Oil reps say ND has proper rail shipment rules

JAMES MacPHERSON, Associated Press

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.

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 Safety 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.

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