New regulations purported to make Bakken crude safer for transport instead allow business as usual for the oil and rail industries moving explosive Bakken crude oil in unsafe DOT-111 rail cars.
The regulations announced Tuesday by the North Dakota Industrial Commission state that: “The goal is to produce crude oil that does not exceed a vapor pressure of 13.7 pounds per square inch (psi).”
There are two important things to note about this goal.
The first is that the vapor pressure of the oil that exploded in Lac-Megantic, Quebec, resulting in the death of 47 people, was under 10 psi and was described as being “as volatile as gasoline.” So the new regulations will permit oil that is significantly more volatile than the oil in the Lac-Megantic disaster to continue to be shipped by rail.
The second important thing to note is that almost all of the oil that the industry and regulators have sampled in the past year has been well below 13.7 psi. Of 99 samples taken in the Pipeline and Hazardous Materials Safety Administration’s sampling study, 94 were below 13.7 psi and the average psi for that study was 12.3 psi.
In the industry-funded study by the American Fuel & Petrochemical Manufacturers, the average vapor pressure was 7.83 psi. In the study funded by the North Dakota Petroleum Council, the average vapor pressure was 11.5 psi.
So the reality is that based on the sampling of data from three studies of Bakken crude oil, most of the oil is both above the vapor pressure of the oil at Lac-Megantic and well below the new standard.
North Dakota State Mineral Resources Director Lynn Helms admitted this when he told the Star Tribune that “about 80 percent of North Dakota crude already falls well below the proposed standard.”
Of course the sampling techniques in the industry-funded studies are suspect and it is known that you can purposely get lower values if you use certain sampling techniques. The regulations state simply that the tests of the crude oil “must be performed by a person sufficiently trained to perform the test.”
The Bismark Tribune reports that this is a concession to industry from the earlier proposed regulations that would have required “independent laboratory testing.” The tests that will be conducted by “sufficiently trained” oil company employees are only required to be done quarterly.
Essentially the new regulations give a green light to the industry to continue doing business as usual, shipping explosive oil. Nothing in the new regulations would have changed the outcome of the Lac-Megantic disaster. The bomb trains will keep rolling.
As if that wasn’t worrying enough, there is one very interesting and troubling part of the regulations buried near the end of the document released yesterday.
(3) The following practices are hereby prohibited:
(a) Blending crude oil produced from the Bakken Petroleum System with liquids recovered from gas pipelines prior to custody transfer; and
(b) Blending crude oil produced from the Bakken Petroleum System with natural gas liquids (i.e. condensate, pentanes, butanes, or propane) prior to custody transfer.
What this new regulation implies is that the North Dakota Industrial Commission is aware that Bakken producers have not only been shipping dangerous oil that has high levels of natural gas liquids (NGLs), such as butane, that are part of the crude oil mixture as it comes out of the ground but that they have been actively adding such explosive NGLs to the oil prior to shipping it by rail.
Why would they do this? Money.
The natural gas liquids are valuable, which is why the industry has been fighting any real regulations that would require them to remove the NGLs and significantly reduce the vapor pressure of the crude oil.
The value of these NGLs was made clear by Ron Ness, president of the North Dakota Petroleum Council to Reuters in the past week when he was making his case for no new regulations by saying, “Don't devalue that quality North Dakota Bakken barrel.”
A similar statement was made in testimony to the North Dakota Industrial Commission about the proposed regulations by Tony Lucero of oil producer Enerplus who said: “The flammable characteristics of our product are actually a big piece of why this product is so valuable. That is why we can make these very valuable products like gasoline and jet fuel.”
This point was made again in an article in the Wall Street Journal last week when PBF Refinery manager José Dominguez said, “The Bakken crude contains a lot of butane, making it volatile but useful.”
So it is clear that the industry likes to have butane in the Bakken crude mixtures they are sending by rail to refineries. And based on the new regulations, apparently there has been an industry practice of adding NGLs into the oil prior to shipment, making the cargo even more dangerous. So much for the industry claiming safety is its top priority.
Earlier in the process of arriving at the new North Dakota regulations, Helms tried to convince citizens this was an impartial process and that the commission was just concerned about safety.
“We're trying to achieve a set of operating practices that generates a safe, reliable crude oil, whichever way you choose,” Helms told Reuters. “We, at this point, don't want to pick winners and losers.”
But that is exactly what they have done. The winners and losers have been picked. The members of the industrial commission, who all were elected with large amounts of donations from the oil industry, are winners. And of course the oil industry itself is the real winner. As for the losers, that would be the millions of people located in the bomb train blast zones along the railways.
The oil industry can rest easy knowing that the Bakken crude has not been devalued. The same can’t be said for the lives of those at risk of the next bomb train disaster that remains inevitable with the continuing lack of real regulations.
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