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U.N. panel to weigh dangers of oil-by-rail cargo

By Patrick Rucker

WASHINGTON (Reuters) - A U.N. panel will examine the rules for handling the kind of oil-by-rail shipments involved in several recent fiery derailments in a move that could rattle the fast-growing sector.

The U.N. panel for shipping hazardous materials said this week it accepted a request from U.S. and Canadian experts to revisit rules that govern shipping the kinds of fuel produced in energy areas such as North Dakota's Bakken.

Specifically, the panel will examine whether rules for shipping crude oil properly account for dangerous pressure and volatile gases.

"Unprocessed crude oil may present unique hazards based on the specific gas content, posing different hazards in transport," the U.N. panel on transporting dangerous goods said in a statement seen by Reuters.

Existing hazardous material rules envision a test for the initial boiling point of crude oil and the liquid's flash point, or the temperature at which it will combust with a spark.

But the rules do not require a test for pressure, and the panel will consider whether that is a blind spot in the regulations that should be addressed.

U.S. and Canadian officials have been trying to understand the potential dangers of oil-by-rail shipments since a 74-car runaway train carrying Bakken crude exploded in Lac-Megantic, Quebec, last July, killing 47 people.

"This is massive," Lawrence Bierlein, a veteran transportation lawyer in Washington, said of the move.

"If it succeeds, this is going to change the definition of flammable liquids in a way that is going to hit the oil industry and many others."

While every country writes its own rules for handling hazardous materials, Bierlein said, the bedrock standard is set by major economies under the umbrella of the United Nations.

Representatives from the United States and Canada are likely to voice their concerns about oil-by-rail cargo when the U.N. panel meets in Geneva in late June, he said.

It will likely take more than a year for representatives to agree to any binding standards, but they could drastically change the way much crude oil is handled on the tracks, industry sources said.

(Reporting by Patrick Rucker; Editing by Ros Krasny, Bill Trott, Meredith Mazzilli and Andrew Hay)

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