This falls under the adage “if it looks like a duck and quacks like a duck.” The North Dakota Petroleum Council commissioned Turner, Mason & Company to look at the properties and quality of Bakken crude. Conclusions from “The North Dakota Petroleum Council Study on Bakken Crude Properties” track with those from AFPM’s “A Survey of Bakken Crude Oil Characteristics Assembled for the U.S. Department of Transportation.” Findings showed that vapor pressure for Bakken crude was well below allowable standards and that the crude poses no special safety hazards compared to other light crude oils.
Read Turner & Mason’s blog on the report here:
On August 4, the North Dakota Petroleum Council (NDPC) released “The North Dakota Petroleum Council Study on Bakken Crude Properties” report, the most thorough and comprehensive study of crude quality from a tight oil production basin to date. This study, commissioned by the NDPC and coordinated by Turner, Mason & Company, was designed to establish a clear understanding of the Bakken crude properties and to provide a crude quality baseline. This report covers, in detail, not only a summary of the laboratory results, but an analysis of the testing results and their implications.
In the past year, considerable attention has been focused on the transportation and quality issues related to Bakken crude oil. As a result of several high profile railcar incidents in the U.S. and Canada, various investigations have been launched by governmental and industry groups to better understand the safety aspects of moving Bakken crude by rail. Questions as to whether Bakken is materially different from other crude oils and whether current material classifications are appropriate have been raised. Speculation as to the cause of accidents has often pointed to Bakken crude as the culprit, without scientific evidence to back up claims. The NDPC report includes an unredacted and comprehensive set of test data, which can be used for establishing best practices and regulations that ensure safe transportation of crude oil by rail, while maintaining a scientific basis for those decisions.
Scope of Study
The NDPC sampling was conducted over a one-month period beginning March 25 through April 24, 2014. As part of the study, samples were tested for API gravity, D86 initial boiling point (IBP), vapor pressure, flash point, light ends and simulated distillation. Sampling locations included seven rail terminals and 15 well sites across the Williston Basin providing a good representation of the entire producing region so as to capture any property variations that may result from geography, production rate, or during processing and transit.
The accuracy and precision of the test program were scrutinized by a series of round-robin tests between three independent labs from two contract companies. The results of the round-robin testing showed excellent agreement on API gravity and vapor pressure, but significant variance on measured D86 IBP. The reason for this difference is because the D86 test was not developed for wide boiling range materials like crude oil, with no specifically defined lab-operating parameters specified. Therefore, different labs used different operating conditions during testing, resulting in a wide variability of values for the IBP. This highlights the difficulty with using IBP for packing group determinations of flammable liquids like crude oil. The full report discusses the difficulties with D86 testing of crude oils.
The results of the testing show Bakken crude as a light sweet crude oil, with an API generally between 40-43° and sulfur content <0.2 wt. %. Those properties make Bakken crude similar to other light sweet crude oils produced and transported in the U.S. Vapor pressure via ASTM D6377 averaged between 11.5 and 11.8 psi for rail and well samples, with over 90% of well and 100% of rail samples measuring below 13 psi. D6377 (true vapor pressure) readings are generally about 1 psi higher than the Reid Vapor Pressure (RVP) method.
D86 IBP readings showed a range of about 15°F on the samples tested. Since the cutoff for a Packing Group (PG) 1 versus 2 material is an IBP of 95°F, the samples spanned this determination threshold. Due to the limitations and inconsistencies of D86 discussed previously, the PG designations based on D86 can vary depending on the laboratory used to conduct the test. However, it is worth noting that both PG 1 and PG 2 materials are handled and transported in the same way, and do not impact emergency response procedures.
The light ends (C2-C4s) content of Bakken from the test program averaged just below 5.5 liquid volume % and is generally within 1-2% of other light crudes. Since no other comprehensive studies on other light tight oil (LTO) basins were conducted, a detailed comparison is not available. However, the data, which is available, indicates that Bakken light ends content is more consistent, and in many cases, lower than for most of the light crudes and condensates produced in the major LTO basins (including Eagle Ford, Utica, Niobrara and Permian basins).
The study testing indicates that the well-to-well quality of Bakken is very consistent. Testing across the geographic area showed very limited geographical variation in key properties such as API, vapor pressure and light ends content. Bakken quality, throughout the supply chain in our sample pool, was also consistent. There was no evidence of “spiking” of Bakken crude with NGLs, with consistent light ends content measured at both the well and rail terminals. Limited sampling at both the rail terminal and destination refinery showed no significant weathering or off-gassing of light ends in transit.
Comparison to Other Studies
During the duration of this study, two other prominent reports were released. In May, the American Fuel & Petrochemical Manufacturers (AFPM) released their report, “A Survey of Bakken Crude Oil Characteristics Assembled for the U.S. Department of Transportation,” and the Pipeline and Hazardous Materials Safety Administration (PHMSA) “Operation Safe Delivery”report was released in July.
The AFPM report came to the same conclusions regarding the safety of Bakken, concluding it was not materially different and posed no special hazards versus other light crude oils. It also drew the same conclusions regarding the safety of Bakken in DOT-111 rail cars, showing vapor pressure was well below allowable pressures and that the Bakken samples tested complied with all specifications for a Class 3 flammable liquid. Despite the same conclusions, a direct comparison between the AFPM and NDPC reports cannot be performed on all data points due to differences with data collection (voluntary submissions versus a controlled study) and variance of sampling procedures and test methods.
The July PHMSA report data also compared well with the NDPC data. The PHMSA report also concluded that Bakken crude is properly categorized based on the regulations laid out by the U.S. Department of Transportation. In the Executive Summary of the PHMSA report, however, certain assertions were made which do not appear to us to be supported by their study or our findings. For example, PHMSA stated, “We conclude that while this product does not demonstrate the characteristics for a flammable gas, corrosive liquid or toxic material, it is more volatile than other types of crude.” No comparative data was provided to support this statement. The limited data available on other crudes (as provided in our report) does not support this conclusion. PHMSA also claims that a higher degree of volatility “correlates to increased ignitability and flammability.” Again, no support is provided for this statement in the report. While we are aware that some groups, including API, are studying this complex subject, we are not aware of any results or conclusions from those studies to date.
The NDPC report (which can be found HERE) provides a significant amount of analytical data on Bakken crude and, in our opinion, debunks the myth that it is somehow different and more dangerous than other light crude oils. The NDPC report lays out the data and our analyses, which we believe shows that not only is Bakken categorized and handled correctly for shipment, but that it is surprisingly consistent in quality and properties across the basin. Turner, Mason & Company was proud to be chosen as project coordinator for the study. Our expertise in crude oil quality, testing, analysis and processing make us uniquely suited to perform such a study. In addition to supporting studies such as this, our firm has been closely following the developments and impacts that the U.S. crude boom has had on all areas of the industry from producers to refiners. Our 2014 North American Crude & Condensate Outlook (NACCO) will be released in September and will focus on rebalancing international crude and refined products as a result of the surge in U.S. production. This will include both the production and logistics in the Bakken and how pending legislation could affect crude-by-rail. For questions on this study, or on any of our products or services, please do not hesitate to contact us.