Biz: Oil train phaseout too aggressive

Biz: Oil train phaseout too aggressive
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Oil companies, fuel refiners, freight railroads and ethanol producers are united in calling for the Transportation Department to give them more time to phase out the use of older rail cars.

Groups representing those industries are adamant that they need more time to replace or retrofit rail cars that have been blamed for a slew of explosions involving shipments of crude oil.

Regulators want the cars out of service in two years, an aggressive timeline that trade groups say is unrealistic and could stanch the flow of energy supplies.

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The American Petroleum Institute (API) estimated the two-year timeline proposed by the Transportation Department’s Pipeline and Hazardous Materials Safety Administration (PHMSA) could cost consumers $45.8 billion.

“PHMSA’s timeline could harm consumers by disrupting the production and transportation of goods that play major roles in our economy, including chemicals, gasoline, crude oil and ethanol,” API president Jack Gerard told reporters, adding the time frame is “not feasible.”

The groups made their criticisms in regulatory comments filed with the Transportation Department in response to the proposals, which were unveiled in July. Comments were due by the end of Tuesday.

The federal government wants rail cars transporting crude and other flammable liquids to have thicker steel on the tanks and possibly enhanced brakes and rollover protection. Regulators have also proposed new speed limits and routing around densely populated areas.

The drafting of the standards was spurred, in part, by a July 2013 train explosion in Quebec that killed 47 people and comes at a time when more fuel is being shipped by rail than ever before due to skyrocketing production.

The API and the Association of American Railroads (AAR) said regulators should allow up to four years for old tank cars under the DOT-111 standard to be phased out. Cars that fit the most recent industry standards should be given another three years in oil and ethanol service, for a total of seven years, the groups said.

“The phase-out program must take into account factors such as manufacturing capacity, the demand for new tank cars, shop capacity for any retrofits that will be undertaken, and the number of DOT-111 cars that need to be phased out of flammable liquid service,” the AAR wrote.

The American Fuel and Petrochemical Manufacturers (AFPM), which represents refiners, said regulators ignored the “root causes” of oil train disasters, such as track integrity and rail personnel training, when writing the rules.

The group wants at least 10 years to phase out old rail cars, saying it would take at least that long to purchase new cars or retrofit old ones. The group said 68,000 cars need to be retrofitted, and shops can only handle 6,400 a year.

The Renewable Fuels Association (RFA) agreed with the oil interests on many points, despite their frequent fights over the federal government’s ethanol mandate.

“Ethanol has 29,780 cars in service, crude oil has 42,550 and remaining other flammables have 25,470 cars that will need to be retrofitted,” the group said. “This program will take a minimum 10 to 15 years or longer depending on the shop space and experienced labor availability.”

Environmental groups are urging the government to press ahead. They said the proposed rules are too lax and have called for the unsafe rail cars to be taken out of circulation immediately.

The Department of Transportation “proposes an inexcusably long time frame for phasing out DOT-111 and other unsafe tank cars from trains,” wrote a coalition of green groups including Forest Ethics, the Sierra Club and the Natural Resources Defense Council.

Those groups estimated that 15 rail accidents could happen during each year of the phaseout, resulting in one or two disasters.

Riverkeeper Inc. agreed, saying that retiring the current models immediately is the only option that lives up to the federal government’s legal obligation to protect against major disasters.

“Put simply, these rules won’t stop the next bomb train disaster,” Paul Gallay, president of the clean water advocacy group, said in a statement. “We deserve real protection for communities and the environment — not a rule that defers to the rail and oil industries at every turn.”

Regulators will now review the more than 2,000 comments filed on the proposal in hopes of issuing a final rule by early next year.

—This story was updated at 3:34 p.m.