Ethanol needs separate treatment in U.S. rail rules -biofuel groups

WASHINGTON, July 23 Wed Jul 23, 2014 6:35pm EDT

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WASHINGTON, July 23 (Reuters) - The U.S. ethanol industry pushed back on Wednesday against what they called a "one size fits all" approach to proposed federal rules for shipping fuel by rail, saying regulators must distinguish between the often corn-based biofuel and crude oil.

Their calls follow an unveiling by the U.S. Department of Transportation of proposed safety features for new tank cars transporting fuel, and the phasing out of older cars considered unsafe.

Developed in response to a string of fiery railcar accidents involving crude oil cargoes, the new rules would also apply to shipments of ethanol.

Biofuel groups said treating both fuels the same is a mistake.

"We shouldn't be forced to pay the bill for somebody else's problem," said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

Over the last 18 months, at least a dozen trains carrying crude oil have derailed. Six of those accidents led to spills and major fires, and one caused the death of 47 people in Lac-Megantic, Quebec.

The U.S. ethanol industry has about 29,000 railcars in its service. The average age of its fleet is nine years old, with each car expected to be in service for 40 to 50 years.

Shaw said his group supports additional regulations to strengthen railcar safety, especially measures that would help prevent accidents, but that new rules should take into account the differences between ethanol and crude oil.

Ethanol is less volatile as crude oil, is biodegradable and has a 99.997 percent rail safety record, according to the national Renewable Fuels Association.

"Unlike oil from fracking, ethanol is not a highly volatile feedstock of unknown and differing quality and characteristics being shipped to a refinery for commercial use," said Bob Dinneen, president of the RFA.

The groups acknowledged that rail transport of ethanol does not come without risks.

In 2009, a train carrying ethanol derailed in Cherry Valley, Illinois, and caught fire, killing a person in a car nearby and injuring several others.

After that accident the National Transportation Safety Board in 2012 recommended safety improvements for certain railcars transporting ethanol and crude oil.

Shaw said the government should look at what makes sense for ethanol as opposed to "one size fits all." (Reporting by Ayesha Rascoe; Editing by Ros Krasny, Bernard Orr)

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