Monday, April 13, 2015

S 859 Introduced – Crude Oil Transport

As I had mentioned in an earlier posting Sen Cantwell (D,WA) introduced S 859, the Crude-By-Rail Safety Act. The bill is an attempt to comprehensively address the safety issues involved in the shipment of crude oil by railroad.


Section 2 provides definitions of terms used in this bill. They include:

∙ High-hazard flammable train;
∙ Oil;
∙ Rail carrier; and
∙ Worst case discharge

The HHFT definition is essentially the same as PHMSA used in their notice of proposed rulemaking. As I mentioned in my post about that NPRM, this expansive application of the definition of HHFT could affect many more industries than just the crude oil and ethanol industries originally intended.

The definition of oil is also overly expansive. The authors were attempting to insure that they covered all of the crude oil sources in their definition, but by defining ‘oil’ as “oil of any kind
or in any form” {§2(2)} they have also included non-hazardous (for rail transport) oils such as mineral oil and vegetable oils.


Section 3 of the bill sets out a number of safety rulemakings required to be completed by the Secretary of Transportation. This section sets out a 90-day time limit to issue a final rule on each of these rulemakings. The time limit is part of a congressional over reaction to the lengthy time that it takes federal agencies to complete rulemakings. Unfortunately, meeting the 90-day limit is not possible if the agency is to complete the congressionally mandated process for rulemaking and this bill does not provide the agency with an exception to that process.

Section 3(a) requires the Secretary to establish an interim standard for the maximum volatility of crude oil (not defined in the bill; perhaps the definition of ‘oil’ should be changed to ‘crude oil’) based upon vapor pressure. As I mentioned in my discussion of HR 1679, the use of vapor pressure as a standard is going to have to be set for a specified temperature that can be expected to be reached incident to transportation. Setting a vapor pressure standard for any other temperature will not adequately reflect the maximum vapor pressure obtained in transportation. A good operational definition would be 10% lower than the setting of the pressure relief device at 140°F using test method ASTM D6336.

Section 3(b) would then require the conduct of a formal study to set a final crude oil volatility standard. The study would conducted by DOT in conjunction with DOE instead of being done by one of the independent scientific bodies usually tasked with such studies. There is a two year time limit to conduct the study with a follow-on requirement to establish that standard by regulation in Section 3(c).

Sections 3(d) and (e) would require the completion of the current HHFT rulemaking within the 90 day limit. Since the final rule is currently scheduled to be published on May 12th (according to the House Committee on Transportation and Infrastructure) these two sections may be superfluous.

Unsafe Tank Cars

Section 4(a) establishes minimum safety standards for tank cars in oil and ethanol service. The Secretary is required to “immediately prohibit the shipment of oil” in DOT 111 cars that have not been upgraded to the CPC 1232 standards or in unjacketed CPC 1232 rail cars. Here is where the overly broad definition of oil would prohibit the use of these tank cars for non-hazardous products.

Ethanol shippers would have two years to stop using the same cars prohibited above.

Paragraph 4(a)(3) adds an vague requirement for shippers of ‘oil and ethanol’ to “take additional precautionary measures to enhance the safe shipment of such liquids, including by avoiding the shipment of such liquids in tank cars with unsafe tank car attributes identified by the Secretary of Transportation, to the extent practicable”. The ‘measures to enhance the safe shipment’ phrase is so vague as to be meaningless. The ‘avoiding… to the extent practicable’ phrase, on the other hand, seems to allow continued use of DOT 111 railcars if the discontinuance would not be ‘practicable’. I’m pretty sure that that was not the intent, but it certainly seems to be what the words mean.

Rail Inspections

Section 5 addresses the issue of the inspections. Section 5(a) requires additional rail and rail geometry inspections on routes over which even 1 HHFT train is operated but it does not provide a time limit of how often that one train operates on that line. Since the time frame for the inspections are ‘per calendar year’, perhaps the intent is one HHFT train per year.

Section 5(b) address the shipper inspection requirement to sample and test 5% of the rail cars loaded with crude oil for volatility and to ensure that they meet the interim volatility standard set above. Interestingly §5(b)(1)(B)(ii) requires that the final volatility standard is more restrictive than the interim standard. This was not part of the requirements of §3(b).

DOT is required by §5(b)(2) to conduct their own spot checks of crude oil volatility, though no inspection rate is specified. Additionally, DOT is required to audit shipper records of their 5% volatility. Again no audit frequency standard is specified and it is unclear how PHMSA (the agency responsible for Hazmat issues) manpower would be able to conduct a reasonable rate of audits of crude oil shippers.

General Fine Increase for Hazmat Violations

Section 6 makes substantial increases in the maximum fines set in 49 USC 5123 for violation of US Hazmat transportation laws. The fine for knowingly violating provisions of 49 USC Chapter 51 is increased from $75,000 to $500,000 per violation {§5123(a)(1)}. The maximum for the enhanced penalty (resulting in death, substantial destruction of property, or significant environmental damage) is raised from $175,000 to $1,000,000 per violation {§5123(a)(2)}.

