One month after industry leaders were called to Washington for meetings with federal officials regarding recent derailments of crude oil unit trains, large freight railroads announced Friday they have agreed to quickly institute a series of voluntary steps to improve the safety of moving crude oil by rail.
The measures, which were developed in consultation with the Department of Transportation's Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA), focus on improving operational procedures. Additional issues such as tank car standards and proper shipper classification of crude oil are being addressed separately.
“Safety is a shared responsibility among all energy-supply-chain stakeholders. 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,” Edward R. Hamberger, president and cheif executive officer of the American Association of Railroads, said in a statement.
The volume of crude oil shipped by rail has skyrocketed since 2008 as energy developers take advantage of new technology and drilling techniques to get at oil and natural gas locked in shale rock formations that were inaccessible with traditional production methods. Large oil fields are being developed around the country, including in Texas and the Plains states; one of the main areas of activity is the Bakken formation in North Dakota and Montana. Rail is the primary way of getting the oil to refineries because little pipeline infrastructure has been built from these remote areas.
Last year, U.S. railroads moved more than 400,000 tank car loads of crude oil, compared to 9,500 tank car loads five years ago, according to AAR statistics.
The DOT recently warned that Bakken light crude may be more flammable than other crude oil.
On Feb. 13, a Norfolk Southern train transporting crude oil from Canada to New Jersey derailed in western Pennsylvania, forcing 21 cars off the track. Four cars reportedly spilled between 3,000 gallons and 4,000 gallons of oil. On Dec. 30, a BNSF Railway petroleum train struck a derailed car from another train, and fuel from the ruptured tank cars ignited into a giant fireball. In November, a 90-car train operated by Genesee & Wyoming, derailed and exploded in rural western Alabama, setting 11 cars ablaze. And last summer, a crew-less oil train rolled downhill and crashed into the center of the small Canadian town of Lac-Megantic, devastating the area and killing 47 people.
The issue of oil by rail is relevant for all shippers because railroads are devoting more of their resources to expanding their oil transport capacity, and any accommodations for oil trains may impact movements of other train types since they all share the same network.
Speaking Thursday at the U.S. Chamber of Commerce's Infrastructure Summit in Washington, D.C., Hamberger defended the industry's safety track record with oil trains.
"It's up to the freight railroads to prevent accidents from happening, and quite frankly, we do a pretty good job," he said. "Last year, with those 400,000-plus cars, exactly 47 of them breached. That's 99.998 percent that made it from origin to destination without an accidental release.
"We want to get to 100 percent, but until we get there, we need to pay attention to low probability, high-impact events."
Under the industry’s voluntary efforts, railroads will take the following steps:
- Increased track inspections — Effective March 25, railroads will perform at least one additional internal-rail inspection each year above those required by new FRA regulations on main line routes over which trains moving 20 or more carloads of crude oil travel. Railroads will also conduct at least two high-tech track geometry inspections each year on main line routes over which trains with 20 or more loaded cars of crude oil are moving. Current federal regulations do not require comprehensive track geometry inspections.
- Braking systems — No later than April 1, railroads will equip all trains with 20 or more carloads of crude oil with either distributed power (locomotives spread out, not just in the front) or two-way telemetry end-of-train devices. These technologies allow train crews to apply emergency brakes from both ends of the train in order to stop the train faster.
- Use of rail traffic routing technology — No later than July 1, railroads will begin using the Rail Corridor Risk Management System to help determine the safest and most secure rail routes for trains with 20 or more cars of crude oil. RCRMS is a sophisticated analytical tool, developed in coordination with the Department of Homeland Security, PHMSA and FRA. Railroads currently use RCRMS in the routing of security sensitive materials. This tool takes into account 27 risk factors — including volume of commodity, trip length, population density along the route, local emergency response capability, track quality, and signal systems — to assess the safety and security of rail routes.
- Lower speeds — No later than July 1, railroads will operate trains with 20 or more tank cars carrying crude oil that include at least one older DOT-111 no faster than 40 mph in 46 high-threat urban areas designated by DHS. In the meantime, railroads will continue to operate trains with 20 or more carloads of hazardous materials, including crude oil, at the industry self-imposed speed limit of 50 mph. (About 92,000 of the older, non-pressure tank cars that meet DOT standards are used to haul flammable liquids, according to the AAR.)
- Increased trackside safety technology — No later than July 1, railroads will begin installing additional wayside wheel bearing detectors, if they are not already in place, every 40 miles along tracks with trains carrying 20 or more crude oil cars, as other safety factors allow.
- Emergency response capability planning — Railroads will, by July 1, develop an inventory of emergency response resources for responding to the release of large amounts of crude oil along routes over which trains with 20 or more cars of crude oil operate. This inventory will include locations for the staging of emergency response equipment and, where appropriate, contacts for the notification of communities. When the inventory is completed, railroads will provide DOT with information on the deployment of the resources and make the information available upon request to appropriate emergency responders.
