Huffpost Green

U.S. Oil Companies Fined For Mislabeling Crude Shipments In First Move After Series Of Derailments

Posted: Updated:
In this Dec. 30, 2013 file photo, a fireball goes up at the site of an oil train derailment in Casselton, N.D. (AP Photo/Bruce Crummy, File) | ASSOCIATED PRESS

By Patrick Rucker

WASHINGTON, Feb 4 (Reuters) - Three oil companies operating in North Dakota were fined $93,000 on Tuesday for wrongly classifying fuel shipments in the first sanctions since a series of fiery derailments put the energy industry under a spotlight.

The Department of Transportation said Hess Corp, Marathon Oil Corp and Whiting Petroleum Corp were cited for wrongly classifying cargo tanks that were hauling crude oil from the field to a railhead.

Fuel shipments must be designated with a hazard class to alert emergency responders in the event of an accident. Eleven of eighteen samples of one survey were mislabeled, the DOT said in a statement.

"The fines we are proposing today should send a message to everyone involved in the shipment of crude oil: You must test and classify this material properly," said Transportation Secretary Anthony Foxx.

A spate of explosive derailments, including one in Quebec last July which killed 47 people, has led to concerns over the safety of shipping crude oil by rail and improper labeling.

Officials have already warned that some fuel found in North Dakota's energy patch, the Bakken, could be more volatile and explosion-prone than other crude oil and that shippers should take precautions.

Typically, crude oil carries a 'hazard class 3' classification and can be shipped in a standard tank car. The shipments are further assigned a 'packing group' to alert to dangers - that portion of the shipping paper was faulty, the DOT said.

While the DOT's Pipeline and Hazardous Materials Safety Administration (PHMSA) has been testing crude samples for months and issued several industry warnings, Tuesday's action is the first sanction.

Phmsa Administrator Cynthia Quartersman said the fines reflected "initial findings" and that officials would scrutinize the corrosivity, pressure and other traits of Bakken crude.

The DOT did not specify which companies would be expected to pay what share of the $93,000 fines but by any measure the sums were small for large energy companies.

Officials from Hess and Marathon could not immediately be reached for comment.

Jack Ekstrom, a spokesperson for Whiting, said that the company had not yet been contacted by the DOT about a possible fine.

Also on HuffPost:

Oil Spills Since The Gulf Disaster
Share this
Current Slide

Suggest a correction

Around the Web

Three Oil Firms Fined for Crude-by-Rail Violations -

U.S. fines three oil companies for mislabeling crude oil | Reuters

UPDATE 1-U.S. fines three oil companies in first move since ...

UPDATE 1-U.S. fines three oil companies $93,000 for mislabeling ...

Oil company fined $60,000 for illegally discharging fracking fluid ...

Companies Face Fines for Not Using Unavailable Biofuel - NYTimes ...

From Our Partners