November 13, 2014 / 8:59 PM / 5 years ago

UPDATE 1-North Dakota proposes rules to make its oil less volatile

(Adds decision to delay vote on standards)

By Ernest Scheyder

BISMARCK, N.D., Nov 13 (Reuters) - North Dakota’s energy regulators proposed standards on Thursday to remove volatile elements from all crude oil produced in the state, part of a response to concerns about the safety of crude-by-rail transport.

Gov. Jack Dalrymple and the two other members of the North Dakota Industrial Commission opted to delay approval until at least December, however, but appeared likely to support the spirit of the proposal: effectively requiring oil producers to boost the temperature at which they heat crude oil to remove propane, butane and other volatile elements.

“Our crude oil leaving North Dakota will behave like the gasoline you put in your car,” Lynn Helms, the head of the Department of Mineral Resources, which came up with the recommendations, told the commission.

The proposed new rules would require every barrel of oil produced in the state to undergo some kind of treatment. It would require North Dakota oil be treated at temperatures of at least 115 degrees Fahrenheit and pressures of at least 50 pounds per square inch (psi).

The goal would be to produce a barrel of Bakken crude with pressure of no more than 13.7 psi, similar to 13.5 psi for most automobile gasoline.

“We already believe the vast majority of our Bakken crude oil falls well below the standard,” Helms said. “But there are times and places where the standards aren’t met, and we want that to happen less and less.”

The North Dakota Petroleum Council, an industry trade group, said it opposes the specific standards meant to achieve 13.7 psi, and would rather allow producers to use their own methods and simply prove their crude oil meets that threshold.

“If it is 120 degrees (Fahrenheit) outside in the middle of July, you don’t want to run your heater,” said Ron Ness, the council’s president.

Dalrymple called the proposed rules a “working draft” and Attorney General Wayne Stenehjem said he would prefer to consider the standards for a few days before a final vote.

“We want this to move along smartly, but we want people to have a chance to respond,” Stenehjem said.

The commission has reopened the comment period for the new rules through 5 p.m., Wednesday, Nov. 19. Based on those comments, Helms and his staff will present revised rules to commissioners at a special meeting to be held on or before Dec. 11. (Reporting by Ernest Scheyder; Editing by Terry Wade and James Dalgleish)

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