[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
BAKKEN PETROLEUM: THE SUBSTANCE OF
ENERGY INDEPENDENCE
=======================================================================
JOINT HEARING
BEFORE THE
SUBCOMMITTEE ON ENERGY &
SUBCOMMITTEE ON OVERSIGHT
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 9, 2014
__________
Serial No. 113-92
__________
Printed for the use of the Committee on Science, Space, and Technology
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Available via the World Wide Web: http://science.house.gov
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. LAMAR S. SMITH, Texas, Chair
DANA ROHRABACHER, California EDDIE BERNICE JOHNSON, Texas
RALPH M. HALL, Texas ZOE LOFGREN, California
F. JAMES SENSENBRENNER, JR., DANIEL LIPINSKI, Illinois
Wisconsin DONNA F. EDWARDS, Maryland
FRANK D. LUCAS, Oklahoma FREDERICA S. WILSON, Florida
RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas ERIC SWALWELL, California
PAUL C. BROUN, Georgia DAN MAFFEI, New York
STEVEN M. PALAZZO, Mississippi ALAN GRAYSON, Florida
MO BROOKS, Alabama JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois SCOTT PETERS, California
LARRY BUCSHON, Indiana DEREK KILMER, Washington
STEVE STOCKMAN, Texas AMI BERA, California
BILL POSEY, Florida ELIZABETH ESTY, Connecticut
CYNTHIA LUMMIS, Wyoming MARC VEASEY, Texas
DAVID SCHWEIKERT, Arizona JULIA BROWNLEY, California
THOMAS MASSIE, Kentucky ROBIN KELLY, Illinois
KEVIN CRAMER, North Dakota KATHERINE CLARK, Massachusetts
JIM BRIDENSTINE, Oklahoma
RANDY WEBER, Texas
CHRIS COLLINS, New York
BILL JOHNSON, Ohio
------
Subcommittee on Energy
HON. CYNTHIA LUMMIS, Wyoming, Chair
RALPH M. HALL, Texas
FRANK D. LUCAS, Oklahoma ERIC SWALWELL, California
RANDY NEUGEBAUER, Texas ALAN GRAYSON, Florida
MICHAEL T. McCAUL, Texas JOSEPH KENNEDY III, Massachusetts
RANDY HULTGREN, Illinois MARC VEASEY, Texas
THOMAS MASSIE, Kentucky ZOE LOFGREN, California
KEVIN CRAMER, North Dakota DANIEL LIPINSKI, Illinois
RANDY WEBER, Texas KATHERINE CLARK, Massachusetts
LAMAR S. SMITH, Texas EDDIE BERNICE JOHNSON, Texas
------
Subcommittee on Oversight
HON. PAUL C. BROUN, Georgia, Chair
F. JAMES SENSENBRENNER, JR., DAN MAFFEI, New York
Wisconsin ERIC SWALWELL, California
BILL POSEY, Florida SCOTT PETERS, California
KEVIN CRAMER, North Dakota EDDIE BERNICE JOHNSON, Texas
BILL JOHNSON, Ohio
LAMAR S. SMITH, Texas
C O N T E N T S
September 9, 2014
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Cynthia Lummis, Chairman,
Subcommittee on Energy, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 7
Written Statement............................................ 8
Statement by Representative Eric Swalwell, Ranking Minority
Member, Subcommittee on Energy, Committee on Science, Space,
and Technology, U.S. House of Representatives.................. 8
Written Statement............................................ 9
Statement by Representative Paul C. Broun, Chairman, Subcommittee
on Oversight, Committee on Science, Space, and Technology, U.S.
House of Representatives....................................... 10
Written Statement............................................ 11
Statement by Representative Kevin Cramer, Subcommittee on Energy,
Subcommittee on Oversight, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 11
Statement by Representative Dan Maffei, Ranking Minority Member,
Subcommittee on Oversight, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 12
Written Statement............................................ 13
Witnesses
Panel I
Mr. Chris Smith, Principal Deputy Assistant Secretary, Office of
Fossil Energy, U.S. Department of Energy
Oral Statement............................................... 15
Written Statement............................................ 17
Submitted Biography.......................................... 25
Mr. Timothy Butters, Deputy Administrator, Pipeline and Hazardous
Materials Safety Administration, U.S. Department of
Transportation
Oral Statement............................................... 26
Written Statement............................................ 28
Submitted Biography.......................................... 42
Discussion....................................................... 43
Panel II
Ms. Kari Cutting, Vice President, North Dakota Petroleum Council
Oral Statement............................................... 63
Written Statement............................................ 66
Submitted Biography.......................................... 72
Mr. John Auers, Executive Vice President, Turner, Mason, &
Company
Oral Statement............................................... 73
Written Statement............................................ 76
Submitted Biography.......................................... 86
Mr. Mark Zoanetti, Deputy Chief of Special Operations, Syracuse
Fire Department
Oral Statement............................................... 87
Written Statement............................................ 90
Submitted Biography.......................................... 93
Discussion....................................................... 94
Appendix I: Answers to Post-Hearing Questions
Mr. Chris Smith, Principal Deputy Assistant Secretary, Office of
Fossil Energy, U.S. Department of Energy....................... 106
Mr. Timothy Butters, Deputy Administrator, Pipeline and Hazardous
Materials Safety Administration, U.S. Department of
Transportation................................................. 109
Ms. Kari Cutting, Vice President, North Dakota Petroleum Council. 113
Appendix II: Additional Material for the Record
Prepared statement by Representative Eddie Bernice Johnson,
Ranking Member, Committee on Science, Space, and Technology,
U.S. House of Representatives.................................. 118
BAKKEN PETROLEUM: THE SUBSTANCE OF
ENERGY INDEPENDENCE
----------
TUESDAY, SEPTEMBER 9, 2014
House of Representatives,
Subcommittee on Energy and Subcommittee on
Oversight,
Committee on Science, Space, and Technology,
Washington, D.C.
The Subcommittees met, pursuant to call, at 2:05 p.m., in
Room 2318 of the Rayburn House Office Building, Hon. Cynthia
Lummis [Chairwoman of the Subcommittee on Energy] presiding.
[GRAPHICS NOT AVAILABLE TIFF FORMAT]
Chairwoman Lummis. The joint hearing of the Subcommittee on
Energy and the Subcommittee on Oversight will come to order.
Good afternoon. Welcome to today's joint hearing. It is
titled ``Bakken Petroleum: The Substance of Energy
Independence.'' Now, in front of each Member are packets
containing the written testimony, biographies, and truth-in-
testimony disclosures for today's witnesses.
Before we get started, since this is a joint hearing
involving two subcommittees, I want to explain how we will
operate procedurally so all Members understand how the
question-and-answer period will be handled. After first
recognizing the Chair and Ranking Members of the Energy and the
Oversight Committees, we will recognize those members of the
subcommittee present at the gavel in order of seniority on the
full committee, and those coming in after the gavel will be
recognized in order of arrival.
I now recognize myself for five minutes for an opening
statement.
I want to welcome our witnesses to today's hearing. Today,
the Energy and Oversight Subcommittees will inquire about the
characteristics and behavior of petroleum produced from the
Bakken region.
Petroleum from the Bakken region recently passed a million
barrels per day, which accounts for approximately 12 percent of
total domestic production. This is an important resource for
the United States and it deserves due attention.
That said, we are not here today to debate the merits of
rail or pipeline transportation, or their current and proposed
regulation. Those are important issues, but today we have a
scientific focus: the characteristics and behavior of Bakken
petroleum.
As we will hear today, the DOT's Pipeline and Hazardous
Materials Safety Administration has undertaken a broad sampling
and testing program to better understand if or to what extent
Bakken petroleum may be unique from other petroleum types.
In July 2014, PHMSAis that what--is that right? PHMSA, you
call it PHMSA? Okay--released a report, titled ``Operation Safe
Delivery Update,'' which concluded that Bakken petroleum ``is
more volatile than most other types of crude, which correlates
to increased ignitability and flammability.'' These conclusions
regarding volatility without context and the assertion that
volatility necessarily correlates to increased ignitability and
flammability have generated significant controversy, which I am
hopeful we can resolve at today's hearing.
The written testimony of our PHMSA and DOE witnesses
clarifies the context of volatility: that petroleum from the
Bakken region is properly classified as a light sweet crude oil
and not outside the norms for light crude oils. And today's DOE
written testimony states that ``more scientific analysis is
needed to better define the relationship between volatility and
ignitability/flammability.''
The Science Committee will be interested to hear about the
results of DOE's research as it progresses. I look forward to
further discussion and again thank today's witnesses for
participating in today's hearing.
[The prepared statement of Mrs. Lummis follows:]
Prepared Statement of Subcommittee on Energy
Chairwoman Cynthia Lummis
Good afternoon. I would like to welcome our witnesses to today's
hearing titled Bakken Petroleum: The Substance of Energy Independence.
Today, the Energy and Oversight Subcommittees will inquire about the
characteristics and behavior of petroleum produced from the Bakken
region.
Petroleum from the Bakken region recently passed 1 million barrels
per day, which accounts for approximately 12% of total domestic
production. This is an important resource for the United States and it
deserves due attention.
That said, we are not here today to debate the merits of rail or
pipeline transportation, or their current and proposed regulations.
Those are important issues, but today we have a scientific focus: the
characteristics and behavior of Bakken petroleum.
As we will hear today, the DOT's Pipeline and Hazardous Materials
Safety Administration, also known as ``PHMSA,'' has undertaken a broad
sampling and testing program to better understand if or to what extent
Bakken petroleum may be unique from other petroleum types.
In July 2014, PHMSA released a report, titled ``Operation Safe
Delivery Update,'' which concluded that Bakken petroleum ``is more
volatile than most other types of crude--which correlates to increased
ignitability and flammability.'' These conclusions regarding: (1)
volatility without context and (2) the assertion that volatility
necessarily correlates to increased ignitability and flammability have
generated significant controversy, which I am hopeful we can resolve in
today's hearing.
The written testimony of our PHMSA and DOE witnesses clarifies the
context of volatility: that petroleum from the Bakken region is
properly classified as a ``light, sweet crude oil'' and not outside the
norms for light crude oils. And today's DOE written testimony states
that ``more scientific analysis is needed to better define the
relationship between volatility and ignitability/flammability.''
The Science Committee will be interested to hear about the results
of DOE's research as it progresses. I look forward to further
discussion and again, I thank today's witnesses for participating in
today's hearing.
Chairwoman Lummis. The Chair now recognizes Mr. Swalwell
for his opening statement.
Mr. Swalwell. Thank you, Chairwoman Lummis and Chairman
Broun, for holding this hearing and I want to thank our
witnesses for appearing today and for their forthcoming
testimony.
We are clearly in the midst of a substantial boom in oil
and gas production, and it is worth reminding my colleagues
here today that this is a great example, whether you agree that
this is a long-term solution for our country or not, that much
of the advances that have allowed this boom have come from
investments that have been made from and by the Department of
Energy. And they have directly allowed advancements in
directional drilling technologies and hydraulic fracturing
practices that have made this boom possible.
But also it should come as no surprise that the rapid,
massive growth and demand to transport these fuels has raised
new issues. What kind of growth am I talking about? Well,
according to the Association of American Railroads, there were
10,800 car loads of crude oil transported by rail in 2009. Now
that may sound like a lot, but in 2013 there were over 400,000
carloads of crude oil or about 37 times as much. And it is
unfortunately becoming increasingly clear that our current
railway safety standards were not designed to handle anywhere
near these levels and types of crude oil transport that we are
seeing today. It is incumbent upon Congress, I believe, to make
sure that the policies and regulations stay up with the
advancements in technology.
There have been several significant accidents in recent
years, one of which led to the tragic death of 47 people in a
small town in Queebec last year. And we are frankly lucky that
the location of some of these other accidents were remote
enough to avoid similar or even worse outcomes.
My home State of California is projected to receive up to
150 million barrels of oil by rail by 2016 compared with just
two million barrels in 2011, and much of that oil will be
volatile crude from the Bakken region of North Dakota and
Canada. And people in my district and at home in the East Bay
are rightfully concerned about what this will mean for their
safety and that is why I am glad that the Department of
Transportation is finally addressing this issue head-on. So we
must do all that we can to protect any persons who are in the
path of this crude oil as it is being transported.
And I would also just like to address the title of the
hearing, ``Bakken Petroleum: The Substance of Energy
Independence.'' I disagree that Bakken petroleum is true energy
independence. I believe this provides at best an energy
lifeline, but I think true energy independence in our country
will be when we are able to fully harness and capture the
renewables. And so I doubt that when we reach that point, and I
hope it is soon, we will ever have to hold a hearing on the
volatility of wind, solar, or fuel cells, and we should be
reminded about the difference between the two.
Thank you again to all of our witnesses for being here
today and providing us with an opportunity to hear from a wide
range of stakeholders, and I yield back.
[The prepared statement of Mr. Swalwell follows:]
Prepared Statement of Subcommittee on Energy
Ranking Minority Member Eric Swalwell
Thank you Chairwoman Lummis and Chairman Broun for holding this
hearing, and I also want to thank our witnesses for their testimony and
for being here today.
We are obviously in the middle of a substantial boom in oil and gas
production, and it is worth reminding my colleagues here today that
this is a great example of how government research can pay off when it
comes to energy development. It is widely recognized that DOE-supported
research was key to advancing the directional drilling technologies and
hydraulic fracturing practices that have made this boom even possible.
But it should also come as no surprise that the rapid, massive
growth in demand to transport these fuels has raised new issues. What
kind of growth am I talking about? Well, according to the Association
of American Railroads, there were 10,800 carloads of crude oil
transported by rail in 2009. Now that may sound like a lot, but in
2013, there were over 400,000 carloads of crude oil, or about 37 times
as many. And it's unfortunately becoming increasingly clear that our
current railway safety standards were not designed to handle anywhere
near these levels and types of crude oil transport we're seeing today.
There have been several significant accidents in recent years, one
of which led to the tragic death of 47 people in a small town in
Queebec last year. And we may frankly be lucky that the locations of
some of the other accidents were remote enough to avoid similar--or
even worse--outcomes.
My home state of California is projected to receive up to 150
million barrels of oil by rail by 2016, compared with just 2 million
barrels in 2011, and much of that oil will be volatile crude from the
Bakken region of North Dakota and Canada.
This is why I am glad that the Department of Transportation is
finally addressing this issue head on. It appears to me that with this
proposed rule we are ensuring that the United States not only continues
to be a leader in the production and transportation of these fuels, but
that we really do this in a safe and responsible manner.
Thank you again to all of our witnesses for being here today and
providing us with an opportunity to hear from a wide range of
stakeholders, and with that I yield back.
Chairwoman Lummis. Thank you, Mr. Swalwell.
The Chair now recognizes the Chairman of the Subcommittee
on Oversight, Mr. Broun, for his opening statement.
Mr. Broun. Thank you, Chairwoman Lummis, and I welcome all
of our witnesses today.
While I look forward to hearing from both panels today, I
must say I am very disappointed, though not surprised, that
this Administration is continuing to have an unwillingness to
work with the Congress. Chairwoman Lummis and I invited
representatives from the agencies who are experts in the
subject matter because we are interested in the science behind
Bakken crude. Instead, both agencies appearing before the
Committee today declined to provide the witnesses that we
requested, sending us in their place, witnesses more
knowledgeable on the politics behind Bakken crude. As I said, I
am not surprised, I am just very disappointed.
Over the past few years, the United States has made
significant technological advances in the production of energy,
leading to an increased supply of our country's vast God-given
resources to fulfill the energy needs of Americans. Much of
this is due to the influx of crude oil output from the Bakken
Shale region, which topped one million barrels per day earlier
this year, and is expected to climb to 1.5 million barrels a
day over the next three years.
Given the large volume of crude being transported across
the country, the Department of Transportation began testing its
characteristics to determine its flammability and volatility.
Preliminary results of the review were published in July, which
concluded that crude oil from the Bakken formation ``is more
volatile than most other types of crude, which correlates to
increased ignitability and flammability.''
The DOT report's comparison of the Bakken crude, which is
classified as a light sweet crude, to crude oil in general,
including heavier crudes, is a bit like comparing apples to
oranges because light sweet crude as a class is generally
considered to be more volatile than the heavier crudes.
Separately, the North Dakota Petroleum Council commissioned a
similar kind of study to the DOT study. While both the
government and industry studies led to similar scientific
results, the NDPC study concluded that Bakken crude is no more
volatile, again, no more volatile than other types of light
sweet crudes.
Energy independence creates a healthy economy, jobs at
home, and directly correlates to our national security by
limiting how much we rely on foreign energy imports to survive
and prosper. America is on the road towards energy
independence, with domestic crude contributing extensively, and
it would be disastrous to impede on this extraordinary
possibility.
