American Oil and Gas Reporter - November 2015 - 128

ConventionCoverage: North Dakota Petroleum Council

Although a number of pipelines are under
construction in the state, the North Dakota
Pipeline Authority expects the amount
of crude oil leaving the state by rail
transport to remain well above 1 million
barrels a day for the next two decades,
NDPA Director Justin Kringstad tells the
North Dakota Petroleum Council.

predicted producers looking to move oil
out of the state would continue to rely
heavily on rail transport.
"Our low-case forecast shows production may dip below 1.2 MMbbl/d in
2016, but it will surpass that level by
2020 and remain above it for the following
15 years," Kringstad advised.
As of July, North Dakota oil exports
were split about evenly between rail and
pipeline, with less than 7 percent sent by
truck to Canada or to in-state refineries,
he said. Crude-by-rail shipments peaked
in fourth quarter 2014 when more than
800,000 barrels left the state daily by
train.
Kringstad noted that since early 2014,
the majority of oil leaving North Dakota
by rail was headed to East Coast markets.
But over the past year, he pointed out,
shipments to the West Coast have grown
to 21 percent of rail destinations.
There are four new pipeline projects
under construction in North Dakota,
Kringstad said. Three are intended to
provide access to oil markets in the Midwest and the Gulf Coast, while the fourth
ties into a Canadian line to the East
Coast.
Changes to rail loading and tank car
specifications were discussed by speakers
from the American Petroleum Institute
and the federal Pipeline and Hazardous
Materials Safety Administration. Beth
Treseder, a policy adviser at API, told
NDPC the institute's new Recommended
Practice 3000 was developed "for characterizing, testing and quantifying crude

oil for rail loading."
Treseder said the guidelines were developed to ensure that crude oil was classified properly prior to transportation,
commenting that determining the proper
hazardous materials classification and assignment of a packing group were important factors when loading crude oil.
Noting that API's RP 3000 does not
recommend a particular method for testing
flash point, but does comment on the applicability of various tests, Treseder said
the RP directed initial boiling point testing
methods to those listed under PHMSA's
hazardous materials regulations. She
added that API also recommended ASTM
D7900 be considered an alternative test
method.
Treseder also addressed the properties
of crude oil. In an interview published in
North Dakota, she said, a representative
of the National Transportation Safety
Board had testified that its investigations
concluded the biggest contributing factor
to large explosions and fire in rail accidents
was how much product was released,
and not the volatility of the crude oil.
Tiffany Ziemer, an investigator at
PHMSA, described changes to rail tank
car specifications under new Department
of Transportation regulations. She said
the specifications for a DOT-117 compliant
tank car featured 0.5 inches of shielding
on the head, tank shell thickness increased
to 0.5625 inches of steel, a layer of
exterior thermal protection, enhanced
protection of hatch fittings, and an improved bottom outlet handle design to
prevent release during an accident.
Ziemer also discussed the agency's
final "Enhanced Tank Car Standards and
Operational Controls for High-Hazard
Flammable Trains" rule issued on May
2. Those regulations define a high-hazard

128 THE AMERICAN OIL & GAS REPORTER

Education and sharing of information are key elements of North
Dakota's pipeline and gathering
system ombudsman program,
according to state Agriculture
Commissioner Doug Goehring,
who spoke to the North Dakota
Petroleum Council's annual meeting, Sept. 21-23 in Fargo.

flammable train as having a "continuous
block of 20 or more tank cars loaded
with a flammable liquid," or as 35 loaded
tank cars "dispersed throughout a train."
The regulations require tank cars built
after Oct. 1, 2015, to meet DOT Specification 117, and mandate that high-hazard
trains have enhanced brakes in place by
2021, and operate at no more than 50
miles an hour. She said trains with older
tank cars going through urban areas were
restricted to traveling no more than 40
mph.
And while the regulations relieve railroads of having to report every train
movement to local responders, Ziemer
said they did call for more extensive
record keeping, safety considerations in
route planning, and increased transparency
on routing decisions.
Published reports in rail industry trade
journals estimate complying with the tank
car regulations will cost $1.7 billion,
while complying with the entire regulatory
package is projected to cost $2.5 billion.

Energy Renaissance
Stephen Moore, chief economist at
the Heritage Foundation, delivered a
luncheon keynote that underscored the
important role of North Dakota's oil industry in driving the U.S. economic recovery.
Since the start of the recession in
2008, Moore said, the oil industry was
responsible for most of the net new jobs
growth through 2014, with North Dakota's
industry playing a key role. "American
ingenuity, technical know-how, and our
entrepreneurial spirit drove us to crack
the code and get at oil and gas that previously was inaccessible," Moore observed.
"Now, an abundant supply of inexpensive
energy has driven new growth in American

American Oil and Gas Reporter - November 2015

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