January 4

Type of oil involved in recent rail explosions may be riskier, regulator says

The agency’s findings may expedite the rail industry’s push for stronger tank cars for moving crude and other hazardous materials.

From staff and wire reports

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A fireball blooms as an oil train derails Monday in Casselton, N.D. The North Dakota accident is the fourth major derailment in North America in six months involving trains transporting a type of crude oil that safety officials said is more flammable and dangerous to ship by rail. Among other things, regulators called for better labeling and stronger tank cars.

Photos by The Associated Press

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Rail cars are backed up in the yard Tuesday following a train derailment and a massive explosion in North Dakota the day before.

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The “implications for cost and speed of crude out of the Bakken as a result of today’s safety alert are likely to depend on the rule-making” that follows, Kevin Book, managing director for research at ClearView Energy Partners LLC in Washington, said in an e-mail. “We expect that the North Dakota accident will bring a proposal sooner rather than later.”

The oil carried on the train that crashed in Lac-Megantic was improperly labeled as a less-volatile liquid with a lower level of hazard, Canada’s Transportation Safety Board said in September.

Crude oils carried in tank cars are classified as flammable liquids and then divided into so-called packing groups based on their level of hazard, with PG I being the most hazardous and PG III being the least. The Bakken oil being transported by the train that derailed in Quebec was described as PG III when it should have been PG II, the board said.

The crude was being delivered to Irving Oil’s refinery in Saint John from the Bakken region. The Bakken shale formation is in the northwestern part of North Dakota and eastern Montana.

NORTH DAKOTA OUTPUT SPIKES

The boom in hydraulic fracturing, in which water, sand and chemicals are shot underground to break apart rock and free the fuel, helped North Dakota pass Alaska in 2012 to become the second-largest onshore producer of oil among U.S. states. Output from that state’s portion of the Bakken formation was up by 250,000 barrels per day in September from a year earlier, according to the U.S. Energy Information Administration.

Some supporters of the proposed Keystone XL Canada-U.S. pipeline say rail accidents buttress their argument. Opponents of the project, by TransCanada Corp. of Calgary, point to spills in Alabama, Michigan and North Dakota to show that method of transporting oil carries its own hazards. In September, a Tesoro Corp. pipeline ruptured and spilled 20,000 barrels of crude in northwest North Dakota.

The pipeline safety agency announced that it was establishing new rules for fuel shipments in September. That agency and the rail-safety regulator are also considering a rule to require stronger tank cars. The proposal has the rail industry’s support and is being challenged by the shippers that own or lease the railcars.

The Association of American Railroads in November asked regulators to require most of the U.S. tank car fleet to be replaced or retrofitted to make the equipment better able to withstand a crash. The Washington-based trade group’s members include BNSF, owned by Warren Buffett’s Berkshire Hathaway Inc.

“The rail industry is and is going to continue to be a player in the rush to this country’s energy independence,” Patti Reilly, a rail association spokeswoman, said in a phone interview. “We’re going to do everything we can to help this country achieve energy independence and we’re going to do it in the safest possible manner."

Bloomberg News and Portland Press Herald Staff Writer Tom Bell contributed to this story.

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Additional Photos

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A photo from July 6 shows smoke and flames rising from the debris of a 72-car runaway train that derailed as it transported crude oil at Lac-Megantic, Quebec. Several of the train’s cars exploded, 40 buildings in the town were leveled and 47 people were killed in the disaster.

The Canadian Press

  


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