Wall Street Journal: Bakken Oil Is Perhaps Most Volatile In The World


MK-CK287_OILTRA_G_20140223182709With explosive train derailments much in the headlines of late, the volatility of Bakken crude oil has become an issue. The feds are seeking data from the oil industry, which is reluctant to feed the idea that Bakken oil makes transport unsafe, but the Wall Street Journal did their own analysis.

According to the results, Bakken oil is some of the most volatile in the world.

Crude oil from North Dakota’s Bakken Shale formation contains several times the combustible gases as oil from elsewhere, a Wall Street Journal analysis found, raising new questions about the safety of shipping such crude by rail across the U.S. …

The Journal analyzed data that had been collected by the Capline Pipeline in Louisiana, which tested crude from 86 locations world-wide for what is known as vapor pressure. Light, sweet oil from the Bakken Shale had a far higher vapor pressure—making it much more likely to throw off combustible gases—than crude from dozens of other locations.

What this means, if the analysis is correct, is that Bakken oil is perhaps the most volatile in the world.

“You can put it in your gas tank and run it,” Jason Nick, a product manager at testing-instruments company Ametek Inc, is quoted as saying in the article. “It smells like gasoline.”

The oil industry argues that whatever the volatility of the oil, it wasn’t what was in the rail cars that made them derail. They say our primary issue is with rail safety.

That’s all well and good, as far as it goes, but rail safety will never be perfect. Derailments are going to happen. I think we’d all prefer that they not be compounded by massive, possibly deadly explosions.

So what can be done? I’m not sure there’s a good answer yet. Safer rail cars that are less likely to puncture during derailment is one step, but I suspect there’s going to need to be more than that. The oil industry people I’ve spoken to tell me this is a new animal.

What may be the most interesting is what sort of impact this has on Bakken oil production. Something like 50 percent of oil-by-rail shipments in America right now are carrying Bakken oil. If the feds crack down on oil by rail shipments, that’s going to put a serious crunch on getting oil out of the Bakken.

Suddenly, pipeline infrastructure seems more important now than ever.