While I have heard the Administration claim over the years
that it supports an ``all-of-the-above'' energy plan, I hope
that when all is said and done, Bakken crude does not become an
example of a ``none-of-the-below'' practice that seems to be
prevalent in this Administration.
Thank you again, Chairwoman Lummis, and I would like to
yield the balance of my time to my good friend, Mr. Cramer, the
Vice Chairman of the Oversight Subcommittee. Mr. Cramer.
[The prepared statement of Mr. Broun follows:]
Prepared Statement of Oversight Subcommittee
Chairman Paul Broun
Thank you, Chairwoman Lummis, and welcome to all of our witnesses.
While I look forward to hearing from both panels today, I must say I am
disappointed--though not surprised--at this Administration's continued
unwillingness to work with the Congress. Chairwoman Lummis and I
invited representatives from the agencies who are experts in the
subject matter because we are interested in the science behind Bakken
crude. Instead, both agencies appearing before the Committee today
declined to provide the witnesses we requested, sending us in their
place witnesses more knowledgeable on the politics behind Bakken crude.
As I said, I am not surprised, just disappointed.
Over the past few years, the United States has made significant
technological advances in the production of energy, leading to an
increased supply of our country's vast resources to fulfill the energy
needs of Americans. Much of this is due to the influx of crude oil
output from the Bakken Shale region, which topped one million barrels
per day earlier this year, and is expected to climb to 1.5 million
barrels a day over the next three years.
Given the large volume of crude being transported across the
country, the Department of Transportation began testing its
characteristics to determine its flammability and volatility.
Preliminary results of the review were published in July, which
concluded that crude oil from the Bakken formation ``is more volatile
than most other types of crude--which correlates to increased
ignitability and flammability.''
The DOT report's comparison of the Bakken crude, which is
classified as a light, sweet crude, to crude oil in general, including
heavier crudes, is a bit like comparing apples to oranges because light
sweet crudes as a class are generally considered to be more volatile
than heavier crudes. Separately, the North Dakota Petroleum Council
commissioned a study similar to the DOT study. While both the
government and industry study led to similar scientific results, the
NDPC study concluded that Bakken crude is no more volatile than other
types of light, sweet crudes.
Energy independence creates a healthy economy, jobs at home, and
directly correlates to our national security by limiting how much we
rely on foreign energy imports to survive and prosper. America is on
the road toward energy independence, with domestic crude contributing
extensively, and it would be disastrous to impede on this extraordinary
possibility.
While I have heard the Administration claim over the years that it
supports an ``all-of-the-above'' energy plan, I hope that when all is
said and done, Bakken crude does not become an example of a ``none of
the below'' practice.
Thank you again, Chairwoman Lummis, and I would like to yield the
balance of my time to my good friend, Mr. Cramer, the Vice Chairman of
the Oversight Subcommittee.
Mr. Cramer. I thank the Chairman, I thank Chairwoman Lummis
and the Ranking Members, and certainly thank Chairman Smith of
the overall committee for agreeing to call this hearing.
Being the sole Representative from the State known as
Bakken, North Dakota, and being that North Dakota is the place
where one of the rail accidents occurred, I am familiar with
both sides of this issue and prefer that there not be sides but
rather that we all pull in the same direction.
And I have to say that while I share Chairman Broun's
perhaps disappointment that we didn't get the witnesses that
perhaps we asked for, I am very pleased with the pre-filed
testimony. I guess that is the right tone and look forward to
the opportunity for Q&A in a reasoned and scientific manner
that is true to the spirit of this committee and to the
commission of this committee.
I think it is hard to move forward with a lot of rules
until we know for sure what we are dealing with on the one
hand. On the other hand, there is a sense of urgency about the
safety of moving this product and we want to be able to have a
rule that not just meets the urgency of the moment but also is
a good rule and a correct rule. That said, I too, and have from
the very beginning, want this hearing to focus specifically on
the characteristics of Bakken crude, perhaps talk about the
differences and similarities in the various studies that have
been done between industry and the government and make sure
that we are all working together on the same team, pulling the
same direction, and for the good of all of our constituents.
So with that, I appreciate the time that you yielded.
Chairwoman Lummis. Thank you, Mr. Broun, and thank you, Mr.
Cramer.
The Chair now recognizes Mr. Maffei for his opening
statement.
Mr. Maffei. Thank you very much, Madam Chair, and thank you
for holding this hearing today.
Like Mr. Swalwell, I too found the title of this hearing
rather curious. The title suggests that Bakken crude oil is
part of America's path to energy independence and I certainly
do want to talk about the various issues related to it. It is
certainly one of those sources that has been increasing in
recent years. But if we do truly want to explore ``energy
independence'' in the United States, as the title of this
hearing does suggest, and given the fact that we are the
Science and Technology Committee, we should be exploring the
use and development of domestic renewable sources of energy
such as wind, solar power, biofuels, geothermal, even nuclear,
those that do not add to the threats posed by global climate
change, which we have already started to see.
That said, once one gets past the politically loaded title,
I am truly grateful to both the Chairwoman of the Energy
Subcommittee and the Chairman of the Subcommittee on Oversight
for calling this hearing today. The issue of Bakken crude oil
and railcar safety combined is particularly important to my
constituency, my constituents, and my district in upstate New
York since we have two train cars a day that carry Bakken crude
oil that pass through the Syracuse, New York, area in my home
district.
And while the production of crude oil from the Bakken
region in North Dakota, Montana, and Canada has increased
markedly in the past several years, jumping a bit more from--
more than 100,000 barrels per day in 2007 to more than one
million per day today, so have the fears about potentially
catastrophic accidents as mile-long train cars transporting
Bakken crude traverse the country.
Now, Bakken crude oil is more volatile, and what I mean by
volatile is a lower flashpoint that could lead to an explosion.
It is more than other heavy crude oils. But I agree with the
Chairs that this volatility is consistent with other light
sweet crude oils. We have no reason to think it is any worse or
better than other light sweet crudes.
So to help address some of the known safety issues in
transporting light crude oils, generally in working with the
industry, the Pipeline and Hazardous Materials Safety
Administration came out with a proposed regulation two months
ago regarding crude-by-rail safety issues, including methods to
help reduce the risk of accidents and areas for improved safety
and response to these potential hazards, and I am very happy to
have PHMSA witnesses today to discuss their efforts regarding
improved safety on our rail.
I am also particularly pleased that we have a witness from
my home district in Syracuse, New York, Mark Zoanetti, the
Deputy Chief of Special Operations for the Syracuse Fire
Department, which I will say is one of the best mid-level city
fire departments in the United States, and he will help us
discuss the real-world consequences of these hazards and how
first responders can train to address the threats and potential
improvement that would help all of us--help all those
departments respond to these and other hazards involving
railcar safety.
Again, trains carrying Bakken crude oil traverse the length
of my upstate New York district on their way to Albany, New
York, and many East Coast refineries, as they do cross much of
the United States. Using the rail lines, these trains can be up
to a mile long and they can carry roughly 120 tank cars with
85,000 barrels of oil. So any substance with any volatility at
all would obviously be a concern to me. I am not necessarily
judging Bakken crude as any different or any more of a concern,
but safety clearly is a concern and one we have to deal with.
And so, therefore, I do look very much forward to hearing
all the witnesses on both panels today, and again, I want to
thank both the Chairman and the Chairwoman for holding this
hearing and also thank my fellow Ranking Member, Mr. Swalwell.
I yield back.
[The prepared statement of Mr. Maffei follows:]
Prepared Statement of Oversight Subcommittee
Ranking Minority Member Dan Maffei
Thank you Mr. Chairman for calling this hearing today. The issue of
Bakken crude oil and railcar safety is particularly important to me and
my constituents since two trains a day carrying Bakken crude oil pass
through Syracuse, New York, my home district. While the production of
crude oil from the Bakken region in North Dakota, Montana and Canada
has exploded in the past several years jumping from a bit more than
100,000 barrels per day in 2007 to more than one million barrels per
day today, so have the fears about potentially catastrophic accidents
as milelong train cars transporting Bakken crude oil traverse the
country.
Bakken crude oil is more volatile than other heavier crude oils,
although its volatility is consistent with other light sweet crude
oils. However, since production of Bakken crude has surged in recent
years and more than 70-percent of this crude oil is now shipped by rail
there is legitimate concern about the volume of this oil being shipped
by rail given its known potential volatility and an increasing number
of train derailments and accidents involving Bakken crude over this
same time period. These are legitimate concerns. While the focus of
today's hearing seems to have shifted from originally examining safety
issues associated with the transport of Bakken crude and other light
crude oils to discussing how Bakken crude oil is part of America's path
to energy independence, we must consider the safety issues associated
with it. If we truly want to explore ``energy independence,'' as the
title of this hearing suggests, and given the fact we are the science
and technology committee, we should be exploring the use and
development of renewable sources of energy, such as wind and solar-
powered technologies.
Bakken crude oil is an important contributor to our energy
portfolio, is a vital economic resource, and helps keep domestic energy
costs low. While we need to do all we can to keep energy costs low for
hardworking middle class families, we must address the real world
consequences associated with crude-by-rail safety issues and potential
accidents. Both these concerns and consequences are increasing as more
crude oil moves along more miles of track than ever before creating new
risks and potential hazards. The National Transportation Safety Board
(NTSB), for instance, describes nine significant crude oil accidents by
rail from 2006 through February of this year. However, eight of those
accidents have occurred since March 2013. The most significant accident
occurred in Lac Meegantic in Queebec, Canada in July 2013, involved 72
rail cars carrying Bakken crude oil and resulted in the destruction of
30 buildings and the death of 47 residents of that town. Other less
serious accidents have occurred since then in Alabama, North Dakota and
Virginia, for instance.
To help address some of the known safety issues in transporting
light crude oils, and working with industry, the Pipeline and Hazardous
Materials Safety Administration (PHMSA) came out with proposed
regulations two months ago regarding crude-by-rail safety issues,
including methods to help reduce the risk of accidents and areas for
improved safety and response to these potential hazards. I am happy we
have a PHMSA witness here today to help discuss their efforts regarding
improved safety conditions for transporting crude oil by rail.
I am also particularly pleased that we have a witness from my home
district of Syracuse, New York, Mark Zoanetti, the Deputy Chief of
Special Operations for the Syracuse Fire Department who can help
discuss the real world consequences of these hazards, how first
responders need to train to address these threats, and potential
improvements that would help them respond to these and other hazards
involving railcar safety issues. Trains carrying Bakken Crude Oil
traverse the length of my Upstate New York District on their way to
Albany, New York and major East Coast refineries. Using CSX rail lines,
these trains can be up to a mile and 120 tank cars long, carrying
roughly 85,000 barrels of oil. Given the high frequency and volume of
Bakken Crude Oil transport through my Upstate New York and other
regions of the Country, it is important that we address the public
safety concerns of this issue. Thank you for being here today Deputy
Chief Zoanetti and I look forward to your testimony and the testimony
of all of our witnesses.
With that I yield back.
Chairwoman Lummis. Thank you, Mr. Maffei. And I understand
it is Maffei like buffet, not fi. And I am Lummis, rhymes with
hummus so we are in the food groups--
Mr. Maffei. Exactly.
Chairwoman Lummis. --with our names. Okay. Thank you.
If there are Members who wish to submit additional opening
statements, your statements will be added to the record at this
point.
Chairwoman Lummis. It is now time to introduce our first
panel of witnesses. Our first witness is Mr. Chris Smith,
Principal Deputy Assistant Secretary for the Office of Fossil
Energy at the Department Of Energy. Mr. Smith was appointed in
2009 as Assistant Secretary for Fossil Energy's Office of Oil
and Natural Gas. Prior to joining DOE, Mr. Smith spent 11 years
with international oil companies focused on upstream business
development and LNG trading.
Our second witness today is Mr. Timothy Butters, Deputy
Administrator for Pipeline and Hazardous Materials Safety
Administration at the Department Of Transportation. Prior to
joining PHMSA, he served as the Assistant Chief of Operations
for the City of Fairfax Fire Department. He served as the
Chairman of the Hazardous Materials Committee for the
International Association of Fire Chiefs. Deputy Administrator
Butters also previously served ten years as Managing Director
of the Chemical Transportation Emergency Center.
As our witnesses should know, spoken testimony is limited
to five minutes each, after which members of the committee will
have five minutes each to ask questions. Your written testimony
will be included in the record of the hearing.
It is the practice of the Subcommittee on Oversight to
receive testimony under oath, so, gentlemen, if you would
please now stand and raise your right hand.
Do you solemnly swear or affirm to tell the whole truth and
nothing but the truth, so help you God?
Let the record reflect that the witnesses participating
have taken the oath.
Thank you, gentlemen. You may be seated.
I now recognize our first witness, Mr. Smith, for five
minutes.
TESTIMONY OF MR. CHRIS SMITH,
PRINCIPAL DEPUTY ASSISTANT SECRETARY, OFFICE OF FOSSIL ENERGY,
U.S. DEPARTMENT OF ENERGY
Mr. Smith. Chairwoman Lummis and Broun, Ranking Members
Swalwell and Maffei, and members of the subcommittee, thank you
for the opportunity to appear before you today to discuss oil
production in the Bakken formation.
As you know, the United States is experiencing a
renaissance in oil and gas production. According to the Energy
Information Administration, U.S. oil production averaged an
estimated 8.5 million barrels per day in July, the highest
monthly level of production since April of 1987. The 2015
forecast of 9.3 million per day represents the highest annual
average level of oil production since 1972. This domestic oil
boom is due primarily to the new unconventional production of
light sweet crude oil from tight oil formations like the Bakken
in North Dakota, as well as the Eagle Ford and the Permian
Basin in Texas. These private developments were made possible
in part by three decades of industrial research cost-shared by
the Department of Energy into technologies such as hydraulic
fracturing, horizontal drilling, and three-dimensional mapping.
The Department of Energy has been actively engaged with our
colleagues at the Department of Transportation in addressing
the challenges associated with moving this wealth of new
production to market. While the Department of Energy does not
collect data on the specific volume of petroleum products
transported by rail, data from the North Dakota Pipeline
Authority indicates daily export volumes by rail from North
Dakota have increased over the past few years from 70,000
barrels per day to over 700,000.
There is growing public concern over the safety of
transportation of crude oil by rail and the public is looking
to the government for appropriate oversight and regulations to
ensure their safety. These public concerns were voiced in
Bismarck, North Dakota, last month at a public forum in which
Secretary Ernie Moniz and Secretary of Transportation Foxx
participated in as part of the Administration's Quadrennial
Energy Review.
Ensuring public confidence in the safety of these shipments
is a priority, particularly because this domestically produced
oil is important for American energy security and our economic
prosperity. To that end, it has become clear that the continued
realization of this tremendous resource may require additional
measures to address safety concerns of the communities where it
is extracted and through which it is transported.
In light of this new and growing resource, various efforts
have been launched by the Federal and State Governments and
industry to better understand the safety aspects of moving
Bakken and other crude oils from tight oil formations. The most
detailed understanding of the chemical and physical
characteristics of Bakken crude oil is based on two studies:
PHMSA's Operation Safe Delivery report and a study by Turner,
Mason & Company on behalf of the North Dakota Petroleum
Council.
Based on our review of these two studies and drawing on our
general knowledge of crude oil, the Department of Energy
considers Bakken to be a light sweet crude oil that can be
considered more volatile than some, but not necessarily all, of
the other crude oils produced in the United States.
The North Dakota Petroleum Council and the PHMSA studies
are based on test and analyses of the physical and chemical
properties of a statistically significant set of Bakken crude
samples collected from above-ground storage tanks at various
individual leases and rail-loading facilities throughout the
Bakken.
Volatility is a measure of the tendency for a material to
vaporize; that is the ease with which it changes from a liquid
to a gaseous state. Crude oil contains numerous different
hydrocarbon components with different volatilities. The lower
molecular weight hydrocarbon constituents such as ethane,
propane, and butane are more volatile than hydrocarbons with
high molecular weight, and the volatility of any particular
crude oil will increase as the concentrations of these lower
molecular weight constituents rise.
DOE has not attempted to make any detailed comparison
between Bakken crude oil and other forms of crude oil. In
support of the Department of Transportation, which has the
preponderance of federal regulatory responsibilities in this
area, the Administration is considering further investigation
into the properties of these crudes from tight oil formations
and how these properties may attribute to their safe handling
and transport.
At the end of the day, if we are to realize the full
potential of the type of oil found in the Bakken and other
formations, we need to make sure that it is extracted and
transported safely. The Department of Energy stands ready to
lend its expertise and experience to that effort.
With that, I would be happy to answer any questions that
the Committee might have at this time, and thank you for giving
me the opportunity to testify today.
[The prepared statement of Mr. Smith follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairwoman Lummis. Thank you, Mr. Smith.
