Federal hazmat regulator AWOL from North Dakota oilfields

While the Federal Railroad Administration has addressed the proximate and contributing causes through changes to train operating practices, its sister agency has been inexplicably feckless in fixing the problem at its source: the oil fields of North Dakota where barely treated “hot oil” is pumped into tank cars for shipment. For reasons still unexplained, PHMSA requires the removal of dangerous butane and propane from crude before it is injected into pipelines, but allows the manifestly dangerous raw Bakken crude to be trained from the mid-continental oilfields, through towns and cities, to refineries on three coasts.

The technology to “stabilize” hot crude by boiling off the liquefied gases for sale or flaring is commonly available and cheap to operate. In fact, the same oil industry voluntarily and routinely stabilizes similar light, sweet crude fracked in Texas.

With the mysterious reluctance of PHMSA to order that crude oil be rendered safe for rail transportation, jurisdiction over the safety of rail’s fastest growing business is defaulting to the oil industry itself and state governments poorly equipped to resist powerful oil industry lobbies. Federal disengagement is producing a patchwork of voluntary business practices and weak state regulation of the continental distribution of flammable crude and its explosive byproducts.

The result of this regulatory entropy is most evident in Bismark, N.Dak., where state officials appear to be moving toward compulsory “conditioning” of crude oil before loading into railcars—using state jurisdiction over natural resources to fill the vacuum created by the federal government’s abdication of its constitutional responsibility for rail safety and hazardous materials.

With the federal regulator absent-without-leave, North Dakota’s initiative must be applauded, but it is no substitute for national regulation.

The state’s three-person Industrial Commission seems likely to adopt a set of industry-designed best practices. Simply put, North Dakotan crude will have to be lightly pressure-cooked to boil off a fraction of the volatile “light ends” before shipment. This conditioning lowers the ignition temperature of crude oil—but not by much. It leaves in solution most of the culprit gases, including butane and propane. Even the industry itself says conditioning would not make Bakken crude meaningfully safer for transportation, though it would make the state’s crude more consistent from one well to another.

The only solution for safety is stabilization, which evaporates and re-liquefies nearly all of the petroleum gases for separate delivery to refiners. Stabilization is voluntarily and uniformly practiced in the Eagle Fork formation in Texas, whose untreated crude is even more volatile than that fracked from the Bakken Formation straddling Montana, North Dakota, and Canada’s Saskatchewan Province.

So far, stabilized Eagle Fork crude has been transported by tank car as far away as Quebec City, without the fireballs that have plagued the shipment of unstabilized Baaken crude since the first, shocking explosion at Lac-Mégantic, Quebec, in July 2013. The Texan gases are liquefied and piped underground to the state’s Gulf Coast petrochemical complex for processing and sale. The lack of a convenient petrochemical complex explains the oil industry’s collective decision not to extract the otherwise commercially valuable gases from North Dakota crude oil. Instead, most of the explosive gases remain dissolved in the unstabilized Bakken oil for extraction after delivery to distant refineries.

Pending development of a North Dakota petrochemical industry, the extracted gases may have to be flared into the atmosphere—already a problem in the state. Alternatively, they could be shipped, as liquefied petroleum gases routinely are now, in tank cars designed for explosive materials. The oil industry says this will increase the net danger from petrochemical trains, so perhaps flaring must be accepted as the safe choice for as long as it takes to collect and process the butane and propane regionally.

In any case, the contradictory handling of similar crudes in Texas and North Dakota shows that the combination of industry best practices and state regulation means wild divergence in the safety of oil trains traversing the continent.

If PHMSA had prescribed stabilization as a national rule at the start of the shale oil boom, the shipping of Bakken crude by rail would have been just as safe as that of comparable Texas crude. The Lac-Mégantic derailment might very well have been a mere environmental calamity, and not a human catastrophe.