Members of the Dakota Resource Council held a press conference outside the meeting at noon with a sign that read “Stop bomb trains. Stabilize Bakken crude” as a backdrop.

DRC member Theodora Bird Bear, a resident of the Fort Berthold Indian Reservation, said “Our primary concern is the public safety portion of this.”

Oil reps say N.D. has proper rail shipment rules

By Nick Smith

BISMARCK, N.D. — Oil industry officials told state regulators Tuesday no additional regulations are needed to transport western North Dakota oil by rail, citing an industry-funded study saying it’s no more volatile than other light crudes.

Members of an environmental group countered that government studies have shown oil produced in the state is volatile. They also called for a development slowdown to allow for the building of proper infrastructure.

A standing-room-only crowd filled the North Dakota Industrial Commission’s Oil and Gas Division conference room in Bismarck to talk about the volatility of Bakken crude. The Industrial Commission is mulling regulations on treating the oil prior to shipment.

“North Dakota has the proper regulations in place to properly treat and condition Bakken crude,” said Kari Cutting, vice president of the North Dakota Petroleum Council. “In fact, additional offsite conditioning would be a redundant process.”

Members of the Dakota Resource Council held a press conference outside the meeting at noon with a sign that read “Stop bomb trains. Stabilize Bakken crude” as a backdrop.

DRC member Theodora Bird Bear, a resident of the Fort Berthold Indian Reservation, said “Our primary concern is the public safety portion of this.”

The debate comes after multiple train derailments within the past 18 months resulting in explosions of tanker cars carrying oil from North Dakota. The most high-profile incident was the deadly wreck in Lac Megantic, Quebec, in July 2013, killing 47 people.

In December 2013, a fiery derailment took place just outside of the city of Casselton.

Industry officials cited a report from engineering firm Turner, Mason and Company, under contract to the North Dakota Petroleum Council. It states Bakken crude is no more volatile than that found in other shale oil plays.

The study sampled 15 well sites and seven rail loading terminals in the state over a monthlong period earlier this year. Samples were tested for such characteristics as the initial boiling point of the crude and vapor pressure.

Brent Lohnes, director for field and plant operations for Hess Corp., said more regulations wouldn’t make a significant difference in product shipped by rail.

“To date, no evidence has been presented to suggest that measurable safety improvements would result from processes beyond current oil conditioning,” Lohnes said. “Furthermore, additional oil conditioning would create two separate product streams of flammable liquids for transport.”

Another recent report on Bakken crude, released by the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration, found Bakken crude is more volatile.

Cutting said crude is already conditioned at the wellhead. She said the equipment required for companies to do that costs between $200,000 and $400,000 per well to install.

Dakota Resource Council senior organizer Scott Skokos said the state needs to take into account more than the industry’s ability to extract oil and gas as fast as it can.

“Our policy recommendations call for a slowdown in the Bakken,” Skokos said. “This meeting is a symptom of a lack of infrastructure.”

The DRC wants a permitting slowdown until the volatility of oil is reduced. Skokos said additional infrastructure is needed

People living in communities across the country with railroad tracks going through them no longer feel safe with trains full of crude passing through, he said.

Skokos’ reaction was borne out by a letter from Minnesota Gov. Mark Dayton to North Dakota Gov. Jack Dalrymple on Tuesday asking for increased regulation and conditioning of Bakken crude.

“There needs to be more comprehensive planning,” Skokos said.

Oil and Gas Division spokesman Alison Ritter said an order on the matter is expected to come before the Industrial Commission sometime in the next 30 to 90 days.