Industry offers crude-train testing standards

The oil industry’s lead trade group released new standards on Thursday for testing and classifying crude shipped by rail after prior shipments were misclassified, including a train that derailed in Canada and killed 47 people.

But as with earlier orders from the federal government, the industry’s standards generally leave it to individual companies to decide how often to test crude in order to gauge its danger.

The American Petroleum Institute said the standards were crafted in cooperation with regulators and the rail industry.

Shipping oil by rail has become far more common as domestic drilling booms in North Dakota, Montana, Texas, Colorado and other states.

In July 2013, a crude train from North Dakota derailed and exploded in Lac-Megantic, Quebec, killing 47. The shipment had been misclassified as posing a low risk, regulators said.

American Petroleum Institute President Jack Gerard said the testing and classification standards were part of a broad effort to reduce the number of oil-train accidents. Since Lac-Megantic, there have been at least six major oil-train derailments in the U.S. and Canada.

A U.S. Department of Transportation spokesman said the agency was reviewing the trade group’s Thursday announcement.

The Association of American Railroads supports the oil industry’s standards, spokesman Ed Greenberg said. The group representing major Canadian and U.S. railroads recently reported almost 230,000 carloads of crude moved in the U.S. during the first six months of 2014, a 12 percent increase versus the same period in 2013.

Hazardous-materials shipments are supposed to be classified into one of nine categories depending on the risk involved. If the materials are misclassified, they could wind up being shipped in less protective rail tank cars, and emergency personnel might follow the wrong protocols when responding to a spill.

The oil in the train that derailed in Lac-Megantic was misclassified as “packing group III,” which the Department of Transportation equates to minor danger.

Oil can no longer be shipped using that less protective category of safety requirements under an emergency order in February from U.S. Transportation Secretary Anthony Foxx. As a result, the fuel could no longer be carried by tank cars that lack certain safety features.

That included only about 3 percent of the total crude fleet, and it did not restrict oil companies from continuing to ship oil using tens of thousands of tank cars that were identified decades ago as a potential safety risk.

In February, federal regulators said they would pursue fines against Hess, Marathon Oil and Whiting for failing to properly classify their oil.