January 31, 2014 / 3:31 PM / 3 years ago

FACTBOX-Accidents in North America draw attention to safety of oil tank cars

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Jan 31 (Reuters) - A series of accidents in the booming North American crude-by-rail business has
forced regulators and the industry to re-examine the safety of tank cars that carry oil.
    But the different segments of this business hold divergent views on what standards should be adopted to
ensure the aging fleet can safely handle the new and growing demand. This factbox compares positions held
by railroads, the lobbying group representing tank car builders and the group representing oil producers
and shippers when it comes to tank car design.
    Train cars known as DOT-111s are at the heart of the recent growth in crude-by-rail shipments. Last
year they ferried more than 780,000 barrels of oil a day, or about 10 percent of U.S. production, according
to the Association of American Railroads (AAR).
    Yet railroads, shippers and regulators had long recognized that DOT-111s, which also carry ethanol,
often fail during accidents. The cars are more likely to spill their hazardous cargo and catch fire,
according to documents dating back to the early 1990s, when the U.S. National Transportation Safety Board
(NTSB) noted their repeated failure.  
    In March 2011, AAR submitted a petition (P-1577) to the U.S. Department of Transportation with design
standards that would ensure these train cars could survive accidents without releasing hazardous materials.
    The petition made recommendations on many aspects of tank car design, from the material for their outer
shells to protective shields and covers for "top fittings" through which liquid cargo is loaded and
    In August 2011, the association went a step further and issued a circular (CPC 1232) that required the
adoption of these standards for all cars ordered after October 2011 that would carry crude oil and ethanol.
    However, AAR's recommendations did not apply to the existing fleet of tank cars that were carrying the
same hazardous cargo. The industry balked because of the high cost of retrofits and the weight the new
design could add to the cars.
    But that changed last summer when an unattended freight train carrying oil from the Bakken shale in
North Dakota derailed and exploded in Lac-Megantic, Quebec, killing 47 people and decimating much of the
small town. 
    In September, the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a
rulemaking document to revise its hazardous materials regulations as they apply to shipping crude by rail.
The document, called an Advance Notice of Proposed Rulemaking, was the regulator's first step to revise its
existing rules on DOT-111 cars. Besides outlining eight industry petitions and four NTSB recommendations,
it solicited comments from interested parties.
    In response, the railroads called for even more stringent standards than those in effect since 2011.
Less likely to shoulder the costs, they stressed the need to retrofit or phase out all cars that do not
meet those standards.
    The Railway Supply Institute, which represents tank car manufacturers and lessors, agreed to some of
the retrofits AAR suggested but said owners should be able to modify, repurpose or retire cars over a
10-year period. The institute estimates only a third of the nearly 39,000 DOT-111 tank cars that carry
crude oil meet the Association of Railroad's 2011 standards.
    On behalf of oil producers and shippers, the American Petroleum Institute (API) requested more studies
into retrofit options before final rules are in place. 
    The comment period on the PHMSA's rule making document ended on Dec. 5. 
    The table below compares the different positions taken by the railroads, in 2011 and last year, as well
as changes proposed by RSI. The API declined to clarify its position beyond what was outlined in a Dec. 5
letter it submitted to regulators.

                          AAR position as stated in  AAR position Nov. 2013        RSI position Dec 2013
                          P-1577 and CPC-1232                                      
 Tank car material--      Tank car heads and shells  No change                     No change 
 shells and heads         must be made of                                          
                          normalized steel (TC 128                                 
                          Grade B steel or A5l6-70                                 
 High-pressure relief     No provision               Cars must be equipped with a  Similar to AAR Nov 2013
 devices                                             reclosing                     position 
                                                     high-pressure-relief valve.   
 Top-fitting protection   Top fittings must be       No change                     No change 
                          covered with a protective                                
                          structure as tall as the                                 
                          tallest fitting.                                         
 Puncture resistance--    Metal jackets are          Metal jackets are mandatory   RSI supports both
 jackets                  optional.                  for all tank cars.            jacketed and
                                                                                   non-jacketed designs.
 Puncture resistance--    Half-height head shields   Full-height head shields are  Trapezoidal or
 head shields             allowed                    mandatory.                    conforming half-height
                                                                                   head shields
 Thermal protection       No provision               Thermal protection needed,    None. RSI says thermal
 (fire resistance)                                   no specific recommendations   protection is already
                                                                                   provided by new features
                                                                                   that protect tank cars
                                                                                   in the event of a crash
                                                                                   and by the added high
                                                                                   capacity pressure relief
 Bottom outlet handles    No provision               Configure bottom outlet       Similar to AAR November
                                                     handle to prevent opening in  2013 position 
                                                     the event of an accident      
 Existing fleet built     Regulations apply to new   Cars can remain in service    Similar to AAR November
 after October 2011       fleet built after October  for their full operational    2013 position 
                          2011.                      lives so long as they are     
                                                     retrofitted with high flow    
                                                     capacity pressure relief      
                                                     devices and bottom outlets    
                                                     that do not open in the       
                                                     event of an accident.         
 Existing fleet built     Does not apply             Aggressive retrofitting and   Car owners should have
 before October 2011                                 phasing out schedule for      option to modify,
                                                     cars that cannot meet the     repurpose or retire cars
                                                     retrofit requirements         over a 10-year period.
                                                                                   Retrofitting program
                                                                                   includes trapezoidal/
                                                                                   conforming half-height
                                                                                   head shields, modified
                                                                                   top fittings protection,
                                                                                   pressure relief valves,
                                                                                   and Blowoff Valve (BOV)
                                                                                   handle modification.
 New tank car             Does not apply             Differentiate between         No provision
 classification                                      baseline DOT-111 cars and     
                                                     new tank car specifications   
 (Writing by Selam Gebrekidan; Editing by Lisa Von Ahn)

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