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UPDATE 2-Train carrying crude oil derails, explodes in Alabama

Edward McAllister
Friday, 8 Nov 2013 | 12:14 PM ET

(Adds details on crude-by-rail, analyst comment)

Nov 8 (Reuters) - A 90-car train carrying crude oil derailed and exploded in western Alabama in the early hours of Friday morning, spilling oil and leaving eleven cars burning in the rural area.

No injuries have been reported, but 20 of the train's cars derailed and 11 were still on fire, the train owner, Genesee & Wyoming, said in a statement on Friday. Those cars, which threw flames 300 feet into the night sky, are being left to burn down, which could take up to 24 hours, the company said.

A local official said the crude oil had originated in North Dakota, home of the booming Bakken shale patch. If so, it may have been carrying the same type of light crude oil that was on a Canadian train that derailed in the Quebec town of Lac-Megantic this summer, killing 47 people.

That accident fueled a push for tougher standards for oil rail shipments, including better testing of potentially explosive ultra-light shale crude and improved rail tank car standards. Tank cars made before 2011 have been cited by regulators as dangerously prone to puncture.

It was not immediately clear how old the derailed Genesee & Wyoming cars were.

While Friday's accident in Pickens County Alabama appeared to have caused no injuries, or major environmental risk, it still seems to be the most dramatic of its kind in the United States since trafficking of crude by rail began to increase with the growth of shale oil production three years ago.

"It will provide very clear evidence of the potential risks for environmental groups and others opposed to the growth of crude by rail, and will likely increase pressure to tighten regulations," said Elena McGovern, Global Energy and Natural Resources analyst at Eurasia Group in Washington.

The Genesee spokesman said the train was carrying crude from Amory, Mississippi, to a refinery in Walnut Hill, Florida. Trade sources said it was likely headed to a large terminal, after which it may have been intended to have been pumped into pipelines or onto barges for delivery to a Gulf Coast refinery.

Don Hartley, regional coordinator for the Alabama Emergency Management Agency, said the train's journey started in North Dakota. Three cars had a "'bleve' - where pressure builds up and blows a hole." That started the fire, he said.

Crude oil did spill on Friday, though it does not appear to be heading to nearby waterways, Genesee said.

Alabama Emergency Management Agency spokeswoman Yasamie August said that one family was evacuated due to the incident, but had already been able to return home.

So far there are no details on the cause.

"We don't have a cause yet, that will be determined with the organization," said a Genesee & Wyoming spokesman.

The company said it had notified the National Transportation Safety Board, Federal Railroad Administration and National Crisis Response Center per standard procedure.

(Reporting by Edward McAllister, Robert Gibbons, Anna Sussman and Jeanine Prezioso in New York and David Sheppard in London; editing by Gerald E. McCormick, Jonathan Leff and Alden Bentley)

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