WILLISTON, N.D. – New rules for conditioning Bakken crude oil take effect today, but will they improve the safety of transporting crude by rail?
The industry and state regulators say yes.
Critics say no.
And a scientist researching the issue says we don’t know yet.
So how is the public supposed to make sense of it all? We’ll try to break it down.
What is the new oil conditioning order?
Starting today, oil companies in North Dakota will be required to remove more volatile gases from Bakken crude oil so it has a vapor pressure of no greater than 13.7 pounds per square inch.
Oil conditioning occurs at the well through equipment that separates the oil, gas and water. Companies can meet the new standard by operating their equipment at specific pressures and temperatures. If they choose an alternative method, companies will need to submit documentation that shows they are meeting the standard.
How was 13.7 chosen?
The independent standards organization ASTM, formerly American Society for Testing and Materials, defines stable crude oil as having a vapor pressure of 14.7 psi. Equipment that tests for vapor pressure has a margin of error of 1, so state regulators chose 13.7 to ensure that it meets the definition, said Alison Ritter, spokeswoman for the Department of Mineral Resources.
Will a vapor pressure of 13.7 make Bakken crude safer in the event of a train derailment?
We don’t know yet, says Chad Wocken, senior research manager with the University of North Dakota’s Energy and Environmental Research Center. More research is needed to understand what properties in Bakken crude cause it to be so volatile, he said.
“We don’t really know what vapor pressure would allow a current rail car to transport crude safely,” Wocken said.
The EERC plans to participate in a Department of Energy study that would further investigate the characteristics of Bakken crude to understand what causes the massive fireballs that have resulted from recent train derailments.
While the vapor pressure is one indicator, Wocken said other factors also need to be analyzed. If the study is funded, it could occur later this year or next year, Wocken said.
“Trying to understand how all these crude oil properties really impact behavior in an accident setting is something that really needs to be studied,” Wocken said.
Then what does the order accomplish?
For the first time, it ensures that Bakken crude meets a consistent standard. State regulators consider it one step toward making rail transportation of Bakken crude oil safer, Ritter said. Other key areas include improving track maintenance, stronger rail cars and new federal Department of Transportation rules, she said.
“When you know what’s in the cars, you can design a better, safer car,” Ritter said.
The order could be amended if new research points to a different vapor pressure guideline, Ritter said.
“We are using the best science that we have available,” she said.
Is the industry ready?
Yes, said Kari Cutting, vice president of the North Dakota Petroleum Council, who estimates companies have spent $20 million on equipment to comply with the order. The new requirement also will cost the industry an estimated 10 cents to 20 cents per barrel, or $120,000 to $240,000 a day based on daily oil production of 1.2 million barrels per day, she said.
How will it be enforced?
Department of Mineral Resources field inspectors will check the pressure and temperature settings during routine well inspections, which are supposed to occur quarterly, Ritter said. Violations can lead to civil or criminal penalties.
What do critics say?
Ron Schalow of Fargo, an outspoken critic of rail transportation of Bakken crude, said he can’t get officials to tell him how many fewer fatalities will result from this new order.
“There’s going to be more derailments, and the same thing is going to happen,” Schalow said. “I think they devised something that would make it look like they were doing something, but they avoided what they really needed to do, which was stabilization.”
Does the order allow for stabilization or other technology?
Companies could request a hearing with the North Dakota Industrial Commission if they want to adopt another process to condition the oil, including stabilization, which safety advocates often mention but is not required by the state.
But if the companies pursue stabilization, they also would need to have additional pipelines and stabilization facilities in place to handle the additional light hydrocarbons that are removed during the process, Ritter said.
So far no companies have requested hearings for an alternative technology, she said.
More research is still needed to determine if stabilization would make rail transportation of Bakken crude safer, Wocken said.
What other consequences will this order have?
The new order is expected to increase natural gas flaring by 2 percent because of the additional gases that are removed from the oil, Ritter said.
That will put additional constraints on operators who are already trying to meet new requirements from the Industrial Commission to reduce flaring.
“We’re literally burning the candle at both ends,” Ritter said.
The department estimates that companies will restrict oil production by 12,000 barrels a day to comply with the oil conditioning order and another 12,000 barrels a day to comply with flaring guidelines also in effect, Ritter said.