The U.S. Department of Transportation (DOT) has proposed fining three oil companies a combined $93,000 for allegedly misidentifying Bakken Shale crude oil slated for rail transport. This comes as the agency probes the growing oil-by-rail activity that has resulted in the past months in a number of fiery derailments. The Pipeline and Hazardous Materials Safety Administration (PHMSA), a division of the DOT, has issued notices of probable violations against Hess Corp., Marathon Oil Corp. and Whiting Gas and Oil Corp. An investigation revealed that crude oil taken from cargo tanks scheduled for rail loading facilities was not properly classified by the companies.
Shippers are required to use nine hazard classes in order to properly classify hazardous materials. Shipping crude oil — or any hazardous material — without proper testing and classification could result in it being shipped in containers that aren’t designed to safely store it. Also that could lead emergency workers to follow the wrong protocol when responding to a spill, according to the DOT. Transportation Secretary Anthony Foxx said last month in a statement:
Transportation has an important role to play in helping meet our country’s energy needs, thanks to the increased production of crude oil, but our top priority is ensuring that it is transported safely. The fines we are proposing today should send a message to everyone involved in the shipment of crude oil: You must test and classify this material properly if you want to use our transportation system to ship it.
As has been widely reported, because of the U.S. energy boom in this country, rail transportation of crude oil has grown dramatically. With U.S. crude oil production at its highest levels in two decades and outpacing pipeline capacity, the U.S. Energy Information Administration said nearly 1.4 million barrels per day of crude oil and refined petroleum products were transported by rail in the first half of 2013. This compares to 927,000 barrels a day in the first half of 2012 — almost a 50 percent increase.
Much of that growth has occurred in the Bakken. PHMSA launched an investigation that tested samples from various points along the crude oil transportation chain to verify that crude oil was being properly classified. Inspectors found that 11 of the 18 samples taken from cargo tanks delivering crude oil to rail loading facilities weren’t assigned to the correct packing group, according to PHMSA. Administrator Cynthia Quarterman made this observation in a statement:
These initial findings remind us how important it is to follow the hazardous materials regulations and to do it in the proper sequence. The process begins by testing, characterizing and then properly classifying the hazard and putting it in the kind of container that will offer the highest level of safety.
PHMSA is expanding the scope of its probe to include testing for other factors that affect classification of hazardous materials for transport, including corrosivity. Three separate fiery crashes brought a great deal of media attention on the subject of crude oil rail transport. The most recent derailment occurred Dec. 30 when a BNSF Railway Co. train carrying crude oil from the Bakken Shale collided with another train near Casselton, N.D. This caused several train cars to derail and catch fire. Just a month earlier, a crude-oil-carrying train owned by Genesee & Wyoming Inc. derailed in west Alabama, causing several of the railcars to burst into flames. Fortunately, no one was injured or killed in those crashes.
But that wasn’t the case in July 2013, when a Montreal, Maine and Atlantic Railway Ltd. freight train hauling 72 tankers of crude oil derailed in Lac-Megantic, Quebec, a town of approximately 6,000 people located 10 miles from Maine’s western border. The derailment set off massive blasts. A part of the downtown was destroyed and 47 people were killed.
After a recent meeting with Secretary Foxx, oil and rail industry representatives agreed to enact a series of voluntary safety measures. But so far, there are no mandatory regulations in place. PHMSA said in a Federal Register posting in January that it wouldn’t finalize rules governing the construction of rail tanker cars until at least January 2015. That is a long way off and more derailments will very likely happen in the interim. Meanwhile, the National Transportation Safety Board (NTSB), the agency responsible for investigating train crashes and other transportation accidents, is urging the DOT to adopt tougher safety measures for trains carrying crude oil. One of the measurers would reroute trains around populated areas.
Hopefully, the DOT is really listening now and will act promptly, making the railroads put safety as a top priority on their agenda. Clearly, this is a most serious problem that must be dealt with. I believe most U.S. citizens expect the DOT to take the steps necessary and to do so promptly.
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