IPAA response to proposed rule on transportation of crude oil by rail

The Independent Petroleum Association of America (IPAA) and the North Dakota Petroleum Council (NDPC) recently submitted comments regarding the proposed rule concerning the shipping of crude oil by rail. In the rule, the Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) specified, among other things, that the tanker car fleet currently used must be retrofitted within a two-year period to comply with heightened standards specified in the rule.

The IPAA and NDPC commented that, according to industry experts, at least six years are needed to replace the current fleet. Imposing a two-year phase-out would, in the IPAA and NDPC’s view, hinder oil producers from timely providing the market with crude oil. Additionally, the IPAA and NDPC argued that the PHMSA unnecessarily targeted Bakken crude oil because it does not impose a heightened safety risk. For support, the IPAA and NDPC relied on several reports that Bakken oil is not more dangerous that crude oil in other areas of the United States.

Read additional concerns raised by the IPAA and NDPC.

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This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Johnjerica Hodge (johnjerica.hodge@nortonrosefulbright.com or 713 651 5698) from Norton Rose Fulbright's Energy Practice Group.