UPDATE 2-BNSF train carrying North Dakota oil derails in Seattle

Thu Jul 24, 2014 12:08pm EDT

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By Edward McAllister

July 24 (Reuters) - A Burlington Northern Santa Fe train carrying crude oil derailed as it left a railyard in north Seattle on Thursday, but there were no reports of a spill or injuries, BNSF said in a statement.

Four railcars came off the tracks at around 2 a.m. PDT (0900 GMT), three of which were carrying crude oil, said BNSF, which is owned by Berkshire Hathaway. The train originated in North Dakota and was bound for Tesoro Corp's 120,000 barrel-per-day Anacortes oil refinery, 80 miles (129 km) north of the city, Tesoro confirmed.

The derailment comes at a pivotal moment for the booming crude-by-rail industry, which has come under intense scrutiny after a series of accidents over the past 18 months.

While small in comparison to recent explosive oil train derailments, Thursday's accident occurred a day after the U.S. Department of Transportation issued new safety proposals governing the transport of crude by rail, including phasing out older unsafe tank cars.

The rail cars that derailed were the CP-1232 model that meets the latest federal safety standards, BNSF said. The train is expected to be back on the track later on Thursday and the cause of the accident is under investigation.

Washington State has become a leading destination for crude-by-rail cargoes from the Bakken region of North Dakota and Montana, which produces oil that is lighter and more volatile than other grades of crude, according to recent government tests.

As many as 19 trains per week carrying Bakken crude oil transited through the state in recent months, according to BNSF data provided to emergency responders in Washington State, as required by a federal executive order this year.

Seattle authorities and residents have become skittish about the growing traffic. Seattle's city council in February passed a resolution urging the U.S. Department of Transportation to strengthen regulations and phase out older tank cars.

The Department of Transportation on Wednesday proposed that older cars be phased out in a staggered manner over five years.

Seattle's resolution also urged the state to assess the safety, environmental and economic risks tied to oil-by-rail traffic through the city and the state.

Washington Governor Jay Inslee has asked the state Department of Ecology to analyze those risks, including Bakken crude volatility, and develop spill response plans. That study is slated to wrap up in October.

There is already opposition to new crude-by-rail projects in the state, including Tesoro's proposed railport in Vancouver, Washington. (Reporting by Edward McAllister and Joshua Schneyer in New York and Kristen Hays in Houston; writing by Edward McAllister; Editing by Jeffrey Benkoe, James Dalgleish and Paul Simao)