Rail shippers have questions about classifying crude
BERTHOLD, N.D. - All crude is not created equal -- and the task of classifying oil when it's loaded into rail cars has some gray areas.
As federal inspectors investigate whether Bakken crude is properly classified at rail-loading facilities in North Dakota, the manager of one rail terminal says the federal guidelines are vague and open to interpretation.
Charlie Roehm, rail manager for Enbridge Rail North Dakota in Berthold, said the company goes above and beyond to follow directions from the Pipeline and Hazardous Materials Safety Administration, including testing its oil weekly and having an independent lab verify results.
But in the aftermath of fiery train derailments that have prompted federal agencies to reiterate to shippers the importance of correctly classifying the oil, Roehm said those federal directives are not specific.
"I'm sure other facilities are trying to do due diligence on what they're supposed to do, too, just like we are," Roehm said. "The message is not clear. To what spec are we supposed to hold it to?"
A PHMSA spokesman said the agency's regulations are very specific, with the federal code available online. Understanding any unique hazards of the crude oil enables carriers, as well as emergency responders, to take steps to ensure the safe transportation of the oil, the agency says in a safety alert.
Weeks after a July 6 derailment and explosion in Quebec that killed 47 people, PHMSA and the Federal Railroad Administration announced the "Bakken Blitz," an effort to verify whether crude oil is properly classified when it's loaded into rail cars.
The investigation, also known as Operation Classification, involved unannounced spot inspections, data collection and sampling to investigate how shippers and carriers classify the oil and what actions they take to understand the characteristics of it. The effort is ongoing but nearing completion.
A PHMSA spokesman said the final report on the samples is still pending.
Days after the Dec. 30 fiery derailment in Casselton, PHMSA issued a safety alert on Bakken crude oil, warning emergency responders, the public and others that the light, sweet crude may be more flammable than traditional heavy crude oil.
The safety alert stemmed from preliminary inspections from the Casselton derailment, as well as derailments in Alabama and Quebec involving Bakken crude. The alert reiterated the importance of properly classifying the oil.
"Proper characterization will identify properties that could affect the integrity of the packaging or present additional hazards, such as corrosivity, sulfur content, and dissolved gas content," the agency said in the alert.
A Federal Railroad Administration official outlined the agency's concerns about potential safety issues related to transporting crude oil by rail in a July 29 letter to the American Petroleum Institute.
In the letter, Thomas Herrmann, acting director of the FRA's Office of Safety Assurance and Compliance, writes that if oil is improperly classified, it might be shipped in a lesser standard tank car.
Enbridge, which loads eight unit trains -- each about 110 cars -- each week, takes a composite sample of a "batch" of oil, or about 250,000 barrels, every week and tests it for quality and various characteristics, Roehm said. The company also tests for boiling point and flash point to determine the proper packing group for the oil before it is loaded into rail cars.
In addition, Enbridge works with an independent lab from Bismarck, N.D., that picks up the samples each week and does additional tests to confirm the results.
Enbridge has chosen to do the tests weekly, but other rail facilities in the Bakken may interpret the guidelines differently. In addition, Enbridge receives all of its oil by pipeline, so the oil already needs to meet a pipeline specification. But other facilities receive oil by truck or a combination of truck and pipeline.
"So far the regulation says please classify your oil correctly," Roehm said. "OK, well it doesn't say monthly, it doesn't say weekly, it doesn't say anything. It just says please classify it correctly."
PHMSA officials visited Enbridge's facility last fall and confirmed that the company had properly classified oil as Packing Group II, Roehm said. According to PHMSA, the packing group means the degree of danger presented by the hazardous materials, with Packing Group I indicating great danger, II indicating medium danger and III indicating minor danger.
The oil involved in the Casselton derailment, loaded at a rail terminal in Fryburg in southwest North Dakota, was Packing Group I, according to the National Transportation Safety Board.
A PHMSA spokesman said the more stringent packing groups require a greater risk analysis and security plan. The packing group also lets emergency responders know the level of danger.
The latest directive from PHMSA regarding the corrosivity of the oil and the dissolved gas content in the oil is also vague, Roehm said.
While a lot of attention after the derailments has focused on the proper classification of Bakken crude, the classification has not been the cause of the derailments.
"How far do you want to dig into these specs before you find out that, hey, maybe it's in the tracks? Keep the trains on the track," Roehm said.
In addition, each of the derailments involved older model DOT-111 cars that are not built to the latest safety standards.
Because the Enbridge rail terminal is one of the newer ones in North Dakota, Roehm said about 75 percent of the tanker cars its customers own or lease are the newer model DOT-111 cars.
But even though many are new, about 5 percent of the railcars that come to the facility are set aside and repaired on-site or sent to an out-of-state shop for more significant repairs, he said.
On two occasions, the Enbridge facility has rejected an entire unit train because the cars needed repairs, Roehm said. Enbridge plans to build a repair facility on-site because of the demand for repairs.
"If something looks suspicious or something looks bad, we're not loading it," Roehm said. "We've caused a lot of headaches for a couple customers when the whole train has sat there for five days."