Derailed Train of Mercuria’s Bakken Oil Burns for Second Day - Bloomberg Business

(Bloomberg) -- A BNSF Railway Co. train carrying Bakken oil for commodity trader Mercuria Energy Group Ltd. continued to burn a day after derailing outside a rural Illinois town.

Five of the train’s 105 cars caught fire and were still burning, BNSF said Friday in a statement. Cyprus-based Mercuria owns the crude and was working with the railway to investigate the accident, Matt J. Lauer, a spokesman for the merchant trader, said by phone from Geneva. The oil was loaded at Bakken Oil Express LLC’s terminal in Eland, North Dakota, Joe Shotwell, operations director at the complex, said by phone on Friday.

A series of derailments, fires and explosions related to Bakken oil carried in rail cars over the past two years has spurred calls for tougher regulations. North Dakota required all operators to condition the crude to a lower vapor pressure beginning in April. A fiery oil-by-rail crash in Quebec killed 47 people in 2013, and last month a CSX Corp. train carrying Bakken derailed, sending up a fireball in West Virginia.

“An initial pool fire occurred that we believe impacted five rail cars and that fire continues to burn,” BNSF, a unit of Warren Buffett’s Berkshire Hathaway Inc. said in the statement on Friday. “Local, state and BNSF Railway emergency personnel are on the scene working to contain the incident.”

Philadelphia Refinery

Mercuria was shipping the oil to Philadelphia Energy Solutions LLC’s refinery in Philadelphia, a person familiar with the situation said, while asking not to be identified because the information isn’t public. The company will work to fulfill the plant’s order with alternative supplies, the person said.

Philadelphia Energy Solutions spokeswoman Cherice Corley didn’t immediately respond to telephone and e-mailed requests for comment left after business hours. The company is a joint venture of Carlyle Group LP and Sunoco Inc., which was acquired by Energy Transfer Partners LP in October 2012.

Twenty-one of the train’s 105 cars, which include two sand cars as buffers, jumped the tracks Thursday afternoon near Galena, Illinois, about 160 miles (260 kilometers) west of Chicago. The U.S. Department of Transportation said 14 cars were in a pileup and half of those were punctured. Emergency responders evacuated a 1-mile radius, which contained six homes. No injuries have been reported.

Crude trains, which travel through crowded communities such as Chicago suburbs and New York state neighborhoods, have increased 40-fold since 2009 to 493,000 last year. Much of the crude originates in the Bakken because of insufficient pipelines to move the oil to refineries on the coasts.

Previous Derailments

Thursday’s incident follows the fiery derailment of two crude-carrying trains last month. A CSX train with North Dakota crude came off the tracks and exploded into flames in rural West Virginia on Feb. 16, forcing nearby residents to evacuate their homes. Two days earlier, a Canadian National Railway Co. train with 100 cars carrying oil-sands crude derailed in a wooded area near Gogama, Ontario, with oil spilled and some cars catching fire.

The BNSF tank cars involved in the Thursday incident were the CPC-1232 model, the railroad said in an e-mail. The industry began making the CPC-1232 tank car at the end of 2011 to increase safety over more numerous, so-called legacy cars.

The transportation department is set to issue new regulations for a safer tank car and modifications that will be required for legacy cars. The current cars may be on the tracks for years because of the time it takes to upgrade or replace them. The department also is considering an electronic braking system that would stop each car separately and help keep them from piling up. Railroads oppose the new braking system because of the cost.

U.S. benchmark West Texas Intermediate oil futures for April delivery fell $1.15 on Friday to settle at $49.61 a barrel on the New York Mercantile Exchange.

To contact the reporters on this story: Thomas Black in Dallas at tblack@bloomberg.net; Lynn Doan in San Francisco at ldoan6@bloomberg.net; Robert Tuttle in Calgary at rtuttle@bloomberg.net

To contact the editors responsible for this story: Edward Dufner at edufner@bloomberg.net Andrew Pollack, Jim McDonald

http://www.bloomberg.com/news/articles/2015-03-06/derailed-oil-train-from-bakken-region-burns-day-after-accident