Oil Boom Shifts The Landscape Of Rural North Dakota

Various authorities have been playing regulatory catchup in the wake of unanticipated oil transport by rail increases and several associated accidents. Today’s big news is a US Transportation Department announcement that crude oil moving by rail will be subject to extensive testing for characteristics like vapor pressure and other properties that impact flammability.

The testing requirements go into effect immediately and non-compliance could cost companies $175,000 per day in fines. Several firms involved in the crude-by-rail transport value chain reacted favorably to the news, but some trade groups like AFPM said unanswered questions remain, such as testing frequency and crude transport impacts on the industry as a whole.

In a speech last week, E. Hunter Harrison, chief executive of Canadian Pacific Railway Ltd., said companies should disclose more about the crude they were transporting. “I think that’d be good public relations on their part,” he said. “It’s the unknown that worries people.” – Wall Street Journal