U.S. DOT Emergency Order Impacts Crude Oil Testing, Rail Shipping Requirements

by Cozen O'Connor

In an emergency order issued on February 25, 2014,1 the U.S. Department of Transportation (DOT) directed all parties offering for transport or transporting petroleum crude oil to ensure that product is properly tested and classified under the applicable federal hazardous materials regulations (HMR)2 prior to shipping. In addition, while the order remains in effect, crude oil shipped by rail may not be designated as Packaging Group III (PGIII), the lowest risk designation. Instead, crude must be designated as Packaging Group I or II, requiring the use of tank cars designed to more stringent standards.

Driving this emergency order is a number of recent high profile rail accidents involving the transport of crude oil from the Bakken fields in North Dakota and Montana. According to the Pipeline and Hazardous Materials Safety Administration (PHMSA), crude from the Bakken has been shown to be more volatile than crude from other plays.3 In August 2013, PHMSA initiated a separate investigation into the classification of Bakken crude, calling the effort both “Operation Classification” and the “Bakken Blitz.” However, while coverage of the emergency order has focused on the connection to the Bakken formation, the emergency order provisions regarding testing apply as written to all crude oil shippers4 and further affect the tank cars that may be used for any crude shipments by rail.

At a minimum, offerors and transporters will need to ensure crude is appropriately tested and classified under the hazardous material regulations before shipment and that results are adequately documented.5 Shippers can no longer rely on outdated material safety data sheets. Testing frequency is not specified in the order, and whether the DOT expects shippers to test a representative sample for each and every bulk shipment of crude oil is unclear. Testing must determine the flash point, boiling point, corrosivity to steel and aluminum, the presence and content of compounds, the percentage of flammable gas, and vapor pressure.

The requirements of the emergency order also may impact the availability of adequate transportation capacity and increase shipping costs, as crude oil may not be shipped in PGIII tank cars while the order is in effect. Tank cars used for transporting hazardous materials designated as PGI and PGII are built to meet DOT specification and typically have a thicker shell, more protective head shields, and additional top fitting protections. Offerors and transporters must also develop a transportation security plan for transporting Class 3 materials designated PGI or PGII.6

Parties affected by the DOT’s emergency order may file a petition for review of the order by March 17, 2014. In the meantime, upstream and midstream companies involved in shipping crude oil should be sure to review procedures for testing and classifying crude oil for shipment, take caution to ensure the commodity is being properly classified under the HMR, and carefully document efforts to comply with the order. The emergency order notes that civil penalties for non-compliance can be up to $175,000 per day for each violation. Criminal prosecutions may result in fines and imprisonment of up to 10 years.

1 Emergency Restriction/Prohibition Order, Docket No. DOT-OST-2014-0025 (Feb. 25, 2014), available here.

2 49 C.F.R. Parts 171-180.

3 Crude oil from the Eagle Ford in Texas has also been suggested as potentially more volatile. Federal testing is still pending. Most oil from the Eagle Ford is transported by pipeline, not by rail.

4 In relevant part, the emergency order provides, “to address the imminent hazard, this Order requires that any person who offers a large bulk quantity of petroleum crude oil into transportation in commerce conduct minimum testing of that petroleum crude oil to verify its classification and to retain records of that testing.”

5 HMR provisions governing testing and classification are found at 49 C.F.R. Parts 172 and 173.

6 49 C.F.R. § 172.800(b).


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cozen O'Connor | Attorney Advertising

Written by:

Cozen O'Connor

Cozen O'Connor on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.