Oil-By-Rail Regulators Consider Crude Oil Volatility Limits That Would Require Oil Stabilization

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In July 2015, a train carrying Bakken crude oil derailed in Culbertson, Montana resulting in an oil spill of 35,000 gallons โ€”ย more than the contents of a full rail tankย car.

But unlike all of the other Bakken train accidents where large amounts of oil were spilled something odd happened.ย There was no explosion orย fire.ย 

So what was different about the accident in Culbertson,ย Montana?

One potential explanation was that the oil was significantly less volatile than the oil involved in other Bakken accidents that resulted in fires and explosions. The Federal Railroad Administration told DeSmog that two samples of the oil were taken and the Reid vapor pressure for those samples were 8.73 psi and 9.23 psi.ย ย 

Reid vapor pressure is used to quantify the volatility of substances like crude oil and gasoline. If there are more natural gas liquids in the crude mixture โ€”ย like propane and butane โ€”ย it will have a higher Reid vapor pressure (RVP).ย 

In comparison, the oil involved in the massive fire and explosion in Mount Carbon, West Virginia had an RVP of 13.9 psi according to the Wall Street Journal. Samples taken from the train derailment and fire in Lynchburg, Virginia averaged RVP valuesย over 14ย psi.ย 

While the initial oil-by-rail regulations released in 2015 refused to address the issue of vapor pressure and volatility,ย the Pipeline and Hazardous Materials Safety Administration (PHMSA) announced earlier this month that it was โ€œconsidering revising the Hazardous Materials Regulations (HMR) to establish vapor pressure limits for unrefined petroleum-based products.โ€ย 

According to the announcement โ€œPHMSA is currently assessing the merits of a petition for rulemaking submitted by the Attorney General of the State of New York regarding vapor pressure standards for the transportation of crude oil. The petition requests that PHMSA implement a Reid Vapor Pressure (RVP) limit less than 9.0 pounds per square inch (psi) for crude oil transported byย rail.โ€ย 

9.0 psi is the industry standard for stabilized oil that is moved in pipelines or on ocean-going tankers and in the petition from the New York Attorney Generalย itย notes that pipeline operators in Texas have the right to reject oil with a vapor pressure higher than 9.0ย psi.ย 

The high vapor pressure and volatility of the Bakken oil moved by rail has clearly createdย a concern for regulators ever since the disaster at Lac-Megantic. Secretary Foxx had asked that the original oil-by-rail regulations include volatility limits but was informed by the White House that this would not happen in theย rule.ย 

American Petroleum Institute – โ€œa very dangerousย conversationโ€ย 

In October, at the annual Energy by Rail Conference in Arlington, Virginia, Suzanne Lemieux of the American Petroleum Institute (API) gave a presentation on crude oil volatility and stabilization with the title of โ€œCrude Oil Volatility: Myth vs. Factโ€ โ€”ย and she was pretty clear about what she thought was aย myth.ย 

โ€œI will reiterate that volatility in itself is a myth as far as a one-size-fits-all solution to this problem,โ€ Lemieux said, โ€œItโ€™s not the way to go as far as improvingย safety.โ€

Lemieux went on to make a statement about Bakken oil that ignores all of the known science.ย 

โ€œI would sayย that all of these conversations about [how] Bakken is inherently more dangerous, itโ€™s more volatile, etcetera, etcetera, those things from a chemical properties perspective just arenโ€™tย true.โ€

And while these are controversial statements as they directly contradict the known science, Lemieux made it clear that the API thinks the real danger is even just talking about thisย topic.ย 

โ€œAnd so we in the oil and gas industry see this as a very dangerous conversation. Because the main point is that youโ€™re not really reducingย risk.โ€

Perhaps Lemieux and the API were aware that PHMSA was planning to announce this rulemaking as she also spoke against just such a potentialย outcome.ย 

โ€œAnd if we were to arbitrarily mandate a national volatility standard as some people have suggested it would really cause a lot of problems and add some additional risk into the supply chainย itself.โ€ย 

Lemieux stressed that this idea was a โ€œhuge concernโ€ for the API.ย 

โ€œSo it is a huge concern for us that there are these conversations that talk about volatility in these kind of simplified terms because there is no simple answer and itโ€™s not a simpleย issue.โ€

While none of this is surprising โ€” it echoes what the API and other industry lobbyists have been saying ever since Lac-Megantic โ€”ย it does contradict the known science and indicates that the API will fight any new regulations requiring stabilization of oil to lowerย volatility.ย 

Department of Energy Still โ€œstudyingโ€ย Issue

Lemieux repeatedly cited the work of the Department of Energy (DOE) and other government agencies (including PHMSA)ย as proof that volatility was not a safety factor worth considering when it came to transporting oil by rail and stabilization of oil to reduce volatility would not decreaseย risk:ย ย ย 

โ€œSo we know from several studies and several government agencies including the Department of Transportation, PHMSA within DOT, the Department of Energy and NTSB, that volatility is not the right measure of what makes crude oil safe orย unsafe.โ€

Yet aย PHMSA study on Bakken crude reached the following conclusion, contradicting herย statement:ย 

โ€œOperation Classification has determined that the current classification applied to Bakken crude is accurate under the current classification system, but that the crude has a higher gas content, higher vapor pressure, lower flash point and boiling point and thus a higher degree of volatility than most other crudes in the U.S., which correlates to increased ignitability andย flammability.โ€

