(Bloomberg) — Almost two years after an unattended oil train derailed and exploded in Quebec, killing 47 people, the U.S. and Canadian governments jointly set new rules designed to make railroad tank cars safer.
Cars built after 2015 must have thicker steel walls, more protection at the ends, tougher valves and other safety features to reduce the risk of punctures. Tankers now in use would be phased out on a staggered schedule depending on the type of car and the flammability of the commodity carried.
The rules are a "significant improvement over the current regulations," and will make hauling crude by rail safer, U.S. Transportation Secretary Anthony Foxx said in a statement.
While regulators had advanced interim measures like speed restrictions, the rules announced Friday are more sweeping in scope and will place tougher requirements on the industry, particularly on companies that own the tank cars, including oil producers and leasing businesses like GATX Corp. in Chicago.
Shipments of crude oil by rail have increased by more than 4,000% since 2009, though have leveled off recently as a decline in oil prices has curtailed the oil production boom.
The long-anticipated rules primarily come in response to the Lac-Megantic, Quebec disaster, in which a train broke from its moorings late one night in July 2013 and rolled into the city's downtown, sparking an explosion that sent massive fireballs hundreds of feet in the sky. Other fiery accidents in both Canada and the U.S. that didn't cause fatalities further underscored the risks of hauling crude by rail.
Oil Shipments
Government efforts to impose new standards sparked a lobbying campaign by various groups: the railroads that haul the oil, the companies that build and own the tank cars, and the oil producers that have increasingly relied on railroads to ship crude to market.
They are defending a crude-by-rail business that has grown along with U.S. oil production in places like the Bakken formation in North Dakota where pipelines are lacking or don't offer access to the right market.
Accidents — including four this year in the U.S. and Canada — have shaken the towns and cities bisected by the trains, which can stretch for over 100 cars filled with more than 3 million gallons of oil.
"This stronger, safer, more robust tank car will protect communities on both sides of our shared border," Canadian Minister of Transport Lisa Raitt said in a statement.
Electronic Brakes
Safety investigators have known for years that older tank cars known as DOT-111s are prone to rupture even in low-speed accidents. The new rules require the DOT-111s to be replaced or retrofitted by Jan. 1, 2018, in the U.S. and by May 1, 2017 in Canada.
Spills in West Virginia, Illinois and in the Canadian province of Ontario also showed flaws with newer model CPC-1232s, that the industry began building in 2011. Those cars face retrofit deadlines starting in April 2020 under the new rules.
The rules also require electronically controlled brakes that stop cars simultaneously rather than sequentially by 2021 for trains with 20 or more tank cars linked together or 35 cars in total that are filled with the most volatile type of crude, including from North Dakota's Bakken formation.
Lawmakers had been pressing the U.S. Transportation Department to raise standards for the rail cars. And even before the release of the rules, there were indications that some members of Congress thought the regulations would be inadequate.
A bill introduced Thursday by a group of Senate Democrats would place a $175 shipment charge on older DOT-111s to discourage their use.
"It's time for the Department of Transportation to push faster and more aggressively to make oil-by-rail transportation safer," Senator Ron Wyden, an Oregon Democrat, said in statement.
Senator Maria Cantwell, a Washington Democrat, has also called on regulators to set new standards designed to remove some of the more explosive elements of the oil before its shipped by rail.
The new rules released Friday don't address oil volatility.
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