Interestingly, the way the amendment of §5123(a) is written it erases the current §5123(a)(3) which deals with the reduced penalties for violating the training requirements of Chapter 51. It does not appear that this was done intentionally.

Since none of the requirements in the earlier sections of this bill made any modifications to Chapter 51, violations of these requirements would not be covered by §5123(a) (which calls into question why §6(a) was included in this bill). As a result §6(b) and (c) make violations of volatility rules and the inspection rules of this bill finable at the enhanced violation rate.

Transportation Safety Programs

Section 7 requires the Secretary to ‘establish or expand’ ten different safety programs or initiatives relating to the transportation of ‘energy products or other Class 3 flammable liquids’ by all land modes. The section would authorize $40 million for this establishment or expansion.

Oil Spill Response Plans

Section 8 requires the Secretary (within 180 days) to amend 49 CFR 130, Oil Spill Prevention and Response Plans to address issues related to discharges from unit trains or blocks of tank cars. Specific measures to be addressed include:

∙ Current 1,000 barrel minimum container size “to account for worst-case discharges resulting from accidents involving unit trains or blocks of tank cars” {§8(b)(1)(A)}; and
∙ Plan requirements for discharges that may impact “a water body or other area that is subject to the jurisdiction of the Coast Guard or of the Environmental Protection Agency” under 33 USC 1251 et seq {§8(b)(1)(B)}.

This section only addresses classical oil spill response plans that deal with limiting the spread of spilled oil, cleaning up that oil and then mitigating the damage done by the oil. It does not address the fire hazard in any way.

Disclosure Requirements

Section 9 expands on the current DOT Emergency Order requirements to notify State Emergency Response Commissions (SERCs) of oil train routes. It would require prior notification of SERCs and Local Emergency Response Committees along routes over which even one HHFT would travel. There is no mention of restrictions or requirements on information sharing by those local agencies.

Emergency Response Resources

Section 10 requires the railroads to “collaborate to develop an inventory of emergency response resources along routes over which 1 or more high-hazard flammable trains operate” {§10(a)}. The inventory would include both spill control equipment and equipment to respond to fires and explosions. The inventory would also include where the equipment was stored and point of contact information for that equipment.

The railroads are required to provide DOT access to the inventory (not provide DOT with a copy) and to make relevant portions available to emergency response personnel upon request.

There is no requirement to have any certain amount of equipment available. Nor is there a requirement to have it available at any specific point in time relative to an accident.

Close Call Reporting

Section 11 amends 49 USC by adding a new section; §20168, Confidential close call reporting. The new section would require the Secretary of Transportation to publish regulations (within 1 year) to outline requirements for railroads to establish a close call reporting program. The railroad programs would include the following elements {§10(d)}:

∙ Provide a safe environment for its employees to report unsafe events and conditions;
∙ Ensure reporting employees are protected from railroad carrier discipline;
∙ Use collected information to develop and implement targeted corrective actions;
∙ Use collected information to supplement inspection data in identifying safety issues and emerging risks before they develop into accidents.

While there is nowhere in the new section that requires sharing of the reported information with DOT, §20168(g) does allow the Secretary to use the information when:

∙ When implementing or updating the Federal Railroad Administration’s National Inspection Plan;
∙ When performing focused inspections; or
∙ When developing agency rulemakings and guidance, as appropriate.

It is hard to see how the industry would not see the second use as a way around the prohibition of using the information produced in regulatory actions. This allowed use of the information would probably stifle railroads from sharing the reported information with DOT.

Reports to Congress

No legislation that billed itself as comprehensive could be complete without at least one report to Congress. This bill has two. The first is a report contracted out to the Transportation Research Board of the National Academy of Sciences on liability and insurance issues for HHFT. The second is a multi-departmental review of the current regulations concerning the transportation of energy products by all modes of transportation.

Moving Forward

Given the Republican control of the Senate there is almost no way that this bill will be considered in committee (Senate Committee on Commerce, Science and Transportation).


The big problem with this bill is the immediate phase out of the DOT 111 cars. While everyone understands the safety concerns with those cars, the current level of flow of crude oil to refineries cannot continue in the near future without the use of these cars. Shutting down that flow to only what the jacked CPS 1239 cars and the newer tanker cars can carry would cause most drilling operations in this country to cease. The economies of North Dakota, Wyoming, Colorado, Oklahoma and Texas would take a severe hit, in some cases a devastating hit.

More importantly there would be a huge surge in gasoline and natural gas prices that would hit the entire economy as the United States suddenly had to compete with the rising gasoline consumption economies of China and India on the international market. It would provide a huge surge of money to Russia, Venezuela, Iran and probably ISIL; money that would further stabilize their current regimes and advance their anti-American agendas.

On top of all of that the bill is poorly written with all sorts of obvious unintended consequences.

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