North Dakota filed a petition on the afternoon of July 17 asking the federal government to block the state of Washington from enforcing a law that would restrict crude oil-by-rail shipments that pass through that state.
Supporters say the law would reduce the risk of explosions and potentially fatal derailments. Opponents say it prevents North Dakota's oil industry from accessing refineries in Washington.
"I understand that Washington wishes to protect its citizens and communities from the risk of derailments, particularly those involving hazardous materials," said North Dakota Attorney General Wayne Stenehjem in a press release announcing the petition. "So does North Dakota, and so does the federal government. That is why the federal government has a detailed, rigorous and comprehensive regulatory scheme governing precisely this concern."
The state submitted the petition to the Pipeline and Hazardous Materials Safety Administration (PHMSA), a division of the U.S. Department of Transportation that is tasked with ensuring the safe transportation of hazardous materials.
North Dakota ships about 10 percent of its oil by rail to refineries in the state of Washington. The new law, which goes into effect on July 28, 2019, prohibits oil from being unloaded at refineries within the state from rail cars that have a vapor pressure greater than 9 pounds per square inch (psi), which is lower than accepted national standards.
In his statement, Stenehjem said Washington's attempt to re-classify crude oil based on its vapor pressure is inconsistent with federal standards, and sets a precedent that one state can restrict another state's ability to move its own natural resources across state borders.
"This is not an issue only about oil. Coastal states should not be able to dictate what goods can move from one state to the next or be exported," Stenehjem said. "This is especially significant for states like North Dakota that do not have direct access to the coasts. While oil is the issue in this case, it is reasonable to expect that other commodities could be next – like soybeans, GMO crops, meat from animals that are not free range – you name it."
Jaime Smith, Washington state Gov. Jay Inslee's executive director of communications, said the state plans to defend the law in court.
"This is an issue that is appropriately settled in court, not via press release," Smith said in an email to FreightWaves. "Every governor has a responsibility and a right to protect the health and safety of their communities and environment. As Washington has experienced an enormous spike in the number of oil trains traveling through our state, this legislation is a reasonable approach to anticipated increased volumes of volatile crude oil."
The American Fuel and Petrochemical Manufacturers Association (AFPM) said in a statement it intends to file its own petition "to further explain the adverse impact of Washington's unlawful action on refiners and consumers."
AFPM General Counsel Rich Moskowitz said, "The free flow of energy products in the U.S. is vital to American energy security, and Washington state's law to regulate the volatility of crude oil in rail transport compromises the safe and efficient transport of key energy sources for both U.S. manufacturers and consumers."
Montana, another oil-producing state, joined North Dakota in the petition filing.
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