I now recognize our second witness, Mr. Butters, for five
minutes.
TESTIMONY OF MR. TIMOTHY BUTTERS,
DEPUTY ADMINISTRATOR, PIPELINE AND HAZARDOUS MATERIALS SAFETY
ADMINISTRATION,
U.S. DEPARTMENT OF TRANSPORTATION
Mr. Butters. Good afternoon. Madam Chairwoman Lummis,
Chairman Broun, Members Swalwell and Maffei, and other members
of the committee, thank you for the opportunity to appear
before you to discuss PHMSA's data results and testing of
Bakken shale crude oil.
Safety is the number one priority for Secretary Foxx and
everyone in PHMSA, as well as the other modal administrations
within the U.S. Department of Transportation. It drives
everything we do. PHMSA works diligently to protect people and
the environment from the risks of hazardous materials by all
modes of transportation, air, surface, marine, and pipeline.
The United States is seeing historic highs in domestic
production and transportation of crude oil and natural gas.
This is a positive development for our nation's economy and
energy independence. These products are also considered
hazardous materials and the safety responsibilities associated
with their production and transportation are serious and
significant. The volume of crude oil transported by rail,
barge, pipeline, and truck throughout the United States is
greater than ever, and it is DOT's responsibility to ensure
these hazardous materials are transported safely.
The production of shale crude oil in the Bakken region has
elevated North Dakota as the second-largest oil-producing State
in the United States. As of March of 2014, over a million
barrels of oil was produced every day in North Dakota, the
majority of which was transported by rail. In 2009, as was
noted earlier, approximately 11,000 carloads were moved by rail
compared to more than 400,000 in 2013.
These compelling statistics and the recognition of DOT's
regulatory responsibility for safety is why Secretary Foxx and
Administrator Quarterman deemed it important to visit the crude
oil production facilities in North Dakota several times last
year. Within the last year, DOT has taken aggressive actions on
multiple fronts to reduce risks and ensure the safe
transportation of crude oil and other flammable liquids by
rail. These actions include more than two dozen initiatives to
strengthen the way shale crude oil is delivered, including
conducting unannounced spot inspections, issuing emergency
orders, safety advisories, and proposing new regulations to
enhance the safety of rail tank cars using the transport of
this oil.
In August 2013 we initiated Operation Classification in the
Bakken Shale formation to verify and ensure that shippers were
properly classifying crude oil for transportation in accordance
with the Federal Hazardous Materials regulations. Observations
by DOT field inspectors, coupled with the recent serious rail
accidents in Canada and the United States involving shale crude
oil led us to more closely examine crude oil being produced in
the Bakken region in terms of its flammability and volatility.
PHMSA wanted to better understand the unique characteristics of
mined gases and oils from the Bakken region and ascertain the
range of physical and chemical properties.
Operation Classification involved months of unannounced
inspections, testing, and analysis of shade crude oil from the
Bakken region. Our report, Operation Life Safety Update, which
was released in July of this year, provides a summary of our
testing and sampling activities from August of 2013 through May
of 2014. During that period, a total of 135 samples were
analyzed and are included in this summary. PHMSA contracted
with Intertek Laboratories, a nationally recognized ISO 9001
certified lab to test all the crude oil samples. Operation
Classification determined that Bakken Shale crude oil is more
ignitable and flammable due to higher dissolved gas content,
higher vapor pressure, lower flashpoint and boiling point than
other types of crude and thus has a higher degree of
volatility, which was noted as a tendency for a material to
vaporize.
PHMSA's analysis notes that Bakken crude oil is more
ignitable and flammable than any other types of--many other
types of crude, specifically those heavy crude oils. Further,
the majority of this crude oil displayed characteristics
consistent with a Class 3 flammable liquid, Packing Group 1,
which is the group designated for highest hazardous materials
within a Class 3 flammable liquid category.
Since PHMSA's Operation Safe Delivery Update was issued, we
continued our testing and sampling activities and we also
refined our collection method. PHMSA now uses a closed sampling
method through the use of a closed-type syringe to minimize the
potential for any dissolved gases to escape during collection,
thus providing increased accuracy. PHMSA is also taking samples
at other shale locations around the United States to further
compare and characterize crude oil with that of the Bakken
region.
PHMSA plans to provide updates to its testing and sampling
activities and work with other government agencies and the
regulated community to ensure the safe transportation of crude
oil across the country. DOT appreciates this committee's
attention to this very important safety issue. If America is
going to be a world leader in producing energy, it is the
Department's commitment and our job to ensure that we are also
a world leader in transporting it safely.
Thank you again for the opportunity to appear and I will be
pleased to answer any questions you may have.
[The prepared statement of Mr. Butters follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairwoman Lummis. I thank the witnesses for their
testimony. And we will now have a period of questioning. Each
member of the committee will have five minutes to ask
questions, beginning with the Chairman. So I will begin the
questioning with five minutes.
And, gentlemen, again thank you for being here today.
I want to focus very narrowly on the scientific
characteristics of Bakken crude. And my first question, Mr.
Butters, is is Bakken light sweet crude oil different from
other light sweet crude oils?
Mr. Butters. The Bakken Shale crude oil is generally
consistent with other light sweet crude oils.
Chairwoman Lummis. So it is fair to say that if you are
comparing Bakken light sweet crude oil to other light sweet
crude oils that are produced outside of the Bakken, that you
have not yet found any different characteristics when comparing
light sweet to light sweet?
Mr. Butters. Well, our data clearly shows that to this--the
Bakken Shale crude oil is a highly flammable crude oil, and the
data that has come from other sources, the petroleum industry,
also suggest the same thing, that these lower boiling points,
flashpoints, vapor pressures, et cetera, put this in a highly
flammable category of oil.
Chairwoman Lummis. Okay. My question, however, is does the
Bakken light sweet crude differ in characteristics from other
light sweet crudes?
Mr. Butters. Well, as I said, the data is consistent with
flammability. And keep in mind that PHMSA's role--
Chairwoman Lummis. Excuse me.
Mr. Butters. I am sorry.
Chairwoman Lummis. Consistent with flammability, so meaning
light sweet crude from the Bakken compares equivalently with
the flammability of light sweet crude from elsewhere? I am
trying to compare apples to apples--
Mr. Butters. I understand--
Chairwoman Lummis. --light sweet to light sweet.
Mr. Butters. I understand that. Keep in mind that our
analysis was--there were two objectives for our analysis. One
was to better understand the chemical and physical properties
of the Bakken crude oil--
Chairwoman Lummis. Um-hum.
Mr. Butters. --and because of the risk in the volume that
is moving across this country, that is why the focus was on
that material.
Chairwoman Lummis. Okay. And--
Mr. Butters. The second purpose was to ensure that shippers
were classifying this oil properly prior to transportation.
Chairwoman Lummis. Excellent. Am I--I understand what the
purpose was. Right now I am just concentrating on the science
and I am trying to make an apples-to-apples comparison. Is
Bakken crude more volatile than other light sweet crude that is
not produced in the Bakken? Yes or no?
Mr. Butters. All I can speak to is the analysis that we
conducted on the Bakken shale oil, not-
Chairwoman Lummis. Okay. So you haven't studied other light
sweet crudes? You have only studied Bakken light sweet crudes?
Mr. Butters. We have taken samples of--from other shale
plays, but the predominant sampling that we have taken is from
the Bakken region. And again, it is because of our role in
terms of the transportation of this--
Chairwoman Lummis. Um-hum.
Mr. Butters. --hazardous material, we wanted to be sure
that we, number one, understood what it was-
Chairwoman Lummis. Um-hum.
Mr. Butters. --and, number two, that shippers were properly
classifying this material, putting it in the proper container
prior to transportation.
Chairwoman Lummis. Mr. Smith, is Bakken light sweet crude
different from other light sweet crude in terms of volatility,
flammability?
Mr. Smith. Thank you for the question, Chairman--
Chairwoman.
So, generally speaking, so I give an answer that is
generally consistent with the answer that Mr. Butters gave, it
is generally consistent in many cases with other light sweet
crudes but I would note that crude oils vary--
Chairwoman Lummis. Yes.
Mr. Smith. --in their composition, they vary in the
geologic settings in which they are created, and therefore,
every crude oil is going to be different. But as a general
categorization, crude oil that is coming out of light--out of
tight formations will tend to have a higher level of volatility
than most but not necessarily every other light crude. But
again, to emphasize that every crude oil--crude oils are
complex--they are complex materials. They are all different, as
anyone who has worked in the refining sector or other
processing or chemical sectors will tell you, crude oils are
different, they vary, and it is something that bears--
Chairwoman Lummis. Okay.
Mr. Smith. --further study.
Chairwoman Lummis. Acknowledging that crude oils are
different, all I am really interested in was the yes or no,
whether Bakken has been found to be different from other light
sweet crudes. I will take it that the answer is no, it has not
been found to be different from other light sweet crudes; it
has been found to be different from intermediate crudes and
heavies?
Mr. Smith. Well, that is not exactly the answer I gave. The
answer is that all crudes are different and Bakken crudes would
tend to be more volatile than many other light crudes. But
again, all--
Chairwoman Lummis. Oh, so it is different?
Mr. Smith. All--
Chairwoman Lummis. Do we know it is different? Is it
different?
Mr. Smith. So we do know that Bakken crudes, when you
compare them to other--first of all, we do know that all crudes
are different.
Chairwoman Lummis. Right.
Mr. Smith. You look at chemical compositions of crude oil
that comes from different sources, you do see lots of
differences in crude oils. So there are things that we know,
there are things that we don't know, so I can't categorically
compare Bakken crude with every other crude that exists, but I
can state that there are differences within crude oils and oil
that comes out of tight formations does tend to have a higher
level of volatility than crudes that come out of other sources.
Chairwoman Lummis. My time is expired. I now recognize Mr.
Swalwell for five minutes.
Mr. Swalwell. Thank you, Chairwoman Lummis.
Mr. Butters, in PHMSA's July 23 report entitled ``Operation
Safe Delivery Update,'' did you find any substantial difference
in the volatility of Bakken crude when compared to other light
sweet crudes like West Texas Intermediate or Brent Crude just
to try and clarify and follow up on the Chairman's question?
Mr. Butters. I understand. The purpose of the report was
not to compare different types of crude oil. The purpose of our
study was to understand the physical and chemical
characteristics of the product because of our role as the
safety oversight agency in the transportation of hazardous
materials.
Mr. Swalwell. Would it be safe to say then that you did not
intend to indicate any such difference?
Mr. Butters. Our intent was to understand the product, the
physical and chemical properties of the product in terms of its
flammability, to ensure that it was being properly classified
and categorized for transportation. If you look at the range of
crude oils ranging from the very heavy to the very light,
Bakken crude oil falls on the light side and therefore
consistent with higher flammability ranges.
Mr. Swalwell. And a Bakken crude oil on the light side, the
light sweet crude, would be more volatile, correct, than a
crude imported from Saudi Arabia or Venezuela categorized as a
heavy crude?
Mr. Butters. Well, that would have to be compared against
its chemical and physical properties.
Mr. Swalwell. Can you tell us how the chemical and physical
properties can help us determine volatility?
Mr. Butters. Certainly. In the case of the Bakken crude
oil, it has a higher amount of dissolved gases, the C1's
through C4's, for example. The flashpoint is lower, which is
the temperature at which there is a higher propensity to
ignite. The boiling point is lower, which is the point at which
the liquid tends to vaporize. And all of that contributes to
increased flammability.
Mr. Swalwell. And is PHMSA in any way attempting to inhibit
the development of Bakken crude or do you believe that it is
solely focused on ensuring that when we develop and transport
this domestic resource we do it as safely and as reasonably as
possible?
Mr. Butters. The latter. We--our responsibilities are to
ensure that hazardous materials, no matter what form they are
in, are properly classified and put in the proper container,
properly communicated in accordance with the hazmat
regulations.
Mr. Swalwell. And Mr.--and thank you, Mr. Butters.
Mr. Smith, does DOE have any estimate on the size of this
resource, meaning how long do you think Bakken crude will be
around and explorable?
Mr. Smith. Well, thank you for the question, Congressman.
So it is a very large resource. So our estimate is it is
something over three billion barrels of crude resources, and
that is indeed a moving target because when you look at proven
resources, the measure of proven resources is based on your
economic and commercial ability to produce the formations. So
it is safe to say it is a very, very large formation, it is a
very large resource, and we think it is going to be an
important part of our energy mix for years to come.
Mr. Swalwell. Great, thank you. I yield back the balance of
my time.
And if the Chairman has any further questions, I would be
happy to yield to the Chairman for followup.
Chairwoman Lummis. I thank the gentleman and I will
actually allow you to surrender that time and yield to Mr.
Broun.
Mr. Broun. Chairman, before we start my time and
questioning, I would like to take a point of personal privilege
just to make a statement, and that is that we can see now why
did we invite technical scientific experts in the field instead
of political witnesses?
Mr. Butters, your inability to provide us a clear answer to
not only Chairman Lummis' questions but even my friend Mr.
Swalwell's questions about this, you are not providing us
straight answers, and that just reinforces what I said in my
beginning statement.
So if I could have my time, I would appreciate it. That is
the reason why I am so extremely disappointed in the
Administration not providing technical witnesses.
Chairwoman Lummis. The Chair recognizes Mr. Broun.
Mr. Broun. Thank you, Madam Chair. If you would start my
time, thank you.
Mr. Butters, the PHMSA study claims that while Bakken crude
``does not demonstrate the characteristics of a flammable gas,
corrosive liquid, or toxic material, it is more volatile than
other types of crude, which correlates to increased
ignitability and flammability.'' Is the claim about
ignitability and flammability a scientific assessment or are
they synonymous with the term volatility, and if not, is the
report projecting a false image of the properties of Bakken
crude?
Mr. Butters. If I understand--Congressman, if I understand
your question, our analysis of the Bakken Shale crude oil
clearly characterized this material as highly flammable due to
its low flashpoint, low boiling point, vapor pressures.
Mr. Broun. Well, we understand it is flammable--
Mr. Butters. Yes.
Mr. Broun. --but is ignitability and flammability
synonymous with volatility?
Mr. Butters. Well, volatility in the science vernacular is
a material's propensity to vaporize, and so as a flammable
liquid has a higher propensity to vaporize, then it
introduces--it has a higher likelihood of ignitability because
of the low pressure--
Mr. Broun. Can you answer yes or no to this question? I
don't get what these--
Mr. Butters. Well, I am trying to answer the question.
Mr. Broun. I have got limited time. I have got several
questions.
Mr. Butters. Okay.
Mr. Broun. Okay. Obviously you can't answer it. Again, that
just reiterates my disappointment.
Following up with you, Mr. Smith, according to your written
testimony, ``DOE believes that more scientific analysis is
needed to better define the relationship between volatility and
ignitability/flammability.'' This appears to contradict the
PHMSA conclusion, what we heard this mumbo-jumbo from Mr.
Butters. So just to be absolutely clear, is it fair to say that
DOE's position is that volatility is not a sufficient indicator
of a material's ignitability and flammability characteristics,
and that this conclusion in the PHMSA report may be
exaggerating the conclusiveness of volatility as it relates to
other petroleum characteristics?
Mr. Smith. Well, thank you for the question, Congressman.
So what I can speak to is DOE's experience and the research
that we are doing and the science and the risk that has to do
with moving these hydrocarbons. So I can--
Mr. Broun. You all ask that there be more scientific
analysis, that is correct?
Mr. Smith. That is what we are undertaking.
Mr. Broun. Okay.
Mr. Smith. That is correct.
Mr. Broun. And it is the discussion between the volatility
versus the ignitability and flammability, you see that as two
different issues from your own written statement, whereas Mr.
Butters is saying they are basically one in the same--
Mr. Smith. Well--
Mr. Broun. --so you all contradict each other.
Mr. Smith. I did not--
Mr. Broun. Would you agree with that?
Mr. Smith. I did not hear him say they are one in the same,
but I can tell you what DOE's position is, which is generally
consistent with the position coming out of PHMSA. Volatility,
flammability, ignitability are different things. They are
different characteristics. Volatility, as Mr. Butters
explained, is the propensity of a material to vaporize, so that
is your light ends coming out of the crude. Ignitability and
flammability are properties of the material in terms of their
propensity to ignite, to catch fire, or to burn, so--
Mr. Broun. Well, water vaporizes, too, so it is not
ignitable, so it is two different things here, is that--
Mr. Smith. And--
Mr. Broun. And that is what you all are saying but Mr.
Butters is trying to equate them in my opinion. Let me ask you
both this: Would you agree that gasoline and even more so
ethanol is more volatile, particularly volatile and also has a
greater flammability than does light crude? Would you both
agree to that?
Mr. Smith. Ethanol is--
Mr. Broun. Yes or no? Ethanol more than light crude?
