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North Dakota regulators weigh input on oil conditioning rules

BISMARCK — North Dakota oil industry leaders spoke in favor Tuesday, Nov. 13, of changing the state’s oil conditioning regulations while an environmental group argued for more stringent rules.

The North Dakota Industrial Commission proposes to amend regulations adopted nearly four years ago that aim to make Bakken crude oil safer for rail transportation.

The regulations, adopted after fiery train derailments, require companies to remove the most volatile gases from Bakken crude oil to ensure that the vapor pressure doesn’t exceed 13.7 pounds per square inch.

The commission is considering reducing how often companies submit vapor pressure tests to regulators. Currently, they submit reports quarterly.

Of about 60,000 vapor pressure tests that have been submitted, about one in 1,000 exceeded the 13.7 psi limit, Director of Mineral Resources Lynn Helms has said.

During a public hearing Tuesday before the Oil and Gas Division, the North Dakota Petroleum Council advocated for vapor pressure tests to be submitted annually instead of quarterly. The industry favors focusing enforcement on winter months when operators are most likely to struggle with meeting the requirements.

Kari Cutting, vice president of the industry group, emphasized that reducing the amount of data submitted to regulators would not change the requirement to meet the 13.7 psi vapor pressure.

“The intended impact is to allow North Dakota’s Department of Mineral Resources to focus its efforts where they will be the most effective and increase their enforcement efficiency without reducing the oversight of rail transportation,” Cutting said.

Meanwhile, the Dakota Resource Council called the state’s current rules insufficient and urged the commission to keep the quarterly reporting requirement.

Executive Director Scott Skokos said if the industry is easily meeting the 13.7 psi threshold, that’s an indication that “the regulation is essentially not actually doing much.”

“It looks like they could actually be setting the bar a little bit higher,” Skokos said in an interview after the hearing.

Jeff Hume, an executive with Continental Resources, said pipeline and rail operators have processes in place to monitor the vapor pressure of crude oil to make sure it’s in compliance. The transportation companies Continental Resources works with require a vapor pressure of 13.7 psi or less, Hume said.

“The industry is working together to monitor crude oil and ensure safe transportation,” said Hume, vice chairman for strategic growth initiatives.

Ray Sheldon, general manager for Basin Transload, which operates two rail-loading facilities in North Dakota, said changes to state regulations would not impact how often rail facilities sample and test the oil's volatility.

“We take rail safety very seriously,” Sheldon said.

Helms said the standard for stable crude oil is a vapor pressure of 14.7 psi. The commission set its limit at 13.7 psi to accommodate for the potential for sampling or laboratory error.

“We went conservative,” Helms said.

The Dakota Resource Council and others have pushed for the level to be set at a Reid Vapor Pressure of 9. However, the Reid Vapor Pressure is a different method of measurement than what the state uses in its regulations.

Chad Wocken, principal engineer with the Energy & Environmental Research Center at the University of North Dakota, said the Reid Vapor Pressure is commonly used for gasoline but is not a good method for crude oil. There is no effective conversion between the two standards, Wocken said.

Helms said he anticipates the Industrial Commission will take action on the oil conditioning rules at the Dec. 18 meeting.

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