UPDATE 2-Bakken crude may be more flammable than previously thought -U.S. regulator

Thu Jan 2, 2014 7:37pm EST
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By Patrick Rucker

WASHINGTON Jan 2 (Reuters) - Crude oil produced in North Dakota may be more flammable and prone to explosions than earlier thought, U.S. officials said on Thursday as they examine whether gas trapped in crude-by-rail shipments could explain a spate of fiery accidents.

In the latest crash involving fuel produced in an oil patch known as the Bakken, several tank cars exploded after a collision on a desolate stretch of North Dakota track on Monday.

In that case, as with several other accidents in recent months, tank cars exploded with a force that surprised investigators.

The incidents "indicate that the type of crude being transported from the Bakken region may be more flammable than traditional heavy crude oil," the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) said on Thursday.

New drilling methods like hydraulic fracturing, or fracking, have unlocked vast oil deposits and producers eager to maximize profits often try to supply refiners off the national pipeline grid who are willing to pay more for the fuel.

That market pull is one reason over two-thirds of North Dakota's oil production is currently shipped by rail.

Northern Oil & Gas Inc, Oasis Petroleum Inc and Continental Resources are among the Bakken producers whose shares dipped on Thursday.   Continued...