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

The type of crude oil carried by a Montreal, Maine & Atlantic Railway train that crashed and burned in Quebec, killing 47 people, may be more flammable and dangerous to ship by rail than other varieties, according to a U.S. regulator, but much less of that oil is now being transported through Maine.

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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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Nearly 5.3 million barrels of the oil, which is largely produced in North America’s Bakken region, passed through Maine last year by train, en route to the Irving oil refinery in Saint John, New Brunswick.

Since the deadly accident in July in the Quebec town of Lac-Megantic, shipments of that type of oil through Maine have declined significantly.

The Pipeline and Hazardous Materials Safety Administration announced its preliminary conclusion Thursday about the volatility of Bakken crude oil, three days after a BNSF Railway Co. train carrying that type of oil caught fire and exploded after a collision in Casselton, N.D.

The North Dakota accident is the fourth major North American derailment in six months involving trains transporting crude oil. Record volumes of oil are moving by rail as production from North Dakota and Texas have pushed U.S. output to its highest level since 1988 and pipeline capacity has failed to keep up.

Since the accident in July, Montreal, Maine & Atlantic stopped shipping oil on its line because of political opposition in Quebec.

Pan Am Railways, which has been hauling oil on a route that takes it through southern Maine, has cut back on oil shipments since the Lac-Megantic accident. The company on Friday declined to comment.

In October, the last month for which state data are available, Pan Am transported 70,000 barrels – less than one-fifth of the amount of oil the railroad shipped per month last spring.

Chalmers Hardenbergh, editor of Atlantic Northeast Rails and Ports, a trade newsletter based in Freeport, said his network of rail fans provide him with reports on rail shipments. In recent months, they have not seen any trains carrying oil in Maine, he said.

He said the oil reaching the Irving refinery is transported on the Canadian National Railway, which travels around Maine through New Brunswick. In addition, Irving is getting oil via ships. Hardenbergh said the vessels pick up oil in Albany, N.Y., and travel down the Hudson River and along the New England coast to Saint John.

“It’s sailing past Maine, not stopping,” he said.

The wreck in North Dakota resulted in an explosion that sent massive flames into the sky, although nobody was injured because the accident occurred in an unpopulated area.

Hardenbergh, who saw a video of the explosion, said the accident in North Dakota will put additional political pressure on the rail industry to use stronger tank cars for moving crude.

“When I saw that mushroom cloud, I thought, ‘Oh my, who would want that stuff running through their town?’ ” he said.

LABELING 'IS CAUSE FOR CONCERN'

The findings by the Pipeline and Hazardous Materials Safety Administration strengthen call for the petroleum industry to accurately label the contents of tank cars and to test shipments to make sure they don’t contain gases produced in the hydraulic fracturing process.

“We believe there is sufficient cause for concern” about whether crude shippers are properly labeling tank cars’ contents, Jeannie Shiffer, a pipeline-regulator spokeswoman, said in an email.

U.S. regulators, including the Federal Railroad Administration, began examining whether Bakken crude is more risky to move by rail following the July explosion of rail cars carrying North Dakota crude in Lac-Megantic. The agencies on Thursday said those inspections will continue. About three-quarters of the oil produced in North Dakota is shipped by rail rather than pipeline.

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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