North Dakota oil and gas regulators hinted yesterday at their plan for reducing the volatility of crude from the Bakken Shale and possibly heading off federal regulations aimed at reducing the number of railroad accidents involving the oil.

Mineral Resources Director Lynn Helms and Assistant Director Bruce Hicks didn’t offer a specific proposal during the four-hour hearing but asked detailed questions about how individual companies operate the treatment equipment at their well sites. Helms told reporters in August that the state may write new rules on how operators use the separator tanks and treatment vessels, a move that would be less expensive than building new plants aimed at making the oil safer for transport.

The U.S. Department of Transportation and Canadian regulators have said Bakken oil is more likely to catch fire during an accident because it has higher levels of petroleum liquids, such as propane, butane and ethane. The oil industry argues that Bakken crude is no more dangerous than other types of crude and that no new regulations are needed.

Requiring new equipment or new treatment plants “would be a costly, redundant process that would not yield any additional safety benefits,” said Kari Cutting, vice president of the North Dakota Petroleum Council.

About two-thirds of North Dakota’s oil is transported by train because the state lacks adequate pipelines. State and federal regulators are under pressure to do something about oil transportation safety after a string of accidents involving Bakken production. A trained derailed and caught fire last July, killing 47 people in Lac-Mégantic, Quebec, and a second train fire occurred in December just outside Casselton, N.D.

The Wall Street Journal reported in July that operators in North Dakota decided years ago not to use plants known as stabilizers that use heat and pressure to strip some of the lighter liquids out of oil.

Those plants are common in Texas, but Texas also has an existing pipeline network to ship the petroleum liquids and a robust chemical industry that uses the liquids as raw materials for plastics and other products, Cutting said.

DOT has proposed a rule that would phase out older-model rail cars used to transport oil and may be planning to introduce requirements for stabilizing plants soon (EnergyWire, July 24).

During testimony yesterday, operators including Continental Resources Inc., Hess Corp. and Statoil ASA said they typically use similar equipment to treat oil at each well site. The most common pieces of equipment are separator tanks, which use gravity to separate oil from gas and water, and heater-treaters, which are vessels that recover more gases by warming the oil. More gases often are removed as the oil stands in storage tanks.

Some operators don’t use separators and others don’t turn on the burners in their heater-treaters during warm months, according to testimony. And most operators bring in specialized equipment to handle the rush of oil, gas and water that happens when a well is first drilled.

Helms and Hicks asked about treatment times, temperatures and pressures. Using higher pressure or lower temperatures in the tanks tends to keep more of the gases in the oil stream, the operators said.

“Are you confident you’re getting out all the light ends?” Helms asked, using the industry term for petroleum liquids.

The Dakota Resource Council, which represents landowners and environmentalists, argued for a phased-in approach including stabilizing plants, better planning for transportation and fines for operators who violate safety rules. Bakken crude has become a rallying cry for some environmental groups that worry that accidents could happen in major cities.

“The country is watching your decision — it’s not just about the impact in rural North Dakota anymore,” testified Theodora Bird Bear, chairwoman of the council’s oil and gas task force.