Rail Agency Probes Possible Safety Flaws in Crude Transit

The Federal Railroad Administration said it is investigating the safety of transporting crude oil by rail, including whether chemicals used in hydraulic fracturing are corroding tank cars.

Regulators in July 29 a letter to the American Petroleum Institute, a Washington-based lobbying and standards-setting group for the oil and gas industry, said the chemical composition of the crude is sometimes misclassified at a lower hazard level, violating existing safety rules.

In some cases, the tank cars shipping the hazardous material may not be equipped with “required design enhancements,” the FRA said in the letter sent three weeks after a deadly explosion in Quebec of a train hauling oil.

“FRA recommends that shippers evaluate their processes for testing, classifying and packaging the crude oil” that they transport, according to the letter.

The agency said it may fine companies that it finds aren’t complying with rules for transporting hazardous materials.

The U.S. agency is investigating after a parked 72-car train with crude oil from North Dakota’s Bakken started to roll, derailed and exploded in the town of Lac-Megantic in Quebec, killing 47 people. A wall of flames 12 stories high incinerated buildings in the town’s center.

Canadian regulators are testing the chemical composition of the fuel being transported. One question is why the derailment led to such an intense inferno, which regulators have said was “abnormal.”

North Dakota

“We did take samples from the tank cars to get a better understanding of what was actually carried in them and verifying that against the shipping documents,” said Chris Krepski, a spokesman for the Transportation Safety Board of Canada.

Investigators went to North Dakota as part of their review, he said.

The letter to API, reported earlier today by the Wall Street Journal, notes that the number of crude shipments has increased 443 percent since 2005. North Dakota accounts for much of the increase. About 75 percent of North Dakota’s oil is shipped by rail, with the rest over pipeline.

Hydraulic fracturing in shale rock formations has pushed U.S. oil production to the highest levels in two decades, with trains hauling much of the increased production.

Tanker Corrosion

In fracking, drillers pump chemicals, water and sand deep underground to break apart rock so that trapped oil and gas can flow to the surface. Some of the chemicals come back up with the oil and can be corrosive to the tank cars, according the FRA.

“Proper identification of these elements will enable a shipper to ensure the reliability of the tank car,” according to the letter.

As part of its investigation, regulators said they are seeking data that would support the shippers’ classification of the crude being transported.

Last week, the Federal Railroad Administration imposed emergency rules to prevent parked trains from rolling on their own. The order prohibits operators from leaving trains carrying hazardous materials unattended without prior authorization and requires employees to tell dispatchers the number of hand brakes used.

Canadian investigators have said that not enough force was applied to the hand brakes to keep the train from moving.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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