Oil, rail groups comment on DOT's proposed crude-by-rail regulations

Oct. 13, 2014
Proposed federal crude-by-rail regulations should focus more on accident prevention and mitigation than tank-car redesigns and retrofits, two major oil industry trade associations separately said in comments submitted to the US Department of Transportation on Sept. 30.

Proposed federal crude-by-rail regulations should focus more on accident prevention and mitigation than tank-car redesigns and retrofits, two major oil industry trade associations separately said in comments submitted to the US Department of Transportation on Sept. 30.

Meanwhile, two railroad industry groups warned that the proposals by DOT's Pipeline & Hazardous Materials Safety Administration (PHMSA) could have other potentially serious consequences. US freight rail traffic is rebounding to prerecession levels, creating new issues as trains carry more grain and automobiles as well as crude oil and ethanol, the American Association of Railroads (AAR) said.

Railroads have played a significant role in delivering crude oil from tight shale formations to refiners, said American Petroleum Institute Pres. Jack N. Gerard.

"North America's rail network moves hazardous materials without incident 99.998% of the time," Gerard told reporters during a Sept. 30 teleconference. "The challenge for both industry and regulators is to address and eliminate the remaining 0.002%."

Reaching a goal of zero incidents requires a comprehensive approach similar to a three-legged stool that focuses on preventing accidents before they happen, mitigating any that occur, and enhancing emergency response, Gerard said.

"That is the approach our industry follows when working to enhance safety, and it is the path regulators should take as well with the rules that govern shipping crude oil by rail," he noted.

Ignores safety issues

DOT's Aug. 1 proposal focuses primarily on railcars and does not address inadequate track integrity and inspections, the two major causes of derailments, the American Fuel & Petrochemical Manufacturers said in its comments.

"DOT needs to prioritize a rulemaking that addresses the primary causes of these derailments, which include track integrity, rail inspections, and personnel training," said David Friedman, AFPM vice-president of regulatory affairs. "Investment in derailment prevention would result in the greatest reduction in risk of transporting all hazardous materials."

Oil shippers demonstrated a commitment to a safer railcar standard well in advance of this rulemaking, having spent more than $3 billion since 2011 to purchase new upgraded CPC-1232 tank cars that go far beyond existing regulatory requirements, Friedman said. "Despite this reality, our members are willing to do more and are embracing many elements of the new tank car standards, as noted in our comments," he said.

"While shippers have willingly undertaken measures to protect the communities through which our products are transported, we are just one part of the solution," Friedman said, adding, "The obvious answer is that the trains must remain on the tracks."

Gerard noted that use of enhanced braking capabilities for trains that carry large volumes of flammable liquids is an important part of accident prevention, the first leg of API's rail safety stool. "We also encourage regulators to evaluate whether the development of new standards or processes could reduce the number of accidents that occur," he said.

Improve response plans

When it comes to enhancing emergency response, Gerard said PHMSA currently does not provide railroads the clarity they need to develop comprehensive and consistent spill-response plans. PHMSA should provide more detailed guidance so railroads can assess their existing plans and work to meet or exceed the desired standards, he recommended.

Gerard said API has devoted most of its efforts toward accident mitigation, its stool's final leg, because that's where it has the most to offer. API published a new recommended practice, RP 3000, on Sept. 25 to provide guidance on procedures for sampling, testing, and classifying crude for shipment by rail, he noted.

Developing an RP of this scale normally takes 2 years, but API-working with the railroad industry, PHMSA, and Transport Canada, PHMSA's counterpart above the border-prioritized their resources and completed the work in about 7 months, Gerard said. "We encourage PHMSA to incorporate this new industry standard into its regulations to ensure the greatest possible safety enhancements," he added.

AFPM and API made different tank-car recommendations. AFPM said it favors with shells 7/16-in. thick with jackets bottom outlet valve modification, an enhanced pressure relief valve, and a head shield. API believes existing cars should be retrofitted with advanced pressure-relief valves and added protection for the valves on top and bottom. Full-height head shields, jackets, and thermal blankets should also be added to nonjacketed cars, it said.

