Eastern Railroad Discussion > Fed tank car rules are slow in coming

NY Times has an article about the "flurry of emergency orders" issued by government regulators following concerns about oil safety.

The article notes that even the rail industry is divided. BNSF has broken with industry practice, and is buying new tank cars. Some refiners are hesitant about retiring "perfectly good" but not 1232 compliant cars. They note that 1232 cars were in the Lynchburg fire last week.

Canadian rules have raised the bar, and CN has raised shipping costs for non-compliant tank cars. That, in turn has created a problem for US shippers.

>>The federal safety board has repeatedly noted in recent years that the tank cars — called DOT-111s — have a high rate of failures in accidents. Making things worse, the kind of oil that comes out of the Bakken region is particularly flammable and prone to explosion.

During a safety forum recently, the departing chairwoman of the safety board, Deborah Hersman, warned of the risk of a “higher body count” if regulators did not update tank car standards.

On Wednesday, transportation regulators said they would urge shippers to stop using older tank cars to carry crude oil, recommending that they use cars with “the highest level of integrity.”<<

On one hand, the industry wants certainty about what will be mandated. On the other hand, they don't want overly fast retirements of cars pinching the supply.

>>The details of what regulators are considering have not been made public and industry officials said they did not know yet what to expect. If the United States regulations are more stringent than those adopted in Canada, officials there said they would toughen their own rules to match them.

“We recognize the status quo isn’t acceptable,” said Mr. Simpson of the Rail Supply Institute. “If I could say one thing to the secretary of transportation, it is get the rule out. Give us certainty and we will act.”

As quickly as the oil started moving by rail out of ND and other areas, I am wondering where all of these 'older' tank cars came from? What were they doing before moving crude oil?

It has only been about 2 years since this traffic has taken off and if the 'newer' tank cars already have the upgraded features, how many 'old' tank cars are we talking about here?

P Wrote:
-------------------------------------------------------
> As quickly as the oil started moving by rail out
> of ND and other areas, I am wondering where all of
> these 'older' tank cars came from? What were they
> doing before moving crude oil?
>
> It has only been about 2 years since this traffic
> has taken off and if the 'newer' tank cars already
> have the upgraded features, how many 'old' tank
> cars are we talking about here?


According to AAR estimates published earlier this year, there are about 92,000 tanks cars in hazmat service (crude, ethanol, other flamables). About 78,000 of those are older cars. The CPC-1232 standard was adopted by AAR in 2011, to be applied to all new tank cars 'ordered' after Oct. 2011. That tells me there were non CPC-1232 type tank cars still being delivered in 2012, so some 'old' cars have only been around 2-3 years.

As far as the crude oil boom, the surge in rail traffic just happened in the last several years but this has been in the planning stages for alot longer. Plains All American finalized the acquisition of the Yorktown facility in Dec. 2011, but they had been in negotiations with Western Refining about the sale for months prior to that. The oil producers knew what was coming at least five years ago. I found an article that said that Union Tank Car started adding employees to handle additional demand back in Aug. 2010.

gcw Wrote:
-------------------------------------------------------
> P Wrote:
> --------------------------------------------------
> -----
> > As quickly as the oil started moving by rail
> out
> > of ND and other areas, I am wondering where all
> of
> > these 'older' tank cars came from? What were
> they
> > doing before moving crude oil?
> >
> > It has only been about 2 years since this
> traffic
> > has taken off and if the 'newer' tank cars
> already
> > have the upgraded features, how many 'old' tank
> > cars are we talking about here?
>
>
> According to AAR estimates published earlier this
> year, there are about 92,000 tanks cars in hazmat
> service (crude, ethanol, other flamables). About
> 78,000 of those are older cars. The CPC-1232
> standard was adopted by AAR in 2011, to be applied
> to all new tank cars 'ordered' after Oct. 2011.
> That tells me there were non CPC-1232 type tank
> cars still being delivered in 2012, so some 'old'
> cars have only been around 2-3 years.
>
> As far as the crude oil boom, the surge in rail
> traffic just happened in the last several years
> but this has been in the planning stages for alot
> longer. Plains All American finalized the
> acquisition of the Yorktown facility in Dec. 2011,
> but they had been in negotiations with Western
> Refining about the sale for months prior to that.
> The oil producers knew what was coming at least
> five years ago. I found an article that said that
> Union Tank Car started adding employees to handle
> additional demand back in Aug. 2010.

