NY Sen. Schumer: Make Oil Safer Before Shipping

Jun 29, 2016

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New York Sen. Charles Schumer says oil companies should be required to make their crude less dangerous to transport before loading it onto trains.

The Democrat said Wednesday that much of the oil being shipped by rail can be rendered less hazardous by removing flammable gasses first.

“When it comes to crude, one of the most powerful things we could do is set a good standard of the volatility and stability of what’s inside the cars.”

Oil coming from North Dakota's Bakken Shale formation is considered more volatile than other types of oil because it contains a greater amount of gas.

Schumer says he's asking the U.S. Department of Transportation to impose the requirement, which he says would reduce the risk of train car explosions.

Copyright 2016 The Associated Press.

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A copy of Senator Schumer’s letter to the Department of Transportation appears below:

Dear Secretary Foxx,

As trains carrying highly volatile Bakken crude oil continue to move through communities across America, we are writing to request that the U.S. Department of Transportation (USDOT) and the Pipeline and Hazardous Materials Safety Administration (PHMSA) move to issue an interim standard for the volatility of crude oil shipped by rail. We must establish more stringent regulations on these oil trains, which pose an enormous danger to cities, towns, rural areas, and the environment.

The June 3, 2016 derailment of a train carrying Bakken crude in Mosier, Oregon is a sobering reminder of the danger that volatile crude oil poses when it is transported by rail. In total, 16 cars of a 96-car train derailed. Of those, four cars caught fire and spilled 42,000 gallons of crude oil. This oil contaminated the soil and the local water treatment facility, through which oil reached the Columbia River.  Due to the derailment and the fire, 100 residents – nearly a quarter of Mosier’s population – had to be evacuated.

The regulation of volatility for crude oil is inconsistent and there remains a gap in regulating the volatility of oil transported by rail. The North Dakota state Industrial Commission has regulated volatility of Bakken crude oil at 13.7 psi Reid Vapor Pressure (RVP).  The New York Mercantile Exchange has limited the volatility of crude oil contracts traded on its exchange to 9.5 psi RVP, and pipeline operators in the Eagle Ford require shippers to limit volatility to between 9 and 10 psi RVP.  However, there is no federal regulation to restrict the volatility of crude oil shipped by rail.    

Currently, PHMSA and the Department of Energy are engaged in a multi-year effort to study the volatility of various types of crude being transported by rail. Under the Fixing America’s Surface Transportation (FAST) Act (P.L. 114-94), PHMSA must issue a report and recommend regulations governing the volatility of crude oil being transported by rail. However, due to the fact that these studies are years from completion, we remain gravely concerned about the safety of our communities along rail lines carrying this volatile crude oil.

Under USDOT’s authority to issue emergency orders (49 U.S.C. 5121 (d)), we urge you to immediately set an interim standard for volatility of crude oil to ensure its safe transport. While standards for tank cars improve, derailments, fires and explosions continue to occur. It is clear that the shipment of crude without a national standard regulating volatility poses an imminent hazard. For the safety of our communities, we urge you to move now to issue an interim standard for volatility.

Sincerely,

Charles E. Schumer

United States Senator

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