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In the 200 pages of the new proposed oil-by-rail regulations the American Petroleum Institute (API) is mentioned 31 times. The mentions include everything from comments the API submitted during the last public comment period to the reality that the regulators writing these new regulations are relying on the API to develop new testing standards for Bakken crude oil.

While the new regulations are supposed to address the need for proper testing of the Bakken crude for classification purposes, they fail to address several important concerns. And when it comes to creating an industry standard for testing crude oil, the Pipeline and Hazardous Material Safety Administration (PHMSA), who wrote the proposed regulations, are actually relying on the API to do that for them. From the regulations:

PHMSA is encouraged by the development of such an industry standard and API’s continued work in the standard and beyond to improve the accuracy of classification of materials and the overall safety or operational rail requirements. Once finalized PHMSA may consider adoption of such a standard and in addition those in the regulated community may petition for the incorporation of such standard through the processes outlined in section 106.95 of the HMR.
So, the API is developing an “industry standard” for testing crude oil and PHMSA “may consider adopting it” in the future or the “regulated community”, which includes the API, could petition to have that standard adopted. But there is no proposed standard in the current regulations.

The lack of any standards for sampling or testing Bakken crude has been crucial to the success of the API’s efforts to say that Bakken crude oil is no different than any other and thus it is safe to be transported in the current DOT-111 tank cars. As reported by Reuters,the industry’s testing that they use to support their claims is “incomplete and out-of-date.”

“...the industry findings hinge on incomplete and out-of-date methods for determining vapor pressure, an important indicator of volatility, that may miss the true dangers of Bakken fuel, according to several industry officials.”
And now the government is not only relying on API to develop the standards, they are not proposing any sampling or testing standards in the current proposed regulations.

In one final nod to the API and the oil industry, the proposed regulations are sure to note that while they are going to require the industry to test the oil, they don’t require those test results to be retained.

It should be noted the while the sampling and testing program is required to be documented in writing and retained while it remains in effect we are not require[sic] a specified retention requirement for the actual testing records.
So no history of actual testing records will be required. This from regulators who say they are looking to get more information on Bakken crude oil so they can better understand it.

Vapor Pressure

In the proposed regulations they specifically mention that prior to 1990, it was required to test the vapor pressure of materials to properly classify them in order to be able to choose the safest and most appropriate tank car.

The older regulations recognized that those flammable liquids that exhibited high vapor pressures, such as those liquids with dissolved gases require additional care in packaging.

High vapor pressure is one of the characteristics that has been noted as making the Bakken crude more dangerous. At a National Transportation Safety Board hearing about oil-by-rail safety in April, Robert Fronczak of the American Association of Railroads (AAR) stated that thehigh vapor pressureled them to believe that a pressure car was necessary to transport Bakken crude.

“We are just not sure what we’re handling,” Fronczak said. “We’ve done some minor sampling, you know a few samples that indicate that the crude oil does have a high vapor pressure and a fairly high amount of dissolved gas and so we feel a pressure car is more appropriate.”
And yet the new proposed regulations do not require vapor pressure testing. But once again, PHMSA says they will consider including it if the “regulated community” requests they do.
We are not currently proposing any regulatory changes related to vapor pressure of a material. However, PHMSA seeks comments from the regulated community on the role of vapor pressure in the classification, characterization, and packaging selection process for a flammable liquid and whether regulatory changes to establish vapor pressure thresholds for packaging selection are necessary.
However, the API has been quite clear that they don’t think Bakken crude is any different than other crude oil based on statements by their CEO Jack Gerard.
“It is essential to separate fact from fiction as we work to enhance the safe transportation of crude oil. Multiple studies have now debunked the idea that Bakken crude is meaningfully different than other crudes.”
So the likelihood of the API or any other industry members lobbying to strengthen regulation of their industry is next to none.

API Encourages Regulation of Rail Companies

Just as the AAR has said the think Bakken crude is more dangerous and deserves to be regulated since that doesn’t affect their rail industry members, the API is quite vocal about the need to regulate the rail industry. This public display of showing concern for the public’s safety when it doesn’t require your own industry to do anything has been a constant in the many hearings and meetings on oil-by-rail safety in the past year. However, as shown by the content of the industry meetings with OIRA held in private, this concern is reserved for public comments.

When it comes to the antiquated braking systems used on most trains, the API’s opinion on this included in the new proposed regulations goes so far as to “encourage” PHMSA to do their job and require modern braking systems. From the proposed regulations:

API encourages PHMSA to evaluate DP [Distributed Power braking] and the development of a mid-train signaling device.
And they don’t stop there. When it comes to rail safety, the API also is concerned about track maintenance. The proposed regulations include the following API comment:
“broken rails or welds caused more major derailments than any other factor. According to task force 87.6, broken rails or welds resulted in approximately 670 derailments between 2001 and 2010.”
So the API is concerned about the railroads making safety enhancements. As the AAR is concerned about the oil industry doing the same. Which, if it was anything more than political kabuki, would appear to make these two industries adversaries. However, the week before the release of the new regulations, they were in complete agreement on two things.  
The two groups said they would oppose lower train speeds and mandatory stabilization for some crude oil deemed more volatile.
The two things that could do the most to make the public safer, but that would cut into industry profits, are the two things that the API and AAR agree can’t happen. Slower trains are safer. And if the Bakken crude was stabilized, there would be no more “bomb trains” because the oil would no longer be explosive.

