It might have been dubbed the “Bakken Blitz,” but the Obama administration’s push to step up crude-by-rail safety is more likely to turn out a slow-burning trench war.
The political ramifications of the horrific train crash that killed 47 people in Lac-Megantic, Que., on July 6 “were almost as intense” in the U.S. as in Canada, says Steven Ditmeyer, adjunct professor of Railway Management at Michigan State University and a former Federal Railroad Administration (FRA) official. That’s because the train, which derailed and exploded, was carrying crude oil from North Dakota, one of the hubs of the U.S.’s shale revolution. Faced with soaring production and a limited pipeline network, U.S. oil producers are loading fuel onto freight trains in ever greater quantities, a practice mirrored in Canada’s oil patch. Over 34 million barrels of crude were delivered to U.S. refineries by rail in 2012, a 500% jump from 2011, Energy Information Administration data show. But, as Lac-Megantic revealed, with that exponential increase in volume comes an exponential increase in risk.
In the aftermath of the tragedy, regulators on both sides of the border rushed to kick-start reviews of oil transport practices in the railroad industry. The U.S. Department of Transportation revealed it had been conducting spot oil-train safety checks even before the accident, and initiated an inquiry into whether to amend existing safety rules and requirements. At least in the U.S., though, it might take a while before the review translates into across-the-board change in the industry, says Ditmeyer.
Three major concerns are a) the design of certain rail cars commonly used to ship oil; b) the way shale oil is classified; and c) crew staffing requirements for trains transporting crude. The controversial tank cars, known as DOT-111 (CTC-111a in Canada), are the ones that exploded in the Lac-Megantic derailment and ones critics says are unfit to transport hazardous material. U.S. regulators also suspect that shale oil might have been misclassified as having a relatively low risk of combustion, as most oil types do, whereas the Lac-Megantic explosion indicates sour crude might, in fact, ignite quite easily. Also, authorities are wondering whether to require railroad companies to staff oil-trains with at least two crew members rather than just one.
Some the fixes are likely to be just as hard to implement in Canada as in the U.S. Retrofitting DOT-111 cars, for example, promises to be complicated, and not just because it’s a massive and costly operation. It’s also because railroad companies don’t generally own the cars, which are manufactured by the chemical industry and leased. Similarly, rail companies are not responsible for certifying the chemical composition of the fuel they transport, which is the job of crude oil shippers. In the U.S., the safety blitz risks opening “fault lines” between freight operators and oil producers, wrote EEPublishing’s Elana Schor.
Lobbying and a convoluted regulatory process in the U.S., though, could stretch reaction times even further. It took Canada all of three weeks after Lac-Megantic to outlaw solo crews on trains carrying hazardous material. In the U.S., by contrast, authorities have merely so far recommended changing staffing practices. U.S.-provenance freight trains carrying dangerous goods and entering Canada, though, will have to comply with Canadian rules, said Transport Canada spokesperson Maryse Durette.
New rules, if they come, could take months or even years to work their way through the administrative maze. The task of designing new regulations on hazardous materials falls with the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), while enforcing them within U.S. the rail system is the job of the FRA, a distinct branch of DoT. “If you were trying to make a complex system for addressing these [railroad safety] issues, you’d probably say we have achieved that,” quips Ditmeyer.
But things get more complicated still. The PHMSA, as many other U.S. government agencies, can’t simply change the rules as it deems necessary. Before doing so it must publish a so-called Notice of Proposed Rulemaking (NPRM), which alerts the public to a proposed regulatory amendment and invites comments from affected parties for a 60-day period. It’s easy to see how the requirement, meant to feed citizen and private sector perspective into rule-making, can be a hindrance when circumstances call for swift action.
PHMSA, though, is treading even more carefully. On oil rail car safety upgrades it has opted for an Advance Notice of Proposed Rulemaking (ANPRM), which invites 60-days of public comments for 60 days even before an NPRM is published. It’s an extra hoop in an already lengthy loop, says Ditmeyer.
If it takes a long time for railroad safety recommendations to become mandatory in the U.S., it also takes a long time for mandatory rules to be actually implemented—and not just because of the technical and budgetary challenges of overhauling a nationwide rail system. The industry is also known for fierce lobbying against new regulations. A recent AP article unearthed a case in point: A 2008 law forcing passenger railroads to adopt technology that reduces the risk of head-on collision had an initial deadline of Dec. 31 2015—already a generous six-plus year window—but some rail companies have been fighting a ferocious battle in Congress to push the deadline to 2020.
For U.S. communities that, like Lac-Megantic, find themselves literally on the path of the current oil-by-rail boom, that would be an eerie precedent.
Erica Alini is reporter based in Cambridge, Mass., and a regular contributor to CanadianBusiness.com, where she covers the U.S. economy.