DOT to Phase Out Old Railcars

STREATOR, Ill. (DTN) -- Thousands of legacy tanker railcars would be phased out within two years under a rule proposed Wednesday by the U.S. Department of Transportation. The proposal is in response to a series of rail crashes, such as the runaway crude train last summer that exploded and resulted in the death of 47 people plus the destruction of the Lac-Megantic downtown area, a small town in Quebec, Canada.

The retrofitting or replacement of DOT-111 tank cars will impact oil and other flammable liquids transported, such as ethanol.

The proposed regulations apply to trains of 20 or more cars.

Canada is proposing a similar rule, but is allowing a three-year phase out of older rail tank cars.

The American Petroleum Institute, an oil and gas industry trade association, said it will review the regulations and plans to submit detailed comments.

"Every decision in the oil and natural gas industry begins with our core value of safety, which we approach with a foundation grounded in science and data," said Jack Gerard, API president and CEO.

However, in a separate statement issued later today, Gerard rebutted speculation by the DOT about the characteristics of crude oil from the Bakken.

"The best science and data do not support recent speculation that crude oil from the Bakken presents greater than normal transportation risks," Gerard said. "Multiple studies have shown that Bakken crude is similar to other crudes."

He added DOT needs to "get this right and make sure the regulations are grounded in facts and sound science, not speculation."

The Renewable Fuels Association, an ethanol trade association, expressed different concerns in a statement.

Bob Dinneen, president and CEO of the RFA, said the rule "paints too broad a brush" and fails to distinguish between products with an admirable safety record like ethanol.

"Ethanol is a low volatility, consistent product with a 99.997% rail safety record," Dinneen said. "Before this proposed rule is finalized, the RFA looks forward to engaging the Department of Transportation in a constructive dialogue about these differences."

(BM/CZ)

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