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Zach Koppang//Shale Plays Media

Goal in oil conditioning regs should be outcome not method

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.

8 comments

  1. On Thursday November 13th, Department of Mineral Resources Director Lynn Helms presented the North Dakota Industrial Commission with proposed new standards (there never were any old standards), supposedly for the purpose of making the Bakken oil trains non-explosive, somewhat less explosive, kinda not explosive, get the height of the fireballs down into double digits…I don’t know.

    But, if the goal is to render the Bakken oil trains NON-explosive, the proposal to “condition” the crude isn’t going to cut it.

    The producers have ALWAYS “conditioned” the crude, but, evidently, NOW they’re going to be “forced” by the North Dakota Industrial Commission to turn the knob a few notches to the right, and everything will be peachy.

    If it was that simple; perhaps they should have done that before dozens of people got killed…maybe sometime shortly after the first Bakken oil train derailed and blew sky high in 2008.

    They need to bring in the proper equipment to “stabilize” the crude, which will remove more than a fraction of highly explosive NGL’s like propane, ethane, and butane… but that option would cost the poverty stricken oil companies a substantial amount of money, and we can’t have that.

    On December 16, 2013, Lynn Helms; said his agency and the state Pipeline Authority are working to create a white paper that would study the characteristics of the state’s oil “to dispel this myth that it is somehow an explosive, really dangerous thing to have traveling up and down rail lines.”

    On November 13, 2014, Lynn Helms says, “The focus is safety first.” Uh huh.

    And…

    “We really believe that the vast majority of our Bakken crude oil will already fall well below the standard.”–Lynn Helms

    If Helms thinks that the “vast majority” is already safe for shipment, then why do the Bakken oil trains violently explode “EVERY” time they derail? We’re up to five as of today, and 47 deaths…five of whom were vaporized.

    Shockingly, the oil guys agree with Helms. (Jeff) Hume (Continental Resources vice chairman of strategic growth initiatives) said most of Continental’s Bakken oil already is below the proposed limit, and that the company would be able to easily comply with the new regulations.

    Now; how did that happen?

    All of that is more than a little dodgy, but get a load of this:

    Bakken producers aren’t just leaving explosive natural gas liquids in the crude; some are adding them…just in case 3 million gallons of “flammable” liquid per train isn’t dangerous enough.

    And our ND oil regulators had to know about it, and did nothing about it,..or else how would they know to make the rule. The practice is just going to be “limited” though, so there’s no reason for Ron Ness to freak out.

    “The rules also would limit the practice of blending Bakken crude with more volatile fuels.”–NEWSOK

    All of this sudden concern for safety is an obvious con, including the phony outrage of the ND Petroleum Council.

    Railway Age called it on September 26th…

    “The state’s (North Dakota) three-person Industrial Commission seems likely to adopt a set of industry-designed best practices. Simply put, North Dakotan crude will have to be lightly pressure-cooked to boil off a fraction of the volatile “light ends” before shipment.”

    This conditioning lowers the ignition temperature of crude oil—but not by much. It leaves in solution most of the culprit gases, including butane and propane.

    Even the industry itself says conditioning would not make Bakken crude meaningfully safer for transportation, though it would make the state’s crude more consistent from one well to another.

    The only solution for safety is stabilization, which evaporates and re-liquefies nearly all of the petroleum gases for separate delivery to refiners. Stabilization is voluntarily and uniformly practiced in the Eagle Ford formation in Texas…”–Railway Age

  2. Well duh…do activists think oil industry wants to waste oil by leaking during shipment. Uh no. Activists just want there cut of an industry that’s making money. It all boils down to money and they want more then their share.

  3. On Thursday November 13th, Department of Mineral Resources Director Lynn Helms presented the North Dakota Industrial Commission with proposed new standards (there never were any old standards), to “condition” the Bakken crude, supposedly for the purpose of making the Bakken oil trains non-explosive, somewhat less explosive, kinda not explosive, get the height of the fireballs down into double digits…I don’t know.

    But, if the goal is to render the Bakken oil trains NON-explosive, the proposal to “condition” the crude isn’t going to cut it.

    The producers have ALWAYS “conditioned” the crude, but, evidently, NOW they’re going to be “forced” by the North Dakota Industrial Commission to turn the knob a few notches to the right, and everything will be peachy.

    If it was that simple; perhaps they should have done that before dozens of people got killed…maybe sometime shortly after the first Bakken oil train derailed and blew sky high in 2008.

    They need to bring in the proper equipment to “stabilize” the crude, which will remove more than a fraction of highly explosive NGL’s like propane, ethane, and butane… but that option would cost the poverty stricken oil companies a substantial amount of money, and we can’t have that.
    On December 16, 2013, Lynn Helms; said his agency and the state Pipeline Authority are working to create a white paper that would study the characteristics of the state’s oil “to dispel this myth that it is somehow an explosive, really dangerous thing to have traveling up and down rail lines.”

    On November 13, 2014, Lynn Helms says, “The focus is safety first.” Uh huh.

    And…

    “We really believe that the vast majority of our Bakken crude oil will already fall well below the standard.”–Lynn Helms

    If Helms thinks that the “vast majority” is already safe for shipment, then why do the Bakken oil trains violently explode “EVERY” time they derail? We’re up to five as of today, and 47 deaths…five of whom were vaporized.

    Shockingly, the oil guys agree with Helms. (Jeff) Hume (Continental Resources vice chairman of strategic growth initiatives) said most of Continental’s Bakken oil already is below the proposed limit, and that the company would be able to easily comply with the new regulations.

    Now; how did that happen?

    All of that is more than a little dodgy, but get a load of this:
    Bakken producers aren’t just leaving explosive natural gas liquids in the crude; some are adding them…just in case 3 million gallons of “flammable” liquid per train isn’t dangerous enough.

    And our ND oil regulators had to know about it, and did nothing about it,..or else how would they know to make the rule. The practice is just going to be “limited” though, so there’s no reason for Ron Ness to freak out.

    “The rules also would limit the practice of blending Bakken crude with more volatile fuels.”–NEWSOK

    All of this sudden concern for safety is an obvious con, including the phony outrage of the ND Petroleum Council.

    Railway Age called it on September 26th…

    “The state’s (North Dakota) three-person Industrial Commission seems likely to adopt a set of industry-designed best practices. Simply put, North Dakotan crude will have to be lightly pressure-cooked to boil off a fraction of the volatile “light ends” before shipment.”
    This conditioning lowers the ignition temperature of crude oil—but not by much. It leaves in solution most of the culprit gases, including butane and propane.

    Even the industry itself says conditioning would not make Bakken crude meaningfully safer for transportation, though it would make the state’s crude more consistent from one well to another.
    The only solution for safety is stabilization, which evaporates and re-liquefies nearly all of the petroleum gases for separate delivery to refiners. Stabilization is voluntarily and uniformly practiced in the Eagle Ford formation in Texas…”–Railway Age

  4. The Bakken producers know how to strip the explosive natural gas liquids from the crude, so the oil trains don’t explode. Why haven’t they?

  5. Which environmental activists? Does Rob Port mean those that have demanded the “stabilization” of Bakken crude, like firefighters, Governors, Mayors, Congresspeople, citizens, and other non-environmental activists, or does he have no idea what he’s talking about?

  6. Stabilization and conditioning aren’t the same. Maybe that’s why the author is confused.

  7. (and very often driven by politics, I’m afraid) says Rob Port the expert pundit. Name one ND politician that even brought up the topic in the last election.

  8. The Coalition for Bakken Crude Oil Stabilization

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