Is There Meaningful Progress in Improving Rail Tank Car Safety?

Rail companies and some shippers appear to be finally taking concrete steps to improve the safety of rail tank cars, under tremendous pressure from the Federation of Canadian Municipalities, some provincial and state politicians, Transportation Safety Board (TSB) of Canada, U.S. National Transportation Safety Board (NTSB), rail safety experts, environmental groups, the general public, and even some tank car manufacturing companies, who consistently have been demanding action now rather than later. It appears that the recent spate of derailments of oil and other dangerous products, including spills, explosions, fires, loss of many lives, significant environmental damage and destruction of property has forced those in charge to finally wake up.

Feeling the brunt of the mounting rail safety criticisms, Canadian National Railway and Canadian Pacific Railway have recently added surcharges on customers who ship crude oil in the older model DOT-111 tank cars which have been known for decades to puncture easily during derailments. The move is expected to induce shippers to upgrade to newer tank car models. Burlington North Santa Fe (BNSF) Railway has recently invited bids from manufacturers for 5,000 new tank cars made to new specifications that aim to make them safer than the voluntarily upgraded tank cars that the NTSB suggests are not safe enough. A number of oil companies and refiners, including Irving Oil Limited, Tesoro Corp. and PBF Energy Inc., have recently taken initiatives to voluntarily phase out the DOT-111 cars, rather than wait for the Canadian and U.S. governments to pass legislation and regulations.

The NTSB and TSB have issued many recommendations over the past 2 decades about improving the safety of the flimsy DOT-111 tank cars. Unfortunately, neither of these agencies has the power to implement any of their recommendations. And, the Canadian and U.S. federal government regulators – Transport Canada and U.S. Department of Transportation – have not responded in any meaningful ways to these continuous warnings. It may take years, according to some rail safety experts, for the 2 federal governments to pass legislation and regulations to force rail companies and shippers to seriously address tank car safety. The most the Transport Canada Minister appears to be able to say is, “the health and safety of Canadians remains our priority”, while the U.S. Department of Transportation said in a statement that safety was its top priority and that it was already acting on NTSB recommendations (which others argue it is not).

At the same time that some rail companies and a few oil companies and refiners are voluntarily moving forward to phase out the DOT-111 cars, it appears the majority of the oil industry is balking at the proposed improvements to tank car safety. For example, the Canadian Association of Petroleum Producers (CAPP), which is a lobby group for oil and gas companies, favours what they call “practical” steps to improve rail tank car safety, and “looks to governments to ensure the implementation of safety standards interrupts service as little as possible and that transporting our products by rail remains a competitive transportation option.” Calgary-based Cenovus Energy considers new safety regulations as a risk factor and said additional rail safety rules “could adversely affect our ability to ship crude oil by rail or the economics associated with rail transportation.” So, while rail companies and a few oil companies and refiners are finally willing to address tank car safety, the majority of the petroleum industry (at least in Canada), is clearly more concerned about the bottom line than the safety of people and the environment.

The attitude of the petroleum industry, save the few companies who appear serious about improving rail safety, is worrisome. If the only reason that transporting crude oil by rail has been economical to date is because serious – and expensive – safety issues have not been properly addressed, perhaps crude oil should not be transported by rail. What are human lives and a healthy environment worth in dollars and cents?

Rail safety experts continue to argue that Canada and U.S. federal regulators must pass legislation and regulations as soon as possible to ensure that voluntary measures taken by rail companies and a few oil companies and refiners, today, are not watered down in the future, under pressure from shareholders as the costs of improving rail tank car safety are added to the ledger.

Sources for this story include: Edmonton Journal, Global Post, The Suburban Newspaper, Reuters 1, Tribtown, Righands, Reuters 2, Prairie Business, CBC News, Bloomberg News). See this link for more information on the risks of transporting  oil and other dangerous goods by rail.

~ by railroaded on March 2, 2014.