North Dakota Bakken Crude Oil

Voluntary, seems to lack teeth unlike the 3 year Canadian phase out of old tankers.

The transportation department issued an emergency order (yesterday) requiring that railroads inform state emergency management offficials about the movement of crude oil through their states and urged shippers not to use older mode tank cars that are easily ruptured in accidents, even at slower speeds.

full article: http://abcnews.go.com/Politics/wireStor ... s-23627424" onclick="window.open(this.href);return false;

North America has a long history — long before Lac-Mégantic — of major disasters involving railroad tank cars:

http://www.msnbc.com/rachel-maddow-show ... 6253507770" onclick="window.open(this.href);return false;

MEC407 wrote:North America has a long history — long before Lac-Mégantic — of major disasters involving railroad tank cars:

http://www.msnbc.com/rachel-maddow-show ... 6253507770" onclick="window.open(this.href);return false;

... and here's the rest of the story (interview with DOT Secretary Anthony Foxx). http://www.msnbc.com/rachel-maddow-show ... 6235587803" onclick="window.open(this.href);return false;

The Director's Cut for May 13, 2014 from the North Dakota Department of Mineral Resources makes for some interesting reading:

Here are the highlights:

Feb Oil 26,657,540 barrels = 952,055 barrels/day
Mar Oil 30,288,575 barrels = 977,051 barrels/day (preliminary)(NEW all-time high)
...
Feb Producing Wells = 10,199
Mar Producing Wells = 10,457 (preliminary)(NEW all-time high)
...
Comments:
The drilling rig count was up slightly from February to March and back down from March to April. The number of well completions was up sharply from 70 to 200.
Investor confidence remains strong. There were still approximately 50 wells shut in for the Tioga gas plant conversion in an attempt to minimize flaring, but the biggest production impact was still the weather. March began with 2-3 days of temperatures well below zero, add to that 7-12 days with wind speeds too high for completion work, and then 8 inches of snow on the last day of the month. In like a lion and out like a lion makes oil and gas work difficult.
...
At the end of March there were about 635 wells waiting on completion services, a
decrease of 15.

Crude oil take away capacity is expected to remain adequate as long as rail deliveries to
coastal refineries keep growing.
...
US natural gas storage is now 48% below the five-year average indicating increasing prices in the foreseeable future. North Dakota shallow gas exploration may be economic at future gas prices.

At the current rate of increase it is likely that in April North Dakota produced crude at a rate in excess of 1,000,000 barrels of oil per day. Also notable is the enormous backlog of wells awaiting completion services, likely to be completed this summer, which will produce an enormous surge of crude onto the U.S. oil markets.

To give one an idea of exactly how much of a backlog here are some basic statistics: Average Daily Oil Per Well (March 2014): 126 BBLS/Day x 635 Wells = 80,010 BBLS /Day Estimated Average Total Backlogged Production.

That is an astonishing 8.1% of current total capacity. In short if all further development activity stopped in North Dakota at the end of March they would still have added tens of thousands of additional barrels of daily production.

Bottom Line: North Dakota is well on pace to crush the 1,250,000 barrels/day mark by the end of the year.

The Star Tribune of Minneapolis published a very well written article on this very report, which now appears to be drawing regular media coverage.

Bad weather once again cheated North Dakota out of its first million-barrel-per-day month of oil production, state officials said Tuesday.

The state came very close in March, producing a record-high 977,051 barrels of crude a day. That was up from 952,055 barrels per day in February. But for the third straight month, North Dakota officials blamed severe winter weather for cutting into production.

“I wouldn’t be surprised to see April squeak past it,” Department of Mineral Resources Director Lynn Helms said of the elusive, symbolic benchmark.

Also of note, despite a continuing disagreement between the central government in Baghdad and the Kurdish Regional Government in Erbil. Iraqi oil exports grew by 6% in April to 2.51 million barrels of oil/day.

From news.com.au portal of News Corporation's subsidiary The Australian:

IRAQ'S Oil Ministry says crude exports have averaged 2.51 million barrels a day in April, a nearly six per cent increase from the previous month.
In a statement on its website on Thursday, the ministry said April's revenues stood at $US7.58 billion ($A8.20 billion), based on an average price of $100.691 per barrel. March's oil exports averaged 2.37 million barrels a day, bringing that month's revenues to $US7.50 billion.

Politico has picked this up:

Oil trains are causing political furors from coast to coast.

In Albany, New York, city and county leaders have balked at a state-approved storage project that would increase the region’s role as a major hub for crude from North Dakota and Canada. In California, environmental groups and Berkeley’s city council are fighting the influx of oil-carrying rail cars, which protesters label “bomb trains.”

