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As oil traffic leaps, N.D. may join states with rail inspectors

BISMARCK — North Dakota has almost singlehandedly driven massive crude-by-rail growth across the nation, but the state doesn’t employ its own inspectors to ensure the trains and tank cars leaving the Bakken oilfields are safe.

Thirty states run their own railroad inspection programs to supplement federal inspectors stretched thin nationwide. Several of them, including Minnesota and New York, are trying to add inspectors to cope with the influx of trains hauling North Dakota crude.

In North Dakota, state officials are just realizing that’s an option.

The state has left inspections of tracks, tank cars and rail-loading facilities to federal regulators, whose ranks in the region haven’t grown even as crude-by-rail shipments out of the Bakken have increased from fewer than 100,000 barrels a day in 2010 to 800,000 barrels per day late last year.

But the explosive derailment in Casselton on Dec. 30 was a wake-up call for North Dakota officials, regulators and lawmakers to just how much oil is being shipped by rail, how volatile Bakken crude may be and what little has changed to oversee its transport.

Now, they say, it might be time for North Dakota to get involved and put its own inspectors in the field. Gov. Jack Dalrymple and a member of the state’s Public Service Commission said last week they will spend the next few months looking into whether the state should set up its own program.

“Casselton has changed things,” Dalrymple said. “It got everybody thinking: What if?”

‘We need to take a look’

A train hauling Bakken crude east collided with a train carrying grain west after the grain train derailed Dec. 30 just west of Casselton. More than a dozen oil cars caught fire and exploded, pumping thick plumes of black smoke over the small town and prompting a partial evacuation.

As safety concerns — and ideas to fix them — swirled in the wake of that crash, North Dakota officials from the governor on down said the state was hamstrung from making safety changes on its own.

“Years ago, the federal (government) took away from the states the oversight of our major railroads. They are the regulator. It is their jurisdiction,” Dalrymple said in a January interview when asked what additional steps North Dakota could take to make crude-by-rail shipments safer.

Yet 30 states, including neighbors Minnesota and Montana, have set up their own rail safety programs through a partnership with the Federal Railroad Administration, the nation’s primary railroad regulator.

In an interview last week, Dalrymple said he meant in his January comment that “there was nothing we were going to be able to do immediately.”

He acknowledged setting up such a program in-state as “a viable option” that merits further study. He said he and Public Service Commissioner Julie Fedorchak had discussed the possibility.

Established in 1970, the State Rail Safety Participation Program allows a state agency to hire its own inspectors, who are trained and certified by the FRA. The FRA does not remove any federal inspectors after a state launches its own program. Each of the 30 states pays for its inspectors by assessing railroads a fee, or through a combination of those fees and public money.

Several North Dakota lawmakers, at both the state and federal level, were unaware North Dakota could add additional railroad inspectors through a state-run program. But they all called it an option worth considering, and one that could ultimately make the state’s railroads safer.

“We need to take a look at it,” said Senate Majority Leader Rich Wardner, a Dickinson Republican. “Everybody is afraid something is going to happen in their town — you can’t argue with that. We do need to take the extra step to make sure the oil … and whatever else is on the rails is transported safely.”

Any such program in North Dakota would have to be approved — and perhaps paid for — by the state Legislature. Fedorchak said she and the PSC will spend several months studying how a program would be run, with the possibility of bringing the idea to an interim legislative committee later this year.

‘Much bigger jump’

Fedorchak and others compared the concept to ongoing discussions of starting an intrastate pipeline inspection program, which was prompted by the 20,600-barrel pipeline spill near a farm in Tioga last fall.

But a similar program for railroads, Fedorchak said, would be “a much bigger jump” because the PSC has no experience overseeing the railroads. The PSC is North Dakota’s regulatory agency for a variety of industries and activities, including pipelines.

Fedorchak said there are several key questions they’ll need to answer before deciding to start a state-run railroad inspection program. Among them: How many inspectors would be necessary, and what would it cost? Are there holes in what federal regulators are currently doing? And could North Dakota improve on it?

Two federal agencies regulate crude-by-rail shipments in North Dakota. The FRA hasn’t added inspectors in North Dakota since well before the Bakken started booming. As of earlier this year, the Pipelines and Hazardous Materials Safety Administration had no inspectors permanently assigned in the state.

“There’s no question that up until now … we have relied on the federal government to be the oversight,” Dalrymple said. “Now the question arises: Is that adequate? Or do we need to be doing more as a state?”

The governor said he hopes to have the answer to that question before the Legislature reconvenes in 2015.

Other states respond

The flow of Bakken crude on railroads across the nation has states wondering whether they’ve got the staff to keep up.

In New York, Gov. Andrew Cuomo hopes to fund another five inspectors — doubling its railroad safety staff — in the state’s next budget. Increased crude oil traffic is a top priority there, New York Department of Transportation spokesman Beau Duffy said.

Minnesota Rep. Frank Hornstein hopes to triple the state’s rail inspection staff, from one track inspector to three inspectors, and perhaps add more later. His legislation to do just that, along with a handful of other bills addressing railroad safety, is working through the Minnesota Legislature.

After the accident in Casselton, Hornstein said, “It became very clear that we didn’t really have the resources in place to address” the crude trains crossing through the state every day.

Minnesota was the last state to create a program, in 2008. Its current budget — roughly $100,000 a year — is paid for by the railroads, said William Gardner, director of the Minnesota Department of Transportation’s office of freight and commercial vehicle operations.

Gardner said the growing number of crude trains from North Dakota passing through Minnesota has been on his radar for several years. If Hornstein’s bill and a companion in the state Senate pass, Gardner said they intend to create at least one hazmat inspector position to focus on shipments of crude oil other hazardous chemicals.

Hornstein stressed the importance of all states taking a look at what more they can do to ensure crude-by-rail shipments are safe.

“There is a lot of federal regulation, but there is a state role too,” he said. “The states can’t just check out of this.”

Kyle Potter
Kyle Potter is an enterprise reporter at the Forum. He came to Fargo-Moorhead in May 2013 after stints at the Associated Press, the Las Vegas Review-Journal, the St. Paul Pioneer Press and the Minnesota Daily. 
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