Processing Magazine

Regulator fines companies for misclassifying crude oil

February 7, 2014

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Crude oil transported by truck from North Dakota's Bakken region to rail loading stations is frequently misclassified, according to the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA).

Officials from the federal administration took samples from 18 truck shipments that were supposed to be transported from the Bakken region to rail terminals. In 11 of these samples, testing proved that the crude oil was misclassified, meaning that adequate measures for protection may not be taken, the PHMSA said.

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Under federal rules, all hazardous materials have to be classified into one of nine categories before they get shipped. The categories are determined depending on the risk involved during shipments and if the materials are wrongly labeled or categorized. For example, the crude may be loaded onto less protective tank cars and emergency units might follow the wrong protocol should they need to respond to a spill, officials from the administration explained.

The PHMSA has proposed fining the three companies involved in the misclassified shipments of crude, with the total penalty adding up to $93,000. Officials have warned that companies have the responsibility to thoroughly test and classify hazardous materials they ship and failure to do so will be penalized. The companies that mislabeled the Bakken shipments were identified as Hess Corp., Whiting Oil and Gas Corp. and Marathon Oil Co.