Interestingly enough, if the Bakken crude was stabilized it might be able to be shipped in the DOT-111’s under the new regulations, an option that is mentioned in the proposed regulations.  

But with the API against “mandatory stabilization”, it is likely the bomb trains will be around in one form or another as long as there is Bakken flowing from wells in North Dakota.

Formalized Self Regulation

The next best thing for an industry to self regulation is to be directly involved in writing any regulations. The American Petroleum Institute is likely to be the most influential group regarding the finalized new regulations for the transportation of oil by rail.

From defining the borders of the debate by taking stabilization of Bakken crude off the table for discussion to actually being in charge of creating the “industry standards” for testing and classifying Bakken crude, the American Petroleum Institute will effectively make these new regulations exactly what they need. The politicians will take credit for making the public safer, the expansion of the oil-by-rail boom will continue unabated and industry profits will be protected.

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Comment Preferences

  •  What is the engineering and risk assessment basis (0+ / 0-)

    implicit with your decision to nearly solely focus only on the issue of vapor pressure testing for transported crude oil when that is only a small part of the overall physical aspect of railroad crude oil transportation?

    If the same tanker rolling equipment with the same technology would be used to transport both higher and lower volatility crude oil, why is the testing issue here so important that you ignore all of the other technical, regulatory and policy issues that are pertinent to this issue?

    •  higher volatility? (2+ / 0-)
      Recommended by:
      bear83, Glen The Plumber

      Please cite an example of higher volatility crude oil that is being transported by rail when compared to Bakken.

      I'm not ignoring any other aspects of safety. Which ones would you like to discuss?  

      •  you said: (0+ / 0-)
        Please cite an example of higher volatility crude oil that is being transported by rail when compared to Bakken.
        Bakken Crude is transported in DOT-111 tank cars.   Your diary makes the overall suggestion that lack of testing of Bakken crude loads and the use of DOT-111 tank cars for Bakken Crude transportation is not safe or is otherwise not a proper practice.    

        The physical basis for these suggestions is not apparent from your diary, and you've not yet explained an engineering and risk assessment basis to your assertions.

        •  Perhaps you missed (3+ / 0-)
          Recommended by:
          Agathena, Glen The Plumber, bear83

          my earlier diary where it was clear that a member of the board of the National Transportation Safety Board said moving Bakken crude in DOT-111's was an "unacceptable public risk"

          It isn't the lack of testing that is the real problem. It is that the testing they do doesn't quantify the things you would want to quantify if you lived in close proximity to large amounts of Bakken crude.  Is Bakken crude more explosive and dangerous than regular crude oil?  The Pipeline and Hazardous Materials Safety Administration says yes.

          A quote from the PHMSA report.

          Given Bakken crude oil’s volatility, there is an increased risk of a significant incident involving this material due to the significant volume that is transported, the routes and the extremely long distances it is moving by rail.
          So, the DOT-111's are an "unacceptable public risk" and they are carrying crude oil that is much more volatile than other crude oils.  

          Please cite examples of crude oil with a high Reid Vapor Pressure than Bakken crude that have been transported in DOT-111's.  

  •  It shouldn't be up to the oil industry (2+ / 0-)
    Recommended by:
    Justin Mikulka, Glen The Plumber

    to determine safety standards for rail cars. They have an incentive to set the lowest, cheapest standards possible in order to keep their transportation costs down.

    The NTSB estimates that 69% of today's tank car fleet has a high incidence of tank failure during accidents. For cars transporting Bakken crude, corrosion problems are a concern. The Volatile chemicals in the oil (hydrogen sulfide, etc.) are likely accelerating the corrosion. Crude oil composition varies by region, and even within regions, making documentation of loaded crude oil, now under intense scrutiny, problematic. Corrosion-resistant tank linings are one solution, but they may render CBR less competitive due to the high cost of a lining—$7,000 to $10,000 per car—and the resulting reduction in tank capacity and higher transportation cost.

    Election Day is Nov 4th, 2014 It's time for the Undo button on the 2010 Election.

    by bear83 on Mon Aug 04, 2014 at 01:05:42 PM PDT

  •  Requiring "stabilization"...removal of (0+ / 0-)

    light ends in North Dakota, means an increase in the amount of energy and greenhouse gases per unit of crude oil delivered to a refinery.   Stabilization is a thermal process requiring crude heating to remove lower boiling point, low molecular weight hydrocarbon compounds.  

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