(Recasts with background on Lac-Megantic explosion and other
By Patrick Rucker
WASHINGTON, April 1 The U.S. oil industry is not
sharing important data on oil-by-rail shipments that may help
prevent accidents, a top regulator said on Tuesday, adding
pressure to an industry already being scrutinized in the wake of
several fiery derailments.
Regulators have sought help from oil shippers and others as
they seek answers about why derailments of some trains carrying
crude oil have also led to dramatic explosions.
Most notably a 74-car runaway train carrying crude oil from
North Dakota's Bakken region detonated in Lac-Megantic, Quebec,
last July, killing 47 people.
The same type of Bakken crude has been involved in several
other fiery derailments, and officials have warned that the fuel
might be particularly volatile.
Cynthia Quarterman, chief of the Department of
Transportation's Pipeline and Hazardous Materials Safety
Administration, or PHMSA, specifically cited the American
Petroleum Institute, the industry's top lobbying group, for not
keeping its promise to share data about oil-by-rail shipments.
"More than two months ago, we received assurances from
industry that the safe transport of crude oil across the country
was a top priority and, to that end, API would begin sharing
important testing data," she said in a statement.
"To date, that data has not been shared."
Eric Wohlschlegel, an API spokesman, said the trade group
was sharing information with regulators, but he did not provide
Lawmakers in Washington as well as state and local officials
have turned to the Department of Transportation to get precise
information about the possible dangers of moving oil by rail.
Tuesday's statement from Quarterman, who is due to testify
to a transportation panel on Capitol Hill on Wednesday, is
likely to add pressure on the industry.
In February, Quarterman's agency fined three shippers for
failing to classify oil-by-rail cargo properly and she oversees
ongoing spot inspections of safety procedures in North Dakota.
"That we're even having this debate about access to
information only heightens our concerns about the safety of
crude oil trains," said Basil Seggos, a deputy secretary for the
environment to New York Governor Andrew Cuomo.
A large share of Bakken fuel moves through New York on its
way to refineries, and state officials are scrutinizing the work
of refiners and shippers.
The spat between API and regulators may boil down to the
meaning of a January letter in which the oil and rail sectors
promised to make hauling oil on the tracks safer, several
industry sources said.
The American Association of Railroads, a voice for the
industry, ordered slower speeds for some oil cargo, a new
routing protocol and other steps before March as agreed in the
But officials say API has done practically nothing to
fulfill its promise to "share expertise and testing information"
with officials or collaborate with PHMSA "on improving its
analysis of crude oil characteristics" by the end of February.
"If there is data Administrator Quarterman or anyone else at
DOT thinks needs to be shared that is not, please let us know so
we can provide it," API's Wohlschlegel said.
Industry lawyers say API might have over-promised by saying
it could quickly gather data from its members.
"They seem to have created their own problem by agreeing a
deadline and getting the regulator's hopes up for something
concrete," said Lawrence Bierlein, a veteran transportation
lawyer in Washington.
While it might be politically awkward, Bierlein said, it
might be time for API to have a frank conversation with its
regulator about what it can deliver.
It can be a challenge for trade groups to present individual
companies' data to regulators but it can be done, lawyers said.
The American Fuel & Petrochemical Manufactures, the voice
for the refining sector, in February told Quarterman that to
sidestep any legal perils it would use a third-party contractor
to collect industry information about shipments.
"While this may seem like a cumbersome process, due to the
confidential nature information PHMSA requested, this layered
approach is necessary," association President Charles Drevna
Gathering data at arm's length, the trade group wrote,
should allow it to satisfy regulators without running afoul of
The running dispute between regulators and the oil industry
is likely to draw more scrutiny from lawmakers.
Democratic Senator Charles Schumer of New York said on
Tuesday that the lack of industry data should weigh on the minds
of officials considering the risks of oil-by-rail shipments.
"This lack of cooperation from the energy industry confirms
all of our worst fears of their failure to prioritize safety,"
(Reporting by Patrick Rucker; Editing by Ros Krasny, Jim Loney,
Peter Cooney and Lisa Shumaker)