’ he said. ‘You don’t prepare for something that doesn’t have to happen.’” Another good quote: “Pressure to make North Dakota crude oil safe for interstate shipment is mounting on several fronts.”– RS]
North Dakota man relentless in push for safer oil by rail shipping
November 02, 2014, by Patrick Springer, Forum News Service
Ron Schalow of Fargo has been an outspoken advocate of stabilizing Bakken oil to remove volatile gases before it is shipped by rail. | David Samson / Forum News Service
FARGO, N.D. — Ron Schalow isn’t bashful about expressing his caustic opinions. He once wrote a book scolding President George W. Bush for failing to prevent the 9/11 terrorist attacks.
Part of the title can’t be printed here, but the subtitle read, “The 9/11 Leadership Myth.”
More recently, the Fargo man, a frequent writer of letters to the editor, has focused his attention on explosive Bakken crude oil and rail safety – an issue that has drawn national attention after a series of fiery train derailments, including an accident that killed 47 people in Canada and one late last year near Casselton.
Schalow launched a petition drive originally called the “Bomb Train Buck Stops in North Dakota,” which he renamed the “Coalition for Bakken Crude Oil Stabilization,” a reference to the process for removing volatile gases.
Improbable activist
Schalow’s background makes him an improbable activist. His early career was spent managing restaurants and bars, with a stint as a minor league baseball manager.
More recently, he worked for software companies including Microsoft in Fargo, but said he grew weary of corporate culture and office politics and turned to freelance work.
He has assembled a loose network of people concerned about the crude oil stabilization issue, including local officials in Minnesota and other states, but laments he has found little support for his crusade in North Dakota.
Still, North Dakota leaders have been under pressure from the federal government and other states, including Minnesota, to treat crude oil before shipping it around the country by rail to refineries.
The North Dakota Industrial Commission is preparing new standards, likely to take effect Jan. 1, to “condition” crude oil before transport to address safety concerns. Separately, federal officials are drafting more stringent safety standards for tanker cars.
“I think we have to take some responsibility over what’s going over the tracks into Minnesota and the rest of the country,” Schalow said. “It has a lot to do with this is a product that’s coming out of my state.”
By his own admission, 59-year-old Schalow is not a consensus builder. A freelance writer for marketing clients, he isn’t a joiner by nature. Bespectacled, with a goatee, he is soft-spoken but adamant in expressing his views.
He has peppered North Dakota officials, including petroleum regulators and the three-member Industrial Commission, with emails calling for action and asking who is in charge of what he sees as a vital issue of public safety.
“I’ve badgered them relentlessly,” he said.
He is dismayed by what he regards as a sluggish state response, even after an official “tabletop exercise” last June that estimated 60 or more casualties if an oil train derailed and exploded in Fargo or Bismarck.
The exercise simulated a disaster similar to the blast that killed 47 and destroyed much of the town of Lac-Mégantic, Quebec, in July 2013.
For Schalow, the key to ensuring the oil is safe is to remove the volatile gases before shipping. Anything else, in his view, is passing along a potentially deadly problem for others to face.
“If you want to fix a problem, you go to the source of the problem,” he said. “You don’t prepare for something that doesn’t have to happen.”
Derailments costly
Dealing with an explosive derailment can be costly. New York officials estimated, for example, it would take $40,000 in foam to extinguish one tanker car.
In the rail accident near Casselton last December, 20 tanker cars derailed, 18 of which were breached, unleashing a series of explosions and an enormous fireball. Intense heat kept the firefighters far from the flames, which they had to allow to burn out.
No one was seriously injured or killed in the crash.
“They can’t be prepared for combat explosions,” Schalow said, referring to the explosive fires that Bakken crude derailments have produced. “What would they do?”
North Dakota officials in the governor’s office and Department of Mineral Resources declined to talk about Schalow’s advocacy, but said the state is moving ahead to improve the safety of crude oil transportation.
“Gov. (Jack) Dalrymple takes rail transportation safety very seriously and he believes it’s important to have the public weigh in on this important issue,” said Jeff Zent, a spokesman and policy aide for the governor, the highest-ranking member of the Industrial Commission.
“That’s why the Industrial Commission will announce further regulations aimed at improving the safety of oil rail transportation,” he added.
“Our goal has always been to make crude oil as safe as possible for transport, within our jurisdiction,” said Alison Ritter, a spokeswoman for the North Dakota Department of Mineral Resources, which regulates oil and gas production.
The department is also working with “the appropriate federal agencies to better communicate our role to make crude oil as safe as possible for transport,” Ritter said.
In contrast to North Dakota, most crude oil in Texas is stabilized before shipment. Pipeline companies routinely require stabilization before accepting shale oil.
“How hard is it to stand up and say I’m against trains blowing up in my town?” Schalow asked, referring to public officials’ initial reluctance to impose tougher standards.
A recent Forum Communications poll found that 60 percent of respondents were concerned about the safety of shipping crude oil by rail, but there has been no real clamor from residents, Schalow said.
“It’d be nice if someone stood up and defended me once or twice,” he said. As for holding a meeting of supporters, well, “Who would I call and who would dare show up? There’s no political will in this state except for that anonymous 60 percent.”
In Minnesota, Gov. Mark Dayton has urged North Dakota to stabilize oil before loading crude onto trains. An estimated 50 North Dakota oil trains roll through Minnesota each week, many with 100 tanker cars.
Pressure to make North Dakota crude oil safe for interstate shipment is mounting on several fronts.
Other states, including New York and California, where refineries take Bakken crude, are considering safety requirements.
“There’s a lot more angst across the country than there is here,” Schalow said, adding that most of his contacts are from other states, including New York, California and Washington state.
“I think he’s a pretty straight shooter,” said Tim Meehl, mayor of Perham, Minn., who is concerned about oil trains traveling through his town. “I think everything he says has a lot of merit to it.”
Meehl has not met Schalow, but saw him at a meeting in Moorhead earlier this fall attended by Dayton and local officials, and has exchanged emails with Schalow.
“They don’t want to step on toes out there,” Meehl, a native of Oakes, N.D., said of North Dakota officials’ deference to oil interests. “We need the oil. We just need to do it in a safer way.”
In North Dakota, residents and politicians seem reluctant to do anything that risks discouraging energy production, a powerful economic engine, Schalow said.
‘Quiet acceptance’
“You can’t say anything that might impact business, no matter what,” he said, describing what he regards as North Dakota’s curious culture of quiet acceptance.
Regulators aren’t alone in singling out oil tanker cars. BNSF announced last week that it will charge a $1,000 fee for each older crude oil tank car, more prone to puncture than newer models. By one estimate, that would add about $1.50 a barrel to the transportation cost.
In Texas, energy companies have invested hundreds of millions of dollars to make crude safer to handle. The cost of stabilizing crude oil could trim potential revenue by perhaps 2 percent, according to the estimate of an unidentified industry executive interviewed by The Wall Street Journal.
Schalow has been an outspoken critic of the Bush presidency and North Dakota leadership, but said he really has no allies in either political party.
A conservative blogger once described him as a “truther” for his criticisms of Bush, whom he castigated for failing to take pre-emptive action against al-Qaida despite warning signs of their terrorist ambitions. Schalow dismisses the “truther” label as unfair, saying he offered no conspiracy theories in his book.
He said the paperback sold 4,000 or 5,000 copies after it came out in 2006. No book is forthcoming on the issue of Bakken crude safety, but Schalow is unlikely to stop writing his letters, emails and Facebook posts.
“I don’t think it’s a political issue,” he said. “I think it’s a public safety issue.”
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. 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.
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
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.
