Damaged rail cars enjoy lenient rules as oil train explosions plague small towns

By Blake Sobczak | 02/18/2015 08:42 AM EST

Rail cars hauling crude oil have had a bumpy ride over the past few years. From Quebec to Virginia, the extreme forces of crude-laden tank car collisions in recent years have split steel like an orange rind. On Monday, another milelong CSX Corp. oil train derailed and caught fire near Montgomery, W.Va., destroying a home and forcing hundreds of people to evacuate. But more often than not, damaged rail cars don’t cause a disaster. And sometimes those damaged cars are attached to the end of another long oil train heading in the same direction.

Rail cars hauling crude oil have had a bumpy ride over the past few years.

From Quebec to Virginia, the extreme forces of crude-laden tank car collisions in recent years have split steel like an orange rind. On Monday, another milelong CSX Corp. oil train derailed and caught fire near Montgomery, W.Va., destroying a home and forcing hundreds of people to evacuate.

But more often than not, damaged rail cars don’t cause a disaster. And sometimes those damaged cars are attached to the end of another long oil train heading in the same direction.


To get cars to the repair shop, shippers plug leaks and seek a special "one-time movement approval" from the Federal Railroad Administration. In other words, they keep moving a damaged oil tank car on the tracks toward its destination. The agency rarely rejects a one-time movement request, according to records.

Instead, the agency will "work with the requestor to ensure the information provided is complete and accurate and that appropriate safety measures are taken prior to moving the cars."

The result? No damaged cars approved for one-time movement leaked any hazardous materials or caused any injuries last year, according to FRA.

While that safety record keeps the agency out of the cross hairs of members of Congress or angry local officials, questions are being raised about a policy that allows cars with significant damage to travel on tracks that pass through hundreds of small American towns. Some of those cars still contain crude oil and other hazardous materials.

Flush with oil

Train crews spotted the first leak on the border of Idaho and Washington last month.

Oil had stained the side of one of 97 tank cars hauling crude from the Bakken Shale play in North Dakota. BNSF Railway Co. employees took the car out of service on Jan. 11 as the rest of the train rumbled past tiny Hauser, Idaho — a pit stop in the "virtual pipeline" linking oil-rich North Dakota to West Coast refineries via rail.

By the time the train reached Vancouver, Wash., the next day, six more cars had sprung leaks and were pulled aside. On Jan. 13, yet another seven cars were found to have spilled crude in Auburn, Wash., about 100 miles south of the train’s final destination, a refinery in Anacortes run by Tesoro Corp.

In all, a few dozen gallons of crude had slopped over the tops and edges of the 14 cars, but no oil ever reached the ground, according to BNSF.

The damaged cars weren’t stopped for long. After rail workers plugged the leaky valves and cleaned the outside of the 14 tankers, they hit the tracks again, still full of crude and as yet unrepaired.

The oil-laden cars were cleared to move under an obscure but growing popular exemption to federal hazardous materials rules: the One-Time Movement Approval (OTMA).

Permit in hand, shippers such as Tesoro Corp. can legally move cracked, dented or overweight tank cars to their end destinations before getting repairs.

"One-time movement, that is something that we’re very interested in because in those cases, we’re dealing with something where there’s already been a problem," said Jason Lewis, transportation policy adviser for the Washington Utilities and Transportation Commission, which is investigating last month’s series of spills en route to Tesoro’s refinery.

But with only one rail hazardous materials inspector, and four inspectors total for all aspects of rail safety in the state, Lewis said his department is limited in how it approaches OTMAs.

"We would like the ability to have inspectors there to make sure that everything that’s being done is in the public interest, for public safety," he said.

The popularity of "one-time" approvals for DOT-111s — the kind of aging tank cars often used to ship crude oil — mirrors the rise in crude-by-rail shipments, which were practically nonexistent in 2007 but were on track to hit 500,000 tank carloads in 2014, based on preliminary industry data.

Crude-by-rail’s sudden rise has exposed gaps in Department of Transportation oversight in the past.

Loose wording in DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) guidelines allowed railroads to move millions of gallons of oil without preparing a comprehensive emergency spill response plan (EnergyWire, April 22, 2014).

PHMSA is working to close that loophole and has separately sent a sweeping oil-by-rail safety rule to the White House for review (EnergyWire, Feb. 6).