"For new construction, we support a car with these same features and a ½-in. thick shell," Gerard said. "API has carefully considered one of PHMSA's proposals to require a 9/16-in. shell, and our conclusion is that the unintended consequences would negate any additional safety benefit by requiring more trains to pull the same volume of crude."

AAR recommendations

AAR said it supports requiring 40 mph speed limits only in federally designated high-threat urban areas for trains with at least one legacy DOT-111 tank car moving flammable liquids, as the industry agreed to implement for crude oil by July 1 as part of a voluntary agreement with DOT. This additional speed restriction would be on top of industry's self-imposed nationwide 50 mph limit for trains with 20 or more cars loads of any hazardous material, it noted.

The railroads oppose requiring electronically controlled pneumatic (ECP) brakes on tank cars used to move flammable liquids, as they are very costly systems not justified in terms of improved safety benefits, and could result in negative network operational impacts. AAR also indicated that under its voluntary agreement with DOT, railroads already have addressed braking systems for trains moving crude oil, using either distributed power or two-way-telemetry end-of-train devices on such trains.

"Requiring the use of ECP braking systems on flammable liquid trains is neither justified by federal and industry safety data, nor practical given the industry's intense focus on improving network fluidity to better serve our customers and delivering for America's growing economy," said AAR Pres. Edward R. Hamberger. "The safety data simply isn't there to justify implementing this complex and costly system-not to mention significant potential efficiency downsides."

AAR urged PHMSA to adopt a federal requirement for a ½-in. shell for new cars in flammable liquid service, plus a 1/8-in. jacket and thermal protection. AAR also recommended requiring full-height head shields, appropriately sized pressure relief devices, bottom-outlet handle protection, and top-fittings protection. From a safety standpoint, these proposed federal standards would dramatically reduce the likelihood of a release in an accident by more than 81% over current nonjacketed DOT-111 tank cars, it said.

AAR also said it would like to see existing flammable liquid tank cars aggressively phased out or retrofitted with appropriately sized pressure relief devices and bottom-outlet handle protection, while nonjacketed legacy DOT-111 cars should be retrofitted with jackets, thermal protection, full-height head shields, appropriately sized pressure relief devices, bottom-outlet handle protection and top-fittings protection.

Unrealistic schedule

The Railway Supply Institute's (RSI) Committee on Tank Cars, meanwhile, joined API and AFPM in urging PHMSA to work closely with Transport Canada to not adopt an overly aggressive implementation schedule that could go beyond rail tank-car facilities' capabilities. "In fact, PHMSA's timeline could harm consumers by disrupting the production and transportation of goods that play major roles in our economy, including chemicals, gasoline, crude oil, and ethanol," API's Gerard warned.

"We believe the timelines for modifications in the US and Canada should be synchronized and feasible to avoid major disruptions of service," said RSI Pres. Tom Simpson. "Moreover, the specifications for new tank cars and the rules for packaging of flammable liquids need to match up across North America. Without making these important changes to align the rules, the effect will be to deplete the fleet of tank cars available for service, and those effects to safety and the economy cannot be underestimated."

Gerard said, "It is no exaggeration to say that, given the shop capacity limitations that exist, PHMSA's current proposals could stifle the North America's energy renaissance and curtail substantial volumes of US and Canadian oil production. We have instead proposed an aggressive yet achievable program for retrofitting the crude oil fleet to get stronger cars onto the tracks as fast as possible while limiting the most adverse economic consequences for consumers."

Under API's proposal for the crude oil fleet, manufacturing facilities would have 6-12 months to ramp up capacity for handling retrofits, Gerard explained. The legacy DOT-111 fleet moving in unit trains of crude oil would then be retrofitted or replaced within 3 years. Retrofits of the stronger, nonjacketed cars constructed since 2011 would be completed after another 3 years, allowing these cars to continue delivering energy to consumers during the retrofit period for the legacy fleet.

"While tank cars are an important part of the comprehensive approach to safety, there are limits to what tank car design can achieve," Gerard said. "Getting to zero incidents will take an equal effort to prevent accidents and improve accident response."