Oil train collision reignites XL Pipeline concerns

Jan 4, 2014

When an eastbound train hauling oil collided with a westbound train hauling soybeans that had derailed near an eastern North Dakota town on Monday, Dec. 30, more than 2,000 residents had to be evacuated when toxic fumes from a fire that engulfed Burlington Northern Santa Fe Railway Co. oil cars threatened their community.

The collision and explosion happened about 25 miles west of Fargo near the small town of Casselton. It has renewed a debate over the safety of shipping oil by rail or pipeline. Nineteen cars carrying crude derailed. Of 106 rail cars, 104 were carrying oil.

President Barack Obama is expected to decide this New Year whether to approve the controversial $5.4 billion Keystone XL pipeline, which TransCanada Corp.

proposes to run from Alberta’s oil sands to the U.S. Gulf Coast. Some cynics wonder if a decision will be delayed until after this year’s congressional elections. John Podesta, Obama’s new adviser, has been an adamant opponent to Keystone.

Keystone would allow about 100,000 barrels a day of crude from the Bakken formation in Montana and North Dakota onto the pipeline through a link in Baker, MT.

“The North Dakota accident is the fourth major North American derailment in six months by trains transporting crude. Record volumes of oil are moving by rail as production from North Dakota and Texas have pushed U.S. output to the most since 1988 and pipeline capacity has failed to keep up,” Bloomberg reported.

Keystone critics have warned that pipeline spills in Alabama, Michigan and North Dakota show pipelines carry their own hazards and risks. Last September, a pipeline ruptured and spilled 20,000 barrels of crude in northwest North Dakota. Pipelines tend to be in more sparsely populated areas. One tank car can hold 700 barrels of oil. The BNSF railroad can carry about 500,000 barrels of oil a day in a given month.

Julie Ellingson, Executive Vice President of the North Dakota Stockmen’s Association, said she was grateful no lives were lost in the horrific train accident. Livestock is not moved by rail in the state. She said such accidents rarely happen.

North Dakota is one of the few states to see an uptick in cattle numbers, Ellingson told WLJ. Its population also is at an all-time high as an energy boom drives the economy in tandem with the state’s strong agriculture sector. North Dakota has enjoyed a good hay year and a good grass year due to good precipitation, benefiting the state’s beef industry. The strong economy has encouraged young people to stay in North Dakota.

On Dec. 27, North Dakota Gov. Jack Dalrymple announced the formation of an advisory panel tasked with researching the latest available technologies for enhanced pipeline safety.

Dalrymple has formed a 15-member advisory panel and directed its members to study and provide recommendations regarding the best available technologies to improve the monitoring and control of oil and gas pipeline systems in North Dakota. The technical working group is composed of private sector engineers, energy industry leaders and state and federal officials.

Dalrymple said the panel’s recommendations will be available to landowners, legislators, regulators, local officials and the general public.

The panel’s findings also will be helpful in broader discussions regarding pipeline regulatory policy.

Dalrymple and U.S. Sen. John Hoeven met with BNSF Railway Chief Executive Officer Matthew Rose to express concern about the derailment and explosion. They called for ways to expedite rail transportation safety.

The North Dakota Public Service Commission has scheduled three public hearings in the state for late February to address a major pipeline project that would span nearly the entire length of the state. Enbridge of Calgary, Alberta, is proposing the $2.6 billion, 610-mile Sandpiper pipeline project.

It would originate at Enbridge’s Beaver Lodge station south of Tioga. About 300 miles of it would run to an existing terminal in Superior, WI, representing about half of the project’s costs. The 24-inch pipeline could transport about 225,000 barrels per day out of the state, substantially reducing truck traffic that has damaged roads in the western part of the state.

The North Dakota Department of Mineral Resources put October oil production in the state at more than 941,000 barrels per day. Production is expected to eclipse the one million barrels per day peak in early 2014. — Mark Mendiola, WLJ correspondent