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N.D. regulators consider oil stabilization policy

Eric Florip | The Columbian (Vancouver, Wash.)

Most Clark County residents don’t pay close attention to the North Dakota Industrial Commission. But the three-member regulatory body has the authority to influence something increasingly familiar to Southwest Washington and the Northwest: oil trains.

The commission this week heard testimony on whether crude oil extracted from North Dakota’s Bakken oil fields should be “stabilized” before it’s transported by rail, and whether the process would make it safer. Stabilization strips flammable natural gas liquids from the oil, reducing its volatility, advocates argue.

The question has gained particular scrutiny in the wake of a string of high-profile derailments and explosions involving crude oil since last year. Multiple reports and analyses have found Bakken oil to be more volatile than other crudes.

A recent public hearing in Bismarck, N.D., drew a standing-room-only crowd, according to the state Department of Mineral Resources. But much of the hearing was dominated by oil producers who resisted calls to further stabilize Bakken crude before it’s transported. The companies maintain that the oil’s properties are largely the same as other crude sources.

“Requiring stabilization beyond current conditioning practices would be a costly, redundant process that would not yield any additional safety benefits,” Kari Cutting, vice president of the North Dakota Petroleum Council, told the industrial commission. Audio of the hearing was posted online.

Oil producers in North Dakota already treat crude at well sites when it’s first pumped out of the ground. On-site equipment separates water and some gases from the oil before it’s loaded into trucks, pipelines and rail cars. Stabilization would remove additional flammable natural gas liquids and reduce the risk of explosions involving trains carrying Bakken oil, critics say. But North Dakota, in the midst of a historic oil boom, lacks the infrastructure and facilities for stabilization that are commonplace elsewhere.

Related: The question of Bakken oil volatility must be settled

In arguing against the need for stabilizing oil, several speakers cited an industry-funded study finding Bakken crude to be comparable to other oils. The report by Turner, Mason & Co., released earlier this year, was commissioned by the North Dakota Petroleum Council.

“The results of the study support our position that there is no practical difference in the characteristics of Bakken crude and other light crudes, and that it is suitable for shipments in current rail tank cars,” Brent Lohnes, director of field and plant operations for oil producer Hess Corporation, said during the hearing.

Cutting also noted that the stabilization process creates by-products that would have to go somewhere.

“The result could be a separate set of flammable liquids or flammable gases being transported by truck or rail,” she said.

More than 11,000 oil wells produce an average of 1 million barrels of crude per day in North Dakota, almost all of that from the Bakken fields in the western half of the state. Washington is on the receiving end of much of that oil, some 60 percent of which travels by rail. Clark County sees two to three oil trains per day roll through on the way to West Coast refineries. A proposed oil transfer terminal at the Port of Vancouver could more than double that.

Locally, opponents of oil-by-rail have focused their efforts on the Vancouver terminal, not stabilization of the crude itself. That’s largely because the oil terminal, still under review, is a fight they believe they can win.

“It’s easier to stop something that hasn’t been built than something that’s already going,” said Vancouver resident Don Steinke, who opposes the terminal.

Steinke said Bakken oil stabilization would be a good thing. But it wouldn’t address the risk of spills or other negative impacts, he said.

It’s unclear whether the North Dakota Industrial Commission will take action on stabilization. The commission, which oversees oil and gas and other industries in the state, could issue any new regulations in the next three months.

 

This article was written by Eric Florip from The Columbian, Vancouver, Wash. and was legally licensed through the NewsCred publisher network.