After Train Explosions, US Warns About Bakken Oil

Shares of Whiting Petroleum Corp , Continental Resources Inc and other top crude oil producers in the Bakken shale formation plunged on Thursday after the U.S. government said oil produced there may be extra flammable.

The warning came three days after a BNSF train carrying crude oil collided in eastern North Dakota with another train carrying grain. The resulting explosion led to the temporary evacuation of a nearby town and added to the growing concern about the safety of oil-by-rail shipments.

Last July a runaway oil train, which originated in North Dakota, derailed and exploded in a small Quebec town, killing 47 people.

Oil extracted from the Bakken, a vast rock formation underneath North Dakota and Montana, “may be more flammable than traditional heavy crude oil,” the Pipeline and Hazardous Materials Safety Administration, part of the U.S. Department of Transportation, said on Thursday.

Whiting & Continental, the largest Bakken producers, saw their shares fall more than 3.5 percent after the announcement. Shares of Oasis Petroleum Inc, Kodiak Oil & Gas Corp and Northern Oil & Gas Inc saw similar drops.

Crude oil prices also fell, contributing to the decline.

The U.S. government’s warning should come as no surprise considering refineries and other oil buyers value the high energy content of Bakken crude oil, said Ron Ness, the head of the North Dakota Petroleum Council, a trade group for oil producers.

“I don’t think there’s any surprise that Bakken crude oil is the highest quality crude oil available and it has more of those high-end components that you’re looking for in a top-shelf crude oil,” Ness said.

Ness said Whiting and other producers he represents follow current federal standards for oil-by-rail shipment. He said the U.S. government should consider updating transportation regulations that currently put crude oil in the same category as ammonia and other chemicals for safety standards.

Oil producers are not responsible for their product once it is loaded onto railcars, a process that typically comes as sale of the oil is finalized. Logistics companies often buy oil from producers and arrange to have it shipped via rail or other means, before selling it to the end user.

The oil involved in the Monday crash was loaded onto the train in Fryburg, North Dakota, and was headed nearly 1,300 miles (2,092 km) to Hayti, Missouri.

Sources familiar with the loading operations told Reuters on Tuesday that Houston-based logistics company Great Northern Midstream loaded the crude at Fryburg, and it was to be unloaded at Marquis Energy’s storage terminal and barge loading facility at Hayti, along the Mississippi River.

“When the train leaves the station, (the oil) is in someone else’s hands,” Ness said.

The American Association of Railroads (AAR), an industry trade group for BNSF and others, said it has worked with federal regulators to try and increase railcar design standards and other regulations. Railways do not inspect material they ship, and simply transport it from one location to another.

A member of the National Transportation Safety Board said on Tuesday that railcars involved in the crash were all older types that do not meet the latest industry safety standards.

RIGZONE

8 Comments on "After Train Explosions, US Warns About Bakken Oil"

Dave Thompson on Fri, 3rd Jan 2014 3:38 am 



“I don’t think there’s any surprise that Bakken crude oil is the highest quality crude oil available and it has more of those high-end components that you’re looking for in a top-shelf crude oil,” Ness said. This is a surprise to me that the stuff from Bakken is considered of the highest quality. Correct me if I am wrong but I was told it is not even called “crude oil” but Kerogen. In geological terms a substance that is missing the final pressure cooking that makes it “crude oil”.

Makati1 on Fri, 3rd Jan 2014 4:55 am 



This is what I found… “Bakken crude oil gravity ranges from 36 to 44 degrees API. The quality of this oil is excellent, almost identical to WTI. The benchmark crude oil is West Texas Intermediate, which is 40 degrees API sweet crude. It is the benchmark because it requires the least amount of processing in a modern refinery to make the most valuable products, unleaded gasoline and diesel fuel.”

If this is true, they will bleed the Bakken dry.

Makati1 on Fri, 3rd Jan 2014 4:57 am 



That would support the comment here: “… U.S. authorities said Thursday crude oil shipped by rail from the Bakken shale in North Dakota across the United States and Canada “may be more flammable” than other types of oil,…”

http://business.financialpost.com/2014/01/02/bakken-crude-north-dakota/?__lsa=f522-cabc

Plantagenet on Fri, 3rd Jan 2014 6:29 am 



First the BO administration blocks the keystone pipeline. Then, when the dangers of transporting by train are exposed by a series of train fires, they try to blame the oil

More amateur hour stuff from the BO people

GregT on Fri, 3rd Jan 2014 6:39 am 



Plant,

“It is better to keep your mouth shut and appear stupid, than to open it and remove all doubt”

You are either a shrill for the oil and gas industry, or you are totally clueless. I suspect the latter, but I could be wrong.