Additionally, the DOE studyย Lemieuxย cited makes it very clear that stabilization reduces the volatility of oil.ย 

โ€œThe principal purpose of stabilization, in contrast to conditioning, is to remove hydrocarbon compoundsโ€”which possess fuel value, but which also possess higher vapor pressures (i.e., have lower boiling points)โ€”so as to reduce the volatility of the crudeย oil.โ€ย 

That DOE study also concluded, โ€œit is likely that a combination of crude oil propertiesโ€”especially those associated with potential for flammable vapor formationโ€”could be used to predictย combustibility.โ€

In a September 2014 hearing on the risks of Bakken oil, Christopher Smith, Assistant Secretary for Fossil Energy at the DOE stated the following: โ€œWe think that in a laboratory setting for crude oil –ย higher volatility is going to be consistent with higher light ends – which do have a higher degree of flammability andย volatility.โ€

So it is clear the DOE understands that having more light ends (aka natural gas liquids) in the crude oil increases the volatility which correlates to a higher degree of flammability and volatility. And PHMSA has reached the same conclusion. The DOE-sponsored report also states that stabilizing oil reduces these lightย ends.ย 

Despite this, the DOE has contracted Sandia National Laboratories to further study the issue of crude oil volatility and flammability. Lemieux said the study was expected to be completed sometime in 2018 because they were still just collecting samples of the oil. Clearly there is no sense of urgency to complete thisย study.

Meanwhileย some people believe that the study in itself isย pointless.ย In April of 2015, industry publication Railway Age asked the DOE why they needed to do further research on what is known and established science. In reporting on the lack of responseย from DOE, Railway Age was quite blunt in assessing theย situation:ย 

โ€œThere was no response from the Department of Energy to our request for more information about the study, specifically why it needs two more years to figure out what by now should be obvious to the dullest high school chemistryย student.โ€

In her opening remarks to the Energy by Rail conference, Susan Lemieux made it quite clear that she is not a scientist saying, โ€œJust to preface my presentation I am not a petroleum engineer and nor am I a chemical engineerโ€ฆโ€ย  She followed this with the statement โ€œwhat weโ€™re trying to get to is to understand what crude oil is.โ€ย ย 

While completely unbelievable, the industryโ€™s position โ€”ย despite spending billions a year on research โ€”ย is that it doesnโ€™t understand crudeย oil.

But, to be fair, perhaps that is what happens when you donโ€™t ask scientists. Lemieux repeatedly stated how complex this was and that only the scientists really understoodย it.ย 

In April 2015,ย Al Jazeera asked an actual oil scientist,ย Ramanan Krishnamoorti of the University of Houston, whether more study was required to understand the volatility of crude oilย and he also was quiteย blunt.ย 

โ€œThe notion that this requires significant research and development is a bunch of BS. The science behind this has been revealed over 80 years ago, and developing a simple spreadsheet to calculate risk based on composition and vapor pressure is trivial. This can be doneย today.โ€

And there you have it. When you ask a scientist, that is the answer you get. The science is known and the risks could be quantifiedย today.

Yet the DOE is now in the process of studying the issue for years and the API claims they still donโ€™t understand the science and that even talking about this issue is a โ€œvery dangerous conversation.โ€ย ย 

All of which delays any regulations that would improve safety and protect workers and those living near theย tracks.ย 

Crude Oil Doesnโ€™t Explode Likeย That

After the disaster at Lac-Megantic, Matthew Goitia, chief executive of Peaker Energy Group LLC, a Houston based crude-by-rail company told the Wall Street Journal that, โ€œCrude oil doesn’t explode likeย that.โ€ย 

Which is true. Traditional crude oils with low amounts of natural gas liquids and much lower vapor pressure and volatility do not explode like that. Which is why if you stabilize light volatile oils like the Bakken crude and remove the natural gas liquids you will get a crude that โ€œdoesnโ€™t explode like that.โ€ย ย 

So, the real question is, what should that vapor pressure be to make oil-by-rail safe? Is 9 psi low enough? ย While the lack of fire or explosion in the Culbertson derailment and spill certainly indicates the lower RVP in that incident may have prevented the oil from igniting, would an even lower RVP beย safer?

As reported by DeSmog, prior to the new oil-by-rail regulations, stabilization company Quantum Energy met with federal regulators and presented information that explained how regular crude oil has an RVPย of 5-7 psi and Bakken crude has an RVP between 8-16ย psi.ย 

The last slide in the Quantum presentation shows that โ€œpost stabilizationโ€ Bakken crude would have a RVP of 1.5 – 6ย psi.

If regular crude, the crude oil that โ€œdoesnโ€™t explodeโ€ has a vapor pressure of 5-7 psi, it would seem like that would be a good starting point โ€”ย if safety is theย goal.ย 

For more information on the history on the efforts to address the volatility of Bakken oil, see this video produced byย DeSmog.ย 

Main Blog Image: Slide from Quantum Energy presentation to OIRA.ย 

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Justin Mikulka is a research fellow at New Consensus. Prior to joining New Consensus in October 2021, Justin reported for DeSmog, where he began in 2014. Justin has a degree in Civil and Environmental Engineering from Cornell University.

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