Skip to comments.New regulations for oil on rail cars to come in 2015
Posted on 01/15/2014 3:09:22 AM PST by thackney
Regulations that could force oil companies to use stronger rail cars to move crude likely will be ready in 2015, according to a schedule released Tuesday by the U.S. Department of Transportation.
Oil companies have increasingly used rail cars to move crude, but recent disasters, including a derailment and massive explosions in North Dakota last month, have drawn attention to the cars vulnerabilities. New regulations that could force older tank cars to be upgraded or phased out are under development, but will not be proposed until Nov. 12 and will be subject to a public comment period until Jan. 12, 2015, according to the Department of Transportation.
However, that initial timeline could shift as the process continues, said Pipeline and Hazardous Materials Safety Administration spokesman Gordon Delacambre.
Recent derailments and explosions, including one in Quebec that killed 47, have involved tank cars widely thought to be weak.
The National Transportation Safety Board on Monday drew more concern about the tank cars, reporting that 18 of the 20 tank cars that derailed in the North Dakota incident were punctured. The NTSB also confirmed that the tank cars involved in the incident were an aging model that has drawn scrutiny for being especially vulnerable to punctures.
The board has for years said the widely used DOT-111 rail tank cars are weak and should be retrofitted or phased out because they experience more serious damage in accidents than other models, such as pressure tank cars. The difference can be attributed to the fact that pressure tank cars have thicker shells and heads, the agencys chairwoman, Deborah Hersman, wrote in a letter to the Pipeline and Hazardous Materials Safety Administration in 2009.
The Department of Transportations Pipeline and Hazardous Materials Safety Administration sets regulations for the rail cars.
About 85 percent of the 92,000 tank cars used to transport flammable liquids in the United States are DOT-111s or other car types that need to be phased out or upgraded, according to the American Association of Railroads.
Comments and proposals
Regulators have solicited comments about the potential regulations and have begun analyzing proposals that would address concerns about the DOT-111 tank cars, Delacambre said.
Despite increased calls for updated regulations following the Dec. 30 derailment in North Dakota, the regulations will take months to develop. Railway workers and companies have been among those calling for new regulations.
Railways typically do not own the rail cars used to hold oil. The cars typically are owned or leased by the companies shipping products by rail.
It’s really the grace of God that we don’t get terrorist oil train assaults. Yet. When they talked about puncture resistance, I immediately thought, what might puncture it. The answer is obvious, and you’d need to be built like tanks to guard against deliberate trouble makers.
Its also sounds one of those things that it would be easy to not get caught doing it.
Long before considering the uparmoring of rail stock, I would be looking at the financial impact on rail companies, and the rise in price for refined products as a natural consequence to the demand for stronger cars by a federal government not known for fiscal responsibility.
Let’s just make a guess that Warren Buffett already has a contract to build them
This type of regulatory tyranny is designed to attach the weights of increased costs on our energy industry. A little oil spilled is little consequence compared to the increased costs to prevent it. There is more engine oil dripping out of our transportation vehicles than we can imagine.
Let’s be real....How many times has this happened??
Let’s be real....How many times has this happened??
The bigger question in my mind is: How effective will the "solution" be? If the government imposes these regulations and then railcars end up spilling oil in most derailment or collision incidents anyway, then what's the point?
If they could get away with it, most local and county governments would (understandably) outlaw the transportation of hazardous materials by rail within their jurisdictions. They are prohibited from doing this because the railroad industry operates under the protection of Federal railroad laws that basically strip state, county and local governments from interfering with railroad commerce.
When you are an industry that operates under the protection of "regulatory tyranny" to begin with, nobody is going to take you seriously when you complain about the heavy-handed costs of government regulation.
He bought a company that builds rail tank cars.
Warren Buffett Cashes In on Railroad Tank Cars
November 14, 2013
Seriously? Maybe you should go to that Quebec town where half the town went up in flames. Then stand in the middle of the town where there is nothing left and say what you just wrote out loud in front of all of the surviving families. Then get back to me.
These old rail cars that have been used for way too many years need to be removed from the rails and replaced with the upgraded tanker cars. Now, I don’t care if it is industry initiative if they are willing or government oversight, but something has needed to be done for many years with these cars.
But these tanks don't wear out real quick so there are a lot of old tanks still in service.
