Oil industry, U.S. regulators mulling new testing standards

WASHINGTON, April 2 Thu Apr 3, 2014 4:10am IST

WASHINGTON, April 2 (Reuters) - U.S. transportation officials and leaders of the oil industry are mulling whether standards for testing crude must be updated in light of several oil-by-rail mishaps.

The American Petroleum Institute, the leading voice for the sector, has convened industry experts to develop new testing standards in a move that could help regulators, a senior Department of Transportation official said on Wednesday.

"They have come forward to put together a working group to look at the classification," said Cynthia Quarterman who oversees oil-by-rail shipments as head of the DOT's Pipeline and Hazardous Materials Safety Administration.

"We appreciate that assistance," she told lawmakers at a hearing on hazardous material rules.

Jack Gerard, the API president, has said the review is due to finish in the next several months.

Existing hazardous material rules envision a test for the initial boiling point of crude oil and the liquid's flash point, or the temperature at which it will combust with a spark.

But the rules do not require a test for pressure and some lawmakers and Congressional staff say that is a blind spot in the regulations that should be addressed.

Emergency-responders, too, are concerned since hazardous materials under pressure can pose a higher risk, said Elizabeth Harman, an official with the International Association of Fire Fighters.

"For us, we need to understand the material in that container whether on the road or on the rail," she said after the hearing. "I need to know the vapor pressure, the flammability."

INDUSTRY TENSIONS

While Quarterman thanked the industry for some cooperation, she faulted API for not sharing data about past oil-by-rail shipments out of North Dakota's Bakken energy patch.

Quarterman said the trade group "has not supplied any data with respect to the characteristics of the crude and one would think that they would know."

API said this week that it is intent on aiding officials who want answers about the kinds of oil-by-rail cargo shipments that have recently derailed and led to dramatic explosions.

Most notably a 74-car runaway train carrying crude oil from North Dakota's Bakken region detonated in Lac-Megantic, Quebec, last July, killing 47 people.

Several lawmakers said that they expect the industry to share what it knows about the kinds of shipments now under scrutiny.

"I've pushed both industry and the Department of Transportation to work together on this," said Senator Heidi Heidkamp whose home state of North Dakota is nearing 1 million barrels per day of production with roughly 72 percent of that moving on the tracks.

"If one side isn't holding up its end of the bargain, that's a serious problem," she said in a statement. (Additional reporting by Selam Gebrekidan in New York; editing by Andrew Hay)

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