Rail

State lawmakers and the governor in California are continuing to raise concerns about the steep increase in rail crude oil shipments into the state (see Shale Daily, May 6). They each are pushing for beefed-up safety programs that the industry thinks are unnecessary.

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.

Global strategic positioning of the United States is going to be driven by the development of domestic shale plays, petroleum analyst/consultant Tom Petrie said Thursday at the Williston Basin Petroleum Conference in a talk centered on “The Geopolitics of Shale Oil.”

Preliminary results of an industry-backed study show that crude oil from the Bakken/Three Forks formation poses no more risk in rail shipment than other fuels. The report, unveiled Tuesday at the Williston Basin Petroleum Conference, is the second this month with the same findings.

Crude oil from the Bakken Shale isn’t significantly more dangerous than crude from other plays to transport by rail and poses a lower transport risk than other flammable liquids, but it may contain higher amounts of dissolved flammable gases compared to heavier crudes, according to a report commissioned by the American Fuel & Petrochemical Manufacturers (AFPM).

Rail crude oil shipments to California were up sharply compared to the same period last year, according to statistics kept by the California Energy Commission (CEC).

Robust crude oil production driven by the shale revolution has produced significant increases in the railroad shipment of oil, and in the next few years that means an almost quantum leap in shipments to California’s major West Coast refineries, according to state energy projections. In two years, more than a quarter of the oil processed is expected to come via rail.

Twenty-one cars of a 118-car crude-by-rail train owned by Norfolk-Southern Corp. (NS) derailed on Thursday near Vandergrift, PA, with up to 4,000 gallons of oil said to be leaking from four cars. NS officials were on the scene and responding, a spokesman said.

The growing emphasis on shipping U.S. crude oil production by rail will continue and the oil sector welcomes tougher safety standards now being contemplated by the federal Department of Transportation (DOT), several oil executives said Wednesday during 4Q2013 earnings conference calls.