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May 20, 2014
DOT orders Bakken crude notifications

The Department of Transportation (DOT) seems to be doing everything in its power to get the nation’s railroads to treat the transportation of crude oil from the Bakken shale formation in the Williston Basin of North Dakota and Montana as an unprecedented risk that requires decisive safety measures.  Over the past 10 months alone, DOT’s Federal Railroad Administration (FRA) and Pipeline and Hazardous Materials Safety Administration (PHMSA) have taken more than a dozen actions to enhance the safe transport of crude oil. 

The main concern is the dramatic increase in rail shipments of Bakken crude to Gulf Coast refineries and pipeline connections in Oklahoma.  Those actions include emergency orders, safety advisories, safety alerts, proposed regulations, and agreements in which railroads commit to voluntary safety measures or programs. 

The two latest measures, announced simultaneously, are an emergency order requiring railroads to notify the State Emergency Response Commissions (SERC) about certain shipments of Bakken crude and a safety advisory urging railroads to use newer tank cars in the shipment of Bakken crude. 

One billion barrels

There is little disagreement that DOT’s level of concern is unwarranted.  Petroleum production in the Williston Basin has accelerated to an extraordinary degree.  Continental Resources, one of the largest producers in the region, recently reported that cumulative oil production in the Bakken shale formation reached the billion barrel mark in the first quarter of 2014, two-thirds of which was produced in the past 3 years.  As a result, the United States has experienced a rapid increase in the amount of crude oil being transported by rail.

Trains shipping crude oil can consist of over 100 cars, and the DOT notes that the number of types of petroleum crude oil railroad accidents that have occurred over the past year is “startling.”  Most recently, on April 30, 2014, 17 tank cars in a train of 105 cars loaded with petroleum crude derailed in Lynchburg, Virginia.  One car was breached, a petroleum fire ensued, emergency responders evacuated approximately 350 people, and 30,000 gallons of crude spilled into the James River.  Other major incidents include a catastrophic derailment in Lac-Mégantic, Quebec, in July 2013 that resulted in the deaths of 47 people.

Emergency order

Effective 30 days after the May 7, 2014, date of the emergency order, any railroad transporting 1 million gallons or more of Bakken crude oil will be required to provide SERC with the following information:

  • A reasonable estimate of the number of trains that are expected to travel per week through each county within the state;
  • The petroleum crude oil expected to be transported in accordance with PHMSA’s hazardous materials regulations (HMRs) at 49 CFR Part 172, Subpart C;
  • All applicable emergency response information required by 49 CFR Part 172, Subpart G; and
  • The routes over which the material will be transported.

The notification must also identify at least one point of contact at the railroad, who is responsible for communication with SERC regarding Bakken crude.  In addition, to ensure that the information provided to SERC remains reliable, railroad carriers must update their notifications before making any material changes in the estimated volumes or frequencies of trains traveling through a county.

Safety advisory

In the safety advisory, the FRA and PHMSA note that carriers continue to use older “legacy” tank cars lacking modern construction and safety enhancements to transport hazardous materials, including Bakken crude.  Accordingly, the FRA and PHMSA recommend that offerors and carriers of Bakken crude oil by rail select and use only tank car designs with the highest level of integrity “reasonably available within their fleet.”  The features that offerors should consider in assessing tank car integrity include tank shell jacket systems, head shields, and top fittings protection.

The FRA and PHMSA are also advising carriers to avoid the use of older, legacy DOT Specification 111 or CTS 111 tank cars for shipment of such oil “to the extent reasonably practicable.”

Emergency order

Safety advisory

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