Feds propose phasing out older crude-oil train tank cars

07/23/2014 6:59 PM

10/07/2014 8:51 PM

The U.S. Department of Transportation proposed a two-year phase-out Wednesday of older railroad tank cars used to transport crude oil, which have been involved in serious derailments over the past year.

Transportation Secretary Anthony Foxx outlined the long-anticipated proposals more than a year after a deadly derailment in Quebec focused government and public scrutiny on the rising volumes of crude oil shipped by train.

The public has 60 days to comment on the proposed rules, and Foxx said the department wouldn’t grant an extension because of the urgency of the issue. The older tankers in question, identified as DOT-111 cars, transport more than 80 percent of the crude oil that moves nationally on rail.

Officials in California and Sacramento applauded the move by DOT, which has almost sole jurisdiction over rail transportation nationally, making it nearly impossible for states to impose their own restrictions or requirements.

“That is very aggressive,” said Sen. Jerry Hill, D-San Mateo, who is pushing in Sacramento for more funding for local firefighters to deal with hazardous train spills. “I thought it would take many years to phase those out because of the large number in the field today. This is good news.”

Local leaders say they still want the federal government to be do more. Rep. Doris Matsui, D-Sacramento, on Wednesday reiterated her request that producers of one crude-oil type in particular, from the Bakken region of North Dakota, be required to strip out some of the mix’s more volatile elements “prior to being loaded onto rail cars.”

In a letter to Foxx this week, California Public Utilities Commission President Michael Peevey went further, calling on federal officials to impose a moratorium on the shipment of “non-stabilized” Bakken crude oil.

BNSF Railway runs 100-car trains carrying Bakken crude through the Sacramento region a few times a month en route to the Bay Area. BNSF officials declined to comment on what kind of tank cars are in the trains.

The Valero Refining Co. of Benicia plans to begin running two 50-car crude oil trains daily next year, likely carrying Bakken, through Sacramento to Benicia. Valero spokesman Chris Howe said his company plans to use an upgraded tank car, not the DOT-111s.

The DOT wants companies to phase out or retrofit older-model DOT-111 tank cars used to transport both crude oil and ethanol. They’ve long been known to be vulnerable to failure in derailments.

“We are proposing to phase out the DOT-111 tank car in its current form,” DOT’s Foxx said.

Kevin Sheys, a Washington, D.C., attorney who advises rail transportation clients, said DOT took a balanced approach. “The crude needs to move, but we have to move it safely,” he said. “And the proposed rule seems to reflect the government’s effort to balance those goals.”

EarthJustice, a San Francisco-based national advocacy group, criticized the department for not going far enough.

“An immediate ban on shipping volatile crude in the DOT-111 tank cars is in order,” EarthJustice attorney Patti Goldman said in a press statement.

The department on Wednesday offered various options for upgraded tank cars, including thicker steel shells, electronic braking and rollover protections. The proposal would require retrofits within five years for newer tank cars built to an industry-adopted higher standard.

The DOT proposed a maximum 40-mph speed in all areas for trains that are operating with older tank cars and for urban areas with more than 100,000 residents, including Sacramento. Trains with tank cars that meet the new requirements would be permitted to travel at 50 mph outside urban areas.

The department’s proposal to limit crude-oil train speeds would apply to the state’s major population centers, including Sacramento and Roseville. It would not, however, include Davis, population 66,000, a university town where local officials and residents have expressed concern about the safety of crude shipments by rail.

The federal DOT also proposed codifying its May 7 emergency order requiring railroads to notify state and local emergency officials about shipments of 1 million gallons or more of Bakken crude.

Lawmakers on Capitol Hill who have been pushing the DOT and the Obama administration to move swiftly on the new rules responded favorably to Wednesday’s announcement.

“We have seen the devastating impact on communities nationwide when our regulatory regime lags behind rapid industry changes,” said Sen. Jay Rockefeller, a West Virginia Democrat who chairs the Senate Commerce, Science and Transportation Committee.

In addition to the notice of newly proposed rules on tank cars, speeds, braking and crude-oil testing, the DOT released an advance notice of new regulations to govern the expansion of comprehensive oil-spill response plans for crude oil trains.

Railroads aren’t required to have such plans for crude oil trains, but derailments in Quebec, Alabama, North Dakota, Virginia and elsewhere since last year have revealed gaps in emergency response training, equipment and staff.

“We are not necessarily done yet with all the ways we plan to address this issue,” said Cynthia Quarterman, the head of the Pipeline and Hazardous Materials Safety Administration at the DOT.

The department Wednesday also released the results of its crude-oil testing begun last year. It concludes that Bakken crude oil, which is extracted from shale rock by hydraulic fracturing, is more volatile than other crudes.

The department proposed a sampling and testing program, and it would require crude-oil shippers to provide information from the tests upon request. The petroleum industry and refiners have disputed the department’s research on Bakken’s volatility, and on Wednesday they cited industry studies that have found the opposite.

“Multiple studies have shown that Bakken crude is similar to other crudes,” said Jack Gerard, the president and CEO of the American Petroleum Institute.

Petroleum and ethanol producers have also pushed back on some of the proposed tank-car standards, including the thickness of the shells.

Two of the DOT’s proposals would increase shell thickness from the current industry standard of 7/16 inch to 9/16 inch. A third option would keep the current standard, which the industry adopted in 2011. Thicker shells could improve puncture resistance, but they also add weight that means the cars could carry less cargo.

Foxx said Wednesday that the department’s proposals were “supported by sound data and analysis.”

Some environmental groups have called on the DOT to ban the use of older tank cars immediately, a move that would disrupt the country’s burgeoning energy production.

Matt Krogh, who’s fought the expansion of coal and crude-oil rail terminals in the Pacific Northwest for ForestEthics, an environmental advocacy group, accused the Obama administration of supporting the wrong side.

“The administration seems to have carefully calculated and managed the inconvenience of these rules to the oil industry,” he said, “but they’ve severely underestimated the threat of these trains to the American public.”

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