J-Gav on Fri, 3rd Jan 2014 10:19 am 



As sending oil by rail ramps up, we can expect more fireballs in Canada and the U.S. … Enjoy the show. Happy New Year!

shortonoil on Fri, 3rd Jan 2014 4:26 pm 



30 to 50% of Bakken production is “field condensate”. Field condensate is not crude oil, it is mostly penatane, a much lighter and less useful hydrocarbon fraction. The EIA began including field condensate into crude production numbers in the 1970’s when field condensate production amounted to about 3% of conventional crude production. They did this for convenience, as its small percentage was usually just mixed in with the regular crude production, and it had very little impact on the crude’s overall quality.

Crude oil has been shipped by rail since the late 1800’s. John D. Rockefeller got very rich by forcing the railroads to pay him a percentage on his competitions shipments. The rail industry is very familiar with crude, but they have had very little experience with condensate. It just didn’t exist in significant quantities until shale came into being. Most condensate came from NG plants (known as plant condensate). It was shipped to the end consumer (mostly the chemical industry) by truck.

As we have been saying for quite awhile, rail crude cars were not designed to handle the lighter condensate. The “sloshing” in the cars is going to have a tendency to flip cars off the tracks. With much of the nation’s rail routes in poor condition, this will remain a dangerous situation. With vulture capitalist like Buffet now controlling much of Eastern and Mid Western rail service (along with opinion in the White House) not much will be done without a major public outcry.

With the Bakken slated to go into rapid decline within the next couple of years, there is going to be a stalling tactic used by the shale industry, White House, and the railroads. Modifying these cars, or replacing them would cost 100’s of $millions. If you live, or work next to a rail line hauling a lot of shale oil production —- buy a very big fire extinguisher.

rockman on Fri, 3rd Jan 2014 7:48 pm 



OK: a little perspective. First, if the desire is to reduce accidental deaths maybe we should ban alcohol…again. That would have prevented the 10,000+ drunk driving deaths in 2012. Yeah…no problem getting public support for that plan. LOL.

Second, refined products, such as gasoline and diesel, are much more explosive than any crude oil. And billions of gallons of these products are shipped by rail as well as truck and barge. Easy statistics to show the odds of anyone in the US being killed by a tanker deliver fuel to a local Chevron station is much greater than being killed by exploding oil in a rail accident. And we don’t need to even need to talk about how many folks are killed by exploding fuel tanks in the hundreds of millions of vehicles on the road today. And do we need talk about the millions of gallons of much more toxic materials, like chlorine and hydrofluoric acid, that shipped by rail? Anyone else besides the Rockman been ordered to shelter in place due to such an accident?

And how much of these refined products ship by various methods? From: http://www.manhattan-institute.org/html/ib_23.htm#.Usb64n_nad4

About 60% by pipeline and 40% by rail, truck and water. Growing up in New Orleans I saw more than my share of exploding barges.

Interesting that while searching for stats this one pitching electric vehicles popped up:

“Since the Model S went into production last year, there have been more than a quarter million gasoline car fires in the United States alone, resulting in over 400 deaths and approximately 1,200 serious injuries (extrapolating 2012 NFPA data). However, the three Model S fires, which only occurred after very high-speed collisions and caused no serious injuries or deaths, received more national headlines than all 250,000+ gasoline fires combined. The media coverage of Model S fires vs. gasoline car fires is disproportionate by several orders of magnitude, despite the latter actually being far more deadly.” So maybe the solution to preventing deaths by rail transported oil would be to ban ICE’s. Yep…then we wouldn’t have to ban booze. Win-win. LOL.

Seems the same point about obsessing over a small number of incidents can be made about the safety of transporting any hydrocarbons via rail vs. other methods. And so far it appears that super safe rail tankers would not have prevented the recent calamities: one might be able to build a tanker that doesn’t slosh but I’m pretty sure you can’t build one that doesn’t rip apart when it derails or is hit by another train.

Lots of ways to be killed by hydrocarbons:

1984 México 500+ dead and 5,000+ severely burned when LPG tank farm explodes

2010 Congo Gasoline tank truck explodes killing 280

1978 Spain Tank truck explodes killing 217

1992 México Fuel station tanks leak into sewers 206 killed and 15,000 homeless

1994 Russia NG explosion in apt building. 200 dead

2009 Kenya Oil tank truck explodes. 140 dead

1944 Cleveland Above ground LNG tank explodes. 200 dead

2012 Nigeria Fuel tank truck explodes. 140 dead

1995 India Fuel tank truck explodes 105 dead

1980 Turkey Home LPG explosion 105 dead

1995 S Korea NG explosion in subway 103 killed

I’ll skip the hundreds of other non-rail hydrocarbon related accidents with death tolls under 100.

And then there are the thousands who have died in rail accidents that didn’t involve hydrocarbons including rather sophisticated systems such as in Japan where the Amagasaki crash killed 107 in 2005.

It would be nice to live in a world where no one died in a rail accident. Or a plane crash. Or a school bus crash. Or in a firefight trying to stabilize an oil producing region in the Middle East.