North Dakota mulls study of state’s oil volatility
By James MacPherson
Lynn Helms, director of the state Mineral Resources, told North Dakota lawmakers last week that some people are attempting to raise fears about railing North Dakota crude, after a train hauling it derailed and exploded in a small Quebec city in July, killing 47 people and destroying much of the town.
Helms, a chemical engineer, said his agency and the state Pipeline Authority are working to create a white paper that would study the characteristics of the state’s oil “to dispel this myth that it is somehow an explosive, really dangerous thing to have traveling up and down rail lines.”
State Mineral Resources spokeswoman Alison Ritter said the agency is unaware of any studies that have been done to compare North Dakota crude to other oils hauled by train.
“We don’t have data that says it’s more volatile or that it’s not as volatile,” Ritter said. “Until we have data that reflects otherwise, crude is crude and it’s been moved by train for a long time.”
Ritter and Justin Kringstad, director of the North Dakota Pipeline Authority, said the funding and authorship of the report have yet to be finalized.
“It’s just discussion, at this point,” Kringstad said. “We don’t have anything official yet. It could go nowhere.”
North Dakota, the nation’s No. 2 oil producer behind Texas, is on pace to surpass 1 million barrels daily early in 2014.
North Dakota oil began being shipped by trains in 2008, when the state reached its then-capacity for pipeline shipments. Helms said that he expects as much as 90 percent of the state’s crude will move by rail in 2014, up from about 60 percent at present.
North Dakota oil drillers increasingly are tabbing trains to ship crude due to lack of pipelines or to reach more lucrative markets not served by them.
About a dozen mile-long oil trains, which typically consist of up to about 100 railcars laden with about 60,000 barrels of crude, are leaving North Dakota daily, Kringstad said. Each tank car can carry about 650 barrels, or more than 27,000 gallons of oil, he said.
Kringstad said North Dakota’s 22 railed oil loading facilities have the capacity to ship about 900,000 barrels daily. Two additional rail facilities under construction will increase the capacity to more than 1 million barrels next year, he said.