By LYNN DOAN
Bitumen from Canadas oil-sands formations is free to
ride in older rail cars under an amended set of rules issued
by the US that also eased testing for oils that shippers are
familiar with handling.
The US Transportation Department clarified requirements for
shipping oil by rail issued Feb. 25 after companies were
found classifying crudes as less hazardous than they were.
The updated order makes clear that the rules apply only to
flammable UN 1267 crudes and that shippers with
sufficient knowledge of the oils theyre
handling will not be required to test for corrosivity.
So unless the bitumen is categorized as UN 1267, Class
III crude oil, the amended EO would not apply, said
Jeannie Shiffer, a spokeswoman for the Transportation
Departments Pipeline and Hazardous Materials Safety
Administration Transportation Department. Bitumen diluted
with condensate may be classified as a flammable oil and fall
under the new rules, she said.
The trade group American Fuel & Petrochemical
criticized the original order, saying it left questions
unanswered, and warned that the lack of clarity could cause
fuel shortages. The revisions are a judicious
response, AFPM president Charles Drevna said in a
Shippers of bitumen, a thick, tarlike substance found in oil
sands, were particularly at risk from the Feb. 25 order. They
would no longer have been able to export product in older
cars known as AAR-211s, companies including Strobel Starostka
Transfer Canada said.
There are companies that take it out of the ground and
call it bitumen or fuel oil from the start, and that would be
perfectly legal under the clarified order, Marvin
Trimble, Strobel Starostkas commercial development
director, said by telephone.
Shipments of bitumen by rail to the US are accelerating. More
than 200,000 bpd of crude are leaving Western Canada by rail,
and Peters & Co., a Calgary-based investment bank,
forecast that would reach 500,000 by the end of the year.
The amended order also clarified that only companies
without sufficient knowledge to classify the oil
theyre shipping may be subject to additional tests such
as those to detect the level of flammable gases, compounds
such as hydrogen sulfide and corrosivity.
It says that if the shipper is familiar with the
material theyre transporting, then those tests are not
necessary, Rich Moskowitz, general counsel for the
AFPM, said by telephone from Washington.
The Transportation Department warned of penalties for those
who try to reclassify their crude to circumvent the