Legislation may be needed to address shortcomings in the Transportation Department's crude-by-rail safety rule, according to Sen. Jay Rockefeller (D-W.Va.) and other senior lawmakers.
The proposed rule, which would require thousands of updated tank cars and impose speed and braking requirements, isn't strong enough, Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee, told Bloomberg BNA.
“There was nothing substantive,” Rockefeller said in an interview about the rule Sept. 10. “There was nothing about rules or regulations at all.”
The requirements were made public as a notice of proposed rulemaking in July to address a string of fiery crashes involving trains shipping crude oil from the Bakken Shale region in North Dakota and other places and sought public comments on three different standards for tank cars.
Sen. Ron Wyden (D-Ore.), the former chairman of the Senate Energy and Natural Resources Committee, also said the proposed rule has “some gaps.” Specifically, Wyden said, the rule doesn't address the flammability of oil being shipped into Oregon from Canada.
“If it's not changed through the rest of the process, it may be necessary to have federal legislation,” Wyden told reporters in the Capitol.
The rule, which was issued jointly by the Federal Railroad Administration and the Pipeline and Hazardous Materials Safety Administration, comes as hydraulic fracturing and horizontal drilling techniques have led daily U.S. oil production to soar to more than 11 million barrels in the first quarter, according to a July 4 report by Bank of America Corp.
Increasing amounts of that oil are being shipped via railroad, according to the Transportation Department, which said carloads of oil increased to 415,000 in 2013 from just 9,500 in 2008.
Crude that hails from the Bakken region is more volatile and flammable than other lighter crude oils, according to a study issued by PHMSA, which contradicted previous studies released by the oil industry and was released the same day as the proposed crude-by-rail rule .
Pipeline Shortage Cited
“I'd just a soon have everything in a pipeline, so we don't have these safety issues,” Sen. Lisa Murkowski (R-Alaska), the top Republican on the Senate Energy and Natural Resources Committee, said in an interview.
“But until we get the approval, whether it's for things like Keystone or further investment in pipeline infrastructure around the country, you've got to figure out a way to move this, and rail is a heck-of-a-lot better than truck,” Murkowski said.
The rule, which is estimated to cost industry as much as $6 billion over 20 years and would affect shippers of ethanol as well, covers a wide range of companies from railroads such as CSX Corp. and Union Pacific as well as rail car manufacturers such as Trinity Industries Inc.
The American Petroleum Institute, whose members include shippers such as ExxonMobil Corp., have opposed classifying crude oil from the Bakken region as more flammable than other types of crude oil but has yet to take a formal position on the DOT's rule.
Limited Time to Act
One barrier to congressional action on the crude-by-rail issue is a lack of time, according to Rockefeller, who is retiring at the end of this term. Congress goes into recess Sept. 23 until late November, after the midterm elections.
And not all think legislation is needed on the issue.
“I think the DOT has taken the appropriate steps,” Sen. John Thune (R-S.D.), the ranking member of the commerce committee, told Bloomberg BNA. “It seems to me at least they are moving in the right direction. Obviously, we will continue to look at these issues, and Congress has a role to play there too, but I'm not sure that it's something we will be legislating on anytime soon.”
For more information on subscribing to "Energy and Climate Report" or to try it for free, click here.
To sign up for email highlights, click here.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)