Department of Transportation Investigating Shippers of Crude Oil by Truck For Sampling and Testing Programs

In the last few months, the U.S. Department of Transportation (“DOT”) has initiated an enforcement investigation into whether commodity traders who contract to ship crude oil by truck maintain a written sampling and testing program for these activities.  The requirement to maintain a sampling and testing program was implemented in a DOT final rule issued in May 2015, which also set out new tank car standards and increased safety measures for the transportation of crude oil by rail (the “Final Rule”).  While the Final Rule largely focuses on crude by rail transportation, the sampling and testing program covers not only transportation of crude oil by rail, but also transportation by highway.

A sampling and testing program must set out procedures to ensure crude oil is tested for certain properties before transportation so that it is properly classified as required by DOT regulations.

Confusion in the marketplace previously existed about whether DOT’s sampling and testing program applied to trucking, in addition to questions about which entities in the chain of custody had responsibility for regulatory compliance (e.g., a trucking company, railroad, the first owner of product at the wellhead, the owner of product when loaded for transportation).  It is clear, however, that the DOT is taking the view that it has authority over trucking activities and that a wide array of companies associated with offering crude oil for transportation in U.S. commerce, including product owners and commodity traders, must maintain a written sampling and testing program.

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