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Rail Oil Transport Draws Regulators' Focus

Given the array of major accidents on both sides of the U.S.-Canadian border during the past 12 months, the booming domestic oil/natural gas industry is keeping a close eye on the U.S. Department of Transportation (DOT) for possible revised rules for shipping crude oil by rail. Swift action last month by Canadian regulators has heightened expectations.

Already on the table at DOT and reportedly under review by the Office of Management and Budget (OMB) are enhanced tank car standards, along with proposed new rules, all of which were part of two days of public discussion at a DOT National Transportation Safety Board (NTSB) forum in Washington, DC, April 23-24. The sessions addressed safety issues related to moving oil and ethanol by rail, which has increased with the shale boom (Shale Daily, Aug. 15, 2013).

At the same time, Canadian Minister of Transport Lisa Raitt announced a series of federal regulatory actions to address initial recommendations from Canada's Transportation Safety Board regarding its ongoing investigation of last summer's oil-carrying train derailment at Lac-Megantic in eastern Canada (see Shale Daily, July 9, 2013).

Among the steps taken in Canada are: removal of the least crash-resistant crude tank cars from use; requiring emergency response assistance plans for shipments of crude oil, gasoline, diesel, aviation fuel and ethanol; creating a task force of industry and local government representatives; and requiring railways to reduce the speed of trains carrying "dangerous goods," of which crude and ethanol are included.

U.S. rail operators immediately endorsed the Canadian action and urged an "aggressive timeline" for the DOT/NTSB work to revise U.S. rules.

Saying that Canada's action recognized the use of "voluntary action items," Association of American Railroads (AAR) CEO Edward Hamberger said the rail operators "have been in the vanguard of those calling for aggressive retrofit or phaseout of cars currently in service moving flammable liquids, including crude and ethanol.

"Transport Canada has indeed recommended an aggressive timeline, and we are confident that the industry will do all it can to meet it."

The speed of the Canadian response to an incident that killed 47 people in Lac-Megantic, Quebec, has the U.S. regulators looking relatively slow to react (see Shale Daily, Feb. 26; Jan. 23).

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