Disasters

The Bad Oil Boom: Train Explodes in Virginia Town While Regulators Chug Along


CSX tanker cars carrying crude oil are in flames after derailing in downtown Lynchburg, Va., on April 30

Photograph by LuAnn Hunt/City of Lynchburg via AP Photo

CSX tanker cars carrying crude oil are in flames after derailing in downtown Lynchburg, Va., on April 30

A CSX (CSX) train carrying crude oil derailed Wednesday afternoon in downtown Lynchburg, Va., prompting the evacuation of some 300 people. Six cars went off the tracks, and local news reports cite at least three breaches on a train carrying between 12 and 14 tank cars loaded with crude.

Early videos and pictures posted by onlookers show plumes of black smoke billowing up from the crash. No injuries have been reported yet, although witnesses described a floor-shaking explosion that sent a fireball almost 200 feet into the air. Early news reports indicate that oil has spilled into the nearby James River, which flows into the Chesapeake Bay. Cities downstream are switching to alternate sources of water.

The derailment is the latest in a series of oil train explosions in the U.S. and Canada over the past several months. As the U.S. oil boom has cranked up, trains have become the preferred mode of transport for much of the oil industry. In the third quarter of 2013, trains carried 93,312 carloads of crude oil, or about 66 million barrels—about 900 percent more than in all of 2008. Much of that crude is coming out of the remote Bakken region of North Dakota.

Over the past year, that oil has begun to make its way to the East Coast by rail, which is where a number of the recent derailments have occurred. It’s unclear where the CSX train was headed, and requests for comment from the company were not immediately returned. Given the company’s network of tracks in Virginia, one likely destination could be the Tidewater area, where it could be loaded onto barges and sent to ports along the East Coast.

Source: Trainweb.org

Even before the latest mishap in Lynchburg, federal regulators were wrestling with how to make crude-by-rail safer and taking fire from critics who believe officials have been too slow to act. This latest explosion will likely increase the pressure to enact new rules quickly. Revised rules have been making their way through the federal bureaucracy that governs the rail industry. Proposals for how to improve safety have been around since at least 2012, when the National Transportation Safety Board suggested crude oil should travel in upgraded tank cars with thicker, more puncture-resistant walls and sophisticated relief valves. But the NTSB can only make recommendations—it’s up to the Department of Transportation to pass final rules.

The derailment comes as Transportation Secretary Anthony Foxx is preparing to send his list of “options” on crude-by-rail safety to the White House Office of Information and Regulatory Affairs. From there, the industry will have a chance to comment before any final rules are enacted. The deadline for new rules doesn’t come until the end of the year, but DOT officials say they’re hoping to be done before then. President Obama has the authority to circumvent this entire process and issue what are called interim final rules, but he has yet to indicate a willingness to do so.

One of the biggest areas of debate concerns the quality of tank car used to transport crude. The DOT-111 class tank car (PDF) has been involved in most of the crude-train explosions, including the one last summer in Quebec that killed 47 people. Although it’s widely deemed unfit for transporting crude, the DOT-111 is used to move the vast majority of oil sent by train in the U.S. It’s also the same classification of car that’s used to haul agricultural commodities such as corn or soybeans. Foxx has said in the past that he thinks the DOT-111 is going to “have to be either retrofitted or replaced.”

Last week, Canadian regulators aggressively moved to phase out all DOT-111s from hauling crude within three years. While the railroad industry is generally in favor of the shift, the oil industry has been less enthusiastic about absorbing the cost of leasing stronger tank cars. It’s also unclear whether alternate styles of tank cars would be any safer in the event of a crash. A handful of oil companies, however, such as Tesoro (TSO), have begun to phase out the DOT-111 and lease more robust cars.

Another issue has to do with how oil trains are routed. Currently, oil trains are not subject to the same strict routing requirements placed on other hazardous materials. So while trains carrying chlorine are barred from travel through the middle of cities, trains carrying crude can pass through downtown Lynchburg. Rerouting crude trains around towns, however, would require railroad companies to coordinate and perhaps share revenue, since the safest route might be on another company’s network.

Finally, there is the issue of the crude itself. It’s become increasingly apparent that the crude coming out of the Bakken contains particularly high levels of propane and methane, making it far more flammable than typical blends of oil. Often, first responders are unable to put out the fires resulting from crude-train explosions and are left to simply watch it burn out.

Philips_190
Philips is an associate editor for Bloomberg Businessweek in Washington. Follow him on Twitter @matthewaphilips.

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  • CSX
    (CSX Corp)
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