BNSF to buy 5,000 next-generation tank cars for transporting crude oil

Posted Thursday, Feb. 20, 2014  comments  Print Reprints
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BNSF Railway said Thursday that it intends to buy a fleet of 5,000 strengthened tank cars to haul oil and ethanol in a move that would set a higher safety standard for an industry that’s seen multiple major accidents.

The voluntary step by the Fort Worth-based subsidiary of Warren Buffett’s Berkshire Hathaway comes as railroads in the U.S. and Canada are under intense pressure to improve safety for hazardous materials shipments.

A series of recent train accidents have involved oil and ethanol, punctuated by a crude shipment that derailed in Quebec last July, killing 47 people. A December derailment near Casselton, N.D., involving a BNSF train resulted in a massive fire and the temporary evacuation of two-thirds of the town’s 2,500 residents in subzero temperatures.

A boom in domestic oil drilling and rising ethanol production spurred a dramatic increase in rail shipments. The oil and ethanol are often hauled by an old fleet of some 78,000 tank cars that are prone to split during accidents.

BNSF spokesman Steven Forsberg said the railroad’s shipments of crude oil averaged about 650,000 barrels per day in 2013, much of it from the Bakken Shale in North Dakota, which has a limited pipeline network. The oil is being shipped primarily to refineries on the East Coast and the Gulf Coast, he said.

Thursday’s announcement does not mean that the older tank cars will go away, and there’s already a two-year backlog on tank car construction.

In announcing that it will ask manufacturers to submit bids for the new cars, BNSF indicated that it is unwilling to wait for the U.S. Transportation Department to finalize regulations on improved tank cars.

The company said it hopes to accelerate the transition to a new generation of safer tank cars and give manufacturers a head start on designing them as federal officials consider changes to the standards.

Typically, railroads don’t own the tank cars, making BNSF’s proposal somewhat unusual. But whether it will spur other shipping companies or railroads to follow suit is uncertain, said Tom Simpson, president of the Railway Supply Institute, a trade association representing tank car makers and owners.

“Everyone has the right to go to a tougher standard,” Simpson said. “We’ll see how it plays out.”

BNSF spokeswoman Roxanne Butler said the request for bids on new cars reflects the company’s “commitment to crude-by-rail growth and improving the overall safety of crude transportation.”

Besides the older tank cars that are prone to fail, about 14,000 cars in use were built according to a more stringent standard established by the industry in 2011. BNSF’s proposal would go further still.

The added safety features being sought by the company include half-inch-thick steel shields that would go on each end of the tank cars to help prevent them from cracking open during accidents. The new cars would also have pressure-relief valves capable of withstanding an ethanol-based fire, as well as a tank body made of thicker steel.

Butler said she has no time frame on when the cars could be built and used.

The BNSF move comes as the National Transportation Safety Board investigates the cause of the December crash in North Dakota and a senator raises questions about BNSF’s track maintenance.

In a letter sent to Sen. Heidi Heitkamp, D-N.D., federal railroad inspectors said they have found more than 13,000 defects on BNSF lines in North Dakota since 2006 and have written 721 violations against the company. Heitkamp had asked the Federal Railroad Administration for data after the Casselton accident.

Federal Railroad Administrator Joseph Szabo said in his letter to Heitkamp that Cass County has seen four other derailments in nine years and that an investigation and safety assessment of the BNSF line in the county are ongoing. He said federal officials have conducted 3,822 track inspections in North Dakota since 2006 and found 13,141 defects.

BNSF said in a statement that it has its own “robust track inspection program” and “inspects its key routes and busiest track more than twice as frequently as required by the FRA.”

“Conditions such as loose bolts and cracked bars are examples of defects often detected and corrected, and both BNSF and the FRA encourage inspectors to document every defect found, even if not a condition that could cause a derailment,” the railroad’s statement said.

“Over the past seven years, FRA audits have yielded a defect rate of less than 1 defect per mile, per year for the 2,300 miles of BNSF track in North Dakota.”

Staff writer Steve Kaskovich contributed to this report, which includes material from The Associated Press.

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