Mr. Smith. Ethanol is a very well understood and
consistent--
Mr. Broun. Yes or no?
Mr. Smith. I can't--
Mr. Broun. Is it more volatile and more flammable than is
light crude?
Mr. Smith. I can't give you a yes or no answer to that
question.
Mr. Broun. Okay. Mr. Butters--
Mr. Smith. I could explain the different between the two.
Mr. Broun. --do you want to answer yes or no to this?
Mr. Butters. That answer--a yes or no answer would not do
the question justice, Mr. Congressman.
Mr. Broun. Well, ethanol, it evaporates--if we were to pour
out some ethanol on the desk right there, it would evaporate
much quicker than light crude would, and if you set a match to
it, it would be easier to set it on fire than it would be light
crude no matter what kind of light crude, whether it is Bakken
light crude. You all never answered Chairwoman Lummis' question
because we really don't know. We need more scientific analysis.
The best way to transport all these things would be by
pipeline, and this Administration has blocked pipeline
production. And I am, as well as my Democratic colleagues are,
very concerned about safety. I am a physician and to me it is
tragic that this Administration is blocking the transportation
of not only Bakken light crude but Canadian oil sands crude and
any other crude. We need to have pipelines instead of--and
transport these things in a very safe way.
Madam Chair, my time is run out. I yield back.
Chairwoman Lummis. The Chair now recognizes Mr. Maffei.
Mr. Maffei. Thank you, Madam Chair.
I am going to take this opportunity to do the rare thing of
disagreeing with my friend from Georgia about these witnesses.
And I don't know what--maybe I am misinterpreting what he is
saying, but I feel--
Mr. Broun. Would the gentleman yield--
Mr. Maffei. Well, let me tell you my disagreement first and
then I am happy to yield.
So I--look, if you ask for specific witnesses and the
Departments didn't give you those specific witnesses, that is
fine. I don't see how it is a point of personal privilege, but
that is something different.
But I will say this, the reason why these gentlemen are not
able to answer your or the good Chairwoman's question are not
because they are not qualified to answer them; it is because
you are asking questions as if they are yes and no that don't
have yes and no answers.
Now, we on the Science Committee have a bit of a
responsibility I believe to at least respect the language that
science uses, and science doesn't always have easy yes or no
answers. If you want to go to the Committee on Oversight and--
the full Committee on Oversight and question people about this
email or that email being lost or something, that is when you
can say yes or no, but you are actually--the gentlemen are
frankly more in agreement I believe with the point of view that
you are interested in getting, but because you are consistently
badgering them by saying yes or no, yes or no, it is not going
to lead to what you want.
And frankly, Mr.--Chairman Broun, using the term mumbo-
jumbo to describe Mr. Butters' testimony I found offensive. He
is here, he has, I thought, written very good and informed
testimony, and I just--so I am taking this rare opportunity to
say that. You and I don't disagree very often about the
operations of this committee, but I really think that these two
gentlemen deserve respect. For whatever reason they are the
people from these--they are distinguished public servants from
these particular agencies and they are giving us good
information to the best of their ability given the--what you
are asking.
I am happy to yield.
Mr. Broun. I thank the gentleman for yielding. The question
was we invited scientific technical experts but the
Administration refused to provide those to us. The witnesses we
have are political experts, and the statement about mumbo-jumbo
was basically geared towards--volatility is a scientific,
measurable--as well as flammability are scientific, measurable
issues, and what I was saying is that the answer I was getting
was not based on science but it is because, as you say, they
are doing the best they can and I do respect every--I
apologize--
Mr. Maffei. Reclaiming my time, Mr. Butters, do you have
any scientific qualifications? What is your background?
Mr. Butters. My background is I have been in the emergency
response business for well over 30 years, primarily in
hazardous materials. I--as an operational officer with both
Fairfax County and Fairfax City and as Chairman of the
Hazardous Materials Committee for the International Association
of Fire Chiefs. I have handled a number of hazardous materials
incidents in the field. I understand how hazardous materials
behave. I have had background training in hazardous materials
chemistry. Am I a chemist by formal education? No. But I do
have quite a bit of experience in this particular area and I
have been managing--overseeing this Operation Safe Delivery
since its inception. At the Department of Transportation I was
specifically assigned this because of my background in this
area, and--
Mr. Maffei. Thank you, Mr. Butters. I don't mean to
interrupt you, but I will take the opportunity to thank you for
your service and probably at personal risk to you at times
during your career.
My point is simply that I am not sure if you are right, Mr.
Broun. I acknowledge that when we asked for a particular
witness, we should get a good reason for that--why that witness
isn't coming forth from the Administration. But that said, I
believe if these witnesses were--gave you even more scientific
answers, you would be even more frustrated with them. You are
asking for a comparison of volatility that both of you--but as
far as I remember both of you asked for a comparison of
volatility to all crude oils or to all light sweet crude oils,
and they can't answer those questions because there are so many
different variables. I, by the way, messed up in my opening
statement. I defined volatility as something that I think is
probably closer to flammability, and even that was probably a
colloquial definition.
These are scientific issues and I just--I don't know, I
implore that all of us should understand that the--when we are
asking these questions that may have complex answers--you know,
we are not on the campaign trail. We should allow the witnesses
to give us that complex answer and--that you may be surprised
that that answer actually comports fine. I mean my view on this
is that it is going to be transported; sure, it is volatile but
so is so many other things that we transport. It is just
because of the increased volume that is being transported we
need to look at the safety considerations, no more, no less.
I would--I am over time so thank you very much.
Chairwoman Lummis. The Chair now recognizes Mr. Cramer, the
gentleman from North Dakota.
Mr. Cramer. I thank the Chair and I thank the witnesses.
I want to also say I appreciate Secretary Moniz and
Secretary Foxx, who have been very engaged with--at least with
the North Dakota Delegation on this topic, and Administrator
Quarterman as well.
And I wanted to focus a little bit--Mr. Butters, in your
pre-filed testimony on page 7 you state that the focus on the
Bakken region is because there was some question of whether
materials were properly classified and characterized by
shippers. Did you find any misclassified--obviously this would
be an area of your expertise I suspect quite specifically, but
find this classified material in the course of the research?
Mr. Butters. Thank you, Congressman. Yes, we did. We did--
as part of our inspections, we did find some shippers were
using generic safety data sheets, MSDSs, as their tool for
classifying this material. They were not analyzing the actual
product that they were offering for transportation. And
classification of the product correctly and accurately is
critical to ensure that it is transported safely.
Mr. Cramer. So I want--then I want to get to the packing
group designation, which I think you speak to as well in your
testimony. Why is light crude like Bakken or WTI--why is it--it
is regulated under Packing Group 1--I think you testified to
that--while ethanol, gasoline, and other flammables are--
volatile Class 3 liquids are regulated under Packing Group
number 2, which is less stringent is my understanding?
Understanding these other Class 3 flammable liquids are being
transported using the DOT 111's, how do we reconcile that with
what we are seeing from the rules? So you have a less stringent
fuel that is classified more dangerous or--more dangerous in my
view if I understand this correctly being classified as less
dangerous in terms of the packing class? Am I misreading this?
Mr. Butters. Let me see if I can answer your question.
Obviously, our safety regulations divide hazardous materials
into 9 DOT classes. Bakken Shale oil is classified as a Class 3
flammable liquid. Within that class, as in all 9 classes, there
are 3 packing groups. Packing Group 3 is considered the least
hazardous, Packing Group 2, sort of median level--
Mr. Cramer. Right.
Mr. Butters. --and Packing Group 1 is considered the
highest hazard of a--for material. So the Bakken crude oil,
because of its flammability, has been determined to be a
Packing Group 1 material.
Mr. Cramer. So--and as I understand this, ethanol Packing
Group 2 then?
Mr. Butters. Yes.
Mr. Cramer. So I want to get then to Chairman Broun's
illustration and realize maybe you can't answer it from a
compound standpoint, so let me ask it from a layman's
standpoint. If I had a 1 gallon container of ethanol and a 1
gallon container of sweet light crude--let's call it Bakken
today--and I drop a match in each one, which one is going to
ignite?
Mr. Butters. Well, they will both ignite. They both have
flammable--flammability characteristics that they will ignite.
I mean I--it is hard to say under the scenario you are
describing but they both--both products have flammability--you
know, flammability ranges that will support combustion--
Mr. Cramer. But if one is a number 1 and one is a number 2,
it seems that the number 1, which in this case is light crude,
would be more flammable, more ignitable than the other unless
there is something that I am not understanding. Is there some
dynamic beyond that that I am not understanding? Because from a
layman's standpoint it is hard to believe that light sweet
crude is more ignitable then refined petroleum product like
ethanol or gasoline.
Mr. Butters. Well, again, it is based on its flashpoint and
boiling point, and that determines which packing group the
flammable liquid is assigned to under our regulations.
Mr. Cramer. So an equal flame dropped in the two
containers, they would respond roughly the same or differently?
Mr. Butters. They would both ignite is--if that is--
Mr. Cramer. Okay. And then I want to go with one other
thing before I run out of time. Do you guys worry--you
mentioned in your testimony that more study is necessary and we
talked about a specific focus on Bakken sweet crude. Are there
plans to broaden the study considering all the plays that might
be out there and all the potential there might be for a lot
more of this product to be moved by rail?
Mr. Butters. Well, we are going to continue our sampling
this year and then we will continue to look at the need for
additional sampling as we go forward.
One point I would want to mention about the difference
between the Bakken Shale oil and ethanol, ethanol is a refined
product--
Mr. Cramer. Um-hum.
Mr. Butters. --unlike the Bakken oil, which is essentially
a raw product that comes right out of the ground and
essentially may go through--some goes through a heated treated
process to remove some of the gas content, but it is
transported in a very raw form, so that is important to
understand in terms of how the product is treated for
classification.
Mr. Cramer. Sure, but we are talking--yes, I understand
that, but if we are talking about flammability, what happens, I
don't know that--beforehand that doesn't matter but I am way
over time. Thank you.
Chairwoman Lummis. The Chair recognizes the gentleman from
Texas, Mr. Veasey, for five minutes.
Mr. Veasey. Thank you, Madam Chair.
I wanted to ask Mr. Smith just to help us understand and
give me a better understanding of the difference between these
psi readings because I was reading an article that said that in
the Bakken there were vapor pressure readings of over 8 psi and
sometimes those readings reached as high as 9.7 psi. Now, when
you compare that to--according to this pipeline data, the
Louisiana light sweet crude had a vapor pressure reading of
3.33 psi. How significant of a difference is that when we talk
about volatility?
Mr. Smith. Thank you, Congressman, for the question.
So when you look at these psi ratings, that is a measure of
vapor pressure for the various types of crude. So the vapor
pressure is a measure of the light ends that is included in the
crudes, be it ethane, propane, butane. So light crudes
generally have a psi rating, you know, somewhere around 10. The
higher the rating, the more ethane, butane, propane will be in
the crude. So when you look at those statistics, and I am not
sure exactly where the ones that you cite are from but I can
say directionally a higher psi rating will just include--will
indicate that there is a greater content of the lighter ends
within the crude.
Mr. Veasey. Okay. The--also from this same article, this
study that I am looking at, it says that Tesoro Corporation,
which is a major transport of the Bakken crude to the West
Coast, said that it regularly received shipments from the
Bakken with psi readings sometimes up to 12 psi. Now, was it--
would that be an unusually high reading?
Mr. Smith. We would expect Bakken crudes to have vapor
pressure readings from, say, 10 to 14--
Mr. Veasey. 10 to 14, okay.
Mr. Smith. --in that general range, so that would be fairly
consistent for a crude coming from that part of the country.
Mr. Veasey. Okay. Mr. Butters, I wanted to ask you, I know
that the Chief of Staff for the Department of Transportation
has said that it was really imperative that the petroleum
industry and other stakeholders work with DOT to share data so
you can make assessments as far as, you know, safety is
concerned. Is that data-sharing--I mean that was from a quote
from your Chief of Staff earlier this year. Are you getting the
sort of cooperation you need to ensure public safety?
Mr. Butters. Yes, we have been--the industry has been
forthcoming in sharing the data that they have compiled, both
the North Dakota Petroleum Council, the Association of Fuel
Marketing, which represents the refiners, did some analysis.
They shared that data with us. And individual companies have
also shared their analysis with us as well.
Mr. Veasey. Oh, well--yes, that is good. That is good. So I
just wanted to close and ask you this--and I will yield back
the time, depending on when you when you finish, to the
Chairwoman--just from a public safety standpoint, from a pure
public safety standpoint, is it better to ship this stuff by
rail or by pipeline?
Mr. Butters. Our role as the transportation safety agency
is to ensure that any hazardous material, regardless of mode,
is properly classified so it safely moves through that mode of
transportation. There is a number of factors that can--that
factor into which mode is selected, but again, our role is
really to ensure that if it is moving in transportation, that
it is properly classified and properly contained in the package
that it is moving in to maximize safety.
Mr. Veasey. Thank you, Mr. Butters. And, Madam Chair, if
you don't mind, I would like to yield the remaining 45 seconds
to Mr. Maffei, please.
Chairwoman Lummis. Mr. Maffei.
Mr. Maffei. I only have one quick question, but I think
what we are all trying to get at is the same thing, which is
this stuff more--forgetting the word flammable, volatile--is it
more dangerous? And of course it is hard because there are so
many different kinds of light crude. But let me ask it this
way. Assuming comparable safety precautions, Mr. Butters, would
you be more concerned about a trainload full of Bakken crude
oil or a trainload full of light crude oil from--imported?
Would it be more--no, I am talking about light in both cases.
Mr. Butters. Well, I guess I would need to understand again
the flammability of both products. I mean if we are talking
about everything being equal, that both products you are
describing are--
Mr. Maffei. So the problem is you don't know what kind of
light sweet crude it is--would be that I am comparing it to I
would imagine but-
Mr. Butters. Well, that is right. I mean you would need to
know the chemical and physical characteristics--
Mr. Broun. Why don't you just assume Bakken versus Bakken?
Mr. Butters. Yeah.
Mr. Maffei. So same, Mr. Smith. Is there--there is nothing
about this that makes it particularly more dangerous than other
kinds of light sweet crude; it is just it depends on the
particularities of both, is that right?
Mr. Smith. I think that is an appropriate characterization.
The one thing I would say to that is that when--so again,
we are not the rule makers so we work with the Department of
Transportation in making the rule, but when we think about the
risk of complex systems, be they the Deepwater Horizon offshore
or issues with other unconventional oil and gas production, it
is a systemic question. So the concern that we would have when
we look at this is the fact that you have gone from 70,000
barrels per day of being moved by rail to 700,000 barrels being
moved per day. It is up--it is an order of magnitude of 10, and
so that is where the risk comes in and that is where--
Mr. Maffei. I am out of time and I don't want to impose on
the Committee. But, yeah--no--but everything else being equal,
that is the thing so--
Mr. Smith. Yeah, but--
Mr. Maffei. --but we will explore the volume part later.
Mr. Smith. If I might add that that is an important factor.
If you describe risk as probability times consequence, this
material as a flammable liquid has significant consequences, as
this photograph from Castleton indicates. The more volume that
moves, that probability also goes up, so risk goes up, and that
is really why we have focused on ensuring that this product is
transported safely.
Chairwoman Lummis. I assume you yield back?
Mr. Maffei. Oh, yeah, yeah. I am way out of time. I
apologize, Madam Chair.
Chairwoman Lummis. Thank you. And I do appreciate your
efforts at trying to get to the heart of this. I don't know why
we are--yeah, I don't know why we are struggling so, but the
Chair--perhaps Mr. Johnson can help us. The gentleman from Ohio
is recognized.
Mr. Johnson. Well, we will see, Madam Chairman. Thank you.
Mr. Smith, I appreciated your phone call a few weeks ago,
months ago about the newly revamped LNG export decision-making
process that your office recently implemented whereby you are
electing not to consider export authorization applications
until individual projects had completed their environmental
reviews. Currently two major export projects in Texas and
Louisiana that completed their environmental reviews months ago
are still waiting on final authorizations from DOE. So how have
you actually streamlined your process if these two major
projects continue to suffer under these undue administrative
delays? Because as I recall our conversation, we talked about a
decision forthcoming within weeks, not months, and certainly
not years. So help me out.
Mr. Smith. Well, thank you for the question, Congressman.
First of all, the new process ensures that instead of walking
down some predetermined queue of projects, we are now
considering those projects on a case-by-case basis once they
are ready to be considered by the Department, which means they
have finished all of their process--
Mr. Johnson. Okay. These two have, so what happened?
Mr. Smith. So the next project in the queue is Cameron,
which has recently finished the Notice for Rehearing at FERC.
Once the project is finished the Notice for Rehearing, then it
is eligible to be considered by the Department. So that project
has not been waiting in the queue for months. It actually very
recently finished that process, and we are right now going
through the possibly--evaluating that project for consideration
so--
Mr. Johnson. Do you have any idea on the timeline for it?
