Feb 27, 2014 12:04 PM by Sanjay Talwani (email@example.com)
HELENA --Oil industry officials in Montana and North Dakota are trying to figure out exactly what a new emergency order from the Federal Railroad Administration might mean for production and transport of Bakken crude.
"Today we are raising the bar for shipping crude oil on behalf of the families and communities along rail lines nationwide," said U.S. Transportation Secretary Anthony Foxx.
"If you intend to move crude oil by rail, then you must test and classify the material appropriately," Foxx explained.
Concerns over crude-by-rail accidents have increased in recent months, and lawmakers have been pushing for updated tanker standards for trains carrying crude oil from the Bakken in Montana and North Dakota.
In January, Transportation officials issued a specific warning that Bakken crude could pose a greater flammability risk than previously thought.
"It is kind of vague," said Dave Galt, executive director of the Montana Petroleum Association. "But essentially what that emergency order does is require more testing of the oil before it is shipped in the tank cars. Our companies have been doing that in the past as part of the process. This just requires more testing."
Specifically, the tests will determine what classification of hazardous materials the petroleum in a given load should be. The order follows a couple of accidents and fires involving Bakken crude in the past several months.
"I think the bigger question is, what kind of follow-up action could it require and whether it could require change in the kind of equipment that oil is transported in, and that would be a significant issue," said Galt.
The nationwide rail fleet includes about 50,000 oil tankers, he said. So changes there, should they eventually be required, would be costly and take a long time.
"But at the end of the day, we want to be safe, we want to move our product safely and we need to get that product out of the Williston Basin to market," Galt said.