Rail Executive Blasts Oil-Train Rules

Wall Street Journal | May 5, 2015 | Column by Laura Stevens

Norfolk Southern CEO says regulations could make oil-by-rail prohibitively expensive

Railroad industry plans to petition for a reconsideration or challenge in court U.S. oil-train safety rules. PHOTO: RUSSELL GOLD FOR THE WALL STREET JOURNAL

Norfolk Southern Corp. Chief Executive Charles W. “Wick” Moorman said that the rail industry will challenge the federal government’s new crude-by-rail rules, adding regulators have “made some serious mistakes in the regulations.”

The new safety rules could make shipping crude oil by train prohibitively expensive, Mr. Moorman said in an interview on Tuesday.

“At a certain point, the economics are such that you can’t justify shipping the oil. The price to get it to the refinery is too high and the downside of that is that it will throttle the journey toward energy independence in this country,” Mr. Moorman said.

On Friday, the U.S. Department of Transportation called for installing new braking systems on trains hauling more than 70 cars of crude oil by 2021. The final rule was issued last week and regulations will be phased in over several years. They also would require upgrades and other changes for tank cars hauling oil and other flammable liquids.

In some respects, the new tank car standards don’t go far enough, Mr. Moorman said. For instance, they require thermal wraps that could prevent a tank car from exploding for 100 minutes during a fire, versus an industry suggestion of 800 minutes. Though the industry generally agrees that hauling crude oil in older tank cars isn’t safe, the new rules allow shipments in any kind of tank car, provided it is in less than a block of 20 tank cars or fewer than 35 tank cars total, he said.

The new brake requirement took the rail industry by surprise, he said. The Norfolk, Virginia-based company is one of a handful of major railroads operating in the U.S. It has most thoroughly tested the newly mandated electronically controlled pneumatic brakes, Mr. Moorman said.

“It is very expensive, it doesn’t work well,” Mr. Moorman said. “We are committed to safety. The last thing in the world we want is a derailment…this technology just doesn’t do anything.”

And it puts the railroads in a difficult spot for a couple of reasons. For starters, railroads don’t own the vast majority of tank cars so have no control over whether the costly new brakes are installed. Moreover, the brake requirement isn’t a mandate for tank car owners, only railroads.

If tank cars aren’t equipped with the new brakes by 2021, oil trains will either have to be reduced to a maximum of 69 tank cars or to a maximum speed of 30 miles an hour, Mr. Moorman said. Either choice would “eat up an enormous amount of capacity,” Mr. Moorman said. Railroads would have to build new tracks and infrastructure to handle the slowdown or extra trains. “Even if you have two tracks, running at 30 mph, you’ll never get there,” he added.

The Association of American Railroads said the new braking rule would apply to about 70% of oil trains. Mr. Moorman said the brake requirement could cost railroads billions of dollars when factoring in added infrastructure if tank car owners don’t install the brakes.

Mr. Moorman said he is sure the industry will petition the Transportation Department for reconsideration or challenge it in court. “There is a lot of discussion going on in the industry about how to challenge this,” Mr. Moorman said. “I’m sure it will be challenged.”

On Friday, Transportation Secretary Anthony Foxx said that if the rule was challenged in court, “we believe strongly that our rule will stand up.”

The Transportation Department estimates that the rule will cost the railroad industry $2.5 billion over 20 years, and save between $912 million and $2.9 billion due to fewer accidents. Industry officials said the government estimate doesn’t account for the cost of brake installations and other expenses.

Write to Laura Stevens at laura.stevens@wsj.com

http://www.wsj.com/articles/rail-executive-blasts-oil-train-rules-1430860808

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PAUSE, People of Albany United for Safe Energy
PAUSE is a grassroots group of individuals who have come together to promote safe, sustainable energy and fight for environmental justice. We engage the greater public to stop the fossil fuel industry’s assault on the people of Albany and our environment.