Pipeline Safety Strengthened in North Dakota

April 22, 2015 Elizabeth Alford

On Monday, Governor Jack Dalrymple took steps to strengthen the state's regulatory oversight on crude pipelines by signing House Bill 1358.

This legislation provides $1.5 million for a study of pipeline technology and gives the state greater authority to regulate construction.

After a series for accidents involving leaks and accidents, Gov, Dalrymple sought help from the federal Pipeline and Hazardous Materials Safety Administration in order to help fund university research in pipeline safety.

“Gov. Dalrymple offered a statement, saying that “This legislation builds on our ongoing work to enhance pipeline safety in North Dakota. With this bill’s passage, North Dakota will require significantly more from pipeline builders and operators. At the same time, the state has significantly expanded its pipeline reclamation fund so that we can also resolve land and water restoration needs that are more than 30 years old.”

The issue of pipeline safety and environmental concerns have increased as more oil has been produced in the United States and producers must find ways to move the product. TransCanada Corporaiton has been working since 2008 to get approval to extend the Keystone, allowing another 800,000 barrels of petroleum to flow from the Bakken region to the Gulf Coast.

Halliburton Lays off 10% of Workforce

April 21, 2015 Elizabeth Alford

This week, Halliburton announced first quarter losses of $643 million and acknowledged that they have cut 9,000 jobs over the past two quarters.

The Houston-based oil giant has been forced to scale back operations in light of plummeting energy prices. They confirmed on Monday that the number of layoffs represent approximately 10% of their workforce.

“Acting CFO Christian Garcia said “We are continuing to take a hard look at our operations and additional actions will likely be required in the second quarter. We believe that the long-term prospects of the industry remain sound. We are excited about the pending Baker Hughes transaction, which will significantly enhance the growth potential of our organization.”

In light of the $35 billion takeover of Baker Hughes, Halliburton is selling several business to secure the necessary regulatory clearance. Once the merger is approved by antitrust regulators, the new entity will surpass Texas-based Schlumberger as the world’s largest oil drilling company.

DOT Tells Oil Tankers to Slow Down

April 20, 2015 Elizabeth Alford

The DOT's Federal Railroad Administration issued an emergency order on Friday that establishes a maximum speed of 40 miles an hour for certain trains going through high threat urban areas.

Citing “gaps in the existing regulatory scheme”, the agency beefed up the 2014 voluntary agreement by making this speed limit a requirement for trains hauling crude oil and other flammable liquids. The emergency order defines affected trains as:

20 or more loaded tank cars in a continuous block or 35 loaded tank cars of class 3 flammable liquid
AND at least one DOT-111 tank car loaded with class 3 flammable liquid

“The emergency order states that “Speed is a factor that may contribute to the severity of a derailment or the derailment itself. Speed can affect the probability of an accident. A lower speed may allow for a brake application to stop a train before a collision, or allow a locomotive engineer to identify a safety problem and stop the train before an accident or derailment occurs.”

The requirements go into effect immediately and carry potential penalties of $105,000 dollars for companies that don’t comply.

This order is one of many attempts by the DOT to address this huge issue of rail safety including two previous emergency orders in the last two years. The department has also proposed a more comprehensive series of regulations that are under review by the White House that includes a stronger tank car design and better train braking systems.

Will Bakken Man Camps Disappear?

April 16, 2015 Elizabeth Alford

As low crude prices continue to ravage the industry, the latest victims may be the man camps throughout the Bakken. These camps that have housed thousands are slowly emptying, and some are folding for good.

Read about Bakken Housing, Lodging, Hotels, & Man Camps

Man camps provide temporary employee housing to oilfield workers and have been a prominent feature dotting the landscape since the oil boom brought an influx of people to the region. These camps often provide dining, laundry, and recreational facilities and were given as a perk when things were hopping. But with energy companies tightening their belts, providing housing for workers is quickly on the chopping block for some companies. Instead of offering these perks, some employers are asking workers to cover their own rent, clothing, and transportation.

“Jeff Zarling, president of Williston (N.D.)-based Dawa Solutions Group told Bloomberg, “It was a necessity of recruiting. But today, what we’re seeing is companies want to get out of the housing business.”

Several companies have recently announced intentions to get out of the man camp business including Capital Lodge, one of the largest man camps in the Bakken that has plans to downsize and become a commercial hotel-style operation. Civeo Corp reported an 89% decline in their share price this year. The company slashed its workforce on Monday and said revenue could fall by a third.

Crude by Rail Facing Tougher Standards

April 15, 2015 Elizabeth Alford

Train Derails in North Dakota — NTSB Calls for Stricter Rail Standards

The National Transportation Safety Board (NTSB) is urging tougher standards for oil tankers carrying Bakken crude.

In a 10 page letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA), the NTSB outlined its findings from their study of recent train derailment accidents and concluded that the current fleet of DOT-111 tank cars rupture too quickly and result in spillage and ignition. The agency also found that performance of the industry’s enhanced CPC-1232 rail car is unsatisfactory.

Controversy over the safety of moving crude by rail has skyrocketed as several high-profile accidents have recently made headlines. This combined with a sharp increase in crude by rail since the start of the oil boom has many concerned.

Related: Crude by Rail Up 1700%

“We can’t wait a decade for safer rail cars,” said NTSB Chairman Christopher A. Hart. “Crude oil rail traffic is increasing exponentially. That is why this issue is on our Most Wanted List of Safety Improvements. The industry needs to make this issue a priority and expedite the safety enhancements, otherwise, we continue to put our communities at risk.”

Based on their study, the NTSB gave the following recommendations that would require:

All new and existing tank cars used to transport all Class 3 flammable liquids be equipped with thermal protection systems that meet or exceed the thermal performance standards
All new and existing tank cars used to transport all Class 3 flammable liquids be equipped with appropriately sized pressure relief devices that allow the release of pressure under fire conditions and that minimizes the likelihood of energetic thermal ruptures
An aggressive, intermediate progress milestone schedule, such as a 20 percent yearly completion metric over a 5-year implementation period, for the replacement or retrofitting of legacy DOT-111 and CPC-1232 tank cars to appropriate tank car performance standards
Establishment of a publicly available reporting mechanism that reports at least annually