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DOT's Foxx Says Lack of Industry Data On Bakken Crude Slowing Rail Safety Efforts

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By Patrick Ambrosio  

April 9 --Transportation Secretary Anthony Foxx told a Senate Appropriations subcommittee that the failure of the oil industry to respond to a request for data on the characteristics of crude oil from North Dakota's Bakken shale region is slowing down efforts to improve the transport of crude oil by rail.

During an April 9 hearing of the Subcommittee on Transportation, Housing and Urban Development and Related Agencies, Foxx said the Transportation Department has received information from three individual oil companies but hasn't received "robust" data from the oil industry, despite a January request for as much information as possible.

The department issued a safety advisory in January cautioning that Bakken crude oil may be more flammable than other forms of crude oil and is continuing to study the issue.

DOT officials met with representatives of the rail and petroleum industries in January and requested that they take voluntary steps to address the safety of transporting crude oil by rail, including the sharing of data on Bakken crude oil .

Foxx said the lack of data sharing is slowing down the department's ability to inform Congress on the volatility of Bakken crude oil and slowing down efforts to coordinate with emergency responders on crude-by-rail safety.

He noted that the Pipeline and Hazardous Materials Safety Administration and the Federal Railroad Administration are conducting their own testing of Bakken crude samples but said additional data from the industry would allow for a better assessment of crude oil characteristics.

Foxx also said federal regulators need a “comprehensive understanding” of crude oil characteristics to develop new standards for rail tank cars that are used to transport flammable liquids.

“It all starts with knowing what we're transporting,” he said.

API Encouraging Data Sharing

The American Petroleum Institute, which represents the petroleum industry, provided Bloomberg BNA with an April 9 letter sent to Sen. Heidi Heitkamp (D-N.D.) on the safety of transporting crude oil by rail.

The letter, authored by API President Jack Gerard, said that although API doesn't collect data on crude oil characteristics, it has encouraged its member companies to share data with PHMSA. Gerard said that at least four of API's member companies have already provided data to PHMSA.

Gerard also noted that the North Dakota Petroleum Council has contracted a consulting firm and an independent laboratory to test the range and variability of Bakken crude oil characteristics. The results of that testing will be shared with PHMSA in addition to any proprietary data submitted by individual companies, according to Gerard.

API also is holding biweekly meetings with federal officials, railroad representatives and tank car builders to work on a new standard for the material characterization, classification and quantity measurement of crude oil being transported by rail. Gerard said API expects to have a first draft of that standard ready by June.

Design Rule to Move Ahead

DOT won't wait to issue proposed tank car design standards, despite the lack of data sharing by the industry, according to Foxx. He said the rulemaking process is “not stopping” for anyone but acknowledged that the DOT wants to avoid a situation where groups complain after the design standards are proposed that the department didn't have all necessary data.

Foxx said his target date for issuing a proposed tank car rule is “as soon as possible” but declined to provide a more specific timeline when asked by subcommittee chairman Patty Murray (D-Wash.) and subcommittee ranking member Susan Collins (R-Maine).

National Transportation Safety Board Chairman Deborah Hersman, appearing alongside Foxx as a witness during the hearing, said the NTSB has recommended that the Transportation Department address the safety design of DOT-111 rail tank cars since 1991. Hersman said the NTSB has seen “poor performance” by the DOT-111 rail tank cars, which she said are likely to breach or puncture during derailments or collisions.

Hersman said the NTSB thinks it would be “wise” for the Transportation Department to go beyond the CPC-1232 standard, a voluntary industry standard adopted for all new tank cars ordered after Oct. 1, 2011, in its rulemaking. She said that a high-speed accident involving a tank car built to meet the voluntary industry standard would still result.

“If you get into a very high speed accident with a 1232, you're still going to have problems,” Hersman said.

NTSB Pushes for Improvements

Hersman said that federal regulators haven't responded quickly enough to address the risks of transporting large volumes of crude oil by rail. She said that recent accidents, including a July 2013 derailment in Lac-Mégantic, Quebec, that resulted in 47 fatalities, illustrate that “vulnerabilities” still exist that put communities at risk.

The NTSB and the Transportation Safety Board of Canada issued joint recommendations in January to improve the safety of transporting crude oil by rail, addressing expanded route planning requirements, proper classification of hazardous materials and response plans for “worst case” incidents .

“These common sense improvements are needed now,” Hersman said.

Hersman acknowledged that the Transportation Department has received voluntary commitments from the rail industry to address several of those issues, including commitments to analyze the routing for trains carrying crude oil and to develop an inventory of emergency response resources along train routes.

The Association of American Railroads, which represents freight companies such as CSX Transportation Inc., Union Pacific Railroad and BNSF Railway Co., committed to those voluntary measures in February .

Heitkamp Calls for Funding

Heitkamp, who was invited to sit in on the subcommittee hearing, said appropriators need to provide the Transportation Department with necessary funding to ensure that crude oil is safety transported by rail.

Heitkamp said PHMSA and the Federal Railroad Administration need additional funding for inspectors and dedicated funding to address the specific challenges associated with transporting crude oil and other energy projects.

President Obama's fiscal year 2015 budget request proposed to establish a $40 million fund within the Transportation Department to support prevention and response activities associated with energy transport .

Heitkamp is one of 16 senators who signed onto an April 4 letter calling for the Senate Appropriations Committee to support the $40 million Safe Transportation of Energy Products Fund.

 

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


The API letter is available at http://op.bna.com/env.nsf/r?Open=rlen-9hzrkl.

The senators' letter is available at http://www.cantwell.senate.gov/public/_cache/files/fb4592e5-f478-4e58-9c33-6123b006be4c/FY15%20Rail%20Safety%20Approps%20Letter%20%283%29.pdf.