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U.S. Sens. Pushing Fast-Track For Oil Rail Car Phase-Out

A group of U.S. Senate Democrats have introduced a bill that would accelerate the phase-out of older rail cars that transport crude oil by incentivizing the process with a tax credit for companies that make upgrades.

U.S. Sen. Sherrod Brown of Ohio, along with U.S. Sen. Bob Casey of Pennsylvania and five other senators, introduced the bill in response to a series of fiery train derailments in states across the country and in Canada that have caused injuries, deaths and millions of dollars of damage in recent years. The bill was introduced last week, a day before the U.S. Department of Transportation (DOT) and its Canadian counterpart issued a final rule on the shipment of flammable liquids by rail, including crude oil and other petroleum products (see Shale DailyMay 1).

More than a year in the making, the DOT's new rules enhance tank car standards, impose a retrofitting schedule, new braking standards and various operational requirements for crude-carrying trains. New tank cars constructed after October are required to meet tighter specifications, while existing model DOT-111 tank cars and newer non-jacketed models must be replaced within three to five years.

Brown's office said the legislation would "encourage companies to move more quickly toward converting DOT-111 to upgraded CPC-1232 cars."

As a result of the onshore shale boom, the number of rail cars carrying crude oil in the U.S. has increased sharply from 10,000 in 2008 to 415,000 last year, according to the Association of American Railroads (see Shale DailyMay 21, 2014). Last year, more than 100 accidents occurred involving the trains, with derailments continuing this year in West Virginia, Illinois and Canada (see Shale DailyFeb. 17).

The bill would provide funding to better equip communities and first responders during a rail accident. It would establish a federal fund for cleanup costs, response training and grant money for states and cities to reroute rail tracks carrying large volumes of hazardous materials away from populous areas.

The fund would be financed with a $175 per shipment fee for the kind of older tank cars involved in recent crashes. The bill would also require the DOT to implement recommendations from the National Transportation Safety Board (NTSB) to give first responders live information on rail transportation, update maintenance standards and study emergency response preparedness across the country.

Casey continued the push on Monday, visiting Harrisburg, PA, the state capital, to drum up support for the bill. Both Ohio and Pennsylvania have seen an increase in trains carrying crude oil from North Dakota's Bakken Shale.

About 60-70 trains bound for East Coast refineries travel through Pennsylvania each week. Gov. Tom Wolf has pushed for tougher regulations. He recently hired an adviser to make recommendations about improving rail infrastructure in the state (see Shale DailyApril 28).

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