North Dakota regulators on Tuesday ordered producers pumping oil from the Bakken shale field to begin removing flammable natural gas liquids from their product before shipment in an effort to prevent deadly explosions involving trains.
The Bakken field has played a major part in the spurt of oil drilling that has raised domestic production by more than 70 percent over the last six years. But a series of explosive accidents involving trains carrying Bakken crude, including one last year in Quebec that took 47 lives, has raised fears in many cities where oil trains regularly transit.
Oil companies rely on the trains because the Bakken shale field has been developed so quickly and adequate pipelines do not exist in and around North Dakota.
The new regulations set by the North Dakota Industrial Commission will require producers of Bakken crude to process their product through mandated temperatures and pressures that regulators hope will remove much of the butane, propane and other volatile liquids commonly found in the North Dakota crude.
“The North Dakota Industrial Commission reiterates the importance of making Bakken crude oil as safe as possible for transportation,” the commission, led by Gov. Jack Dalrymple, said in a joint statement after a meeting on Tuesday. “This order will bring every barrel of Bakken crude within standards to improve the safety of oil for transport.”
Once the rules are in force early next year, transported North Dakota crude oil will have a similar volatility to that of automobile gasoline, which should decrease the risk and size of any fire that might occur once a rail car is punctured in an accident, according to state regulators.
Little oil was transported by trains just five years ago, but today, roughly 800,000 barrels of oil a day transit on trains.
Several oil companies, including Hess, Whiting Petroleum and Continental Resources, have opposed the new regulations, saying they are not needed and will increase production costs. With oil prices in sharp decline, the added cost to buy and run equipment to conform to the new temperature and pressure standards will be particularly onerous.
Lynn Helms, director of the state’s Mineral Resources Department, said regulators would conduct field inspections to enforce compliance. He said oil companies that did not comply could face a penalty of up to $12,500 for every day they were in violation of the new rules.
Energy experts say another safety issue lies with the tank cars themselves, especially older DOT-111 tank cars that have thin shells prone to puncturing and rupturing in accidents. Federal regulators are expected to issue new regulations requiring safer tank cars in the coming months.
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