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DOT to Submit Crude-by-Rail Safety Proposal For OMB Review Within Week, Foxx Says

Monday, April 28, 2014

By Patrick Ambrosio  

April 25 — The Transportation Department plans to send a comprehensive proposal on the regulation of crude oil and ethanol transport by rail to the White House Office of Management and Budget sometime during the week of April 28, according to Transportation Secretary Anthony Foxx.

Foxx, in an April 24 blog post, said the proposed rule will include “options” to improve the safety design of DOT-111 rail tank cars, which are used to transport crude oil, ethanol and other flammable liquids

The safety of allowing legacy DOT-111 rail tank cars to continue transporting crude oil and ethanol has been called into question following a series of recent derailments, including a July 2013 accident in Lac-Mégantic, Quebec, that resulted in 47 deaths. The National Transportation Safety Board and the Association of American Railroads have both called on the DOT to require the phaseout or retrofit of existing DOT-111 cars that don't feature enhanced design features, including thicker tank shells and puncture-resistant shields on both ends.

Foxx's announcement came one day after Transport Canada said it will immediately prohibit the use in hazardous materials service of about 5,000 DOT-111 rail tank cars that are not equipped with continuous bottom reinforcement and will require the phaseout or retrofit of all DOT-111 rail tank cars that don't meet new safety design standards within three years.

Foxx said the DOT plans to work collaboratively with the OMB's Office of Information and Regulatory Affairs to release the rule to the public and initiate a formal public comment process as soon as possible.

Industry Wants Data-Driven Changes

An official with the American Petroleum Institute told reporters April 24 that the industry is willing to work with regulators on the upgrade of older tank cars used to transport crude oil and ethanol, but only if data justify the design changes.

Bob Greco, group director of downstream and industry operations at the API, said April 24 the industry hasn't yet seen data that would support a rapid phaseout of existing DOT-111 rail tank cars. He said a mandatory phaseout of the older tank cars, which still make up the bulk of the fleet used to transport crude oil from North Dakota's Bakken shale region and other production areas, would be “a very poor policy decision.”

Greco said it was too early to comment on the new Canadian regulations, but said the API would like to understand the information that pushed Transport Canada to decide on a three-year phaseout and retrofit period.

“We think these are safe cars that, when operated properly, can be used safely,” Greco said. “I think we need to understand what the benefit of the retrofit is. We want the data to tell us where we should be going on retrofits.”

Greco spoke to reporters during a media lunch on the role of rail in transporting energy resources. The API plans to hold a series of media lunches on energy transport issues, part of a new infrastructure campaign highlighting the need for a reliable, safe energy supply chain.

Industry Building Enhanced Cars

The petroleum industry adopted the voluntary CPC-1232 standard, which has a number of safety design features not included in the older DOT-111 tank cars, for all new tank cars ordered after Oct. 1, 2011. Greco said the API projects' “state of the art” CPC-1232-compliant cars will make up 60 percent of the crude oil fleet by the end of 2015, while noting that any sort of phaseout requirement would affect the remaining 40 percent of the fleet as well as the ability of industry to move crude oil.

The National Transportation Safety Board and the Association of American Railroads, which represents major U.S. freight railroads such as BNSF Railway Co. and CSX Transportation Inc., have both said the CPC-1232 standard is not adequate for crude oil and ethanol transport and have requested that the U.S. Transportation Department require additional safety design features, including a thicker tank shell.

Rail Industry Statistics Questioned

Greco and Prentiss Searles, marketing issues manager at the API, both said the industry needs to have a better understanding of a model developed by researchers supported by the Railway Supply Institute and Association of American Railroads to assess the safety of different tank car designs.

Todd Treichel, director of the Railway Supply Institute/Association of American Railroads tank car safety research and test project, shared statistics on the “conditional probability of release” of different tank car designs with the National Transportation Safety Board during an April 22-23 forum on rail safety. Treichel said an assessment of incident data from 29,900 total accidents indicated that 4.2 percent of tank cars built to meet an enhanced design proposal supported by the Association of American Railroads would be expected to release some product when involved in a derailment, compared with 26.6 percent of legacy DOT-111 rail tank cars that are not equipped with protective jackets.

Greco said the conditional probability-of-release statistics was derived from a proprietary model that has not been shared with the petroleum industry.

“The problem is we don't fully understand how they got to this conditional probability of release number,” Greco said. “We need to understand the assumptions that go into that.”

Risk of Added Weight

Searles noted that the API would like to make sure regulators look at all risk factors in assessing the effect that different design requirements would have on safety.

Searles said several of the proposed design enhancements would add weight to each tank car and reduce the capacity of each car, meaning it would take more cars to transport the same volume of crude oil or other product. He said the proposed requirements, including requiring a 9/16-inch-thick steel tank, would reduce the capacity of DOT-111 rail tank cars by between 10 percent and 13 percent, meaning that between 10 percent and 13 percent more tank cars would be needed to transport the same amount of product.

Greco said regulators must consider whether possible new design requirements would actually reduce risk, or if they would “shift risk” by increasing in the number of tank cars carrying flammable liquids on the rails.

To contact the reporter on this story: Patrick Ambrosio in Washington at pambrosio@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

Foxx's blog post is available at http://www.dot.gov/fastlane/enhanced-tank-car-standards.

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