Oil lobby claims rules excessive, environmentalists find them too lax
By Liz Schevtchuk Armstrong
Moves to enhance the safety of crude-oil transportation and passenger railroads and to control oil processing advanced recently at both state and national levels, but one key initiative — stricter federal standards for so-called “bomb trains” — drew immediate attack both from industry insiders who termed the rules excessive and environmentalists who labeled them insufficient.
The latest developments include:
- Issuance by the U.S. Department of Transportation May 1 of the new set of rules covering rail transportation of crude oil and similar fuels, including phasing-out of railroad cars deemed too flimsy to carry highly flammable materials, setting of train speed limits, and use of better brakes on trains with extremely combustible cargo.
- Announcement by the New York State Department of Environmental Conservation on May 21 that it intends to rescind a November 2013 determination that an oil firm’s creation of a new facility for heated tar-sand crude oil in Albany posed no environmental threats.
- Introduction of a proposed law by Sen. Charles Schumer (D-N.Y.) to make the federal oil train regulations tighter by demanding faster mothballing of less-durable rail tankers; applying train speed limits in rural and small-town areas, not merely in select cities; and enactment of a federal standard on oil volatility.
- Passage in Washington by the House of Representatives of legislation, now under Senate committee review, to help pay for equipping commuter rail lines with a system called Positive Train Control, seen by the National Transportation Safety Board as an important accident-prevention mechanism; and successful efforts in early May by the legislation’s House sponsor, Rep. Sean Patrick Maloney, a Cold Spring Democrat, to obtain nearly $1 billion to assist with installation of PTC by the Metropolitan Transportation Authority, parent of the Metro-North commuter railroad that suffered fatal derailments in December 2013 and this past February.
Capping almost two years of preparation and temporary measures, the U.S. DOT revealed its “final rule” on carrying of flammable liquids, such as crude oil and ethanol, by railroads. The “rule” — actually a 345-page document with numerous regulations and provisions — specifies in part that tank cars built after Oct. 1 of this year and transporting the most dangerous fuel must have walls 9/16-inch thick and contain other safety features; that older cars be retrofitted to make them safer; that the weaker cars be removed from service over the next two to 10 years; that certain cars (not all) have higher-quality brakes than those currently used; and that the most volatile trains reduce their speed to 40 miles per hour in metropolises considered “high-threat urban areas” from an anti-terrorism perspective (in this state, only New York City and Buffalo qualify).
The U.S. Department of Transportation calls for replacing vulnerable DOT 111 crude-oil railroad cars with a sturdier version, the 117. (Drawing from the Transportation Department)
“Safety has been our top priority at every step in the process for finalizing this rule, which is a significant improvement over the current regulations and requirements and will make transporting flammable liquids safer,” U.S. Transportation Secretary Anthony Foxx declared.
Oil trains roll down the western side of the Hudson River, opposite Philipstown and past West Point, raising local fears of a derailment inferno, and environmental groups active in the valley and beyond find the DOT rules lacking.
For instance, Riverkeeper said in a several-page analysis, “the new tank-car standards do not apply to every oil tank car” but merely to long “High-Hazard Flammable Trains,” comprised of 220 continuous oil or ethanol cars or 35 such cars interspersed throughout the train’s length. However, Riverkeeper states, “34 tank cars can carry approximately 1 million gallons of oil, meaning that the worst cars will still be on the rails, hauling explosive oil, and not bound by any of this rule’s safety provisions.”
In short, it asserted, DOT’s set of regulations “has huge loopholes.” The issue involves the present tankers, known as DOT 111 cars, and somewhat newer CPC-1232 cars, which also were involved in derailments that this year caused major conflagrations in rural areas. The DOT wants to replace the 111 with a beefier DOT 117 model.
Riverkeeper said that while the new cars will have thicker walls, retrofitted tankers “will be allowed to stay in use” with a thinner shell, leaving them more likely to be pierced or torn open in an accident.
Riverkeeper observed that Canada, which presented its own set of heightened rules the same day as the American regulations, applies upgraded car-safety rules “to every single tank car,” and the NTSB “recommended that the new U.S. standards apply to every single tank car carrying hazardous flammable liquids” as well.
Citing these and other reasons, on May 15 in the 2nd U.S. Circuit Court of Appeals, in New York City, Riverkeeper brought a legal challenge to the DOT regulations. Similarly, in San Francisco, the Sierra Club and other organizations filed a comparable federal appeals court suit.
“These seriously flawed standards all but guarantee that there will be more explosive derailments, leaving people and the environment at grave risk,” Riverkeeper President Paul Gallay said. “The DOT completely fails to recognize that we’re in the middle of a crisis. We don’t need bureaucratic half measures that are years away from implementation. We need common-sense protections today.”
The American Petroleum Institute, a Washington-based trade organization for the oil industry, disagreed profoundly. API, too, filed a lawsuit, seeking a longer period of time in which to retrofit existing tank cars and objecting to the DOT stipulations regarding enhanced brakes, among other points. It described various demands under the new rule as “in excess” and beyond DOT purview.
In a statement before the lawsuit was submitted, API President and CEO Jack Gerard referred to “the 99.997 percent safety record of freight rail” and said API members “support upgrades to the tank-car fleet and want them completed as quickly as realistically possible” but believe the DOT schedule “will lead to shortages.”
Like the environmentalists, Schumer called for taking action swiftly. “Allowing these outdated oil cars to continue rolling through our communities for another eight years is a reckless gamble that we can’t afford to make,” he said May 4, announcing his draft bill. Earlier this year, he introduced a related measure that would exact fees for use of DOT 111 cars for fuel; the fees would go into a fund to cover costs of handling oil-train disasters. Both pieces of legislation were pending before the Senate Commerce, Science and Transportation Committee as of May 26.
The DOT estimates that there will be 10 oil train derailments per year and that they will cost $4 billion over the next 20 years. That works out to $200 million per year, or $20 million per derailment. That is an average. An oil-train derailment can get much more expensive as the one in Lac Megantic, Canada shows. The clean-up alone is at $200 million and counting. Compensation to the relatives of the 47 people who died is not even being guessed at yet.
Would the railroad be liable for clean up, property damage and personal injury? Unclear. The railroad, shippers (who own the talk cars), and oil companies, would point fingers at each other and hunker down for years of legal skirmishing. It is likely, for example, that the Canadian federal government will compensate Lac Megantic survivors.
The railroads have computer programs that tell them how often to inspect the tracks for defects that lead to broken rails and then to derailments. A key input to the program is the cost of the derailment. The more it costs, the more the railroad is willing to inspect and repair the rails to avoid it. It’s simple economics.
But have they done more inspecting since the oil trains began running? Only one of the big 7 railroads has increase inspections, by 2.5 times the federal standard, voluntarily. The Federal Railroad Administration’s recent round of rule changes did not raise the inspection bar. Please sign the petition insisting that the FRA strictly enforce the rules, especially in areas where oil trains roll.
Personally, I would like to see the shippers made fully responsible for all damages from any accident, anywhere they occur, and they should carry large insurance policies so as to avoid business decisions that are made based upon calculated risk. We should learn our lessons from Deepwater Horizon and the other ecological nightmares that have caused unanticipated damage reaching far beyond the initial accidents, where business decisions trumped safety and environmental damage.
And for those of you who have said that there is too much regulation already, I wonder what you want your water to taste like?