Call for tougher US crude-by-rail rules mounts

OREANDA-NEWS. March 12, 2015. Wisconsin lawmakers have joined a chorus of officials urging President Barack Obama to issue tough final rules to address crude-by-rail safety amid a spate of fiery derailments.

"Oil train accidents are increasing at an alarming rate as a result of the increased oil production from the Bakken formation in North Dakota," senator Tammy Baldwin and representative Ron Kind wrote in a letter to President Barack Obama this week. "The danger facing Wisconsin communities located near rail lanes has materialized quickly."

Lawmakers have been ramping up the pressure on the Department of Transportation (DOT) to move faster and more comprehensively with new rules governing the transportation of hazardous materials like crude. Three explosive derailments have happened in the last month; two in Ontario and one in Illinois. All involved crude oil. Questions are also rising over the safety of the newer-build CPC-1232 tank cars, which were involved in at least two of the accidents.

Crude train derailments comprise a tiny percentage of overall train incidents. In 2014, 1,861 derailments happened across the US. Six of those derailments involved crude – or a rate of 0.0032pc of all derailments, according to an Argus analysis of data from the Pipeline and Hazardous Materials Safety Administration (Phmsa) and Federal Railroad Administration (FRA). Crude oil comprises 1.6-1.7pc of all carloads moved in the US, and 99.995pc of all crude trains move without incident, according to the Association of American Railroads (AAR). Still, the accidents can lead to dangerously explosive fires, such as one in 2013 that killed 47 people in Lac Megantic, Quebec.

The recent accidents are likely to shape, but not dramatically shift, the outcome of the DOT's pending rules, said ClearView Energy Partners managing director Kevin Book.

"The spate of recent crashes may make it harder for the Obama administration to finalize an accommodative rule, especially in terms of tank car design and phase-out timeframes," Book said.

The DOT is expected to finalize new standards in May for hauling hazardous materials such as crude and ethanol. The agency has proposed a two-year phase out of older DOT-111 tank cars unless the cars are retrofitted, and is weighing enhanced thickness and braking standards on new tank cars. It is also considering restricting train speeds.

US senator Maria Cantwell (D-Washington) has said she will propose legislation that goes beyond those proposed rules. She has also questioned the efficacy of the newer-build CPC-1232, which were used in the latest fiery derailment near Galena, Illinois.

US senator Chuck Schumer (D-New York) has called for the DOT to require stabilization of Bakken crude. New York state legislator Phil Steck last month urged the same.

"Conditioning crude oil is not enough – the dangers of transporting highly flammable, volatile crude across the country are too great," Steck wrote in a letter to the agency.

New York has two major crude unloading terminals.

"While North Dakota has attempted to address this issue on a state level, it seems apparent that their regulation did not go far enough," Schumer said.

Pennsylvania governor Tom Wolf has also called for more federal oversight of crude-by-rail. His state sees 60-70 trains of Bakken crude a week.