* Railcars don't meet industry's latest safety standards
* Crude loaded in North Dakota, bound for Missouri
By Alicia Underlee Nelson
FARGO, N.D., Dec 31 The railcars carrying crude
oil that crashed into a derailed grain train in North Dakota on
Monday were all older types that do not meet the latest industry
safety standards, a member of the National Transportation Safety
Board said on Tuesday.
Robert Sumwalt, who is leading the NTSB's investigation into
the collision of two BNSF Railway Co trains, said the
cylindrical tank cars on the oil train were known as DOT-111s,
which are widely used to move crude and ethanol.
In October 2011, the American Association of Railroads, the
rail industry's trade group, adopted new standards requiring
tank cars manufactured after that date to have thicker hulls and
reinforced valves to better protect against punctures and leaks
in derailments. U.S. regulators also are considering tougher
"Our preliminary information is that none of the cars were
of the newer design," Sumwalt said at a news conference in
Fargo, North Dakota, east of the crash site.
Those details go to the heart of growing debate about
stronger safety measures as the oil-by-rail movement grows in
tandem with the U.S. shale oil boom.
Such measures could include tighter rules for moving highly
flammable types of crude, such as the light-sweet variety
produced in the Bakken shale play, or costly retrofits of older
Monday's crash of the 106-car eastbound BNSF crude train
into a derailed westbound BNSF grain train set off explosions
near a small town west of Fargo, North Dakota, and a fire that
still burned more than 24 hours later.
No injuries were reported, but the crash was among several
explosive derailments in 2013 involving trains hauling oil. The
worst accident by far happened in July in a small Quebec town
when a runaway train derailed and exploded, killing 47 people.
The NTSB has said at least 69 percent of railcars in use
were built before 2011. The rail industry also has said it could
cost $1 billion to retrofit all those railcars to meet the
post-October 2011 standard.
BNSF Chief Executive Officer Matt Rose, who is stepping down
as CEO on Wednesday but will remain chairman, told Reuters in an
interview in November that the company supports phasing out
those older cars over seven years, which allows companies enough
time to build replacements.
BNSF is owned by Warren Buffett's Berkshire Hathaway Inc
Sumwalt said the crude involved in the crash was loaded onto
the train in Fryburg, North Dakota, and was headed nearly 1,300
miles (2,092 km) to Hayti, Missouri.
Sources familiar with the loading operations told Reuters on
Tuesday that Houston-based logistics company Great Northern
Midstream loaded the crude at Fryburg, and it was to be unloaded
at Marquis Energy's storage terminal and barge loading facility
at Hayti, along the Mississippi River.
Great Northern Midstream referred all questions to the NTSB,
and Marquis Energy did not return a call seeking comment. Both
companies are privately held.
Marquis Energy's Hayti operation receives crude via rail,
then transports it via barge to refiners along the river and the
U.S. Gulf Coast.
The U.S. East and West coasts are the major destinations for
railed Bakken crude, as it is cheaper than imports and rail is
the main transport choice because pipeline infrastructure is
The U.S. Gulf Coast market has less demand for Bakken crude
because growing pipeline infrastructure in Texas increasingly
moves burgeoning Texas output - also largely light sweet crudes
that are cheaper than imports - to Gulf Coast refineries.