Norfolk Southern to ask customers for legal protection against older cars

June 26 Thu Jun 26, 2014 8:56pm EDT

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June 26 (Reuters) - Norfolk Southern Corp said it would require its customers to give the railroad company legal protection against damages caused by explosions or leakage of hazardous materials carried in older tank cars, The Wall Street Journal reported on Thursday.

According to the report, the company has notified its customers that the legal protection would cover losses, damages, court costs, and costs of environmental cleanup and remediation, emergency response and evacuations, judgments, fines and penalties. (on.wsj.com/1m2rQZC)

Norfolk Southern said the legal protection, which applies to older DOT-111 tank cars built before late 2011, would take effect on July 15, the newspaper reported.

Norfolk Southern was unavailable for comment outside regular U.S. business hours.

A series of accidents on rail tank cars carrying crude oil has put the workhorses of the oil industry under scrutiny, and U.S. and Canadian regulators are carving out new rules on how to build them.

In April, Canadian authorities ordered the phase-out of older rail cars, partly in response to the explosion and fire on a train carrying Bakken crude that killed 47 people in Lac-Megantic, Quebec, last July.

While the DOT-111 model has long been the workhorse for oil-by-rail shipments in North America, most stakeholders agree it is outdated. A tougher tank car design known as the CPC-1232 has been the industry standard since 2011. (Reporting by Soham Chatterjee; Editing by Leslie Adler)

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