The city council of Vancouver, Washington, voted this month to oppose plans for a major oil-by-rail project at the nearby port. In Washington, D.C., residents have even raised the oil-train specter while fighting CSX’s plans to replace and expand the Virginia Avenue Southeast rail tunnel. (The project’s environmental study says the expansion won’t bring additional oil shipments through D.C., which now are “very rare.” CSX spokeswoman Melanie Cost added, “There is no market for crude oil in or around the District, now or in the foreseeable future.”)

...

DOT’s attempts to toughen the safety standards have prompted a flurry of finger-pointing. Oil companies dispute the department’s assertions that Bakken crude may be more flammable than typical oil, and say lab tests don’t show the need for additional regulations. The railroad industry wants DOT to stop oil shippers from using the older tank cars, but it also objects to calls for sharply lower speed limits. And the shippers — chiefly energy companies, which would pay for any tank car upgrades — say the focus should be on making sure trains don’t derail in the first place.

http://www.politico.com/story/2014/06/e ... 07966.html

In a "peripheral" issue, some of the proposed restrictions on the movement of oil by rail involve a speed limit on trains carrying crude -- 40 MPH according to some sources. With dispatching priorities (assuming the bi-directionally signaled 2-main track model common on most main lines) geared toward keeping everything moving at a uniform speed, and the potential for one move overtaking another diminishing as congestion increases, and the lack of siding capacity for overtaking moves in many cases, what's all this going to mean for day-to-day operations?

40 MPH isn't going to make much difference in reducing the severity of oil train disasters. The train in this disaster was only going 24 MPH. They need to improve the crashworthiness of the cars, plain and simple.

This past Tuesday, the Wall Street Journal carried an interesting article regarding the transport of Bakken crude:

http://online.wsj.com/articles/north-da ... kken+crude" onclick="window.open(this.href);return false;

Brief passage:

About a million barrels a day are pumped from the Bakken, an oil field that has grown so fast that few pipelines exist to transport the crude. Instead, about 630,000 barrels a day travel by train to refineries on the East, West and Gulf coasts, a trend that is growing because the energy industry has found rail shipments to be more flexible than fixed pipelines.

All told, it appears that the respective industries - extraction and transportation - have a learning curve ahead in order to handle the product safely. It was fate that Megantic had to be the first incident to attract worldwide media attention. What if Casselton happened prior to Megantic? The industries would have known that incidents could occur on well managed roads that know how to keep their property in tip-top shape. Such might have been impetus to embargo the traffic from roads that cut every corner there was to cut. Forty seven souls might still be with us had such been the case.

Notice of Potential Rulemaking:
http://www.dot.gov/briefing-room/us-dot ... -crude-oil" onclick="window.open(this.href);return false;

3 Tank car designs to be considered:
1. 9/16" steel with rollover protection and electronically controlled pneumatic (ECP) brakes
2. 9/16" steel without rollover protection and ECP brakes
3. 7/16" steel 2011 industry standard design.

Speeds to be considered:
1. 50 mph MAS for cars meeting the new design
2. 40 mph MAS for older cars
3. 40 mph speed restriction for older cars in High Threat Urban Areas including a 10-mile buffer zone
4. 40 mph speed restriction for older cars in areas greater than 100K population
5. 30 mph speed restriction for cars without ECP brakes.

The proposed rules would be for cars built after October 1, 2015, but given the potential speed restrictions, I expect car buyers to switch their orders to 9/16" steel immediately.

From Crowne Plaza Piitter Hotel, Salzburg--

Thank you Mr. Solberg for locating then summarizing same.They were reported on very briefly in the International New York Times.

What I find astounding is that over here with freight trains hardy exceeding the tonnage of a passenger train, there is only one way to get stuff from Vladimir's gas station to here and elsewhere is pipeline.

Gilbert B Norman wrote:From Crowne Plaza Piitter Hotel, Salzburg--

Thank you Mr. Solberg for locating then summarizing same.They were reported on very briefly in the International New York Times.

What I find astounding is that over here with freight trains hardy exceeding the tonnage of a passenger train, there is only one way to get stuff from Vladimir's gas station to here and elsewhere is pipeline.

The Bakken production area is not presently served by pipelines and to build them is a major political/environmental knock down drag out! The oil producers have found that using rail gives the more flexability in serving multiple refinery markets. Additionally, pipeline interests have stated that Bakken crude, in the form it Is being shipped by rail is too explosive for pipeline shipment.

The unstated problem of slowing hazmat trains down: the length of exposure time to any community the train is passing through is extended.

Les (Playing the part of Capt. Obvious)

Another unstated problem is that the train at Lac-Megantic was stationary when the trouble started; i.e., when the train was left unattended and unsecured. One of the few characteristics that did not contribute to the consequences seems to be the track speed in effect.