North Dakota crude does not need special handling: U.S. refiners

WASHINGTON Wed May 14, 2014 6:32pm EDT

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WASHINGTON (Reuters) - Despite several fiery mishaps involving fuel produced in North Dakota's Bakken energy patch, cargo from the region does not need special handling when it moves on the tracks, the leading voice for U.S. refiners said on Wednesday.

The American Fuel & Petrochemical Manufacturers (AFPM), the trade group for the country's refiners, funded a third-party study of Bakken fuel that concluded the product is being handled properly.

"Bakken crude is as safe to transport as other crude oils and is well within the safety standards for current rail car designs," said Charles Drevna, the president of the trade group.

Some Bakken fuel samples were found to carry a large share of flammable gas but not so much that special handling is required under the rules, he said.

U.S. Transportation Secretary Anthony Foxx asked for the industry's help in understanding possible dangers of Bakken fuel earlier this year. The AFPM study involved roughly 1,400 samples collected over three weeks ending in early March.

Standard tank cars could easily contain the vapor pressure of the samples, the trade group said, although two other measures of volatility often ran high compared to other hazardous materials.

The AFPM study found that some fuel samples had an initial boiling point and flash point - the temperature at which they will combust with a spark - that would require handling like the most dangerous flammable liquids.

But all of the samples would have been appropriate to move in standard tank cars like the model DOT-111, the current workhorse of the oil-by-rail sector, the trade group said.

Foxx and other officials have said that the DOT-111 design is not fit for hauling Bakken fuel. Regulators are developing new safety standards for moving fuel on the tracks. That process is expected to last most of the year and some lawmakers are growing impatient.

"There needs to be new standards, more exacting and demanding standards, but equally important is more vigorous enforcement," said Senator Richard Blumenthal, a Democrat from Connecticut.

The Department of Transportation in February fined three oil companies for wrongly handling Bakken fuel, but the $93,000 in penalties against Hess, Marathon Oil Corp and Whiting Petroleum Corp have already been modified and may yet be reduced further.

"Fines and penalties need to match the seriousness of the threat that comes from safety failures," said Blumenthal, who chairs a surface transportation subcommittee of the Senate Commerce Committee.

The DOT's Pipeline and Hazardous Materials Safety Administration (PHMSA) has been running spot inspections in North Dakota since the summer in a program dubbed "Bakken Blitz" but officials have yet to present any findings.

PHMSA has collected roughly 80 fuel samples and officials have said preliminary findings could come later this month.

(Reporting by Patrick Rucker; Editing by Ros Krasny and Sandra Maler)

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