Bloomberg News

U.S. May Require Stronger Rail Tank Cars for Fracking Crude (1)

September 04, 2013

Rail tank cars, which are moving an increasing volume of crude oil and other hazardous materials, may have to be stronger and better able to withstand a crash, U.S. regulators said.

The Pipeline and Hazardous Materials Safety Administration today took the first step in a rulemaking for what are known as DOT-111 tank cars, a model transportation safety investigators have criticized as rupture-prone. It’s the type of car that was hauling crude on July 6 when a runaway train plowed into Lac-Megantic, Quebec, sparking an explosion and fire that killed 47 people.

“Now is the time to make sure safety regulations are robust enough for the increased hazmat movement on our rails, roads and in our pipelines,” PHMSA Administrator Cynthia Quarterman said in an e-mailed statement.

The agency released the proposal following two decades of criticisms of the tank cars by North American transportation safety investigators, who can recommend rule changes while lacking regulatory authority. The changes PHMSA called for today include more puncture resistance of the head and shell of the cars and stronger top fittings protection. A rule could add cost to transporting crude if it requires more expensive tank cars or cars that can hold fewer gallons of oil.

Fracking Crude

Tank cars are moving an increasing amount of crude as North American production increases through the use of hydraulic fracturing and as rail gains on pipeline in popularity for transporting the liquid.

The volume of crude oil moved by large U.S. railroads more than doubled in the second quarter from the same period a year earlier, the Association of American Railroads said last week. U.S. railroads originated 108,605 carloads of crude in the quarter ended June 30, setting a U.S. record for crude rail shipments in a quarter.

Holly Arthur, a spokeswoman for the Washington-based association, whose members include Burlington Northern Santa Fe LLC, owned by Warren Buffett’s Berkshire Hathaway Inc. (A:US), and Union Pacific Corp. (UNP:US), the largest U.S. railroad by track miles, had no immediate comment.

The U.S. National Transportation Safety Board has investigated rail crashes dating back to 1992 when this type of tank car ruptured. Board Chairman Deborah Hersman last year in a letter to Quarterman said DOT-111s have “inadequate design” and that in investigations over the years, the board found they have “a high incidence of tank failures during accidents.”

Bakken Formation

PHMSA wants to ensure the safe transport of oil produced in the Bakken formation centered in North Dakota, Quarterman said today in a blog post. Last week, she announced the “Bakken blitz” of unannounced inspections of railcars carrying Bakken crude to make sure they’re properly labeled.

“We are also laser focused on the energy boom epicenter -- the Bakken Shale Formation,” she said in today’s post. “Oil production there has doubled in just the past three years, and right now countless workers are building pipeline facilities, hundreds of new trucks are on the road, and many new rail facilities are moving gas and hazardous liquids from the Bakken to locations throughout the country.”

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net

To contact the editors responsible for this story: Bernard Kohn at bkohn2@bloomberg.net; Jon Morgan at jmorgan97@bloomberg.net


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