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Damaged rail containers and twisted wreckage can be seen on the main road through downtown Lac Mégantic, Quebec early July 7, 2013, a day after a train carrying crude oil tankers derailed and burst into flames.

Moe Doiron/The Globe and Mail

As Canada and the United States move to strengthen the rules for transporting crude oil by rail, there is mounting evidence that regulators are relying on tests that underestimate the risk of a fiery explosion like the one that destroyed Lac-Mégantic.

The current testing regime was not designed for unrefined crude and, as a result, can play down the dangers of shipping some light crude oils, according to industry and transportation experts. A United Nations panel on hazardous materials shared similar concerns last week when it announced that it would review international standards for shipping crude oil, including how crude is tested and classified, in response to a string of recent accidents in North America.

With the accuracy of the tests in question, there is suspicion that some shipments of Bakken crude may be more volatile than officials believed. It also raises the possibility that light crude oil drawn from other locations in North America is as potentially explosive as crude from the Bakken – but has not been receiving the same level of scrutiny.

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The devastating fire in Lac-Mégantic, Que. last July, began when a train carrying Bakken crude jumped the tracks and exploded in the centre of the small town, killing 47 people. A Globe and Mail investigation showed that oil from the Bakken formation, which straddles North Dakota, Saskatchewan and Manitoba, is more volatile and prone to exploding than conventional forms of crude.

Crude oil with a high concentration of light ends – such as methane and propane – is "most at risk" of being mischaracterized in standard testing procedures, according to a recent report commissioned by Transport Canada. Those light ends are potentially dangerous because they can ignite and magnify the size of an explosion.

The inaccuracies underscore how little is known about the risks of shipping crude oil by rail, a practice that has increased dramatically during the past five years and now accounts for an estimated 230,000 barrels of oil a day in Canada. Oil is widely known to be flammable, but regulators did not believe until recently that it had the potential to explode and cause the kind of destruction it did in Lac-Mégantic.

Flash point and boiling point tests, which are required for crude shipments in Canada and the U.S., both have difficulty measuring samples that contain significant concentrations of light ends, according to the report to Transport Canada. Another common test, known as the Reid Vapour Pressure test, has also been criticized for use on crude oil because it can allow light ends to easily vapourize at the time samples are collected from highly volatile crude.

"When you try to apply [current tests] to samples that have light ends, they don't work as well," said Bob Falkiner, a director for the Canadian Crude Quality Technical Association who also works for Imperial Oil. "You get biased results reported from those test methods because of the lost light ends."

A spokesperson for Transport Minister Lisa Raitt said the minister is aware of concerns about the crude-testing regime and Transport Canada is "looking at options" related to volatility tests. Speaking with The Globe after an event in Toronto last week, Ms. Raitt also welcomed the UN panel's decision to study crude shipments and testing.

Producers in the Bakken are expected to stabilize crude oil before shipping it, in a process meant to remove many of the light ends from the rest of the product. Those light ends can be sold separately, but limited transportation infrastructure in the fast-growing Bakken area has led some producers to flare the products instead – which means they simply burn them on the spot. In some cases, flaring has become a "de facto stabilization process," said Bill Lywood, founder and president of Crude Quality Inc.

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However, several industry experts said there is a financial incentive for producers to leave some light ends in the crude – rather than burning them off or selling them separately – because they can increase the overall volume of the crude they are selling. At the same time, because of testing limitations, it can be difficult for producers, shippers and buyers to determine whether enough of the volatile light ends have been stripped away before crude oil is transported across the country.

In an effort to address the problem, some companies and industry experts are advocating the use of a newer vapour pressure test that uses a sealed, pressurized cylinder to prevent light ends from escaping when a sample is taken.

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