North Dakota Gets Front Row Seat On Rail Stresses
By Tom Curry
Posted at 7:30 a.m. Dec. 10, 2014
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Scott Berreth, a derrick hand, works on an oil rig drilling into the Bakken shale formation outside Watford City, N.D. (Photo by Andrew Burton/Getty Images)
State lawmakers visiting Washington for the National Conference of State Legislatures Forum got a briefing Tuesday from a federal rail safety regulator and a representative of the oil industry on the issue of moving crude oil by rail.
Two-thirds of the crude from North Dakota’s Bakken region is being moved by rail. Bakken production is about one million barrels a day, accounting for about a quarter of U.S. production, according to the American Petroleum Institute, and could reach two million barrels a day by 2020.
Robert Benedict, an official with the Pipeline and Hazardous Materials Safety Administration, told the legislators that due to the volume of comments and economic data that it has received, PHMSA may not meet the March 2015 target for issuing a regulation on tank cars and safer oil shipment.
“We really want to make sure we do get it right,” he said.
(A summary of the omnibus spending bill released by the Senate Appropriations Committee Tuesday night said the bill directs PHMSA to issue new tank car regulations no later than Jan. 15 of next year, but a search of the bill’s text found no explicit language on that point.)
One complaint at the briefing, by API official Bob Greco, was that PHMSA “overestimates the ability [of oil shippers] to quickly retrofit tank cars.”
Oil and railroad trade groups, he said, “are committed to a realistic retrofit schedule and we’re trying to work with PHMSA to educate them about the actual shop capacity.”
He added, “If you put in an unrealistic schedule, you risk retiring cars prematurely and potentially shutting down production and jeopardizing our energy renaissance.”
With a front-row view of the benefits and stresses of the Bakken boom is North Dakota House Majority Leader Al Carlson of Fargo, a Republican and co-chairman of the NCSL Task Force on Energy Supply. Rail capacity is overburdened, and his state is witnessing the struggle between oil and commodities such as wheat. (North Dakota ranks second to Kansas in wheat production.)
“It was very contentious for a while, but it has gotten better,” Carlson said Tuesday. “Burlington Northern has invested tremendously in our state…. And it is better, but we’re still having a huge backlog in farm commodities.”
Of the pending PHMSA rule on tank car safety, Carlson said, “Does it ever relieve people’s tension? No. There’s a lot of trains going through our towns. When we have 80 trains going through my city a day in Fargo, going east and west, that’s a lot of trains.”
In a separate development, the North Dakota Industrial Commission approved an order on Tuesday requiring Bakken crude to be made more stable before being shipped by rail. The oil must have a vapor pressure under a threshold set by the state to try to ensure that it will be less volatile
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The Container covers the transportation community in Washington.
Tom Curry (@TCurry_Himself) writes for The Container. He has been a national affairs reporter and editor for nearly two decades, having covered elections, Supreme Court nominations, fiscal policy and the health care debate.
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