North Dakota officials are viewing as a constitutional duty to possibly file a lawsuit challenging a new law in Washington state that could restrict oil shipments from the Bakken Shale.
Director of the Department of Mineral Resources Lynn Helms noted Wednesday that Gov. Doug Brugum and other officials think North Dakota has to file a lawsuit as Washington’s state Senate Bill (SB) 5579 violates the Interstate Commerce Clause (ICC) of the U.S. Constitution.
"We truly believe this is a violation of the ICC and the federal preemption over railway regulations," Helms said during his regular monthly webinar. "It is also a violation of the science behind crude-by-rail and required vapor pressures."
SB 5579 covers oil rail terminal facilities loading/unloading crude and requires the terminals to report to the Washington Department of Ecology on the type and vapor pressure of each shipment received. At issue is a standard for allowable vapor pressure in rail tank cars that carry crude. SB 5579 includes all crude supplies transported by rail.
The legislation is scheduled to take effect July 28, but a two-year lag to allow facilities to reach compliance could delay its impact on North Dakota oil shipments, which now total 225,000-275,000 b/d.
"There are a number of parties likely to intervene on the side of North Dakota in this case," said Helms. In a recent North Dakota Industrial Commission meeting Burgum, the state attorney general and the agricultural commissioner discussed options for the state. "That's where we are headed with near-100% certainty."
Existing facilities may avoid Washington’s new pressure vapor requirements as long as they don't increase the amount of crude handled year/year by more than 10%. Given the effective delay, Helms said it is unlikely that North Dakota would seek a court injunction before the law takes effect.
"To get an injunction you need to show real and present harm, and because there is a delay in this case it is not likely," said Helms.