U.S. Issues Emergency Testing Order to Crude Oil Rail Shippers
Move by Transportation Department Response to Crude-by-Rail Accidents

Federal regulators issued emergency rules Tuesday requiring extensive tests on crude oil moving by rail, concluding the system had become "an imminent hazard to public health and safety and the environment."

The order is aimed at operations in one of the U.S.'s booming oil fields, the Bakken Shale in North Dakota, where production has far outpaced the availability of pipelines to move crude to refineries.

The order will require companies to test each batch of crude for an array of characteristics, from the temperature at which it boils to the percentage of flammable gases trapped in the oil and the vapor pressure, which is created when crude emits gases that can build up inside railcars. Previously, federal rules didn't require that crude be tested as extensively; indeed it only required that crude be properly classified and didn't spell out in any detail how often to test the crude.

The testing requirement goes into effect immediately with a stiff penalty for noncompliance. "Any time the government is talking about $175,000 per incident per day in fines, they're pretty serious," says Kevin Book, an energy analyst at ClearView Energy Partners LLC.


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