Mr. Smith. I can't give a commitment on timing but what I
can say is the Department is committed to moving as
expeditiously as possible and we are moving through that
process--
Mr. Johnson. But you are still committed to weeks, not
months, as you talked to me about, correct?
Mr. Smith. Each project is going to be different but
certainly we think that the pace for doing these projects
should be consistent with the pace that we have had in past
projects, which has been on the order of weeks.
Mr. Johnson. What about Freeport?
Mr. Smith. Indeed. So as these projects are ready to be
considered, they will be considered in due course--
Mr. Johnson. Are they ready?
Mr. Smith. Freeport is still passing through that process
right now, but again, once they are finished with the
rehearing, once they are done with the FERC process--
Mr. Johnson. So they are not done as far as you are--as far
as you know?
Mr. Smith. My understanding is that the Cameron project is
finished with the rehearing and I am not sure off the top of my
head about whether or not the Freeport project--
Mr. Johnson. Okay. We--it was our--it was my understanding
that they were both completed with that process and had been
waiting for--had been finished months ago and were now waiting
on DOE authorization. So we have got differing things so I
might reach out your office and let's compare notes and see
what we have got.
Mr. Smith. We would be happy to follow up--I will follow up
on that.
Mr. Johnson. Also, in your prepared testimony you say that
DOE believes that more scientific analysis is needed to better
define the relationship between volatility and ignitability and
flammability. So, Mr. Smith, did DOE review the methodology
used by PHMSA to arrive at the conclusion that increased
volatility correlates with increased ignitability and
flammability?
Mr. Smith. Well, thank you for the question. So we have an
ongoing discussion with PHMSA, so our view on volatility,
ignitability, and flammability, again, those are different
properties of any material. We think that in a laboratory
setting for crude oil, higher volatility is going to be
consistent with higher light ends, which do have a higher
degree of flammability and volatility. When you are actually
looking at a very complex system like a railcar overturning
within a containment system that may or may not have the crude
contained, which may or may not have pressure regulation
devices, et cetera, that is a much more complex question that
has--that is worthy of a lot more study.
So to say categorically that over all cases that volatility
is correlated with ignitability and flammability is probably
further than we can demonstrate through our scientific studies,
but we know in a laboratory setting when you know that the
vapor--the material that is being vaporized is flammable, in a
laboratory setting, again, there would be a correlation.
Mr. Johnson. Okay. Well, quickly because I am almost out of
time, can you provide expected benchmarks to this committee
explaining what DOE intends to learn about the characteristics
and behavior of Bakken petroleum?
Mr. Smith. So we are going through the Statement of Work
right now for this study. This is a new area of research for
the Department. It is worth noting that the rate at which tight
oil has increased production recently has been very dramatic.
This is a new issue for us in terms of detailed study of having
these crudes by rail. So we are going through right now that
Statement of Work, which essentially is going to be able to
allow us to offer more precise questions to the question you
just asked, which is in the real world with a real railcar with
a real derailment with a real fire, what would be the
relationship between vapor pressure, volatility, ignitability,
flammability? Those are some things that we haven't done again
in real practical applications so we need to move from the lab
to kind of the real-world laboratory of real railcars. So those
are the types of questions that we will be able to answer and
our Statement of Work will make that much more clear as we
develop it.
Mr. Johnson. Okay. All right. Thank you.
Madam Chairman, I yield back.
Chairwoman Lummis. The Chair now recognizes the gentleman
from Texas, Mr. Weber.
Mr. Weber. So that was an interesting exchange talking
about the railcars overturning, and of course you know, my
grandfather used to say that to a hammer everything looks like
a nail, and I guess to a match everything looks like it is
ignitable. So if a railcar overturns, what it really needs is
an ignition source. Is that true, Mr. Smith?
Mr. Smith. If there is going to be a fire, there has to be
an ignition source.
Mr. Weber. It has got to have an ignition source?
Mr. Smith. That is correct.
Mr. Weber. Mr. Butters, you mentioned earlier that PHMSA
went out and collected crude oil samples and I think you said
they got them from the tanks around and about presumably in
North Dakota?
Mr. Butters. Congressman, we drew samples from a number of
different sources.
Mr. Weber. Well, we are talking about the Bakken Shale.
Mr. Butters. Right, but I am--we drew samples from tanks,
from railcars, from different--
Mr. Weber. Okay.
Mr. Butters. --points in the transportation process. But--
Mr. Weber. So you have had quite a bit of discussion about
the hydrates that are located--the ethanes, the butanes, the
propanes, and those types of liquids that are involved in that
shale oil and the fact that it is lighter and sweeter?
Mr. Butters. Right, the isomers that are--
Mr. Weber. That is right. So--and I want to--Freon changes
state twice in the system from a liquid to a gas and back to a
liquid so I am familiar with the boiling off and the
vaporization point. So is it safer for pipelines? There is a
number of facilities that will take that crude and dehydrate it
at various different places, assuming they can get the permit
from the DOE and from the government. But the quicker they
dehydrate that oil, the safer it is?
Mr. Butters. Well, again, our role in this process is to
ensure that any--
Mr. Weber. Let me rephrase the question. Less ethanes, less
butanes, less propanes in crude oil, less volatility?
Mr. Butters. If you are reducing the flammable
constituencies of a product, then, yes, it becomes-
Mr. Weber. Okay. We finally got a yes. So we would think
that any pipeline situation--and you may probably know that the
pipeline history has a 99.9 percent safety rating. Were you
aware of that?
Mr. Butters. Both pipeline and rail are a very safe mode of
transportation.
Mr. Weber. But rail does not have the same rating as a
pipeline, are you aware of that?
Mr. Butters. I am very familiar with the transportation of
hazardous materials by rail, pipeline, and other methods.
Mr. Weber. Okay. And they do not have the same rating, is
that true, in safety?
Mr. Butters. Depending on the product that is moved--
Mr. Weber. Okay. Well, let me--
Mr. Butters. --the pipeline and--
Mr. Weber. I am glad I could be here today if for no other
reason than to help you. They don't. Okay. Pipelines are the
safest. So with that in mind, pipeline would be the best way to
move this product with a higher safety rating and less
hydrates, agree?
Mr. Butters. Again, PHMSA and DOT's role in this is to
ensure--
Mr. Weber. Okay. Let me move on.
Mr. Butters. --that any product moving in transportation-
Mr. Weber. Let me move on. When PHMSA went out and took
those samples, and again my question was did they have less
hydrates or more hydrates in them, but when PHMSA went out and
took those samples, how did you get--how did the PHMSA
employees get there? Did they drive?
Mr. Butters. Did they--well, they went to the jobsites. Is
that what your--the question?
Mr. Weber. No, how did they get to those jobsites? Did they
drive vehicles?
Mr. Butters. Yes, they did.
Mr. Weber. Did they have gasoline in those vehicles?
Mr. Butters. Yes.
Mr. Weber. Did they know the volatility ratings of that
gasoline?
Mr. Butters. Do I know the volatility of-
Mr. Weber. I--
Mr. Butters. --refined gasoline?
Mr. Weber. I asked you first.
Mr. Butters. I don't have that specific data in front of me
but--
Mr. Weber. Okay. Were you all concerned about that
volatility when the--were you concerned about the employees'
safety driving that vehicle with gasoline in it with the high
volatility rate?
Mr. Butters. Well, keeping in mind that the risk that we
are addressing is the volume of the product that is moving
through transportation. A 20-gallon gasoline tank on a vehicle
doesn't pose the same degree of risk as a 105-car train with
20,000 gallons of product--
Mr. Weber. You are making my argument for me. So now we can
come back full circle and say that a pipeline is a safer way of
moving that than a train.
Mr. Butters. The question--Congressman, the question you
asked is if a vehicle carrying gasoline is riskier than a
train.
Mr. Weber. And--
Mr. Butters. That was the question.
Mr. Weber. So you can compare those two risks and now you
would also have to say that a pipeline with a 99.9 percent
safety rating would be safer than a train. Do you know of any
people in Canada, the 40 or so that was killed by rail accident
here a year or so back? Do you know of any that will kill like
that by pipeline with Bakken shale oil? Answer, no. So one
could deduct at least in the short term that it is safer.
Madam Chair, I yield back.
Chairwoman Lummis. All right. The gentleman yields back.
The Chair recognizes the gentleman from Oklahoma, Mr.
Bridenstine.
Mr. Bridenstine. Thank you, Madam Chair.
I just wanted to ask a question about the thickness of the
walls of the tank where your proposed rule is moving from 7/16
of an inch up to 9/16 of an inch. Do you have any analysis on
the economic impact or what that is going to cost the industry
to move from 7/16 to 9/16 of an inch?
Mr. Butters. Thank you for that question, Congressman.
Because the rulemaking is currently in the process, I can't
really respond to those specific types of questions. The
rulemaking does address the issue of tank car thickness in
terms of a number of different options, so we are looking
forward to the comment period closing at the end of September
so we can evaluate the next step in terms of that rulemaking.
Mr. Bridenstine. So when you get that comment period, are
you going to take it seriously?
Mr. Butters. Of course.
Mr. Bridenstine. Because yesterday I met with the American
Fuel and Petrochemical Manufacturers. They said that they
studied over 1,000 samples of Bakken crude and analyzed the
data on your behalf at your request. The data points to Bakken
crude were similar in characteristic to light crude extracted
from other plays into the United States and the risks
associated are fundamentally the same as well according to
their study. And again, they spent their own money, their own
time, their own effort developing thousands of samples that
they tested.
Your proposed rule regarding oil by rail proceeded to
ignore those findings and the science behind it and claims
Bakken crude specifically to be inherently more dangerous. Can
you see why people would look at this and think it is, you
know, agenda-driven? Do you see why--like if you are requesting
the information and then you are ignoring the information and
going ahead with rules that don't take into account the science
that they provided, do you see why some folks--my constituents,
for example--might perceive it to be agenda-driven?
Mr. Butters. Well, I will--I would say this, is that as
part of the comment period for this rulemaking, which
includes--again, this is a comprehensive approach to rail
safety. It addresses prevention and, quite frankly, I think
that is what--where the priority needs to be is preventing
these incidents from occurring in the first place, so
addressing prevention, mitigation, which is--addresses the
safety and the strength of the railcar that is used to carry
this product, as well as emergency preparedness and response.
And it is part of--we welcome comments and input from the
industry in terms of the products that will be carried in these
cars and what those specifications need to be.
Mr. Bridenstine. So when we move potentially from 7/16 of
an inch to 9/16 of an inch, do you have any assessments on how
much time that requirement might take?
Mr. Butters. How much time?
Mr. Bridenstine. Yeah, is it going to be one year, two
year, three year, four year. When--how long are they going to
have to make that transition?
Mr. Butters. Well, that is part of our seeking comments
from the industry, from the public, from anyone, and what--
Mr. Bridenstine. So right now you are open. You haven't put
a time on it as 3 years?
Mr. Butters. We had--there is a number of proposals in the
proposed rule that address time frame, and part of the--our
desire is to hear back and get comment from those regulated
entities and others that are affected by this proposed rule as
to what the impact will be.
Mr. Bridenstine. Apart from the costs associated with the
tank cars, are you considering any modifications to the rail
itself?
Mr. Butters. Rail integrity is part of that proposed rule
as well.
Mr. Bridenstine. And as all of these costs are added up, do
you see how this is going to increase the cost of energy for my
constituents?
Mr. Butters. As part of any rulemaking, Congressman, we--
agencies are required to go through a cost-benefit analysis of
any proposed rule. That is--was part of the process that was
done for this Notice of Proposed Rule as well and we will
continue to look for--ask for comments on cost impact of the
proposed regulation.
Mr. Bridenstine. Okay. One specific cost impact that I
think is important--and I am running out of time here--is the
impact on crude transportation out of North Dakota.
Specifically, that is what I am interested in, the cost of
crude coming out of North Dakota.
And with that, Madam Chair, I will yield back.
Mr. Broun. [Presiding] Thank you.
Mr. Bridenstine. I apologize for calling you Madam Chair.
You were a Madam until just a few minutes ago.
Mr. Broun. No, sir, I have never been a Madam or anywhere
close, but thank you. My Navy colleague, my sailor colleague, I
appreciate that.
I have got a unanimous consent request that we allow Mr.
Rohrabacher to participate as if he is a member and ask
unanimous consent request that we allow him to ask questions
for five minutes.
Mr. Swalwell. No objection.
Mr. Broun. Okay. Having said that, Mr. Rohrabacher--
Mr. Swalwell. I am sure I say that at my own peril though.
Mr. Rohrabacher. Thank you very much, Mr. Chairman, and
thank you to the Ranking Member as well for permitting me the
opportunity to participate. I was here a little late and I
didn't catch every detail of what you were announcing today,
but we are--how do you say? It is very clear that people on
this side of the aisle at least are very--not skeptical but we
are hesitant to just accept that this Administration is moving
forward in an open manner in discussing what and why they are
trying to do. Frankly, it is--most of us believe and--on the
side of the aisle that social engineering goals are being
accomplished by this Administration by using regulatory powers
that government has been given, and that is not what those
regulatory powers were all about.
Now, in this case we have--you know, there is--you know, we
have heard in the past with a--that people in other industries
talk about foot-dragging and harassment, of producers' double
standards of enforcement, for example, by different regulatory
units on things that just don't go along with the basic goals
of what the Administration wants to accomplish in their social
and economic agenda.
I won't have to say, and I don't say this in a hateful,
mean way, but Mr. Butters, your inability to what seems to me--
I am setting off to the side. Your inability to answer directly
these questions, will you confirm for us that there is game-
playing going on and that you just won't answer anything that
in any way could reflect badly on this whole idea of that--of
what your agency is trying to do because the agency may be
involved in a play based on global warming theory trying to
again suppress the usage and use and availability of fossil
fuels and letting that be in the background forcing situations
and forcing people like you to have to go through those verbal
acrobatics not to answer a question? Please feel free to
comment on it. And I am not impugning your integrity.
Mr. Butters. I understand that and I appreciate your
comments, Congressman.
DOT and PHMSA is a safety agency. That is our role. Energy
and hazardous materials are critical to this nation's economy.
I mentioned that. We strongly support that and we believe that,
but our role is to ensure that this energy is moving safely
through transportation. These crude oil lines that carry these
large volume of flammable crude oil, which this material is, we
need to ensure that it moves and gets to its destination
without incident. That is our role and we are going to--want to
address the risks associated with that and that is what we are
doing and to better understand this material so it is properly
classified that-
Mr. Rohrabacher. Okay. Well, let me accept that that is
what the stated goal is. And again, what makes us weary of
having that used as perhaps a faacade to obtain what we clearly
have as a goal of this Administration, which is to reduce
America's use of fossil fuel, even though it is now being
presented to us as something about safety, let me ask you this:
As compared to the loss of life and lack of safety in obtaining
oil from offshore oil sources or the loss of life or lack of
safety in coal-fired plants, the digging of coal and how to--
coal plants and the transportation of coal, nuclear power--have
there ever been any deaths caused from nuclear power? Is there
any risk of nuclear power? And of course what about tanker-
delivered oil from overseas?
Now, when you compare all of those to the amount of risk
that could be--that we could face from getting our oil
domestically from the--from North Dakota, why did you pick
North Dakota to focus on your time and effort and resources on
rather than all of these others? Aren't these others more
dangerous than what has been going on in North Dakota?
Mr. Butters. Well, first off, I am going to defer the first
part of your question to my colleague Mr. Smith from DOE. He is
probably in a better position to respond to that.
But again, to just reinforce the role of DOT in this arena
is to ensure the transportation of energy and hazardous
materials is done in a safe manner. There are a wide range of
systems out there, of movements, and they all have a different
level of risk.
The Bakken Shale oil issue, the reason that PHMSA and DOT
is focused on it is because of the volume of product that is
moving out of that area by rail. The incidents in--that have
occurred and Castleton, North Dakota; Lac-Meegantic in Queebec;
Aliceville, Alabama; most recently in Lynchburg, Virginia, I
went down to the incident scene on that derailment. This
material poses a risk and we want to make sure that it moves
safely. We are not trying to restrict the movement. We want to
make sure it moves safely. That is our role.
Mr. Broun. The gentleman's time is expired. I appreciate
the colleagues in allowing Mr. Rohrabacher to speak.
And I will now ask unanimous consent to recognize Mr.
Cramer for two additional minutes, realizing that--and this
will be our last question of you guys. We have got votes in
about 40, 45 minutes, so we are going to have to go to the
second panel.
Very quickly, Mr. Cramer, you are recognized.
Mr. Cramer. Thank you.
Mr. Broun. Unless I hear objection. No objection?
