July 14, 2014 / 10:46 PM / 3 years ago

U.S. oil and rail sector agree on train tanker safety

WASHINGTON, July 14 (Reuters) - Leaders of the U.S. energy and rail sectors have agreed to toughen tanker cars for future oil train cargo and to a schedule to retire older model cars that regulators have deemed unsafe, said two industry sources familiar with the plan.

The agreement, if endorsed by regulators and other industry stakeholders, would clear one obstacle to a comprehensive deal on oil train safety.

The Transportation Department is expected to outline that safety plan before the end of the month.

Rail operators and tank car manufacturers have been pushing for a shell 9/16th inch thick, while the oil industry has said 7/16th inch is sufficient.

The American Petroleum Institute and Association of American Railroads have agreed to split the difference and settle on a 1/2 inch tank car thickness, said two industry sources.

The agreement only pertains to crude oil deliveries and not ethanol or renewable fuels, said one industry source who was not authorized to comment.

API and AAR have also agreed to a schedule to scrap or retool the current workhorse of the rail tanker fleet - the model DOT-111, which government studies have concluded is unfit for carrying volatile crude oil.

Representatives of the AAR and API were not immediately available for comment.

News of the industry deal was first reported on Monday by Bloomberg News. (Reporting By Patrick Rucker; Editing by Steve Orlofsky)

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