HR 3435 Introduced – Crude Oil Vapor Pressure

Last month Rep. Lowey (D,NY) introduced HR 3435, a bill that would establish crude oil Reid Vapor pressure standards for the shipment of crude oil by rail. The bill is virtually identical to HR 2379 that was introduced in the 114^th Congress. No action was taken on that earlier bill.

The bill would immediately establish a maximum Reid Vapor Pressure limit of 8.5 psi for all crude oil shipped by rail. The DOT would then be required to establish “establish an appropriate national standard for the maximum volatility of crude oil to be permitted to be shipped by rail” {new 49 USC 20169(b)}. No guidance is provided on what would constitute ‘an appropriate national standard’.

Moving Forward

Lowey is not a member of the House Transportation and Infrastructure Committee to which this bill was assigned for consideration, but her co-sponsor {Rep. Garamendi (D,CA)} is. This means that there is a remote chance that the bill could be brought up in Committee. It is highly unlikely that the bill will receive consideration due to oil industry opposition. Since the initial RVP standard set in this bill is the average value reported out of the Bakken oil fields, it would severely reduce oil shipments from those fields (the bills intention).

Commentary

The fact that this bill would rely on the Trump Administration to establish an ‘appropriate national standard’ without providing legislative guidance on that standard provides a clear indication that this is a pro forma introduction with no expectation that the bill will pass into law. Further, the introduction of the bill just before the summer recess (particularly when it is nothing more than a copy of a previously ignored bill) is a clear indication that Lowey and Garamendi produced the bill to ‘show’ their supporters that they are doing something about crude oil shipments.

As I have mentioned in an earlier post the Reid Vapor pressure test required by this bill has a number of technical problems associated with it. There is a good technical article that describes those problems and more effective test for predicting the problems with the rapid rise in pressure due to fire impingement that has led to some of the overpressure situations seen in some Bakken crude oil train wreck.

I would think that most transportation safety people would agree that some sort of reasonable limit on the vapor pressure of crude oil, particularly a standard related to the rate of pressure rise in a fire impingement situation, would help to reduce some of the incidents of explosive fires that we have seen in some crude oil train incidents. Having said that, the Reid Vapor Pressure testing required by this bill is totally inadequate to that task.

OMB Approves PHMSA Oil Volatility ANPRM

On Monday, the OMB’s Office of Information and Regulatory Affairs (OIRA) announced that it had approved for publication an advanced notice of proposed rulemaking (ANPRM) submitted by DOT’s Pipeline and Hazardous Material Safety Administration. PHMSA is considering this rulemaking in response to a petition for rulemaking from the Attorney General of the State of New York.

The ANPRM that will probably be published in the Federal Register in the coming weeks will see information from the public and the regulated community on a variety of questions related to the appropriateness and use of Reid Vapor Pressure (RVP) testing and establishing a maximum RVP standard for shipping crude oil by rail.

The timing of this rulemaking may make for an interesting look at how the Trump Administration will look at the regulatory process for chemical transportation safety. It is generally assumed that the new administration will be very limited in its use of the regulatory process, rather letting ‘market forces’ control how businesses conduct their operations.

This ANPRM is likely to be published before the upcoming inauguration of Donald Trump as President. The public comment period will thus be started under the Obama Administration, but it will be Trump’s DOT Secretary (probably Elaine Cho) who makes the determination of whether to proceed with this rulemaking process or deny the petition for rulemaking.

Those political questions aside, there is still the technical question of the appropriateness of RVP sampling and testing. As I pointed out in an earlier blog post the results of RVP testing can  be extremely variable based upon differences in the sampling regime. If a vapor pressure standard is needed for crude oil shipments (and that is a political question), it would seem to be important that the method used to obtain that information should be the most reliable and replicable method. Hopefully, PHMSA will address this in their request for information in the ANPRM.

HR 2379 Introduced – Volatile Crude

Earlier this month Rep. Lowey, (D,NY) introduced HR 2379, a bill that would prohibit the transportation of certain volatile crude oil by rail. The bill would establish an interim standard of 8.5 psi as the maximum Reid vapor pressure that would be allowed for crude oil transported by rail.

This bill is somewhat similar to HR 1679 that was introduced last month; though the maximum Reid vapor pressure is significantly lower. In fact, this is the average vapor pressure for Bakken crude oil reported by American Fuel & Petrochemical Manufacturers in a study they conducted for PHMSA.

As I mentioned in my blog post on HR 1679, Reid vapor pressure is a totally inadequate measure of the volatility of crude oil. To make matters worse the test results for crude oil are so dependent on the sampling techniques that it is unlikely that two samples obtained by different people of the same material would be statistically similar.

Ms. Lowey is not a member of the House Transportation and Infrastructure Committee {though one of her co-sponsors, Rep. Garamendi (D,CA) is, but he is not on the appropriate sub-committee} so it is unlikely that she would have the political pull to get this bill considered in Committee. This is another crude oil transportation bill that is more about political grandstanding than transportation safety.

HR 1679 Introduced – Bakken Crude

As I had mentioned earlier Rep. Garamendi introduced HR 1679, the Bakken Crude Stabilization Act of 2015. The bill attempts to reduce the risk of shipping crude oil from the Bakken reserve by requiring a reduction in the volatility of the crude oil by specifying a maximum Reid vapor pressure (RVP) of 9.5 pounds per square inch (psi). All Bakken crude oil shipped 90 days after the bill is adopted would have to meet this new standard {§2(b)}.

Commentary

The bill specifically applies the new shipping safety criteria only applies to “Bakken crude oil” {§2(a)}. Crude oils from other sources with higher RVP could still be shipped. If RVP is a measure of crude oil transportation safety, then it should be applied to all crude oils, not just Bakken crude.

The 9.5 psi standard is, according to the bill {§2(a)}, based upon a standard promulgated by the New York Mercantile Exchange (NYMEX) in crude oil futures contracts. While no reference is give a search of futures contract definitions shows that there is just one contract standard that does contain this requirement, but it only applies to Light Sweet Crudes from Texas, Oklahoma or New Mexico. Other crude oil contract definitions (see here, here and here) do not contain product quality specification of any sort and certainly not RVP standards.

Reid vapor pressure (ASTM D323) only provides a measure of vapor pressure at a single temperature 100° F (37.8°C). The American Fuel & Petrochemical Manufacturers in a study they conducted for PHMSA measured RVP on 807 Bakken crude oil samples; the RVP results ranged from 4.2 to 11.3 psig with an average value of 8.5 psig. DOT 111 railcars have a 240 psig minimum bursting pressure limit and have pressure relief devices set at 35 psig. Thus by Reid vapor pressure measurements alone Bakken crude oil should not present any real hazard during shipment.

There is an interesting article in Advances in Petroleum Exploration and Development that discusses the problems with RVP testing of crude oil and the analysis of the hazards associated with crude oil volatility. The authors recommend that more complex testing should be done using a device made by Grabner Instruments using test method ASTM D6336. This method would probably produce data that could provide a reliable safety standard for crude oil volatility.

Moving Forward

This is just one of the bills being introduced this session that address the safety issues associated with rail shipments of Bakken crude oil. This bill would certainly be opposed by the oil industry and would thus see significant opposition in the Republican controls congress. While Garamendi is a senior Democrat on the House Transportation and Infrastructure Committee, he is not on the Railroads, Pipelines and Hazardous Material Subcommittee which would be expected to handle this bill first. It is unlikely that he has the influence to get Chairman Shuster (R,PA) to begin consideration of this controversial and ineffective bill.