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The American Association of Railroads, which initially expressed reservations about stricter tank regulations, said in November that it supports standards for upgraded tank cars.
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Another part of the problem is past comparisons of the frequency of the accidents do not take into account the large increase in crude oil rail traffic.
Since the oil tank cars are typically owned by the oil company, and the rail company gets most of the blame in accidents, this will help the rail companies.
The new guidelines, put forward in March 2012 but which have not yet been adopted by the Department of Transportation agency that oversees the sector, stem from a deadly ethanol train derailment and explosion in Illinois in 2009.
DOT-111 railcars ordered after October 2011 have been manufactured to the new code, but the industry has resisted spending an estimated $1 billion to retrofit nearly 300,000 existing tank cars.
If they mandate that 85% of all tank cars get upgraded overnight, it will cause a major spike through the energy sector.
Berkshire Hathaway (Warren Buffet) will benefit greatly if this happens as his railroads will have less risk and his rail tank car manufacturing (purchased only months before this proposed change) will boom. Win-Win.
Your comments are stunning. The issue isn’t preventing spilled oil. It’s protecting people’s lives and property. I live in an area of about 300,000 population. Train tracks go through the middle of the west side of town. In the north side of town, the tracks are within feet of homes. There are two small cities to the north. Those same tracks bisect those towns. It’s human lives we’re talking about.
My son works in the industry which repairs and upgrades rail cars. These old tanker cars need reinforced heads. Heads are the ends of the cars right above the point where the cars link together. Sudden impacts, even sudden stops, can cause parts of one car to pierce the head of the car ahead or behind and cause an inferno. Needs fixing.
Where is Cosmo Kramer and his bladder system when you need him?
Are you sure the tanker cars are owned by the oil companies?
The reason I ask is that very few lumber mills own the flatcars or box cars that they load lumber, plywood or osb board on/in. I only know of one mill that has a lease on flatcars.
No company is going to voluntarily replace existing equipment unless either they are forced to because of government regulation or they perceive it will lessen their exposure to lawsuits.
wasn’t Warren buying railroad stock as soon as Obama was elected?
what a coinky dink
While not all are owned that way, keep in mind these oil trains are often replacing pipeline. The same cars are dedicated to the same pickup and delivery and run non-stop.
Also dry freight doesn’t worry about contamination from the previous load. They need to be sure what they load in and out.
Sorry, I forgot one more piece.
From the following article:
Rail customers, like oil companies, buy or lease the tank cars that they use to ship their products.
Remember the Keystone Pipeline? Don’t you get a feeling there is an effort by the Carbon Nuts to pinch off our distribution of domestic oil production? Michael Whatley thinks so:
Michael Whatley, executive vice president of Consumer Energy Alliance, an industry-backed group that supports Keystone, said more rail accidents can be expected with the increased use of trains to carry oil to market.
Trains need to be a supplement, not a replacement for pipelines, Whatley said. While both forms of transportation are safe, we need expanded pipeline infrastructure, he said.
Here is an article that gives a picture of what’s going on in the pipeline vs rail debate:
We would have the Keystone Pipeline if it were not for the “regulatory tyranny” going on in this country. In my opinion, the pipeline is safer because they go though less populated areas, unlike trains.
You can make the train only so safe. The Casselton, North Dakota incident may have happened because of a broken axle. How do we prevent against those types of failures? Making the tank cars more resistant to punctures will be expensive and there is no guarantee such efforts will prevent all explosions. There is always the possibility of terrorist activity too. We can only be so safe and then we try to live with the things that happen out of our control. Those who play on our fears are doing so because of an agenda. The agenda is to limit our use of fossil fuels. The Regime is doing everything it can through “regulatory tyranny” to do so.
One more reason for rail companies to improve their equipment: if they don’t, their insurance costs will go up. And, insurance companies will demand that the rail companies make their equipment more reliable, or they will lose their insurance coverage. You wouldn’t want to risk a huge lawsuit without insurance coverage. When the Obama Regime gets their regularity hands into the problem, I would suspect their agenda to limit fossil fuel production. Don’t you?
While the Keystone XL would carry some domestic production, the large majority of it would be Canadian imported oil/bitumen. Of course I would rather import more from Canada and less from OPEC.
“or they perceive it will lessen their exposure to lawsuits”
We have a consensus.