PHMSA fines three oil companies for misclassifying crude shipments

The Pipeline and Hazardous Materials Safety Administration (PHMSA) yesterday announced the first results from "Operation Classification," its investigation into Bakken oil transported from cargo tanks en route to rail loading facilities that wasn't properly classified.

PHMSA has issued three notices of probable violations totaling $93,000 to Hess Corp., Whiting Oil and Gas Corp. and Marathon Oil Co.

Shippers are required to use nine hazard classes as a guide to properly classify their hazardous materials. Shipping crude oil or other hazardous materials without proper testing and classification could result in materials being shipped in containers that are not designed to safely store them or cause first responders to follow the wrong protocol when responding to a spill, PHMSA officials said in a press release.

"The fines we are proposing should send a message to everyone involved in the shipment of crude oil: You must test and classify this material properly if you want to use our transportation system to ship it," said U.S. Transportation Secretary Anthony Foxx.

PHMSA and the Federal Railroad Administration launched Operation Classification in August 2013 in response to increased oil-production activity in the Bakken. From August to November, PHMSA inspectors tested 18 samples from various points along the crude-oil transportation chain, including tank cars, storage tanks and connecting pipelines. Test results showed 11 of the samples weren't assigned to the correct packing group, PHMSA officials said.

As a result of the findings, the administration has expanded the scope of Operation Classification to include testing for other factors that affect proper characterization and classification, such as "Reid Vapor Pressure," corrosivity and hydrogen sulfide content. PHMSA also plans to continue working with the rail and oil industries to share additional data and determine recommendations for future safety initiatives.