Regulators have hinted at gaps in their oversight of one-time approvals to move cargo, as fuel logistics firms such as USD Group and Musket Corp. increasingly turn to the once-obscure approval process.

In a 2011 agency meeting, William Schoonover, staff director of FRA’s hazardous materials division, reassured his colleagues that the one-time movement permitting program "has been in place for more than 15 years now without an injury, fatality or release of hazardous materials for shipments moving under an approval."

FRA officials say approvals give regulators a way to gather important data on hazardous material safety practices.

Still, the number of requests — and corresponding approvals — has steadily increased. In 2007, the agency issued 380 approvals for all types of rail cars no longer conforming to federal rules. Four years later, FRA was handling more than 1,000 requests per year. By 2013, FRA issued 564 one-time movement approvals for crude-laden cars alone.

FRA updated its program in 2012 to cut down on the deluge of applications. The reforms established a "standing approval" for certain minor flaws. That means in most cases, shippers don’t have to wait for a written nod from FRA to move tank cars with defective safety valves, dented metal, leaky heating coils (for heavy crude) or bad bottom outlet valves.

Railroad officials flagged concerns about overweight cars in their draft crude-by-rail rule last summer. They noted that the nature of the fuel logistics business — in which "key" trains of 80 cars or more rush from North Dakota to East Coast refineries without so much as stopping for classification at a rail yard — may prevent regulators from tracking tank cars considered too heavy to be safe.

An FRA official said the agency aims to boost reporting of overweight rail cars through "outreach and education." The official noted that an overweight tank car hasn’t necessarily been filled with too much crude by volume. That’s because scales calculate the gross weight of the tank car and its contents — not the weight of the crude alone.

"Be advised, it is the shipper’s responsibility to ensure the car is not overloaded by volume and the car complies with [federal hazardous materials regulations]," warned FRA safety specialist Erich Rudolph in a one-time movement approval granted to an undisclosed crude oil shipper on April 29, 2014.

The car in question was 3,900 pounds overweight and had been cleared to move roughly 340 miles from Chattanooga, Tenn., to the Hunt Southland refinery in Rogerslacy, Miss., records show.

The next day, a CSX Corp. train hauling oil derailed and caught fire in Lynchburg, Va., hurting no one but leaking crude into the James River. That train did not include the weighty tank car approved the previous day for a ride on Norfolk Southern Railway.

‘Some manner of defect’

Regulators have pushed for clearer markers on cars moving under one-time approvals in case an accident upsets the process’s pristine record.

"The FRA believes that better identification of rail cars moving under One-Time Movement Approvals (OTMAs) listed on the train consist would provide further benefit to emergency responders as these cars generally have some manner of defect," PHMSA Administrator Cynthia Quarterman noted in a July 16, 2013, letter to experts at the National Transportation Safety Board. Quarterman has since left PHMSA.

NTSB spokesman Eric Weiss said the safety watchdog’s hazmat inspectors "have not come across [OTMA] as a problem."

"Of course, we check the filling history of cars involved in accidents, and we would have noted if they were overfilled or used an OTMA," he added.

Large-scale crude-by-rail shipments were thought to be a temporary business when they began in the late 2000s with the onset of the shale drilling boom. Many analysts figured that pipelines would quickly replace their rolling counterparts in expanding oil patches such as North Dakota’s Bakken Shale formation.

Even as more pipeline capacity arrived, rail shipments still accounted for 59 percent of crude oil leaving North Dakota in November, the most recent data available.

The industry’s continued reliance on decades-old, puncture-prone "beer can" DOT-111 tank cars hasn’t sat well with safety advocates and environmentalists.

"There is clearly an imminent hazard posed by these unit trains and DOT-111 tank cars, yet the DOT has dragged its feet on the one thing it could do to protect public health and safety, which is to ban DOT-111 cars immediately," said Devorah Ancel, an attorney with the Sierra Club.

The DOT has stopped short of ordering a ban on DOT-111s but has recommended avoiding them "to the extent reasonably practicable" (EnergyWire, May 8).

That May 7 safety advisory served as another reminder to crude-by-rail players: Meeting but not exceeding DOT standards may not be enough to earn a safe reputation.

