Anthony Foxx

Wed, 2014-07-09 10:38Justin Mikulka
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Fox Guarding Henhouse: Oil-By-Rail Standards Led by American Petroleum Institute

How did it get missed for the last ten years?”

That was the question Deborah Hersman, chair of the National Transportation Safety Board (NTSB), posed to a panel of industry representatives back in April about how the rail industry had missed the fact that Bakken oil is more explosive than traditional crude oil.

How do we move to an environment where commodities are classified in the right containers from the get go and not just put in until we figure out that there’s a problem,” Hersman asked during the two-day forum on transportation of crude oil and ethanol. “Is there a process for that?”

The first panelist to respond was Robert Fronczak, assistant vice president of environmental and hazardous materials for the Association of American Railroads (AAR). His response was telling.

We’ve know about this long before Lac-Megantic and that is why we initiated the tank car committee activity and passed CPC-1232 in 2011,” Fronczak replied, “To ask why the standards are the way they are, you’d have to ask DOT that.”

So, now as the new oil-by-rail safety regulations have been sent from the Department of Transportation (DOT) to the White House’s Office of Information and Regulatory Affairs, it seems like a good time to review Hersman’s questions.

How did we miss this? Is there a process to properly classify commodities for the right container before they are ever shipped? 

Sun, 2014-06-15 07:00Justin Mikulka and Steve Horn
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Meeting Logs: Obama White House Quietly Coddling Big Oil on “Bomb Trains” Regulations

When Richard Revesz, Dean Emeritus of New York University Law School, introduced Howard Shelanski at his only public appearance so far during his tenure as Administrator of the White House Office of Information and Regulatory Affairs (OIRA), Revesz described Shelanski as, “from our perspective, close to the most important official in the federal government.”

OIRA has recently reared its head in a big way because it is currently reviewing the newly-proposed oil-by-rail safety regulations rolled out by the Department of Transportation (DOT) and Pipeline and Hazardous Materials Safety Administration (PHMSA).   

During his presentation at NYU, Shelanski spoke at length about how OIRA must use “cost-benefit analysis” with regards to regulations, stating, “Cost-benefit analysis is an essential tool for regulatory policy.”

But during his confirmation hearings, Shelanski made sure to state his position on how cost-benefit analysis should be used in practice. Shelanski let corporate interests know he was well aware of their position on the cost of regulations and what they stood to lose from stringent regulations. 

Regulatory objectives should be achieved at no higher cost than is absolutely necessary,” Shelanski said at the hearing.

Fri, 2014-03-28 06:26Justin Mikulka
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Feds Weaken New Oil-By-Rail Safety Regulations Days After Announcing Them

Oil train in Montana

Nine days after announcing new regulations designed to improve oil-by-rail safety, the Department of Transportation quietly weakened the rules for testing rail cars and exempted shippers of bitumen from having to meet the new regulations.

The department had been under pressure from industry since announcing new regulations in response to a round of testing on shipments of Bakken crude oil that found companies had classified crudes as less hazardous than they were in 11 of 18 rail cars.

The tanker cars that exploded in Lac-Megantic, Quebec, in July of 2013 were also carrying Bakken crude that was misclassified.  The result of these errors is that first responders can arrive at a scene and expect a crude oil fire and instead find a “river of napalm”, as they did in Lac-Megantic.

Tue, 2014-02-25 11:37Justin Mikulka
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Past Time to Close Loophole That Exempts Oil by Rail Companies from Spill Response Planning

In 2013, with the rapid expansion in the use of rail to transport crude oil, we learned that there was a huge increase in the the amount of oil spilled as a result of rail incidents.  

Just two weeks ago, a train
derailed near Pittsburg and spilled 4,000 gallons.  More than 1.15 million gallons of crude spilled from rail cars in 2013.  And this does not include the 1.6 million gallons that spilled in July of 2013 in Lac-Megantic in Canada.   

To put this in perspective, the 2010 Marshall Michigan Pipeline spill — currently the largest and most costly spill on land in US history according to the National Transportation Safety Board (NTSB) — only spilled 843,000 gallons.

These rolling unit trains of crude oil can be carrying over three million gallons of crude oil at one time. The train that derailed and exploded in Aliceville, Alabama in November 2013, was
carrying 2.7 million gallons of Bakken crude oil.  

However, as noted in the recent NTSB recommendations, thanks to a loophole in regulations set up in 1996, the companies transporting this oil by rail are exempt from having comprehensive spill response plans.  According to the January 23, 2014 Safety Recommendation from the NTSB (link to PDF):

oil spill response planning requirements for rail transportation of oil/petroleum products are practically nonexistent compared with other modes of transportation.”

Estimates are that 90% of the oil produced in the Bakken fields in 2014 will be transported by rail. This is up from a rate of 63% in September of 2013.  And as the NTSB notes, current regulations do not require the companies moving this crude to have comprehensive spill response plans despite the amounts of crude oil they are moving.

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