Tuesday, March 31, 2015

BNSF and Crude Oil Trains

There is a brief article at ProgressiveRailroading.com about the latest move by BNSF to protect themselves in the crude oil train controversy. It seems that yesterday they sent a letter to their customers outlining the steps that they intend to take to reduce crude oil train derailments. In addition to internal actions like further speed reductions in urban areas they intend to “to transition DOT-111 cars from shale crude service on our railroad within one year”.

While any number of safety and environmental advocacy groups would certainly applaud such action, this appears to be a publicity stunt more than a real action to prevent accidents. As long as PHMSA approves the use of DOT-111 cars for flammable liquid service BNSF is required under their common carrier obligations to accept the use of such cars on their system. While we are still waiting on PHMSA’s final rule on flammable railcars (expected in May) it is unlikely that PHMSA will phase out the use of the DOT-111 cars in less than a year; five years is the more likely time frame.

The big problem is that there are not enough newer railcars available to carry the current load of crude oil from the Bakken oil fields to the refineries located around the country. The older DOT-111 and the slightly safer unmodified CPC-1232 will have to be continued in use until the newer railcars built. And that is going to take three to five years at a minimum.

BASF can encourage shippers to use the newer cars all it wants. It is already facing a law suit in US District Court for adding a $1000 surcharge for each DOT-111 rail car used to ship crude oil. It will be interesting to see what kind of backlash will result from this newest attempt. The oil industry’s basic reply will be stop the derailments and the fires will stop.

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