North Dakota Regulators Mull Relaxing Oil Train Shipment Rules

September 20, 2018

North Dakota regulators are considering relaxing rules that require shippers to remove the most volatile gases from oil before it’s loaded onto train cars.

The rules, which were fought by the energy industry, took effect in 2015 and are aimed at making the state’s crude oil safer for transportation following several explosive train derailments, including one five years ago in Lac-Megantic, Quebec, that killed 47 people.

State Mineral Resources Director Lynn Helms told members of the North Dakota Industrial Commission last week that the industry has conducted 60,000 vapor pressure tests since the regulations took effect and that the vast majority of tests have been within the state’s limits.

But he said companies sometimes struggle to meet the requirements in early and late winter, or when the temperature is between 20 degrees and 40 degrees, the Bismarck Tribune reported.

In those cases, companies are required to adjust their equipment or take other steps to condition the oil.

Current rules require North Dakota crude to have vapor pressure below 13.7 pounds per square inch, which is less than the 14.7 psi threshold that is recognized national standards as being stable.

The Industrial Commission led by Republican Gov. Doug Burgum voted to proceed with amending the rules, proposing to require vapor tests “pursuant to commission approved oil conditioning policy/guidance.”

The commission has not yet determined how often the vapor pressure tests would be required under the amended rules.

Rail transportation of North Dakota crude oil has increased in recent months, but volumes traveling by rail are still far below the peak in 2014, state data show. Most of the state’s crude oil transported by rail travels to the West and East coasts.

Earlier this year, Democratic New York Sen. Chuck Schumer called for tougher standards to reduce the volatility of North Dakota crude oil that’s transported through New York.

North Dakota officials do not intend to hold a public hearing on the proposed changes. The commission will accept written comments through Oct. 1.

The commission is expected to take final action on Oct. 25.

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