The 2011-2012 collapse in the ethanol business also released a lot of older tan cars for crude oil service. Many smaller providers went belly up (and were bought by Valero, etc). Many tank cars committed to the ethanol business were released for crude service.

I recently read the article about the CSX derailment, in that particular piece they mentioned possibly proposing more lower speed restrictions on these trains. If so, traffic problems on the rails could get worse, and would it really make any difference to the "older" type tanker cars? Could get interesting.

There have been MANY sightings of former ethanol fleet tank cars now carrying crude oil (their placards have changed from UN1987 to UN1267 quite fast), and that's become a normal thing of late. Are these those "what did they carry before crude oil" cars people are asking about? We know they're former ethanol fleet cars, as the REPORTING MARKS have remained the same; only the commodity hauled has changed. But then, the ethanol fleet tank cars are now being seen carrying a whole host of other hazmat loads, making the fleet versatile enough to be useful in the event ethanol use declines, however unlikely that seems at this time.



Edited 1 time(s). Last edit at 05/09/14 09:24 by rbx551985.

rbx551985 Wrote:
-------------------------------------------------------
> There have been MANY sightings of former ethanol
> fleet tank cars now carrying crude oil (their
> placards have changed from UN1987 to UN1267 quite
> fast), and that's become a normal thing of late.
> Are these those "what did they carry before crude
> oil" cars people are asking about? We know
> they're former ethanol fleet cars, as the
> REPORTING MARKS have remained the same; only the
> commodity hauled has changed. But then, the
> ethanol fleet tank cars are now being seen
> carrying a whole host of other hazmat loads,
> making the fleet versatile enough to be useful in
> the event ethanol use declines, however unlikely
> that seems at this time.

Until recently, the railroads have owned relatively few DOT-111 tank cars and their variants for customer service. Union Tank Car (UTLX), General American (GATX) and others have provided the bulk of the lease car fleet.

There are many reasons why an investment partnership would want to own a fleet of tank cars and make them available for lease. Low interest rates on borrowing, tax advantages with depreciation, various manufacturing credits, etc. Creates a lot of manufacturing jobs for American and Canadian workers, too.

Maybe, instead of slower speeds, it's time to start increasing track inspections on routes that handle oil trains. They also need to end the practice of letting track inspectors do all their work in a hi-railer. A hi-rail truck doesn't put the same load on the track structure as a train. The same defect that you will never see or feel in a truck, could become critical when a train passes over it.

Track inspectors should have to ride the head end of a train, at speed, over the territory they are inspecting at least once every two weeks.

bioyans Wrote:
-------------------------------------------------------
> Maybe, instead of slower speeds, it's time to
> start increasing track inspections on routes that
> handle oil trains. They also need to end the
> practice of letting track inspectors do all their
> work in a hi-railer. A hi-rail truck doesn't put
> the same load on the track structure as a train.
> The same defect that you will never see or feel in
> a truck, could become critical when a train passes
> over it.
>
> Track inspectors should have to ride the head end
> of a train, at speed, over the territory they are
> inspecting at least once every two weeks.

Surprisingly enough Southern Pacific was a railroad that got this concept. The SP had some of the heavier used lines radiating out of Houston and the Chemical Coast tested by Sperry Rail Service four times a year for rail defects. Just to be on the safe side.

Jim

Sperry tests CSX's Philly Sub at least four times per year and it sees loaded crude and etanol in regular freights Q370 and Q373 and empty crude trains but no loaded crude unit trains.

tp117 Wrote:
-------------------------------------------------------
> Sperry tests CSX's Philly Sub at least four times
> per year and it sees loaded crude and etanol in
> regular freights Q370 and Q373 and empty crude
> trains but no loaded crude unit trains.

I've seen/heard the Sperry truck on the Trenton sub (between Manville and West Trenton NJ) several times as well. In addition to the empty crude/ethanol trains that line hosts unit crude loads, too.