Mr. Cramer. Thank you, Mr. Swalwell and Mr. Chairman.
We have been talking about the issue but we haven't really
talked about the two specific reports or at least named them.
Of course there is the PHMSA report we referenced, but in a
little bit we are going to have the second panel and we are
going to have somebody from Turner Mason, and I just wanted to
get some sort of a general statement from one or both of you.
Did you see anything in the Turner Mason report that you found
disagreement with or--because I know you relied on it. I have
seen comments from time to time. But I am really interested
frankly in reconciling if there are any differences and
certainly in highlighting consistencies between the two, so if
I could just get each of you to give a short comment on the
Turner Mason report and your assessment of it.
Mr. Smith. Well, thank you for the question, Congressman.
So I think it highlights that there are some uncertainties
here. I mean this is an area of new study. When you go from
70,000 barrels per day to 700,000 barrels a day, you are in new
waters in terms of risk and understanding the risks around
complex systems. So PHMSA's job is to make sure that these
things are moved by rail safely and there isn't a tremendous
amount of research and development on the very complex question
of the relationship between volatility, vapor pressure,
ignitability, and flammability into the real world in which you
have crude actually traveling in cars.
I think that is probably what these different studies
highlight is that there are things that we know, things that we
understand about the chemical compositions of these different
types of crude. But there are some practical matters that we
don't understand yet because we simply haven't had the
necessity to do that research and development until now. So
that is what the DOE brought out.
Mr. Cramer. Thank you, Mr. Smith. Mr. Butters, just in the
remaining seconds?
Mr. Butters. Certainly. In our review of those studies,
their data is consistent with ours in terms of the flammability
of this product and the need to ensure that it is again
packaged properly, it is communicated properly before it is
offered for transportation. It is a flammable--highly flammable
liquid and their data that they published is generally
consistent with the data that we have found as well.
Mr. Cramer. Thank you. I yield back.
Mr. Broun. I want to thank the witnesses for you all's
testimony here today and I thank the members for your
questions. The members of this committee may have additional
questions of you two guys and we ask that you respond to those
questions in writing, and please do it so very expeditiously.
The record will remain open for a very short period of time, so
if you all would respond. And if you want to flesh out anymore
of the answers that you already gave to the oral questions, I
encourage you to do so.
The witnesses are excused and I now call up the second
panel of witnesses. And while we are doing so, I just want to
tell my friend Dan Maffei that I was frustrated with the lack
of answers and the words I utilized to indicate the
filibustering and maybe I should have used that word better. I
certainly didn't want to cause any hard feelings. But the thing
is, we did ask for scientific technical witnesses and we were
sent political witnesses by the Administration. And we could
have, I think, had good answers from a scientific perspective.
So if the second panel will please take your--
Mr. Maffei. Would the Chairman yield?
Mr. Broun. Certainly.
Mr. Maffei. Just in response. Yeah--no, look, first of all,
as I just mentioned, I do believe that that the Chairman, if
your--if the Administration is not supplying the witnesses that
you request, should inform you exactly why they are not and why
some other witness would be more qualified. I fully respect
that. And all I was really trying to do was just make sure that
at least in my view that these two witnesses were, you know,
providing good information to the best of their ability and
were not trying to avoid the question in my view again. So that
is all I was interested in.
Mr. Broun. Well, I would agree with my colleague. I think
they were trying to but the problem is that the Administration
didn't supply us proper witnesses to answer scientific
question. Just from a scientific perspective, we can measure
volatility. They couldn't answer that question. We can
scientifically measure flammability and those types of things
and they were just not prepared because they just didn't have
that expertise and the Administration refused to give us the
proper witnesses.
Now it is time to introduce our second panel of witnesses.
First is Ms. Kari Cutting, Vice President of the North Dakota
Petroleum Council. Ms. Cutting brings over 30 years of
experience in the North Dakota energy industry, and looking at
her, she started very young at that--in that perspective.
Previously, she has served as a Project Logistics Manager at
the Dakota Gasification Company. The North Dakota Petroleum
Council promotes environmentally responsible oil exploration
and development, and we are all, on Republican as well as the
Democrat side, believe that we have got to be good stewards of
our environment. And you all audit and respond to oil and
natural gas development impacts.
Our second witness is Mr. John Auers, Executive Vice
President at Turner, Mason & Company, an international energy
consulting firm. Mr. Auers leads assignments in the area of
refining economics and planning, modeling, downstream asset
valuation, crude oil valuation, and capital investment and
strategic planning. Previously, he worked with Exxon
Corporation.
And our final witness today is Mark--you want to pronounce
it for me, please?
Mr. Zoanetti. Zoanetti.
Mr. Broun. Zoanetti, okay. Zoanetti. My family can't spell
or pronounce this Broun but it is spelled with a U. So
Zoanetti, Deputy Chief of Special Operations, Syracuse Fire
Department. His current role--in his current role Mr. Zoanetti
is responsible for oversight at the--of the hazmat airport and
the urban search and rescue components of the fire department.
Mr. Zoanetti has been a member of the Syracuse Fire Department
for 29 years. He has received certification as a hazardous
materials technician, as well as other state and federal
training courses and hazardous materials. Mr. Zoanetti is also
the Deputy Coordinator for the--you want to tell me what
county? I don't know how to pronounce that, too, so--
Mr. Zoanetti. Onondaga.
Mr. Broun. Say--
Mr. Zoanetti. Onondaga.
Mr. Broun. Onondaga, okay, County Department of Energy
Management.
As our witnesses should know, spoken testimony is limited
to five minutes each, after which members of the committee have
five minutes each to ask questions. Your written testimony will
be included in the record of the hearing.
Now, please, we have votes probably in 30 minutes now, 35
minutes, so if you can chop down to the time that you gave your
oral testimony, and, Members, let's try to keep our questions
as concise as we can so that we can get through this before
votes.
It is the practice of Subcommittee on Oversight, which I
chair, to receive testimony under oath. If you all would now
please stand and raise your right hand.
Do you solemnly swear or affirm to tell the whole truth and
nothing but the truth, so help you God?
Zoanetti? Okay. I didn't hear you Mr. Zoanetti. Please be
seated.
Let the record reflect that all the witnesses participating
have taken the oath.
I now recognize our first witness, Ms. Cutting, for five
minutes.
TESTIMONY OF MS. KARI CUTTING,
VICE PRESIDENT,
NORTH DAKOTA PETROLEUM COUNCIL
Ms. Cutting. Chairman Broun, Ranking Members Swalwell and
Maffei, thank you for the opportunity to testify today on
Bakken petroleum, a substance of energy independence.
The North Dakota Petroleum Council represents over 530
companies engaged in all aspects of oil and gas activity in
North Dakota, South Dakota, and the Rocky Mount region. NDPC
members produce 98 percent of all oil and gas in North Dakota.
The State of North Dakota is one of the only States with a
multi-resource comprehensive energy policy. North Dakota is
proactive and aggressive in addressing energy development and
serves as a model for America in fostering innovation and long-
term energy development to meet our nation's growing demand and
need for energy security in an environmentally responsible
manner.
North Dakota is now the second-largest oil-producing State
in the Nation, reaching 1 million barrels of daily production
in a 2014, up from 100,000 barrels in 2007. The industry has
almost 11,000 producing oil wells, employs tens of thousands of
direct and indirect jobs, has a $30 billion economic impact,
and contributes $11 million per day to our state and political
subdivision and oil reduction taxes.
The States of Texas and North Dakota combined produce
nearly half of the crude oil produced in the United States and
increased domestic production has helped stabilize energy
prices despite turmoil overseas. In fact, this new domestic
energy production has reduced imports by 4.4 million barrels
per day since 2005. Imports from Saudi Arabia are down 25.3
percent while imports from Venezuela are down 47.8 percent.
Because of shale oil and gas, North American energy security is
now achievable and North Dakota is very proud of its role in
this progress.
Although North Dakota oil and gas production has grown
substantially in recent years, pipeline capacity to key markets
has not, requiring 59 percent of the Bakken crude to be hauled
via rail in June. Since the increase of crude being transported
by rail, there have been eight railway incidences involving
crude oil that have raised questions as to the chemical
characteristics of Bakken crude, how it compares with other
flammable liquids under U.S. Department of Transportation
regulation, and whether it can be safely transported across
North America under the current regulatory environment as
enforced by the Pipeline and Hazardous Materials Safety
Administration.
Three independent studies have now shown that Bakken crude
is similar to other North American light sweet crude oils in
gravity, vapor pressure, flashpoint, and initial boiling point,
which are the key parameters in proper classification.
According to these studies, Bakken crude oil chemical
properties attest to its proper classification as a Class 3
flammable liquid. This category contains most of the valuable
fuels and fuel feed stocks offered for transportation in the
United States.
One of the studies was commissioned by the North Dakota
Petroleum Council to answer questions raised about the chemical
properties and transportation safety of Bakken crude oil. The
study included a comprehensive and--comprehensive sampling and
analysis plan and was conducted by Turner, Mason & Company, an
internationally known and recognized group of engineering
consultants with extensive crude oil expertise, at a
significant cost.
The oil and gas industry in North Dakota has a very strong
safety culture focused on zero incidences. All incidences large
and small generate a safety investigation to determine the root
cause of the safety incident. Procedural changes or additional
safety measures are implemented to mitigate the root cause and
prevent a recurrence of a similar incident. This is true
whether the incident occurs during a drilling, completions,
reduction, or transportation aspects of the industry's
activities. Commissioning of the Turner Mason study is an
example of the industry's desire to investigate safety
incidences.
The Turner, Mason & Company study was designed to provide
scientific answers to address the growing perception that light
crude oil is more hazardous than other flammable liquid or
hazardous materials being transported in the United States. The
results of the study do not support the speculation that Bakken
crude in particular is more volatile than other crude oils or
other flammable liquids.
There are nine classes of hazardous materials transported
by truck, rail, ship, and cargo air in the United States.
Material from all nine hazardous materials classes are
transported safely every day in this country millions of times
a year. Those who offer hazardous materials for shipment must
be certified and are required to properly classify the material
being offered for transportation.
All classes of hazardous materials transported by rail
arrived safely at destination greater than 99.997 percent of
the time. The efforts of all stakeholders, including PHMSA, the
oil and gas industry, tank car builders and owners, the
railroads, and the State of North Dakota are focused on
affecting an incremental safety improvement for the remaining
0.003 percent incidences.
In conclusion, safety always has and continues to be a core
value of the oil and gas industry. The NDPC and its members
believe rail safety improvements must be developed using a
holistic, comprehensive, and systematic approach that examines
prevention, mitigation, and response. Safety solutions must be
data-driven and produce measurable improvements to safety
without creating new risks or inadvertently shifting the risks
to other businesses or operations. To achieve this,
collaboration is needed among government, shippers, railroads,
and tank car builders.
All stakeholders recognize the important of implementing
additional safety measures to reduce the probability of the
remaining 0.003 percent. Efforts to improve safety of the rail
car, routing analysis, infrastructure inspection and
enhancements, as well as additional training and information
for emergency management personnel, are all efforts being
addressed. The oil and gas industry, it partnership with the
railroads, is working to develop a common educational tool to
be distributed broadly to fire departments either through web
portal or DVDs. This information will also be available for
companies to use in continued interaction with fire departments
and other EMS personnel. Rail and oil industries in many States
have worked collaboratively on drills and exercises,
development of additional response resources, and periodic
meeting to keep the lines of communication open to maximize
information sharing of the latest data on emergency response
for these type of incidences.
We look forward to continuing this work with the state and
federal leaders to enhance safety and bringing this product to
market and ensuring our State can continue to improve energy
security by providing a reliable energy resource for our
nation.
Thank you very much for allowing me to testify. I will be
happy to answer-
[The prepared statement of Ms. Cutting follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Broun. Thank you, Ms. Cutting.
Mr. Auers, you are recognized for five minutes.
And again, I want to reiterate we are pressed because of
votes so if you all could try to get--we are going to get
through with this questioning as quickly as we can, too, so if
you could make sure they stay within the five minutes, I
appreciate it.
TESTIMONY OF MR. JOHN AUERS,
EXECUTIVE VICE PRESIDENT,
TURNER, MASON, & COMPANY
Mr. Auers. Okay. I want to first express my thanks to
Chairman Broun, Ranking Member Swalwell and Maffei, and all the
members of the Energy and Oversight Subcommittees for your time
and attention.
As a result of several high profile rail incidents,
questions as to whether Bakken is materially different from
other crude oils and if the current railroad materials
classification is appropriate have been raised. To answer these
questions, the North Dakota Petroleum Council commissioned
Turner, Mason & Company to conduct a comprehensive sampling and
testing program. One hundred and fifty-two samples were taken
over a four-week period from seven rail terminals and 15 well
sites. The crude producers that provided the well samples
account for 50 percent of the total North Dakota production and
the rail facilities sampled represent a similar proportion of
the total North Dakota crude-by-rail capacity.
The sampling locations covered the entire producing region
and include those old and new wells, getting good
representation of any property variation as a result from
geography, production rate, or during processing and transit. I
believe this program is the most thorough and comprehensive
study of crude quality from a title production basin to date.
The results of this study are being used to establish a
bottom quality baseline and to ensure continued crude quality
and consistency. The study was also used to evaluate the impact
of field operating conditions on Bakken qualities. These study
results, together with followup effort, will be used to
establish management best practices for operating field
production equipment to best meet the proposed quality
specifications.
Our study confirmed that Bakken crude is a light sweet
crude oil with an API gravity generally between 40 degrees and
43 degrees and a sulfur content less than 0.28 percent. As
such, it is similar to many other light sweet crude oils
produced and transported in the United States and falls in the
middle of the range defined by the Energy Information
Administration for that category. Overall, over 60 percent of
the crude produced in the United States falls into this or
wider categories representing over five million barrels per
day.
During our sampling program, Bakken had an average vapor
pressure between 11.5 and 11.8 psi with 90 percent of the well
samples and all of the rail samples measuring below 13 psi.
This means Bakken is more than 60 percent below the 43.5 vapor
pressures threshold for liquids under the Hazardous Materials
regulation and almost 90 percent below the 100 psi rating that
the railcars use for transport.
Because of the dearth of consistent data for other crudes,
comparisons are difficult. The data that is available show
Bakken vapor pressure to be within 2 to 3 psi of other light
sweet crude oils with some lower but most other tight oils
higher. While sampling occurred during a shoulder period, data
outside that period provided by an NDPC member company showed
some seasonality in vapor pressure with summer results
averaging about 3 psi lower than those in the winter.
The light ends content, as defined by C2's through C4's,
average just below 5.5 liquid volume percent for all the
samples and under five percent for the rail samples. This is
generally within one to two percent of most other light crudes
with some showing lower levels and others having more light
ends.
The flashpoint of Bakken measured below 73 degrees
Fahrenheit, initial boiling point generally averaged between 95
degrees Fahrenheit and 100 degrees Fahrenheit, both of which
are a normal range for light crude oil. The data supports the
current Department of Transportation and Pipeline and Hazardous
Materials Safety Administration classification for Bakken crude
as a Class 3 flammable liquid which is similar to other crude
oils, as well as gasoline, ethanol, and other materials
containing light components. As a result, Bakken crude oil
meets all specifications for transport using existing DOT 111
tank cars.
Flammable liquids fall into packing groups depending on the
IVP as defined by the ASTM D86 method. Our results show some
variability, especially on samples tested by different labs.
This is because D86 was not developed for wide-boiling range of
materials like crude oil. The difficulty with achieving
consistent IVP results between different labs, other groups are
working on recommendations for an alternative approach to
determine packing group classification with a goal of obtaining
DOT approval.
Based upon the findings of our study, the NDPC has decided
to encourage all members to classify their Bakken crude as a
Class 3, Packing Group 1 flammable liquid until more definitive
testing protocol is established. It is critical to note the
determination of Packing Group 1 versus Packing Group 2 has no
impact on the type of rail car used or on first responder
response to an incident. It had no impact on any of the
incidents in which Bakken was involved.
We found that the qualities of Bakken were very consistent
in our sample population and throughout the supply chain from
wellhead to rail terminal to refining destination. Test results
showed no evidence of spikes in natural gas leakage before a
rail shipment. Due to the fact that crude from a number of
wells is aggregated, samples taken at the rail terminal should
have less variation and tighter averages than well readings.
The test results from the study are also consistent with the
recorded result of others, including the American Fuel &
Petrochemical Manufacturers' Bakken report, the PHMSA Operation
Safe Delivery report, NDPC member-gathered data, and other
recent studies and presentations on the quality of Bakken crude
oil.
The accuracy and precision of our test program was ratified
by a series of round robin tests between both the SGS
laboratories used in our study and Intertek, the testing
company used by PHMSA in their study. The results of the round
robin testing showed excellent agreement on API gravity in
vapor pressure. Significant variation did occur in the measured
IVP from D86 testing due to the issues I mentioned earlier.