- Increased emergency response training and tuition assistance — Railroads commit by July 1 to provide $5 million to develop specialized crude-by-rail training and tuition assistance program for local first responders. One part of the curriculum will be designed to be provided to local emergency responders in the field. Some will receive comprehensive training at the rail industry's Transportation Technology Center, Inc., facility in Pueblo, Colo. The funding will provide program development and tuition assistance for an estimated 1,500 first responders in 2014.
The AAR trained 22,000 first responders last year, including 2,000 in Pueblo, Hamberger said Thursday.
Two steps — better route planning and auditing carriers' response capabilities — mirror safety recommendations made last month by the National Transportation Safety Board to the DOT regarding crude by rail.
"There is no one within these agencies and no one within these respective sectors that isn't fully cognizant of the responsibility that we have to move our product as safely, efficiently and quickly as humanly possible," Stephen Brown, vice president, federal government affairs for San Antonio-based Tesoro Corp., an independent refiner and marketer of petroleum products, said at the U.S. Chamber event. "I think the relationship is going well."
It is unclear if the new safety measures adopted by the rail industry will forestall further government action, as legislators and regulators in the United States and Canada explore ways to tighten safety standards for crude by rail.
Chicago Mayor Rahm Emanuel recently proposed a federal freight fee on both oil manufacturers and end users to encourage compliance and upgrade aging infrastructure. He also called for mandating those who transport hazardous materials on railways carry the necessary insurance to compensate victims after an accident.
Congress is scheduled to hold several hearings on rail safety in the next couple weeks, as several key members press the DOT to review current safety practices.
In August, the DOT launched an enforcement "blitz" in the Bakken region to verify that shippers were properly classifying crude oil in shipping documents. Earlier this month, PHMSA announced the first proposed fines associated with its investigation. Shippers are required to use nine hazard classes as a guide to properly classify their hazardous materials so proper packaging and containers for safe storage are used, and the risk is accurately communicated to emergency responders in local communities.
PHMSA said 11 of 18 samples it took from cargo tanks delivering oil to rail loading facilities were not assigned to the container that offers the highest level of safety.
The agency proposed fines totaling $93,000 that were issued to Hess Corp., Whiting Oil and Gas Corp., and Marathon Oil Co.
"The fines we are proposing today should send a message to everyone involved in the shipment of crude oil: You must test and classify this material properly if you want to use our transportation system to ship it,” DOT Secretary Anthony Foxx said in a statement at the time.
PHMSA and the FRA also are currently preparing a rulemaking to improve the design of the DOT-111 tank car because they are considered prone to rupture. The rulemaking also intends to determine what should happen to the current fleet.
The railroad industry recently called on regulators to require that all tank cars used to carry liquids such as crude oil and ethanol be retrofitted or phased out, and new cars be built to more stringent standards to decrease the likelihood of a release if a car is involved in an accident.
Rail cars ordered since October 2011 have been built to a higher standard, voluntarily adopted by railroads, car manufacturers and users. These new cars make up nearly 40 percent of the crude oil tank car fleet and will constitute 60 percent of the fleet by the end of 2015.
The AAR recommended that federal design standards for new cars include an outer steel jacket around the tank car and thermal protection, full-height head shields, and high-flow capacity pressure relief valves. It also seeks upgrades to tank cars built since October 2011, including relief valves and design modifications to prevent bottom outlets from opening in the case of an accident, and an aggressive phase out of older-model tank cars used for flammable liquids that are not retrofitted to meet new federal requirements.
Overall, there are 335,000 tank cars in circulation, with 92,000 of them used to move flammable liquids. Tank cars are typically owned or leased by rail customers.
"We are doing it safely, but it would be safer if we went to more robust tank car," Hamberger said. But he cautioned regulators and others from trying to move too fast before a determination is made on manufacturing capacity and parts availability to meet demand for the upgraded cars.
Earlier this month, Tesoro announced it will replace its fleet of DOT 111 tank cars and move up to AAR-sanctioned tank cars by the middle of the year. It also said the new rail car design will be one of the factors it considers when deciding on business partners who may ship crude oil into company-owned facilities, including its refinery and proposed distribution terminal in Washington state.
"Tesoro is committed to the safe and environmentally sound handling of crude oil. The safe design of rail cars in crude service is of paramount importance," Keith Casey, senior vice president of strategy and business development, said in a statement. "We're proactively making these commitments today, before expected changes in future federal regulations, because we believe it's the right thing to do for all of our stakeholders."
The American Petroleum Institute, which has participated in the meetings with DOT officials, on Friday issued a statement saying it has assembled top experts to develop a comprehensive standard for testing crude oil, loading and unloading.
“We are committed to using the best science, research and real-world data to make measurable improvements to safety. A holistic approach based on sound science and data will ensure that any changes to existing standards and practices achieve real safety improvements and do not shift risk to other areas. It is critical that our actions actually improve safety and reduce risk,” it said.