The debate over oil stabilization can be a confusing one. It’s important to a lot of people because we’ve all read the headlines about, and seen the pictures of, explosive train derailments. But the information we get about the issue is often conflicting (and very often driven by politics, I’m afraid).
Currently the North Dakota Industrial Commission is considering a draft field order for conditioning Bakken oil before shipment. The rules would not only set a target for stabilization (measured by vapor pressure) but would also dictate how the industry would go about hitting that target.
Recently, while guest hosting the Mike Kapel show on WDAY AM970 in Fargo, I spoke with Kari Cutting of the North Dakota Petroleum Council about this issue. Cutting is a chemist, and so was able to shine a lot of light on the issue.
It may surprise you to learn that most of the oil coming out of the Bakken is already being conditioned. According to Cutting, every oil company operating in North Dakota already has various methods for conditioning Bakken crude. What’s currently missing is a government-mandated target standard for that conditioning (the vapor pressure) and standardized procedure for hitting it.
It may also surprise you that the Petroleum Council, as representatives for the industry in the state, aren’t necessarily against the former.
Cutting told me the industry would welcome a standardized target for the condition the oil needs to be in before being shipped. After all, while some may rant about “bomb trains,” the truth is that nobody wants derailments or explosions. Going beyond the most important considerations about safety, oil is a valuable product. Derailments and explosions not only waste that product but create delays in bringing oil to market.
Not to mention heaping helpings of negative publicity.
But what the oil industry is objecting to is the state dictating the steps for reaching that target. They want to leave the various oil producers free to develop their own methods for hitting that target, something which would allow for innovation and invention.
Cutting says the industry is afraid that a state-mandated procedure would obviate innovation that might make the process more efficient and cheaper.
This seems like a reasonable compromise to me. While some environmental activists very much see it as their goal to micromanage the oil industry, I think more reasonable people would agree that we just want oil shipments to be safe. If we can do that by implementing a target for conditioning, without dictating how that target is to be reached, that seems to me to be the best of all worlds.