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Wed January 29, 2014
New Safety Regulations For Bakken Shale Oil
Canadian and American regulatory bodies are taking steps to change the way crude oil from the Bakken shale formation in North Dakota is transported by train.
While most crude oil is not very flammable, oil from the Bakken Shale has been involved in two huge explosions during train accidents, one of which claimed 47 lives.
The new safety regulations call for strengthening the train cars in which Bakken crude is moved, and planning new routes for those trains that would minimize exposure to populated areas.
MEGHNA CHAKRABARTI, HOST:
It's HERE AND NOW.
And we've got an interesting step forward in the ongoing story of crude oil coming out of North Dakota. This month, Canadian and American officials called for new regulations in how crude from the Bakken Shale formation is transported by train. While most crude oil is not very flammable, oil from the Bakken crude has been involved in two huge train derailments and explosions, one of which claimed 47 lives in Quebec.
Angela Greiling Keane is a transportation reporter with Bloomberg News, and she joins us now with more. And, Angela, these new safety recommendations came from the U.S. National Transportation Safety Board and the Canadian safety board following their investigation into that deadly explosion in Quebec, so tell us more.
ANGELA GREILING KEANE: So what the boards asked for are stronger tank cars, first and foremost. That's something that the U.S. National Transportation Safety Board already called for, and the Canadians followed suit last week by asking for either replacement or retrofits of tank cars. They're known as DOT-111s, and they are more prone to rupture in a crash than other types of tank cars, but they're extremely common. Most of the cars in the tank car fleet are this model. So they're out there and they're going to be out there for a long time. So the boards asked that the ones that are out there be retrofitted to be made stronger and more crash resistant.
They also asked for railroads to consider slowing down trains that are carrying crude in highly populated areas. If a train is going slower, it's less likely to have a devastating crash. They also are talking about possibly rerouting some shipments, but that's difficult because railroads are where they are. And towns built up around railroads historically in the U.S. and Canada, so it's a very difficult proposition to just put the oil on a different route, that there's not always another route to put it on.
CHAKRABARTI: Well, let's talk in a little bit more detail about some of these recommendations. First of all, you mentioned recommending that the strength of the cars carrying the crude be increased. But, obviously, there's some debate on how that should even be done.
KEANE: Well, it would be expensive, for one thing. Bloomberg government analysis found that it could cost up to 5.2 billion, billion with a B, to modify the tank cars in the way that the safety advocates are calling for. So 5.2 billion is not pocket change, and that's money that would come out of the pockets of the rail car owners or lessers. So those are usually the oil industry companies better than the railroads. But, obviously, any sort of expense like that ultimately trickles down to the consumers. So that could mean higher energy prices for a lot of people if those costs were to be passed on.
And there's 70,000 to 80,000 cars that would be candidate for retrofits, according to a Wells analysis. So it's not something that could be done overnight. It might sound civil and logical, but it's not an easy proposition to make these changes.
CHAKRABARTI: Right. And similarly not easy is, as you mentioned, rerouting trains because, I mean, the railroads, the rail lines are where they are. What was the reaction to that recommendation?
KEANE: Well, the railroads aren't enthused about any sort of rerouting requirements. The railroads and their advocates point out that there is a cost benefit with safety to rerouting ideas because the longer that the shipment spends on a railroad, the more likelihood there is of a possible accident. So usually things now move the shortest route between point A and B. And if you reroute, it might be more miles to get there. So you could actually end up increasing the risk of an accident rather than decreasing it even if you move it away from a populated area. And if you move it away from one area, of course, it's going into another area, and the people there might not want it either.
CHAKRABARTI: Right. So these recommendations come out of that investigation in the Quebec explosion. And since then, obviously, we've had other major disasters. And I'm specifically talking about the Casselton, North Dakota...
CHAKRABARTI: ...crash and explosion. First of all, do we have any new developments in that investigation?
KEANE: Not yet. The NTSB sent a team there and is investigating that, but it takes the NTSB normally a number of months to investigate and come to conclusions about what cause the crash. What we do know there that we knew right away was that the train that was carrying the crude crashed into another train that had derailed. So what the oil industry is saying is the root of all these problems is that railroads keep falling off the tracks in the first place. So the oil industry is saying, hey, we're going to be shipping crude by rail. We want it to be done safety, and it's up to the railroads to make sure that their tracks are in good shape, that their rails don't break.
We also saw another accident just a week ago with a CSX train that was carrying lots of things, including crude, and it derailed on a bridge over the Schuylkill River in downtown Philadelphia. And they were all very lucky there in that it did derail, but it didn't fall off the bridge.
So you can see some pretty scary-looking pictures of rail cars on a bridge toppled. But it was an accident that could have been a lot worse had cars fallen off the bridge. But it was one more incident involving crude while we're already talking about this.
CHAKRABARTI: Well, Angela, one of the recommendations that we heard that came out of the Castleton crash was that possibly, crude could be degasified, which is a thing that I understand is usually done to crude before it's moved by pipeline and that perhaps the same process could be used for crude that's moved by train. Do we know any more about that?
KEANE: Well, U.S. regulators are continuing what they call the Bakken blitz, which is looking at the composition of oil moved out of that region by rail. So that's still ongoing. They haven't released any detailed results yet or any recommendations about what could or should be done to more safely ship the oil. But that's the kind of thing that we could see come out of that regulator which is part of the U.S. Transportation Department.
CHAKRABARTI: Right. Well, before we move further, I just want to note that even though we are talking about railroad safety and Bakken crude, obviously, the vast majority of shipments that are moved by rail get there safely. But on the other hand, you mentioned the Bakken blitz, so there's keen federal interest in doing someone about moving crude safely. Do you think we could see any federal agencies formally adopting the recommendations that we talked about a little earlier?
KEANE: We definitely could. It's in regulators' interest to move on their own and to move quickly. Congress is, of course, keenly interested in this issue as well. There have been lots of calls from senators and House members to investigate and to take action on how to safely ship oil by rail. And regulators would, of course, rather do things their own way than be told exactly what to do by Congress. So in that sense, regulators have a sense of urgency to make some changes and allay the concerns of Congress members and mayors and governors who are all calling for action right now.
CHAKRABARTI: Well, Angela Greiling Keane is a transportation reporter with Bloomberg. Angela, always great to talk to you. Thank you so much.
KEANE: Yes. Thank you.
CHAKRABARTI: This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.