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Bakken Crude NGLs Examined in Rail Debate

The question of whether the high natural gas liquids (NGL) content of Bakken Shale light crude oil in North Dakota should be addressed in efforts to beef up the safety of crude rail shipments is surfacing in various industry and government venues. Members of Congress and energy executives have been quoted on the robust new source of NGL-rich oil.

NGLs are routinely stripped from crude in other oil production areas, such as the Eagle Ford in Texas, but in those cases the infrastructure of stabilizers has been in place to do the job where the production sits relatively close to the robust NGL market on the Gulf Coast. North Dakota has no in-state petrochemical market (see Shale Daily, May 27) and is 1,500 miles away from the Gulf.

Having just released the preliminary results of a quality/safety study focused on Bakken crude's content and its increasing volumes shipped by rail, the North Dakota Petroleum Council (NDPC) said its third-party testing of Bakken supplies showed no "spiking" with NGLs before rail shipments.

The scenario that some stakeholders in Washington, DC, and the oil patch are discussing focuses on U.S. Department of Transportation regulations as an offshoot of a series of serious crude rail tank car derailments in the past year. Some discussion proposes that NGLs be stripped out of Bakken supplies before they are permitted to be shipped by rail. Currently that would mean about two-thirds of a 1 million b/d supply chain would need to have NGLs removed.

The infrastructure of processing towers, or stabilizers, required would be costly, requiring billions of dollars, according to some of the proponents and opponents of the idea.

While North Dakota fully supports actions being taken at the federal level to strengthen regulation of crude rail transport, a spokesperson for the state’s Department of Mineral Resources said other states require a network of stabilizers because of the ready petrochemical market for their NGLs; North Dakota-stripped NGLs would either have to be flared or shipped by rail.

"North Dakota is far from refineries and does not have any petrochemical facilities," said the spokesperson.

NDPC cites a recently-released report by Turner Mason & Company that it contends "definitively answered" the questions of whether Bakken crude oil was more volatile or flammable than other crudes. "The data clearly shows that neither is the case," a NDPC spokesperson told NGI's Shale Daily.

With its NGLs included, Bakken crude falls clearly below the federal safety margins regarding vapor pressure that are built into rail tank cars, the spokesperson said.

"Stripping NGLs is used only in the condensate window where API gravity is above 50 degrees," she said, underscoring that the study confirmed with sampling of crude from throughout the Williston Basin that Bakken crude API gravity is 41 degrees. "At API gravities of 50-60 degrees, stabilization is required for pipeline transportation and required by U.S. Environmental Protection Agency standards."

With its relatively low API gravity, the NDPC spokesperson said "it doesn't make sense for industry or regulators to explore stripping the NGLs from the Bakken crude [before shipment]."

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