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North Dakota reps seek federal intervention in crude-by-rail law

North Dakota’s lawmakers are fighting Washington state’s new crude-by-rail law, saying it could curtail shipments of state-produced Bakken crude oil.

Last week, the state’s Congressional delegation pressed U.S. Department of Transportation (DOT) Secretary Elaine Chao to confirm that Washington state’s new crude-by-rail law violates the Interstate Commerce Clause of the U.S. Constitution.

Republican Senators John Hoeven and Kevin Cramer and Representative Kelly Armstrong sent Chao a letter saying that the DOT should be the primary authority in determining the regulations for how crude is shipped over state lines.

The Washington state law, which Washington’s Democrat Governor, Jay Inslee, signed on May 9, “effectively blocks” Bakken crude from North Dakota because of the law’s requirement that crude unloaded in the state meet a Reid Vapor Pressure limit of 9 pounds per square inch (psi), the delegation said.

“Washington State’s law will limit our energy industry’s ability to access safe and reliable transportation for this vital commodity, impacting good-paying jobs in our state and undermining our nation’s energy security,” the delegation said in a joint statement last week. “At the same time, instead of getting light, sweet Bakken crude, refineries in the Pacific Northwest will have to rely on foreign crude shipped by barge, which is less environmentally sound. That’s why we will continue working to overturn this law and resolve this matter as soon as possible.”

North Dakota regulations require Bakken crude to have a vapor pressure that does not exceed 13.7 psi, but the Washington state bill says that starting in 2020, companies planning to unload or store crude in Washington will have to put the crude through extra processing so that the vapor pressure is reduced to 9 psi, the delegation said.

The delegation had sent a letter to Inslee in April asking Inslee to veto the legislation (SB 5579) because of “unscientific underpinnings” that determined what vapor pressure level would be appropriate when transporting crude-by-rail.

While North Dakota lawmakers press the DOT, North Dakota Attorney General Wayne Stenehjem said he plans to urge the Pipeline and Hazardous Materials Safety Administration to tell Washington state that it doesn’t have the authority to define acceptable vapor pressure levels.

Crude-by-rail can be a hot issue among localities because of concerns over the potential severity of an accident. Accidents such as the July 2013 incident at Lac Mégantic in Quebec, Canada, in which an unattended train carrying Bakken crude oil derailed, killed 42 people and destroyed the town center, have put communities on edge. Some are also concerned about the environmental impacts that could occur as a result of an oil spill or accident.

Since the federal government hasn’t regulated yet vapor pressure levels for crude transport, any state laws attempting to mandate levels as they pertain to crude transport were susceptible to face legal challenges or federal intervention, experts have said.

Inslee’s office said Washington state is prepared to fight for the validity of the law in court.

“This is an issue that is appropriately settled in court, not via press release. Washington state will defend its law in court,” Inslee spokeswoman Tara Lee said.

The law, which becomes effective on July 28, addresses vapor pressure and reporting requirements to state emergency offices and the state’s Department of Ecology. For facilities constructed or permitted after January 1, 2019, the vapor pressure limit of 9 psi applies for crude being unloaded and loaded in Washington state. Older facilities must comply with the 9 psi threshold if volume has increased by more than 10 percent of the facility’s 2018 volumes. Failure to comply will result in penalties.

Facilities must also provide advanced notices to the state about crude-by-rail shipments passing through, and that information may be passed along to local emergency responders.

The law says it doesn’t prohibit crude from entering Washington state via rail nor does it require the railcar to be checked for the crude oil’s vapor pressure before entering the state.

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Joanna Marsh

Joanna is a Washington, DC-based writer covering the freight railroad industry. She has worked for Argus Media as a contributing reporter for Argus Rail Business and as a market reporter for Argus Coal Daily. Her transportation background extends to writing about automotive fuels and additives for Hart Energy Publishing and producing summaries on advanced transportation research for a federal government agency. In her spare time, she likes writing travel articles, taking photographs, and singing and dancing. She has a bachelor's degree in music and political science from Barnard College, a master's in journalism from Boston University, and a master's in musical theater from Boston Conservatory.

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