Tablet Business

Rail industry agrees to new guidelines for oil trains

The Transportation Department outlined several steps Friday aimed at improving the safety of crude oil in trains after a series of derailments prompted concerns from state and local officials.

Among other measures, trains carrying oil in older, less-reinforced tank cars will slow to 40 mph in major cities. Railroads will conduct more frequent inspections of tracks over which oil shipments move, will improve those trains’ braking capabilities and will install new sensors along major routes to detect train defects.

The department also said it will work with railroads to determine the safest routing options for crude oil, examine emergency response capabilities and address the concerns of communities.

The measures are voluntary and will be in place by July 1. Railroads aren’t waiting for the new rules, though.

On Thursday, Fort Worth-based BNSF Railway, the continent’s biggest hauler of crude oil in trains, said it will buy 5,000 better-reinforced tank cars. Typically, railroads don’t own tank cars; rather, shippers lease them.

“The rapid increase in the production and transportation of crude oil requires additional vigilance for the continued safe movement of this commodity by all stakeholders involved, including both the rail industry and the federal government,” Transportation Secretary Anthony Foxx said in a letter to the Association of American Railroads, the industry’s Washington advocacy group.

“After all, nothing is more important for all involved than safety.

In a statement, Edward Hamberger, the group’s president and CEO, said the industry worked with regulators to develop the guidelines.

“Safety is a shared responsibility among all energy-supply-chain stakeholders,” Hamberger said. “We will continue to work with our safety partners — including regulators, our employees, our customers and the communities through which we operate — to find even more ways to reinforce public confidence in the rail industry’s ability to safely meet the increased demand to move crude oil.”

BNSF said in a statement that it “strongly supports the new voluntary commitments to further reduce risk in the movement of crude oil by rail. The rail industry plays a critical role in helping the U.S. and North American economies achieve energy independence and this crude oil safety initiative will enable that to continue to develop with even greater safety.”

According to the Association of American Railroads, the volume of crude oil moving by rail increased to 400,000 cars last year from fewer than 10,000 in 2008. Rail has captured the bulk of oil shipments from North Dakota’s booming Bakken Shale region, largely because pipelines simply don’t go where the crude is needed and they take a long time to build.

However, the rapid development of the Bakken put oil into tens of thousands of tank cars that have long been identified as vulnerable to breaches during derailments.

Deadly consequences

The results have proved destructive and deadly. In July, 47 people were killed when a train loaded with Bakken crude derailed and exploded in Lac-Megantic, Quebec. More recent derailments in Alabama, North Dakota and Pennsylvania resulted in intense fires, large spills or both. Officials from mayors to members of Congress have demanded that federal regulators respond to the new danger.

Friday’s announcement does not address the safety of those tank cars, called DOT-111As. The Pipeline and Hazardous Materials Safety Administration, part of the Transportation Department, is working on new standards for those cars, but a final rule is likely a year away.

Last week, Canada’s two largest railroads said they would impose additional fees on shipments of crude in older DOT-111As.

At least two refiners have said they will ship crude only in newer tank cars.

While the severity of recent accidents has raised safety concerns, transportation officials point out that over the past decade, derailments have decreased by 47 percent.

Hamberger, of the railroad association, said the industry has placed a priority on safely transporting crude and will live up to the agreement with the government.

“No. 1, it’s better for safety. And No. 2, their reputation is on the line,” he said.

Staff writer Jim Fuquay contributed to this report, which includes material from The Associated Press.