Industry to Feds: “We Will Not Remove Any Unsafe Oil Rail Cars from Service”

What the oil industry's own numbers say about their commitment to safety.
This post is 28 in the series: The Northwest's Pipeline on Rails

“We will not remove any unsafe oil rail cars from service.” That was the upshot of oil industry testimony at a recent rail safety hearing before the US Senate.

To be fair, that isn’t a direct quote. But it is a direct consequence of the math.

Under questioning from Senators about the wisdom of continuing to use older unsafe tank cars to haul crude oil—especially the very volatile crude coming out of North Dakota—the American Petroleum Institute representative testified that tank cars built to the newer standard, called “CPC 1232″ would make up “sixty percent [of the oil tank car fleet] by the end of 2015.” It’s a good sound bite—and it certainly reinforces industry PR that everyone is busy making oil-by-rail as safe as possible—but it is also misleading. Dangerously so.

In fact, on the very same day as the Senate hearing, another oil industry representative provided a more complete picture to the US Surface Transportation Board’s (STB) rail energy transportation advisory committee.

Crude oil tank car chart

Image by US Surface Transportation Board

The oil industry presentation for the STB provided detailed information on the composition of the nation’s oil tank car fleet—the number of newer-standard tank cars alongside the total number of tank cars that were rolling at the end of 2013 and that are projected to be on the rails by 2015. A bit of simple arithmetic yields the number of legacy tank cars—the outdated and obviously unsafe ones—that the industry expects to be in service hauling crude oil.

Composition of US Crude Oil Rail Car Fleet, End 2013 to End 2015

What the oil industry is showing here, but not necessarily talking about, is that they expect a surge in shipments of volatile shale oil from North Dakota and other areas. More precisely, they believe that they will need 84 percent more tank cars by the end of 2015 to haul the coming flood of crude oil. And to accommodate all that oil, the industry expects to keep every one of the 25,806 legacy DOT-111 oil tank cars in service through at least the end of 2015. (The tank car numbers here are consistent with data the industry has provided in other documents. See for example, Table 2 in the Rail Safety Institute’s written testimony on tank car standards recently submitted to the federal government.)

In short, according to the oil industry’s own numbers, they will not retire any unsafe older crude oil rail cars in the near future. That makes for a different sound bite, doesn’t it?

The percentage of newer tank cars in the overall fleet is irrelevant until it starts to approach 100 percent because it does nothing to reduce the chances of an older tank car blowing up. Worse yet, the presence of older tank cars actually renders the newer tank cars unsafe too. According to federal investigators at the National Transportation Safety Board, the “safety benefits [are] not realized if old and new tank cars are commingled,” as they inevitably will be.

There is an alternative. Instead of exposing communities to the ongoing threat of unsafe oil trains, we could choose to ship crude only in safer new-model tank cars—even if it means leaving some of our newfound oil reserves in the ground.

 

Postscript. In this article we refer to the CPC 1232 standard for rail cars as better than what was on the books previously. That’s true, but even these newer tank cars are seriously flawed. The National Transportation Safety Board (NTSB) is not convinced that they “offer significant safety improvements.” They also still have bottom outlet valves, “which have been prone to failure in derailment accidents.” And as we pointed out, the “safety benefits [are] not realized if old and new tank cars are commingled.”

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Comments

  1. Oplo says:

    Are you sure you aren’t mixing up # of tank cars produced vs # of cars in the whole fleet? The infographic above from the STB is a bit unlcear because it refers to both production of tank cares and % of fleet. If you look at slide 12 in the same STB presentation, it shows that the total fleet of tank cars around 350,000 in 2013.

    • Eric de Place says:

      Sharp eye. Yes, the language is a bit confusing. They are using the word “production” in a different sense than we normally do.

      Keep in mind that crude oil tank cars are only a subset of the entire tank car fleet. In other words, there are many more tank cars in the total fleet than there are used specifically in the transport of crude.

      We are confident in the numbers we presented here though. Not only are they the figures reported to the US Surface Transportation Board, but they are also the same numbers used by the Railway Supply Institute in its official accounting of crude oil tank cars. See Table 2 here.

    • Eric de Place says:

      Our numbers are also consistent with what the Reuters news service has reported: “39,000 carry crude, less than a third of which are built to a higher safety standards in effect since 2011.” See here.

  2. Oplo says:

    Thanks for the clarification.

  3. Lazlo Toth says:

    Umm… where exactly is your evidence that these old cars ARE substantially unsafe? All you’ve shown us as far as I can tell is that there was a new legal standard set, and that not all the cars are obliged to live up to it.

    Those cars were already in service before the law was passed. The laws of physics and the physical properties of those cars did not suddenly change because a new standard was introduced, nor did their actual chance of failure.

    So that raises the question: what IS the real chance of these cars failing? I’m not saying you’re full of it, I’m just saying that until you prove the real hazard, this is not a very convincing article.

    • Eric de Place says:

      Lazlo,

      Good question. In previous installments, we wrote extensively about the manifold safety flaws with the older-model tank cars. (So have many, many other folks.) You can read our analyses here and here.

      The nickel version is that federal safety inspectors at the National Transportation Safety Board have for years—decades actually—been calling attention to serious problems with the tank car designs.

  4. Dumptruck says:

    This seems in line with OPA90 which permitted industry to phase out single hull tankers and tank barges over many years and required replacement tonnage to be double hulled.

    It appears that Congress is looking to avoid making a decision which would likely cause a spike in crude prices (by removing industry needed rail cars from service), and provides industry time to build safer rail cars. [assuming law will require a drop-dead date for the old tank cars]

    One thing worth noting is with the increase in use of rail to transport crude means there are more newer operators running the trains. As with any industry experiencing rapid growth, troubles come due come to inexperience. In the transportation industry lack of experience can have devastating results.

  5. Living by the Tracks says:

    Lets not forget the return trip. The demand for ‘drilling fluids’ is on the rise as well and the owner of the railroad recently invested heavily into it. tBerkshire Swaps $1.4 Billion in Phillips 66 Stock in Deal

    I watch both new and old tanker cars (always commingled) go north and south all day everyday and can tell you its increasing at a scary pace and I know communities along the way, like mine, are not prepared, Keystone pipeline or not.

  6. Don Steinke says:

    Thanks Eric.
    It is worth noting that the cars being produced are to the post Oct 2011 standard only, not the next generation extra safe cars that BNSF is seeking.

    Regulatory uncertainty means that it’ll take time before industry tools up to the new standard.

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