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Federal regulators issue emergency order on oil shipments

Oklahoma City’s Continental Resources Inc. is the largest producer in the Bakken region, source of the oil involved in a series of train accidents.
Published: February 26, 2014
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— Federal regulators issued an emergency order Tuesday requiring more stringent testing of crude oil before shipment by rail to determine how susceptible the cargo is to explosion or fire, a response to a string of train accidents since last summer involving oil from the Bakken region of North Dakota and Montana.

Oklahoma City-based Continental Resources Inc. is the leading producer in the Bakken, where it has 741 million barrels of proved reserves.

Eric Eissenstat, Continental senior vice president, general counsel, and secretary, said the company was evaluating the recently issued order.

“We are studying it, but agree that all crude oil should be properly tested, classed and transported safely,” Eissenstat said.

The order also would place crude oil under more protective sets of hazardous materials shipping requirements, rather than allowing some shipments to be treated as less dangerous, the Transportation Department said.

That means the fuel may no longer be carried by tank cars that lack certain safety features, according to government officials. That includes 1,100 cars that account for about 3 percent of the total crude fleet, according to the Association of American Railroads.

However, the order did not restrict oil companies from continuing to ship crude using tens of thousands of tank cars known as DOT-111s that the National Transportation Safety Board says are at risk of rupture in an accident.

Shippers already had to classify oil shipments based on the risk for explosion or fire, but federal investigators found that many shipments were being misclassified as less dangerous. The order said testing for classification before shipment must be done “with sufficient frequency and quality” to make sure the oil’s volatility is properly gauged.

Misclassified oil

Government investigators found crude oil being transported from the Bakken region was misclassified in samples taken from 11 out of 18 truck shipments en route to rail loading stations, federal officials said earlier this month.

“Today we are raising the bar for shipping crude oil on behalf of the families and communities along rail lines nationwide. If you intend to move crude oil by rail, then you must test and classify the material appropriately,” Transportation Secretary Anthony Foxx said in a statement.

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