The rail industry has sought to one-up DOT’s base-line tank car rules in the past. In 2011, after two decades of warnings from NTSB officials, a deadly ethanol train crash involving DOT-111s drove the industry to adopt a new, voluntary car design in advance of formal rulemaking.

Since then, tens of thousands of tougher CPC-1232 tank cars have hit the tracks, with many refineries and oil traders phasing out their older fleets in an attempt to burnish their safety practices.

The cars that dripped oil across Washington last month were built to this higher standard, according to Tesoro, which no longer includes older DOT-111s in its fleet.

Tesoro, which obtained one-time movement approvals for the 14 tank cars after they were initially sidelined from the leaks, said it had since removed the entire impacted train from service.

"Once these cars arrived at our Anacortes facility they were offloaded, inspected and removed from service," Tesoro spokeswoman Tina Barbee said in an email. "Additionally, we proactively removed the cars in our fleet that were determined to be of the same build group even though the cars were not found leaking or defective. These cars will remain out of service pending maintenance work."

But despite DOT’s misgivings and safety warnings dating back to 1991, DOT-111 tank cars are still the default choice for many crude shippers. After all, even lightly dented DOT-111s are automatically considered safe to transport under the one-time movement approval process.

"Our intention here is to not do something that’s unsafe, you know," said Robert Fronczak, assistant vice president for environment and hazardous materials for the Association of American Railroads, in a 2011 meeting with federal rail regulators. "I think we’re trying to identify things that are clearly fairly minor and, you know, having the ability to move some of these cars to the closest repair locations is probably not such a bad idea."

Several rail worker unions have been more skeptical in comments to the agency on the issue of one-time approvals to move damaged rail cars. Railroads and shippers will pressure the agency to accelerate the approval process, warned the group, which included the United Transportation Union, in its letter. "Such acceleration will undoubtedly diminish the level of detail and due diligence now afforded each request, resulting in an increased probability of unintended consequences such as fire, explosion, or chemical exposure."

The show must go on

Why don’t railroads in North Dakota’s Bakken, such as BNSF Railway Co. and Canadian Pacific Railway Ltd., simply refuse to move a shipper’s older, riskier DOT-111s full of crude?

The short answer: It’s illegal.

As long as a DOT-111 is properly packaged, common carrier laws leave railroads no choice but to move the tank car to its destination.

But damaged cars moving under one-time approvals aren’t covered by common carrier obligations. That gives railroads the option of rejecting a car that has been stamped safe by FRA.

Such refusals are rare, officials say. For instance, a railroad might reject an overweight car approved for one-time movement if the car would have needed to pass over a bridge not rated for the heavier load.

"In spite of the FRA approvals, we still have the option to reject them if we think it is unsafe to move in a unit train," said BNSF spokeswoman Roxanne Butler. "The alternative would be to move it with another means, such as loaded on a flatcar."

There are often few alternatives to moving a damaged tank cars to a repair shop. For one, they’re massive. DOT-111 tank cars are more than 50 feet long and weigh over 250,000 pounds when fully loaded.

"Every train goes through a series of inspections as it moves from origin to destination, and if a car has been identified as not being in compliance, it is taken out of service and through the OTMA process eventually transported to a repair facility," said AAR spokesman Ed Greenberg in an emailed statement.

Just once — or twice

Occasionally, one-time approvals play out in two steps: One short movement gets the tank car to where crude can be offloaded, then a second, typically longer-distance approval lets the empty tank car reach the repair shop.

That’s what happened to a DOT-111 tank car hauling crude oil through Buffalo, N.Y., last year.

Tidal Energy Marketing Inc. asked regulators to sign off on the two-time movement of a tank car with a "defective/leaking bottom outlet valve."

After traveling 10 miles, the car would be unloaded in Hamburg, south of Buffalo, before embarking on a 1,025-mile journey to a repair shop in Nebraska.

The agency approved its request but warned, "This approval provides no relief from the regulatory requirement that a hazardous material package offered for transportation retain its contents during transportation."

In regulatory-speak, that means, "You’d better not leak." It’s small comfort to Jean Dickson, a Buffalo resident who lives feet from train tracks operated by CSX Corp.

She said in a recent interview that she regularly sees crude oil, ethanol and other flammable liquids and chemicals pass by her home.

"What’s really worrying is that there’s all kinds of horrible stuff going right through where everybody lives," she said.