Regulators call for stringent testing of oil shipped by rail

Federal regulators issued an emergency order Feb. 25 requiring more stringent testing of crude oil before shipment by rail to determine how susceptible the cargo is to explosion or fire.

“Today we are raising the bar for shipping crude oil on behalf of the families and communities along rail lines nationwide,” Transportation Secretary Anthony Foxx said in a statement. “If you intend to move crude oil by rail, then you must test and classify the material appropriately.”

The move comes in response to a string of train accidents since last summer involving oil from the Bakken region of North Dakota and Montana.

The order also would place crude oil under more protective sets of hazardous materials shipping requirements, rather than allowing some shipments to be treated as less dangerous, the Transportation Department said.

As a result, crude oil may no longer be carried by tank cars that lack certain safety features. According to the Association of American Railroads, that includes about 1,100 cars, or about 3 percent of the total crude fleet.

The order does not prevent companies from shipping crude on in tens of thousands of tank cars classified as DOT-111s, which the National Transportation Safety Board has said are at risk of rupture in an accident.

Shippers already are required to classify oil shipments based on the risk for explosion or fire, but federal investigators say many shipments have been misclassified as less dangerous. The new order says testing for classification before shipment must be done “with sufficient frequency and quality” to make sure the crude oil’s volatility is properly gauged.

Hazardous materials shipments must be classified as one of nine categories depending on risk. Misclassified materials could be shipped in less protective tank cars, and emergency personnel might follow the wrong protocols when responding to a spill.

Government investigators found crude oil transported from the Bakken region was misclassified in samples taken from 11 out of 18 truck shipments en route to rail-loading stations, federal officials said earlier this month.

A runaway train with 72 tank cars of Bakken oil derailed, exploded and burned in downtown Lac-Megantic, Quebec, in July 2013, killing 47 people and destroying 30 buildings. Oil trains exploded and burned in North Dakota and Alabama since then.

The oil in the Lac-Megantic train incident was misclassified as “packing group III,” which the safety administration equates to minor danger.

The emergency order calls for “minimum testing” of any large bulk quantity of crude that is being transported.

That includes determining the crude’s flash point, how corrosive it is to steel and aluminum, and whether the dangerous and explosive gas hydrogen sulfide is present. It also requires determining the percentage of flammable gasses in the crude - an issue of heightened concern for the oil from the Bakken region, which has higher levels of natural gas than other crudes.

U.S. crude oil production is forecast to reach 8.5 million barrels a day by the end of 2014, up from 5 million barrels a day in 2008. The increase is overwhelmingly due to the oil boom in the Bakken region.

U.S. freight railroads transported about 415,000 carloads of crude in 2013, up from just 9,500 in 2008, according to government and industry figures.

NTSB member Robert Sumwalt told a House Transportation subcommittee hearing on Feb. 26 that rail tank cars being used to ship crude oil from the Bakken region pose an “unacceptable public risk,” and even cars voluntarily upgraded by the industry may not be sufficient.

NTSB has been urging replacing or retrofitting the tank cars since 1991, but the most recent federal effort to write tougher regulations for new cars didn’t get underway until 10 years later.

An initial public comment period closed in December, and regulators are currently at work writing proposed new standards, Cynthia Quarterman, head of the Transportation Department’s Pipeline and Hazardous Materials Safety Administration, told the panel.

Quarterman said she expects her agency to propose new tank car standards before the end of this year, but refused to be pinned down under questioning by lawmakers on when those rules might become final.

All major regulations go to the White House before they are issued to ensure the safety benefits outweigh the cost to industry. It often takes months to years between when new rules are proposed and when they become final.