Government proposes to retire older railroad tank cars that transport oil

07/23/2014 7:38 PM

07/23/2014 7:38 PM

The U.S. Department of Transportation proposed on Wednesday a two-year phase-out of older railroad tank cars used to transport crude oil, which have been involved in several serious derailments over the past year.

Transportation Secretary Anthony Foxx outlined the long-expected proposals more than a year after a deadly derailment in Quebec focused government and public scrutiny on the rising volumes of crude oil shipped by train.

As oil production in Canada and North Dakota has risen sharply, so have oil shipments by rail through hubs such as Kansas City.

The public has 60 days to comment on the proposed rules, and Foxx said the department wouldn’t grant an extension because of the urgency of the issue. The shortened time frame is likely to set off a flurry of efforts in Washington by oil producers, rail companies, refiners and tank car manufacturers, as well as community and environmental groups.

The department had sought input from these groups, which often had different priorities and couldn’t agree on the details. But Kevin Sheys, an attorney who advises rail transportation clients, said Transportation took a balanced approach.

“The crude needs to move, but we have to move it safely,” he said. “And the proposed rule seems to reflect the government’s effort to balance those goals.”

The Association of American Railroads, the industry’s advocacy group, issued a statement praising the proposal, which largely aligns with steps the industry has already taken or proposed. Kansas City Southern said it agreed with the association’s statement and was examining the details of the rules before providing a more specific response to the Department of Transportation.

The Transportation Department will seek the phase-out or retrofit of older model DOT-111 tank cars from crude oil and ethanol service. They’ve long been known to be vulnerable to failure in derailments.

The department offered various options for upgraded tank cars, including thicker steel shells, electronic braking and rollover protections. The proposal would require retrofits within five years for newer tank cars built to an industry-adopted higher standard.

The department proposed a maximum 40 mph speed in all areas for trains that are operating with older tank cars and for urban areas with more than 100,000 residents. Trains with tank cars that meet the new requirements would be permitted to travel 50 mph outside urban areas.

The industry lobbied against a 30 mph standard and has been voluntarily going along with the 40 mph standard.

The department also proposed codifying its May 7 emergency order requiring railroads to notify state and local emergency officials about shipments of 1 million gallons or more of Bakken crude oil, a lighter type from the northern Great Plains that’s been involved in recent derailments.

Lawmakers on Capitol Hill who have been pushing Transportation and the Obama administration to move swiftly on the new rules responded favorably to Wednesday’s announcement.

“We have seen the devastating impact on communities nationwide when our regulatory regime lags behind rapid industry changes,” said Sen. Jay Rockefeller, a West Virginia Democrat who heads the Senate Commerce, Science and Transportation Committee.

In addition to the notice of newly proposed rules on tank cars, speeds, braking and crude oil testing, the DOT released an advanced notice of new regulations to govern the expansion of comprehensive oil spill response plans for crude oil trains.

Currently, railroads aren’t required to have such plans for crude oil trains, but derailments in Quebec, Alabama, North Dakota, Virginia and elsewhere since last year have revealed gaps in emergency response training, equipment and staff.

“We are not necessarily done yet with all the ways we plan to address this issue,” said Cynthia Quarterman, the head of the Pipeline and Hazardous Materials Safety Administration at Transportation.

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