Thune urges White House to delay tank car safety rules

WASHINGTON – An Obama administration effort to boost the safety of tank cars used to transport crude and other materials by train could disrupt the country’s already congested rail network if an unrealistic proposal is allowed to go forward, the head of the powerful Senate Commerce, Science and Transportation Committee said Wednesday.

Sen. John Thune, R-S.D., who chairs the Senate panel that oversees the country’s railroads, said the government was moving too quickly with a proposal for phasing out or retrofitting older freight-rail tank cars known as DOT-111 that carry crude oil and ethanol. The Transportation Department is to finalize the regulations on May 12, before giving the rail industry two years to comply.

“Without question, we must improve the safety of our nation’s rail system, but I am concerned about the unattainable deadlines the rule proposes,” Thune said. “The DOT issued this proposed rule without analyzing the potential tank car shop capacity needed to retrofit or replace over 100,000 DOT-111 tank cars.”

The Transportation Department has estimated the rule could cost as much as $6 billion and result in delays on the country’s rail network and out-of-service time for rail equipment. The American Petroleum Institute, a critic of the plan, said last year the change could cost consumers as much as $45.2 billion unless it is relaxed.

API, which represents the oil industry, and the trade group representing the railroads have argued there is not enough capacity to retrofit the estimated 143,000 tank cars with thicker walls that would need to be modernized to meet the new safety specifications. They also contend tank manufacturers could not build cars quickly enough to meet the crude-oil industry's already growing need for additional cars.

Chris Jahn, president of The Fertilizer Institute, the trade group that represents the crop application, told the Senate panel the new crude oil standards proposed by DOT could affect shippers of other commodities that depend on the railroads to move their products. A proposal to impose speed restrictions also would add congestion to an already overburdened network.

These rules could “have the unintended consequence of crowding out shop capacity for maintenance required for other cars,” he said.

Jahn added that all fertilizer shipped across North America touches the rail transportation system at some point. Farmers have a narrow window to apply fertilizer to their crops, and a failure to receive it on time would lead to depressed yields for crops and potentially higher food prices for consumers, he said.

The safety of thousands of older tank cars has come into question following a number of train accidents involving cars carrying crude and other flammable materials, much of it from the Bakken Oil Field that is transported through South Dakota and other states. About 70 percent of crude oil shipped to refineries from the Bakken Shale Formation in North Dakota and Montana -- and 70 percent of ethanol shipped to refineries -- is transported by rail, according to the American Fuel and Petrochemical Manufacturers, a trade group representing 120 U.S. refineries.

In July, 2013, a train derailed and exploded in Lac-Megantic, Quebec, killing 47 people. Five months later, the derailment of a mile-long train in eastern North Dakota prompted authorities to ask 2,400 residents of Casselton to evacuate.

Sen. Ed Markey, D.-Mass., said the increase in oil shipments by rail has resulted in an increase in accidents, with a record 141 unintentional releases reported in 2014. He chided the Transportation Department for moving too slowly to implement the new safety rules.

“The longer we delay the more lives that are actually in danger,” Markey said. “It’s critical for us to get some certitude in terms of what the new rules are going to be.”

David Brown, chief operating officer of Genesee & Wyoming Inc., a company that operates 116 railroads including the Rapid City, Pierre and Eastern Railroad in South Dakota, said it supported implementation of the new tank car standards. Already, Genesee & Wyoming uses safety precautions depending on the type of hazardous material being transported, volume and the condition of the track.