While the test results from PHMSA's report agree closely
with the NDPC results, PHMSA did make some assertions in their
executive summary which do not appear to be supported by their
study or our findings. First, the PHMSA report makes a
statement that ``we conclude that while this product does not
demonstrate the characteristics of a flammable gas, corrosive
liquid, or toxic material, it is more volatile than most other
types of crude.'' No comparative data was provided in the
report to support this statement.
Second, PHMSA also claims that a higher degree of
volatility correlates with increased ignitability and
flammability. Again, no support is provided for this statement
in the report. While we are aware that some groups are studying
this very complex subject, we are not aware of any final
conclusions from those studies to date.
I have submitted a separate written testimony which
provides more detail and results from our study and our
complete report is available on the NDPC website. With that, I
conclude my prepared remarks and-
[The prepared statement of Mr. Auers follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Broun. Thank you, Mr. Auers.
Mr. Zoanetti, you are recognized for five minutes.
TESTIMONY OF MR. MARK ZOANETTI,
DEPUTY CHIEF OF SPECIAL OPERATIONS,
SYRACUSE FIRE DEPARTMENT
Mr. Zoanetti. Good afternoon, Chairman Broun, Ranking
Members Swalwell and Maffei--
Mr. Broun. Please turn on your microphone. Is the red light
on there? Speak and so you--
Mr. Zoanetti. Good afternoon, Chairman Broun, Ranking
Members--
Mr. Broun. No, that is not--could somebody help him get his
microphone on, please? Mr.--maybe you could use Mr. Auers'
microphone.
Mr. Zoanetti. Good afternoon, Chairman Broun, Ranking
Members Swalwell and Maffei, of the Energy and Oversight
Committee. I am here on behalf of the City of Syracuse at the
request of Congressman Maffei. I want to thank you for allowing
me to share my experience in dealing with hazardous materials
and rail transportation and the challenges that first
responders face on a daily basis.
As a joint effort between the Syracuse Fire Department and
the Onondaga County Department of Emergency Management, we
contacted CSX for information about Bakken oil. Initially,
shipment information was not made available. With persistent
pressure from state and federal--and local government, CSX
agreed to meet with the Syracuse Fire Department to discuss the
movement of Bakken oil. In the meeting we received information
about shipments and hazards associated with Bakken oil. We were
able to establish a dialogue with CSX that eventually brought
educational resources to first responders.
With information about the light sweet crude, we made a
hazard assessment to determine what if any gaps existed in our
response plans to an accident involving Bakken crude trains. It
was determined that additional training and planning were two
key components in dealing with this hazard.
Because of what we were--believed to be the lower ignition
temperature of the crude as compared to other crude shipments,
the hazard has increased. In reviewing incidents in Queebec and
North Dakota and information from several resources we
recognized the hazard of transportation of Bakken crude. We
were advised that the rail lines that run along the northern
border of our city and are being utilized for the movement of
this product. CSX lines border Onondaga Lake at the
southernmost end and is adjacent to Destiny USA, a large
shopping and entertainment center. The rail proceeds past the
William F. Walsh Regional Transportation Center, a minor-league
ballpark, and a light industrial area. Once out of the city's
jurisdiction, the trains move to an East Syracuse rail yard, a
village on the eastern border of the city.
Following the issuance of an emergency order from the U.S.
Department of Transportation that required railroads--railroad
carriers to release information in writing to state emergency
response centers in each State in which the rail carriers
transporting more than--transporting one million gallons or
more of Bakken crude, CSX disseminated information of
commodities transported through central New York.
The data from the 2013 Hazardous Materials Density Study in
Onondaga County reported the number of carloads and percentage
of total hazardous materials as transported through our County.
The Bakken crude compromised--comprised the greatest share of
haz materials transported at 34 percent of the total. We found
that many other hazardous materials were transported through
the city, which we have known for a long time that these
commodities move through the city, but were unaware of the
amounts. There are large quantities of liquefied petroleum gas,
sulfuric acid, propane, chlorine, and ethanol to name a few.
There are shorter rail lines besides CSX that traverse through
downtown Syracuse and move tank and bulk products.
The Bakken crude is moved through central New York by rail
every day. There are two trains that daily traverse Syracuse at
approximately 100 tank cars in each train. When a concern--the
concerned for potential hazard of this commodity were brought--
was brought to light that these trains were in our community,
we had little information about shipment outside of media
reports.
With information in hand, we determined a course of action.
Training became the next step in our progression. A training
program supplied by CSX was presented to our members that
contained the DVD lessons that matched a workbook in dealing
with rail emergencies. After completion of these lessons, CSX
brought their safety training program into Syracuse for some
hands-on training in working with DOT 111 tank cars. A total of
60 members of the Syracuse Fire Department attended this hands-
on training. Those members are assigned to stations that
respond to the rail incident should a Bakken crude train have
an incident. Participants in this training include our
hazardous material unit where the balance of our department is
going to receive awareness training in rail incidents.
From the perspective of the Syracuse Fire Department,
Bakken crude trains do not present the only challenge for first
responders. The vast array of other hazardous materials that
move through our jurisdiction require us to be prepared for all
hazards. The Syracuse Fire Department hazardous material team
must train and equip to deal with whatever emergency might come
our way besides establishing procedures for dealing with Bakken
train trains at present. However, I am confident we are
prepared to respond should an incident happen. Because of the
potential for a transportation accident, we train to meet all
hazards. The Syracuse Fire Department is also working with the
Local Emergency Planning Committee to help protect the public
from an incident.
In November of 2011, a train derailed in a residential area
of the city of Syracuse. Several tank trains and bulk hopper
cars derailed. The tank car carrying non-odorized propane was
our biggest hazard. Because of the potential hazard, we
evacuated approximately 100 home. This also caused the closure
of a main highway, Route Interstate 81. The origin of the
incident was determined to be a bad section of track. The
deficient track was identified in July and--of that year and
was not repaired. The section of track that caused the
derailment was in the middle of the city causing the cars to be
dragged up to one mile further before overturning. Fortunately,
there was not a release of propane and the cars were eventually
righted without further incident.
The city and the county have created a stockpile of
firefighting foam and are acquiring appliances to deliver the
foam at an incident. Additionally, with the production of an
ethanol plant in the nearby city of Fulton, we are finding
large quantities of ethanol being transported through central
New York.
The hazardous materials team of the Syracuse Fire
Department is comprised of 36 highly trained hazmat
technicians. All members meet or exceed the standards for
training set forth by CFR 29 1910.120 and NFPA 472. All hazmat
officers as well as chief officers of the Syracuse Fire
Department are trained in Hazardous Materials Incident Command.
Syracuse Fire Department hazmat team is a regional response
team for a three-county area in central New York. We are a FEMA
Type I team, the only team in our region. We have responded
outside of our area in New York State mutual aid assets for
natural disasters that have affected the State.
At a time when increasing demand for emergency services
is--are becoming more complex, local resources are becoming
financially strapped very quickly. The assistance from state
and federal resources and shippers would provide for responder
training, development of effective response capabilities, and
planning to be able to safely mitigate an incident and protect
the public from harm.
I want to thank you for holding today's meeting about
transportation of the Bakken petroleum and rail safety. The
hazards of this product are not unlike others that are--others,
but because of the volume that is moved across America through
many small communities, it has created a tremendous concern.
Should an accident happened similar to the ones that have
already occurred--excuse me--local resources will be overtaxed
quickly. To be able to protect the public, emergency response
agencies need the tools to respond and mitigate accidents.
Prevention of accidents should the--should also be on the
forefront of this endeavor whether through engineered controls,
track maintenance, or product safer transportation.
I will answer any questions.
[The prepared statement of Mr. Zoanetti follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Broun. Thank you, Chief. I thank the witnesses for your
testimony. The Chair will now at this point open the first
round--well, I guess we only have time for one round of
questions.
For Members' information, the last report we got from the
cloakroom is we are going to have votes somewhere between 4:15
and 4:30, so just to inform the Members.
The Chair now recognizes himself for five minutes.
Ms. Cutting and Mr. Auers, the PHMSA report claims that
Bakken crude is ``more volatile than most other types of
crude.'' Is it a fair comparison? Should the report have
compared it Bakken crude with other light sweet crudes since
they are in the same category? Is this just stating an obvious
fact that it is more volatile than just other types of crude?
Mr. Auers. As our report--
Mr. Broun. Turn on your mic.
Mr. Auers. As our report showed, Bakken is very similar to
other crudes. Again, there is not extensive--the level of data
on other crudes as there was on Bakken with ourselves, PHMSA,
and others-
Mr. Broun. And let me interrupt you because we are real
tight on time. The question is PHMSA said it is more volatile
than most other types of crudes. That includes heavy crudes,
all crudes, and during your testimony you said that it is no
more volatile than other light crudes if I remember correctly.
So the question is is it just stating an obvious fact that they
said that it is more volatile than other types of crudes?
Mr. Auers. Light crude will generally have more light ends,
so the answer is yes, it is stating an obvious fact.
Mr. Broun. Ms. Cutting?
Ms. Cutting. Bakken crude is a light sweet crude. It is the
same as other light sweet crudes. When compared to heavier
crudes, as PHMSA kind of was talking about, it could be
considered to be lighter, have different composition than real
heavy crudes, but it is a light sweet crude similar to other
light sweet crudes.
Mr. Broun. So you would agree that it is just stating an
obvious fact in the PHMSA report that light--that Bakken crude
is more volatile? And I take it from your answers, is that
correct? Yes or no? I mean that is what we are trying to get
at.
Ms. Cutting. There is a different chemical composition
between a heavy crude and a light crude.
Mr. Broun. Well--
Ms. Cutting. We have stated that, right? Because volatility
is a lot more complex question than we can address--
Mr. Broun. Well, I agree with that and that is the reason I
am disappointed that we didn't get the scientific folks from
DOE and DOT.
Ms. Cutting and Mr. Auers, you have heard me question the
first panel about inconsistencies in their characterizations of
the Bakken crude's ignitability and flammability
characteristics. What impact does this have on industry when
regulating agencies such as PHMSA appears to make a more
incendiary statement about Bakken crude characteristics than a
scientific agency such as the Department of Energy?
Ms. Cutting. I think that the real issue here is how the
public perceives that information when a regulatory body makes
a comment like that. Of course it causes concern in the public.
And I think that the other part of the public that becomes very
concerned is the emergency response people, and because they
knew how to deal with flammable liquid, and now when they are
saying this is somehow different, it causes them to go back to
the drawing board and try to figure out how it is different and
how they are going to respond.
Mr. Broun. Mr. Auers, do you want to make any comments?
Mr. Auers. Yeah, I would agree with that. Again, Bakken is,
you know, a very typical light crude. It is not an unusual,
particularly hazardous material and, you know, the public, to
their credit, wouldn't know the difference but when they hear
that from an official source, Bakken is something different and
more dangerous, that, you know, is sort of like screaming fire
in an elevator, you know, or theater. It is just not something
you should do. You should base it on facts, and the fact is
Bakken is a very typical light crude, probably more similar to
conventional light crude than most other tight oils.
Mr. Broun. Well, and that is the purpose of this whole
hearing is PHMSA is recommending that Bakken crude be
characterized as Class 1 whereas my question about ethanol and
gasoline, which is Class 2, you are recommending Class 3, and
this is the reason we are trying to get into the scientific
aspects of all this. And I thank you all for your testimony.
I yield now to--I guess Mr. Swalwell is gone so to my good
friend Dan Maffei.
Mr. Maffei. Thank you. Thank you, Mr. Chairman. I
appreciate it.
Just--I obviously am very, very pleased to have our deputy
chief from the Syracuse Fire Department down here, and I
appreciate yourself, the leadership of the Syracuse Fire
Department and Mayor Miner for letting you come testify.
I am focused on the safety aspects of this. If there is any
theme out of this hearing I think it is that this Bakken crude,
while not necessarily any more dangerous in and of itself than
any of the other volatile chemicals that we in a modern society
have and have to transport, it is a much broader volume than it
has been between 2011, 2012. It went from some 65,000 carloads
to 257,000 carloads. The first panel was talking about
basically a tripling--I am sorry, a multiplication by 10 over
the period when we started doing this, so it is a lot more.
Mr. Zoanetti--Chief Zoanetti, are you seeing enough
additional resources to handle that additional risk created not
by necessarily the quality of this particular material but the
volume?
Mr. Zoanetti. Certainly improved training and planning. I
know that in the other discussions safety features of either
the railcars and train--track maintenance, things of that
nature are going to help reduce risk. Resources for emergency
service first responders is always going to be a need there. We
need to increase our training capabilities and our capabilities
to respond to that catastrophic incident that may or may not
happen. We have to be prepared to be able to meet the needs and
the people are expecting us to meet those needs.
Mr. Maffei. Do you feel that you and other local fire
departments are getting enough information, scientific and
otherwise, to be able to assess any potential threat that could
occur if there was a train derailment for instance?
Mr. Zoanetti. I personally am often looking for information
and most of the information I have received has not been
completely scientific. I think I--not that I am a scientist,
but I--more information would certainly be better. Information
sharing is to me very critical.
Mr. Maffei. Mr. Zoanetti, in upstate New York, as you know,
we have a lot of volunteer fire departments. How does that put
increased pressure on a professional department like Syracuse
in terms of its regional leadership?
Mr. Zoanetti. Well, as I mentioned, we are the only
hazardous materials team in the central New York region, so
that responsibility does fall to us. Each volunteer department
has a home responsibility if it happens in their districts, but
quite honestly, if something does happen, they are going to be
requesting our services and looking for us to help them solve
their problem.
Mr. Maffei. So the resources you get, even though your
responsibility is just to the city of Syracuse, you may very
well use in all sorts of cases in the State should there be
some sort of incident?
Mr. Zoanetti. Yes, sir.
Mr. Maffei. Let me ask you this. Do you feel that there is
any particular kind of safety provisions on the railcars? This
has been some point of controversy. Or do you have any--a way
to assess that or are you, you know, feeling like a--there is
enough precautions as there already are or are you being asked
these questions?
Mr. Zoanetti. Well, I am not an engineer so I really don't
know about the engineering part of it. I know that my training
has told me that if an incident happened, I have to respond and
deal with it to the best of my ability and the engineering part
comes from some folks other than myself.
Mr. Maffei. In terms of mitigation, you were talking about
the various foams used for this kind of hazardous material but
also other things, liquid petroleum, other kinds of hazards,
chlorine, et cetera. Is this foam expensive and are there
varieties of it? Give us a sense of what that is.
Mr. Zoanetti. The foam is roughly about $50 to $75 a
gallon. That is foam concentrate. So the cost is definitely
significant. As I mentioned, we are trying to stockpile a
certain amount but I am not sure that a catastrophic incident
we would have enough. We would have to reach out to other
resources at the state and possibly at the federal level to get
enough firefighting foam to really accomplish the goals that we
need to accomplish.
Mr. Maffei. Has your budget gone up at all given this--
because we have--I think in central New York has also seen
about the same increase in the number of trains going through.
Mr. Zoanetti. That has not affected our budget in a
positive way at all.
Mr. Maffei. All right. So basically trying to do the same
with what you had before but with more incidents?
Mr. Zoanetti. Yes, sir.
Mr. Maffei. All right. Well, Mr. Chairman, my time is up
but I would like this committee and other committees to just
consider the volume of this, not with any--well, let me say
this, without prejudice to whether the material itself is any
more volatile or any less volatile but any other industrial
material or energy source that we have to transport is simply
that the volume of it requires that we look at ways to make
sure that emergency departments and first responders do have
the amount of resources needed to make sure that no minor
incident or accident becomes a serious incident. And I will
yield back.
Mr. Weber. [Presiding] Thank you.
The gentleman from North Dakota is recognized for five
minutes.
Mr. Cramer. Thank you, Mr. Chairman. Thank you, Ranking
Member.
I might just say with regard to the Ranking Member's most
recent statement, I certainly don't disagree with that although
I do think that Transportation and Infrastructure Committee is
probably going to take up--and maybe the committee jurisdiction
on some of those areas, so--but I appreciate-
Mr. Maffei. I just want to send them our transcript.
Mr. Cramer. Yeah, very good.
Mr. Auers, you heard the--did you listen to or watch the
testimony of the previous panel?
Mr. Auers. I did.
Mr. Cramer. And so, again, Chairman Broun previously, much
like he did with the first panel, started down talking about
the comparison between refined fuels and light sweet crude.
With regard to the packing designation of 1 versus 2, 1 being
more I guess safeguarded versus 2, and yet 1 is the Bakken
crude and 2 is the ethanol gasoline. Is that a
mischaracterization, and if so, why?
Mr. Auers. Well, you know, I am not an expert on packing
groups necessarily but ethanol is--and--you know, is flammable.
