Sunday, June 5, 2011

STB TIH Advisory Committee Killed

Last August I wrote about [link added 6-5-11; 11:45] a move by the Surface Transportation Safety Board to establish an advisory committee, the Toxic by Inhalation Hazard Common Carrier Transportation Advisory Committee (TIHCCTAC), that would help the Board develop the information necessary to resolve a variety of disputes between TIH shippers and the carrying railroads. I hadn’t heard anything about the actions of this board so I went searching and found that the STB had killed the idea [link added 6-5-11; 11:45] back in April.

In its decision [link added 6-5-11; 11:45] canceling the formation of the TIHCCTAC, and closing out the open docket on the examination of the common carrier obligation to carry TIH chemicals, the STB cited fundamental disagreements on legal issues between the chemical producers and the railroads, as well as concerns about the anti-trust issues.

It was always a long shot that an Advisory Committee like the one proposed by the STB last summer would be able to get these two groups to sit down and iron out the serious differences between them. But, as the STB points out, the failure of this attempt leaves the board to decide these issues on case-by-case basis, like the two chlorine transportation disputes currently before the board.

TIH Transportation Dispute

There is a fundamental issue dividing these two groups. The position of the TIH producers and shippers is clear; they need the railroads to transport their products, including such chemicals as chlorine gas and anhydrous ammonia (the two largest volume toxic inhalation chemicals shipped in the United States). Not only is rail transportation generally cheaper than transporting their products by truck, but it is inherently safer for a variety of reasons.

The railroads don’t really want to carry these dangerous chemicals. Under current laws and regulations they bear sole financial responsibility (actually the railroads and their insurance carriers) for damages resulting from a release of the chemicals in transit. While the railroads have a good safety record transporting these chemicals, the Graniteville, SC accident (hardly a worst case scenario accident by any means) shows how expensive a TIH accident can become.

Railroads have little option when it comes to deciding whether or not to accept these chemicals for transportation. Under Federal laws they were given virtual monopolies for major portions of their routes. To protect shippers from monopolistic economics, the railroads are required to accept all properly offered shipments, commonly known as their common carrier obligation.

When it is suggested that the shippers should share in the financial responsibility for transit releases the chemical industry is quick to point out that the most of the catastrophic releases that do occur have been the result of problems caused by the railroads or their employees. They note that they still have legal responsibility for any releases caused by their failure to properly prepare the railcars for shipment.

Transportation Security

The conflict between shippers and railroads are further complicated by the issue of transportation security. Given the nature of the physical hazards associated with TIH chemicals these TIH railcars are an obvious potential terrorist target. Given the amount of TIH chemical transported in a single railcar they have the potential for generating a toxic cloud that can cover an extensive area in the event of a catastrophic release. It is obvious why this is just about the only mode of surface transportation that is significantly regulated for transportation security issues.

The most significant and burdensome security regulations concern points in transit where there is a change in possession of the railcars. The transitions between shipper and carrier, between carriers, and from carrier to receiver have well defined security responsibilities and procedures. Thus it is in the best interest of railroads to minimize these transitions. Additionally the railroads have informally agreed with the Transportation Security Administration (TSA) to minimize the time these railcars sit idle during transit.

With the way that rail lines have been designed and urban areas have grown up around node points in the rail network, it is inevitable that long distance transportation of TIH chemicals results in their routing through urban areas. This, in turn, causes the risk of attack on these railcars to increase as urban areas are a much more lucrative terrorist targets than open country.

Urban security and safety planners readily recognize the extent of the potential hazard associated with the transit of TIH chemicals. Unless the shipper or receiver of TIH railcars reside within their jurisdiction, there is no economic incentive or benefit to having these chemicals move through ones jurisdiction to compensate for the huge potential liability of a terrorist attack or even a transportation accident resulting in a catastrophic release of these chemicals that could cause hundreds of thousands of injuries and deaths.

An effort was made to regulate the routing of TIH chemical shipment. Because of the complex nature of the routing decision, the physical limitations associated with rail transportation, and political constraints, these routing regulations are so vague as to be practically meaningless beyond being a documentation exercise.

Case-by-Case Problem Resolution

It is in this environment that the Surface Transportation Board is called upon to resolve conflicts between TIH shippers and railroads. These conflicts generally boil down to railroads attempting to limit their physical or financial liability for TIH shipments while the shippers are trying to maximize their economic benefit from shipping the chemicals to various markets.

One can sympathize with the STB for not wanting to become involved in these convoluted conflicts. Both sides have utilized their substantial political power to ensure that Congress is unable to come down clearly on one-side or the other in these disputes. So they continue to fight at the margins in these disputes, trying to gain advantage before the STB.

As long as this remains essentially a safety issue, there will be no real resolution to the underlying problems. The safety record for both shippers and railroads in this area is really pretty impressive. But, as soon as this actually involves a real terrorist attack (successful or otherwise) on a TIH shipment in a major urban area, the political situation will drastically change and the third party to this dispute, the pubic put at risk, will be heard. When that occurs, the political knee-jerk reaction will be swift and uncomfortable in the extreme for both the railroads and the shippers.

The only one to benefit in that situation will be the Surface Transportation Board; they will then have much clearer guidance upon which to base their decisions.

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