BISMARCK, N.D. — Regulations meant to reduce volatility of crude oil transported from the state were passed Tuesday by the North Dakota Industrial Commission.
The new rules, with some changes having been made following an extended time for industry comment, will impact about 960 facilities in western North Dakota, according to Lynn Helms, director of the Department of Mineral Resources.
The three-member commission unanimously approved the changes during a special meeting in the Pioneer Room at the state Capitol.
Industry officials had argued the regulations are too specific in setting industry mandates and could create unintended consequences, such as increases in flaring.
“We still are focused on safety,” Helms said. “It will meet the stable crude oil standard.”
Don Morrison, executive director of the Dakota Resource Council, said the Industrial Commission rules are only as strong as the enforcement taken.
“They’re going to have to step up and be regulators. The current way of doing things is ridiculous,” Morrison said.
The rules, which take effect April 1, made some concessions based on both industry and conservationists’ comments.
The rules outline a series of standards for pressure and temperatures for production facilities to follow in order to separate volatile gases from crude oil. Companies are already required to have equipment, such as separators and heater treaters, for those tasks at well sites.
North Dakota crude oil will not be allowed to exceed a vapor pressure of 13.7 pounds per square inch; national standards require 14.7 psi. The 1 psi margin is meant to address any margin of error in testing equipment.
One concession to industry was requiring crude at facilities to be heated at 110 degrees, down from 120 degrees in the draft order.
Helms said the 120-degree requirement could have “put the whole gas-gathering system at risk.”
Another change allowed trained staff at facilities to test crude rather than requiring independent laboratory testing.
One other change was the removal of language requiring additional testing at rail-loading facilities. This was to avoid potential conflicts with federal regulators that already oversee those facilities.
Helms said nearly two dozen staff are being recommended in the agency’s 2015-17 budget — more than half are for inspectors in the oil patch.
Helms said staff conducted 300 inspections in the past three weeks at facilities in the oil patch. Of these, 56 percent were in compliance, 31 percent were heating oil below 110 degrees and the rest weren’t heating oil at all.
“This is not a huge, significant demand on staff. We can make it work,” Helms said.
North Dakota Petroleum Council spokesman Tessa Sandstrom said the group is going to have to review the new rules to determine the impacts.
“We don’t know what the other implications are going to be,” said Sandstrom, adding the impact will vary because each company treats oil differently.
Morrison dismissed petroleum council arguments that the rules shift the discussion from rail safety to the product itself.
“Our responsibility is to make sure the Bakken crude is safe before it gets on the train,” Morrison said.
The additional scrutiny on volatility comes after multiple train derailments that have occurred within the past 18 months resulting in explosions of oil tanker cars carrying oil from North Dakota.
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