Winnipeg Free Press - PRINT EDITION

Railway will continue to haul Bakken crude

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BISMARCK, N.D. -- The main rail company moving crude oil out of the rich Bakken formation in North Dakota and Montana said a new federal emergency order on rail shipments will not affect shipments.

The U.S. Department of Transportation on Wednesday required railroads to inform state emergency-management officials about the movement of large shipments of crude oil. The agency also asked companies shipping oil from the Bakken region to stop using older-generation tank cars that have been involved in a spate of fiery derailments over the past year.

"We will comply with the new reporting requirements but do not anticipate they will impact our service," BNSF Railway Co. said in a statement. "We will continue moving the freight that our customers demand."

Public and political pressure to make oil trains safer began last summer, when a runaway oil train carrying Bakken crude derailed and exploded in Lac-Mégantic, Que., killing 47 people and incinerating much of the town. Other trains carrying Bakken crude have derailed and caught fire since then in Alabama, North Dakota, New Brunswick and -- just last week -- in Virginia.

Ron Ness, president of the North Dakota Petroleum Council, said Thursday Bakken crude is being unfairly targeted by regulators.

"We're still in kind of amazement that they singled out Bakken crude," said Ness, whose group represents more than 500 companies in North Dakota and Montana. "We believe Bakken crude is a superior crude and can be shipped by rail just like ethanol, gasoline, diesel and other crude oils."

Ness said his group commissioned an independent study of Bakken crude characteristics, the results of which will be shared with federal regulators this month. He said more than 150 oil samples were taken from well sites and rail facilities throughout North Dakota and Montana and sent to independent laboratories for analyses.

"We're hoping to share that information with the Department of Transportation and come up with a practical, scientific solution because right now the only solution appears to be a political solution," he said.

Federal officials have said Bakken crude oil being shipped by rail may be more flammable than traditional forms of oil. The U.S. Department of Transportation issued a safety alert in January warning the public, emergency responders and shippers about the potential high volatility of crude from the Bakken oilpatch. The sprawling shale-oil reserve is fuelling the surging industry in eastern Montana and western North Dakota, which is now the nation's second-largest oil producer behind Texas.

The Bakken encompasses some 64,750 square kilometres in North Dakota, Montana, Saskatchewan and Manitoba. BNSF Railway, a unit of billionaire Warren Buffett's Berkshire Hathaway Inc., hauls about 75 per cent of the oil that leaves the Bakken by train, said Justin Kringstad, director of the North Dakota Pipeline Authority.

 

-- The Associated Press

Republished from the Winnipeg Free Press print edition May 10, 2014 B11

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