On March 13, American Fuel & Petrochemical Manufacturers (AFPM) — the oil refiners' trade association — sued oil-by-rail carrying giant Burlington Northern Santa Fe (BNSF) for allegedly violating its common carrier obligation under federal law. A DeSmogBlog investigation has revealed there may be more to the lawsuit than initially meets the eye.
Filed in the U.S. District Court for the Southern District of Texas, Houston Division, AFPM sued BNSF “for violating its common carrier obligation by imposing a financial penalty” for those carrying oil obtained via hydraulic fracturing (“fracking”) in North Dakota's Bakken Shale basin and other hazardous petroleum products in explosion-prone DOT-111 rail cars.
AFPM's beef centers around the fact that BNSF began imposing a $1,000 surcharge for companies carrying explosive Bakken fracked oil in DOT-111 cars, as opposed to “safer” CPC-1232 cars, at the beginning of 2015.
The Warren Buffett-owned BNSF did so, argues AFPM, illegally and without the authority of the federal government.
“This $1,000 surcharge on certain PHMSA-authorized rail cars breaches BNSF’s common carrier duty to ship hazardous materials under the auspices of PHMSA’s comprehensive regime governing hazardous materials transportation,” wrote AFPM's legal team, featuring a crew of Hogan Lovells attorneys. “Allowing railroads to penalize companies that ship crude oil in federally-authorized rail cars would circumvent PHMSA’s statutory and regulatory process for setting rail car standards for hazardous materials shipments.”
Upon a quick glance, it seems like a fairly straight-forward case of federal law and an intriguing example of an intra-industry dispute. But as recent history has proven, the devil is in the details.