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 The controversial step is designed to abrogate the damage North
Dakota crude oil - 70 percent of which is transported via rail - can
cause during derailments.
In the absence of concrete regulations from the U.S. Department of
Transportation, North Dakota's new rules become the de facto
national standard on the treatment of crude before tankcar loading.
"North Dakota's crude oil conditioning order is based on sound
science and represents an important step in the ongoing work to
ensure that oil-by-rail transportation is as safe as possible," said
Governor Jack Dalrymple, who has also been pushing federal
regulators for stricter rail car designs.
The new regulations require every single barrel of North Dakota
crude to be filtered for ethane, propane and other natural gas
liquids (NGLs), which are found naturally co-mingled with oil.
North Dakota crude contains a far-higher percentage of those gases
than, for instance, crude extracted in Texas or Alaska, and that
added volatility fueled a deadly derailment in Quebec in late 2013,
as well as a string of successive disasters.
The goal would be to produce a barrel of Bakken crude with pressure
of no more than 13.7 psi, similar to 13.5 psi for most automobile
gasoline.
Because most of the oil extracted in the United States via hydraulic
fracturing, commonly known as "fracking," is transported by rail,
North Dakota's rules will influence regulatory decisions in
Colorado, Wyoming and new shale fields, and have a national ripple
effect.
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Dalrymple and two other members of the North Dakota Industrial
Commission, the state's energy regulator, spent months collecting
data and reviewing testimony from oil companies, academics,
residents and investors on how best to implement the crude treatment
rules.
The triumvirate relied heavily on a crude quality report from Turner
Mason & Co funded by the state's oil producers that downplayed the
volatility of North Dakota oil. That's proven a delicate balancing
act for the oil industry, which also touts the appeal of the state's
crude to refiners.
"North Dakota officials need to think more about the safety and
health of all the people who live along train tracks nationwide,"
said Don Morrison, head of the Dakota Resource Council, an
environmental group. "These new rules don't cut it."
(Reporting by Ernest Scheyder; Editing by Terry Wade)
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