Oil, Rail Industries Want 7 Years To Fix Tank Cars

Hess To Form MLP For North Dakota Oil, Gas Transport Assets
The oil and railroad industries are urging US regulators to allow them as long as 7 years to retrofit existing tank cars that transport crude oil, an industry official says.

WASHINGTON (AP) — The oil and railroad industries are urging U.S. regulators to allow them as long as seven years to retrofit existing tank cars that transport highly volatile crude oil, a top oil industry official said Tuesday. The cars have ruptured and spilled oil during collisions, leading to intense fires.

Jack Gerard, president of the American Petroleum Institute, told reporters in a conference call Tuesday that the institute and the Association of American Railroads are jointly asking the Department of Transportation for six to 12 months for rail tank car manufacturers to gear up to retrofit tens of thousands of cars and another three years to retrofit older cars.

The two industries — which were at odds until recently over how best to prevent oil train collisions and fires — also want three years after that to retrofit newer tank cars manufactured since 2011, known as "1232 cars," he said.

In July, the transportation department proposed that older cars be retrofitted within two years.

The longer timeline reflects the need to allow tank car manufacturers time to expand their operations while still producing new tank cars, Gerard said.

The government's more aggressive 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," he said. All those products are shipped in the same type of tank cars as those under government regulations.

Rail shipments of crude have skyrocketed from a few thousand carloads a decade ago to 434,000 carloads last year. Thanks to an oil fracking boom, the Bakken region of North Dakota, Montana and southern Canada now produces over 1 million barrels of crude per day, and production is increasing.

Since 2008, there have been 10 significant derailments in the U.S. and Canada in which crude oil has spilled from ruptured tank cars, often igniting and resulting in huge fireballs, according to the National Transportation Safety Board. The worst was a runaway oil train that exploded in the Quebec town of Lac-Megantic just across the U.S.-Canada border in July 2013, killing 47 people.

Copyright 2015 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Ken | Oct. 2, 2014
Have it done in 7 months and repair the railway tracks at the same time


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