So is gasoline. And I would--I did listen to the testimony
earlier. I do believe if I threw a match in Bakken crude oil,
it would not light. Gasoline and ethanol would. We don't burn
crude oil on Bunsen burners. You know, we do burn ethanol. It
wouldn't seem consistent that ethanol is in a less stringent
packing group than crude oil, same with gasoline.
Mr. Cramer. Thank you. Because this gets to my concern
about a calming scientific approach versus a sort of hysterical
approach if you want to know the truth because when we start
packing and considering crude oil to be as flammable, as
volatile as refined product--and then--and let me ask you this.
I was somewhat personally confused by the end of the
discussion--it wasn't a discussion; it was a question and it
was an answer. Did you hear one of the witnesses say that
because it is refined, somehow it--ethanol and gasoline should
be safer? I mean because that didn't make sense to me or did I
mishear it?
Mr. Auers. Yeah, I mean there is no--I don't see any basis
for that. I mean, you know, gasoline is a refined product. I
don't think of ethanol as a refined product. It is a--
Mr. Cramer. Sure.
Mr. Auers. It is a pure component. Another thing about
ethanol that, you know, the issue has been brought up is
whether the volatility makes something more ignitable or
flammable, and volatility--I don't really use that term.
Volatility can't be measured. It is a--you know, most people
when they talk about volatility they talk about a variety of
different physical and chemical metrics that can be measured
like IVP--
Mr. Cramer. Um-hum.
Mr. Auers. --like flashpoint, which are in the packing
regulation, and also vapor pressure and light ends contents. In
the case of ethanol it actually isn't volatile by those
measures; it has actually got a very low vapor pressure, but it
is only 2.3 psi.
Mr. Cramer. Sure. Help me maybe better understand that
then. Is there a linear relationship between all of these
things that leads to volatility or is there something more
dynamic that we should be considering?
Mr. Auers. Well, again, the term volatility is defined by
different people different ways so I don't tend to--
Mr. Cramer. Sure.
Mr. Auers. --use that term. We in the refining industry
sometimes will directly talk about volatility directly as vapor
pressure, but we are not talking about something that is more
subject to being--to flammability. It is just the fact that it
has a higher vapor pressure. And vapor pressure--and as I
mentioned in my prepared testimony, there are no direct
correlations between all of these metrics and ignitability and
combustibility. And there are groups studying that. It is a
very complex issue and there aren't any firm answers on that
yet on what leads to--but certainly not a straight-line
correlation. As I mentioned, ethanol has a very low vapor
pressure but it is extremely flammable and ignitable.
Mr. Cramer. And I do think--and I appreciate that all of
the witnesses have said there needs to be further study and we
are in sort of new territory. You clearly have done the most it
seems at this point.
Also then in fairness could you sort of characterize for us
in the few seconds you have remaining the Turner Mason study?
And I don't want to say versus but compared to the PHMSA study,
are there some stark differences or are they largely similar?
Mr. Auers. The results are extremely similar in terms of
the testing. What we found when we compared their results to
our results, they were very close. I heard Director Butters
confirm that as well. The differences are in the conclusions.
They do two conclusions that we don't think were supported by
any data that either they had or we have seen.
Mr. Cramer. My time is expired. Thank you, Mr. Chairman.
Thank you.
Mr. Weber. Thank you.
Mr. Veasey, I believe you are up next or--Paul Broun
recognized you, didn't he, Mr. Maffei?
Mr. Maffei. Yep.
Mr. Weber. Yeah, good.
The gentleman from Texas.
Mr. Veasey. Thank you, Mr. Weber. I appreciate that.
I want to ask either Ms. Cutting or Mr. Auers about an
article that was in the Wall Street Journal earlier this year
that analyzed data from Capline Pipeline. I am not sure if you
are familiar with the company Capline Pipeline in Louisiana,
but it tested crude from about 86 locations worldwide for--to
measure vapor pressure, and it--and from what they found
according to this article was that the light sweet crude from
the Bakken had a higher vapor pressure than crude from dozens
of other locations around the world. And I just wanted to ask
you, like one of the companies in here, for instance, Tesoro
Corporation, a major transporter of Bakken crude, said it
regularly received oil from North Dakota with even more
volatile pressure readings, sometimes up to 12 psi. Does that
sound unusual to you at all?
Mr. Auers. Twelve fits right in with what Bakken looked
like. In our study it varied. And again, sometimes I get
confused in talking about RVP and true vapor pressure and we
use a true vapor pressure, which measures out about a pound
higher than RVP does. But typically Bakken, from an RVP
standpoint, will be 8 to 12 pounds from a true vapor pressure
standpoint, 9 to 13 pounds. Again, it does vary seasonally a
little bit. So 12 fits right in that range.
Mr. Veasey. Is it--well, compared to other light sweet,
was--would other light sweet be in that range as well?
Mr. Auers. You know, as I mentioned in my testimony, some--
within two or three pounds of that, some higher, some lower. A
lot of the conventional pipeline crudes like the LLS, the West
Texas crude at Cushing, some of those will be generally a
little bit lower, more in the five to eight range. Almost--most
of the tight oils are going to be potentially higher, the Eagle
Fords, the Niobraras, the Uticas. So it varies, but within
those ranges I don't know that there are substantive
differences. What again others are studying, you know, and it
was mentioned earlier, I don't think anybody knows--certainly
vapor pressure doesn't correlate directly with flammability or
ignitability as per the ethanol example, but to what degree it
contributes to the ignitability or flammability, that is being
studied. And we didn't--we are not doing that study. That is
being studied by other groups.
Mr. Veasey. Well, what about--it said by comparison that
the Louisiana light sweet from the Gulf of Mexico had vapor
pressure readings of 3.33 psi according to Capline. So when you
compare that 3.33 psi compared to what is coming out of the
Bakken, how large of a difference is that? Because you are
talking about those being light sweet there.
Mr. Auers. LLS actually is one of the--and that is pure
LLS. You know, right now, you know, Bakken is part of the LLS
stream. When Bakken comes into St. James, it gets blended into
LLS. So LLS actually--a typical LLS is probably about that
level now. It is probably more than a 5 or 6 psi range.
What is the difference between a three- or four-pound crude
and a 10-pound crude as far as safety issues? I don't know
that. I don't know the answer to that. People are studying
that. I suspect that, again, in my example, ethanol has a vapor
pressure of 2.3 psi, which is lower than LLS, but it is
extremely flammable and ignitable. So it is a very--the
ignitability and flammability question is extremely complex,
and one reason why there haven't been any results, any
conclusions from those studies to date is because there are a
lot of factors that go in to it beyond just vapor pressure,
beyond just light ends content, beyond just flashpoint or
initial boiling point.
Mr. Veasey. I mean with your knowledge of, you know,
transportation and quality issues related to the Bakken, I mean
what is safer from a public safety standpoint? Is it better to
transport this stuff by rail or is it more safe to have it in a
pipeline?
Mr. Auers. I believe, you know, as I heard in earlier
testimony and I am sure Kari say that as well, it all depends.
You know, I think all those forms of transportation can be
safe, including marine, which you didn't mention. We transport
crude oil products by all forms of--all those forms of
transportation--
Mr. Veasey. You are transporting Bakken by marine around
the United States?
Mr. Auers. Bakken will be--you know, they are putting in
rail terminals on the West Coast. The idea is to rail it to the
West Coast and transport by marine down to California. Bakken,
as I said, does make it to the Gulf coast and some of those
barrels do get blended in to an LLS stream. That--the potential
is to transport that by marine around to the East Coast. So I
anticipate that Bakken will be moved by marine at some point.
Again, the plans are if those terminals on the Columbia River
get built, then there will be Bakken moved by marine. So all
forms of transportation are safe if they are done correctly.
Mr. Veasey. Thank you. Thank you, Mr. Chairman.
Mr. Weber. Thank you.
The Chair has a unanimous consent request. Our fellow
member Jim Bridenstine from that North Texas community called
Oklahoma isn't on the Committee but he would like to act as a
member of the committee. Without objection, so ordered.
Mr. Bridenstine. We are not North Texas. Texas is Baja,
Oklahoma. Let's be clear.
The California guy laughs.
Ms. Cutting, would the hazardous material regulation cause
you to treat Bakken crude any differently than crude from Eagle
Ford in Texas or the DJ Basin in Colorado?
Ms. Cutting. No.
Mr. Bridenstine. So the regulations would not cause you to
treat one differently from the other?
Ms. Cutting. No. The regulations have a decision tree they
must go through that initially you look at flashpoint in
material and then you look at initial boiling point. And given
that criteria that is used to determine packing group, all of
those would be in either Packing Group 1 or Packing Group 2.
And if I can take a moment to make a statement that part of the
controversy that is going on as far as packing groups and some
of what you have heard today is because the methodology--
prescribed methodology used today with wide boiling range
materials cannot tell the difference between Packing Group 1
and Packing Group 2. And that is really causing some of these
issues. So I feel very safe in saying that all those materials
would be Class 3 flammable liquids, Packing Group 1 or Packing
Group 2. Further, Packing Group 1, Packing Group 2 designation
does not change the railcar that is used to move the material
and it does not change the emergency response.
Mr. Bridenstine. Thank you for sharing that and clarifying.
Mr. Auers, what are the most unique characteristics of
Bakken petroleum and please explain to what extent those
characteristics distinguish Bakken petroleum from other types.
Mr. Auers. Again, I don't think Bakken is particularly
unique in general, but there are some things that make a
difference in some of the other titles. For one, it is very
consistent across the whole basin. Most other titles tend to
vary quite a bit. Eagle Ford crude, for example, varies from
very gassy areas to natural gas liquid area to a very light
condensate down to, you know, a heavier crude oil. So even in
the liquid part of Eagle Ford basin can vary from 30 gravity
crude to 60 gravity crude. Bakken falls in a very tight range,
generally between 40 and 43 API gravity. So it is a very
mother's milk crude to the refiners, very high yields of
gasoline and diesel. Refiners love it. It fits really well into
the East Coast refining systems, the way they are configured.
It fits pretty well into the Pacific Northwest refining
complexes as they are configured. And it is--you know, it is
one of the examples of why, you know, that works that way. I
mean it has been very easy for those refiners to back out
waterborne light crudes. It fits very well and it is a
replacement for those offshore international crudes.
Mr. Bridenstine. Is it true that petroleum produced from
the Bakken region has an average lower sulfur content than the
average sulfur content processed by U.S. refiners on average?
Mr. Auers. Oh, yeah, quite a bit lower. It is less than,
oh, .28 percent sulfur. I think the average sulfur of U.S.
refinery crude runs somewhere in the 1.6/7 range.
Mr. Bridenstine. What are the consequences of petroleum
with lower sulfur content?
Mr. Auers. It requires less intensive processing at the
refinery level to produce clean products, you know, low sulfur
transportation fuels. That makes it less expensive to process.
Mr. Bridenstine. So this would be a more marketable, you
know, crude than other crudes?
Mr. Auers. It is a more valuable crude. The sulfur is not
the biggest part of its value; it is the fact that it has very
good distillation characteristics, again, a high yield of
gasoline components and distillate diesel components, high-
value transportation fuels.
Mr. Bridenstine. Is it true that increased Bakken
production has led to the continued operations of certain East
Coast refineries?
Mr. Auers. Yeah, I believe that is very true. Just 2 or
three years ago there were several refineries that were
threatened with shutdown. Before that time two or three--really
four or five actually did shutdown. Once they were able to gain
access to lower-cost domestic supply to be able to replace the
high cost international barrels they were running, we were able
to keep the Philadelphia Energy Systems plant, a big 330,000
barrel-a-day plant in Philadelphia operating. The Phillips 66,
Conoco Phillips, was looking at shutting down their Marcus Hook
plant south of--you know, close to the Philadelphia airport.
Delta Airlines--that is a Monroe Energy subsidiary--bought that
plant and it is operating. The Delaware City plant has--that
was shut down for a while has started up. So we--and I think
continued access to that crude is crucial to keep the East
Coast refineries running.
Mr. Bridenstine. Thank you for sharing that. I am out of
time. I just want to say it is true that what is happening in
the Bakken is good for our country, and thank you guys for
being here.
Mr. Weber. The gentleman yields back.
Mr. Rohrabacher, did you have a question?
Mr. Rohrabacher. Thank you very much. I guess we are going
for votes so I will round things off.
I mentioned earlier to the first panel that there are
dangers with offshore oil drilling, and I have visited offshore
oil platforms. I am a surfer and a scuba diver. And--but there
are people who lose their lives in building these things and
also we have had fire flame outs and flares and oil spills and
things in the Gulf of Mexico, et cetera.
We have had the of course Alaskan and Arctic oil
production, which again is very expensive and many people
probably over that time period of driving supplies and things
lost their lives in making sure we had the production from the
pipeline in Alaska.
And let's just note, by the way, we should all consider
what our economy would have like in the last 20 years had we
not thought through the Alaskan pipeline because the Alaskan
pipeline only won by one vote in the United States Congress.
And had we not had to that oil, what would our economy have
been like during these last 30 years when the dependency on
Gulf oil--meaning Persian Gulf oil--was sucking the life out of
our system? You know, in coalmining there are people who die in
coalmining and transporting coalmines, and of course in nuclear
power we have got a waste left over that is there for 1,000
years.
So maybe, it seems to me when you have all these other
resources for energy and that is what you are facing, we should
be thanking God that we found oil and gas in North Dakota of
all places.
And let me--I mean that was--and I am saying that as my
father, mother were both from small farms in North Dakota and
life was so tough in North Dakota on these small farms that my
dad left the farm in order to fight in the Marine Corps to
fight World War II. And life was so rough that the life of a
Marine fighting World War II was actually more comfortable than
the life on the farm and so he stayed in the Marine Corps.
And I--when I look and see how people in North Dakota are
living now and what this means to people--ordinary people's
lives, again, you should be thanking God rather than sending
out an army of regulators to try to find--and using a
microscope to find out any excuse to put a roadblock in the way
and try to stop this wonderful gift that we have from being
utilized to upgrading people's lives in our country. So that is
the number one point.
Let me ask you about--and again, I think the motive that
this Administration--that is why you are getting these type of
very skeptical questions of the first panel is we can see that
this Administration honestly believes in the global warming
theory, and thus it really wants to stamp out the use of fossil
fuels, and that would mean--and that is why we have the excuse
of no pipeline, the Keystone pipeline, after all of this time
not being approved. We are paying the price. We are paying the
price for that and ordinary people in this country, like the
people in North Dakota in particular, but ordinary people who
live in this country are going to pay a price for not having
this wealth that God gave us as a gift. And of course with our
intelligence and the new fracking system--let me ask one
question about your production there.
One thing--I have watched this develop in North Dakota
because I have these family ties, gee, I sure hope there is
some under my grandpa's old land but we haven't determined that
yet so let me ask you this about flaring, which is one thing
that I have been concerned about is that when you see these
pictures at night, you see that there is enormous amounts of
flaring going on in North Dakota. Now, flaring is a waste of
resources. Flaring is a waste of natural gas and you are
putting stuff into the air that you don't necessarily want to
put in the air. I understand that North Dakota now is going out
of its way to try to bring the flaring of natural gas in the
Bakken under control. Is that right?
Ms. Cutting. That is correct. The North Dakota Petroleum
Council stood up a task force to look at this flaring issue and
the industry itself identified the roadblocks to bringing
infrastructure into place to capture that gas and a lot of
that--the roadblocks had to do with landowner rights and
easement. The fact that there needed to be better communication
with companies who are building pipeline, this turned out to be
a major roadblock. So through the effort of that task force and
with working with the North Dakota Industrial Commission it was
determined that one of the ways to better capture gas as
quickly as possible was to have a gas capture plan required at
the time of permitting, and that is now occurring.
Mr. Rohrabacher. We are blessed with a great gift of oil
and gas in North Dakota and I hope that we are able to get the
flaring under control because that does reflect a waste of
wealth and also something that could be harmful to people's
health.
So with that said, thank you very much. This has been a
very, I think, significant hearing.
Mr. Weber. The gentleman yields back.
I will say, Dana--you know, he is being a little modest. He
told me that his parents grew up on a farm that was so poor it
took three acres just to rust one nail, so that is pretty poor.
So perhaps they will find oil underneath your grandpa's old
farm.
So with this, this hearing is concluded. Thank you for your
testimony.
[Whereupon, at 4:37 p.m., the Subcommittees were
adjourned.]
Appendix I
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Answers to Post-Hearing Questions
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Answers to Post-Hearing Questions
Responses by Mr. Chris Smith
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Responses by Mr. Timothy Butters
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Responses by Ms. Kari Cutting
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Appendix II
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Additional Material for the Record
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Prepared Statement of Full Committeee Ranking Member
Eddie Bernice Johnson
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