Slow pace of oil train fixes draws Senate ire

WASHINGTON – Virtually all of the potentially unsafe rail cars carrying crude oil across the country remain in service, hauling highly flammable liquid, an official from the American Petroleum Institute (API) testified at a Senate hearing on rail safety Thursday.

API official Prentiss Searles told Sen. Heidi Heitkamp, D-N.D., that to his knowledge the oil and gas industry had retired none of the puncture-prone tankers from their fleets.

The issue arose after Searles testified that 40 percent of the rail cars now hauling crude have updated superstructures designed to keep them intact if they derail.

Heitkamp pressed Searles to clarify his point. The senator explained that crude oil shipments from her state's Bakken formation are growing so fast that all the newer, safer tanker cars being produced are needed for increased capacity, not replacement.

The tanker fleet "has grown," Heitkamp said to Searles. "You haven't taken any [of the more vulnerable cars] off the rails."

"Not to my knowledge," Searles replied.

Those cars continue to carry crude oil despite a National Transportation Safety Board (NTSB) determination that "multiple recent serious and fatal accidents reflect substantial shortcomings in tank car design that create an unacceptable public risk."

In the third quarter of 2013, there were 27,130 tanker cars carrying crude oil that did not meet upgraded voluntary construction standards for newly built tanker cars, according the Railway Supply Institute. Another 29,071 carried ethanol, which is also flammable.

These cars meet the current federal standard for construction, but they are also the cars that the transportation safety board believes pose an "unacceptable risk" for leaks and punctures. The government has been trying to upgrade its standard, but has received some push-back in its rule-making process from the oil and gas industry, which is concerned about the costs of improvements.

Frustration with the speed at which safety reforms are being implemented dominated Thursday's hearing, which came in the wake of fiery oil train derailments in North Dakota and Canada.

Minnesota Sen. Amy Klobuchar, a Democrat, pointed out to a panel of government regulators and private industry representatives that federal rules for safer tank cars have been 2½ years in the making with no resolution.

"We're moving as fast as we can," answered Cynthia Quarterman, head of the Pipeline and Hazardous Materials Safety Administration.

Her response and those of leaders of the Federal Railroad Administration and Federal Communications Commission, drew an exasperated rebuke from Sen. Richard Blumenthal, D-Conn., who chaired the hearing.

"We need to get it right, but we need to get it done," Blumenthal said.

The volume of crude oil moved by train from production points in the United States to refineries grew from about 9,500 carloads in 2008 to 400,000 carloads in 2013. Each tank car holds 25,000 to 30,000 gallons of crude oil.

Virtually all of that oil gets where it is going without incident. But in the very rare exceptions, consequences have been destructive and sometimes deadly. The danger raises the stakes for people living near rail lines in states like Minnesota, where eight oil trains pass on a daily basis, six through the Twin Cities.

The oil and gas industry, which owns or leases most of the rail cars used to ship crude oil, developed a set of voluntary standards for more puncture-proof and leakproof tanker cars. But the NTSB considers the new design inadequate, something the petroleum institute disputes.

"This is shaping up as a regulatory fight," Heitkamp observed. "This is very problematic from a public ­perspective."

Besides the structure of rail cars, lack of computerized control of trains — called positive train control — and the unique volatility of oil drawn from the Bakken Formation were sore points at the hearing.

Positive train control will require installation of roughly 22,000 antennae near tracks across the country. The Federal Communications Commission has delayed antenna deployment while it checks to see if any of the sites violate environmental and historic preservation laws. Several senators blasted the FCC for bureaucratic foot-dragging.

The unique volatility of Bakken oil also remains in dispute. The oil and gas industry denies it, but the Department of Transportation has said the oil drawn from North Dakota "may be more flammable than traditional heavy crude oil."

Quarterman of the Hazardous Materials Safety Administration said the government has moved from testing its flash point and boiling point to looking at its vapor pressure and sulfur and flammable gas content. Still, regulators and industry have not settled on a new testing or classification regimen.

"It's a learning process," Quarterman said.

Jim Spencer • 202-383-6123