Proposed Oil Train Rules: The Good, The Bad and The Ugly

On July 23, the federal regulatory agencies in charge of oil trains released the details of a rulemaking proposal to improve the safety of moving large quantities of flammable materials by rail, particularly crude oil and ethanol. Oil trains have been the subject of increasing worry after five separate derailments in the past year unleashed towering infernos. The recent announcement opened up a sixty-day comment period after which the US Pipeline and Hazardous Materials Safety Administration (PHMSA) will issue a set of final rules.

In our judgment most media coverage of the proposed regulations has been rather credulous, overlooking several important dimensions and ignoring some glaring flaws. (One counterexample is Joel Connelly’s coverage at Seattle P-I.) So to correct the record, here is Sightline’s take on the good, the bad, and the ugly in the new proposed tank car standards.

The Good

• The proposed rules have been released sooner than expected. Many industry observers speculated that this rulemaking process, which started in September 2013, would drag on much longer.
• The draft rules are fairly comprehensive, addressing many of the unique safety issues of unit trains carrying oil or ethanol, including questions about how oil producers classify their crude, how train braking systems operate, how emergency responders are to be notified, emergency response planning, rail routing, and train speeds. Among the most closely watched issues are rules that will set standards for new-built and retrofitted tank cars.
• PHMSA concurrently released a report summarizing an analysis of Bakken crude oil. Unsurprisingly, the federal data show that crude oil from the Bakken region in North Dakota tends to be more volatile and flammable than other crude oils. The new findings contradict recent assertions by the American Petroleum Institute that, based on their private studies, Bakken oil is no different from other flammable liquids commonly shipped in DOT-111s and that therefore there is no need to change tank car standards, which incidentally would increase their costs.
• The feds propose to create a new improved tank car classification, DOT-117, for transporting Class 3 flammable liquids in unit trains.

The Bad

• The rules only apply to a “high-hazard flammable train” (HHFT), which is defined as a unit train comprised of 20 or more carloads of a Class 3 flammable liquid. If the rule is approved as drafted, it would still be legal to transport around 570,000 gallons (the equivalent of the fuel carried by seven Boeing 747s) of volatile Bakken crude in a train composed of 19 unsafe legacy DOT-111 tank cars—and none of the other aspects of the new rules, including routing, notification, train speed, and more would apply.
• Instead of proposing a single tank car standard based on the best available science, the proposed rule sets out three options for comment. Option 1 was developed by the federal agencies, option 2 was developed from a recent railroad industry proposal, and option 3 is based on an upgraded tank car currently being built and what the oil industry has preferred. These can be described as best, better and fair improvements over legacy DOT-111 tank car standards. Option 3 would have a tank car shell of just 7/16” (versus the 9/16” recommended by federal safety investigators).

The Ugly

• The rules do not propose an immediate ban on unsafe legacy DOT-111s. Legacy DOT-111 tank cars will be allowed to haul Bakken crude and other highly dangerous liquids until October 1, 2017. That is three years from now—not two years, as many media outlets blithely reported based on misleading language in the USDOT announcement—but more than three full years. Between now and then, every single movement of Bakken crude in trains with legacy DOT-111 tank cars needs to be perfect. There is solid evidence that in a major derailment the well-documented weakness of these older tank cars will “inevitably,” in the words of expert analysts, puncture the tank cars and spill the crude oil within.
• Less dangerous flammable liquids will be allowed in legacy DOT-111s until 2018 (Packing Group 2) or 2020 (Packing Group 3).
• Bottom outlet valves are allowed on tank cars. The US National Transportation Safety Board (NTSB) has found that these valves “have been prone to failure in derailment accidents.” It’s a risk that has been recognized for many years. In fact, based on NTSB recommendations, members of the Chemical Manufacturers’ Association voluntarily upgraded the tank cars hauling hazardous chemicals (DOT-105 and DOT-112 tank cars) in the early 1990s to eliminate bottom outlet valves because of their inherent danger. Yet in this case, federal agencies are weighing the cost concerns of the oil-by-rail industry and opted not to propose elimination of bottom outlet valves.