TRANSPORT

DOT rule proposal seeks 'new world order' for oil by rail

The Department of Transportation unveiled a sweeping oil-by-rail rule today that seeks to overhaul decades-old tank car standards and curb speeds for "high-hazard" trains.

The proposed rule would give shippers two years to upgrade or retire the "highest-risk" tank cars typically used to haul crude and ethanol.

"We're going to be very clear that we need a new world order on how this stuff moves," Transportation Secretary Anthony Foxx told reporters yesterday.

The older, type DOT-111 car targeted by the rule has become the workhorse of the North American shale oil boom, but it's been involved in spectacular crashes and fires. A 72-car oil train that derailed and exploded in Lac-M├ęgantic, Quebec, last summer killed 47 bystanders.

Foxx said DOT would use the 60-day public comment period "to inform what we do in the final rule," but added that "we will push as hard as we can to get that new world order established."

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Oil companies and tank car manufacturers had lobbied for a more leisurely, 10-year deadline for phasing out older cars after DOT first announced its intentions to draft a rule last September (EnergyWire, Sept. 5, 2013). Executives worry a faster deadline could put the brakes on development in North Dakota's oil patch, which has relied heavily on rail due to a shortage of pipeline infrastructure.

The American Petroleum Institute has said it plans to submit "detailed comments" on the rule to the Pipeline and Hazardous Materials Safety Administration (PHMSA), part of DOT.

"The government can and should take steps to ensure greater safety without stalling the energy renaissance that is creating good jobs, growing our economy and improving America's energy security," API President and CEO Jack Gerard said in a statement.

PHMSA is also considering comments on three options for new tank car standards, one of which is based on existing industry specifications in place since 2011.

The second tank car option would thicken that car's steel shell by an eighth of an inch, while the final option would also add electronically controlled pneumatic brakes and rollover protection.

Environmentalists who have called for requiring pressurized cars for Bakken crude, in addition to an emergency order banning older-model cars, weren't impressed by DOT's proposal. The rule only applies to trains carrying 20 or more cars of flammable liquids and would also seek to cap the speed limit for such "high-hazard" trains at 50 miles per hour. Trains using older-model DOT-111 tank cars could be required to go below 40 mph under the new rule.

ForestEthics campaigner Matt Krogh said in a statement that "the worst of these oil tanker cars are unsafe at any speed -- they should be banned immediately, not years down the line."

Congress reacts

Sen. Charles Schumer of New York, which has seen a surge in oil train traffic through its capital, Albany, welcomed the proposed rulemaking in a statement today.

"For those of us long fighting to phase out the dangerous, crude-carrying DOT-111 tanker cars, our train has finally arrived in the form of much-needed new regulation from the federal Department of Transportation," the Democrat said, calling on DOT to finalize and enforce the rule "as soon as possible."

Sen. John Hoeven (R-N.D.) offered more guarded praise for the proposal. His state sees the bulk of the nation's crude train traffic, and a two-year deadline for retiring or updating many DOT-111 cars could hamper oil production there.

Hoeven said his office "will continue working to bring together all relevant stakeholders to ensure we have common-sense and comprehensive rail safety standards."

North Dakota oil companies have taken issue with DOT's findings that Bakken crude is more volatile than other types.

Today, Foxx said the regulator has "confirmed" that Bakken oil is "on the high end of volatility compared to other crude oils," although DOT's proposal stops short of requiring producers to stabilize the crude before pumping it into rail cars.

API's Gerard dismissed Foxx's claims about Bakken crude volatility as "speculation."

"Multiple studies have shown that Bakken crude is similar to other crudes," he said.

There may be more rules to come amid ongoing investigations of recent oil train derailments and explosions, according to PHMSA Administrator Cynthia Quarterman.

Quarterman called today's notice of proposed rulemaking "one big step forward for the department" but also told reporters that "we are not necessarily done yet with all of the ways that we plan to address this issue."

Reporter Elana Schor contributed.

Twitter: @BlakeSobczak | Email: bsobczak@eenews.net

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