In the wake of the fatal train derailment in Canada that killed dozens as crude oil tank cars exploded, the oil industry and railroads are resisting attempts by the Obama administration to boost rail safety standards.
The Associated Press is reporting:
“Industry groups say it is impractical to retrofit tens of thousands of existing tank cars used to haul oil, even as they have adopted voluntary standards to ensure that cars ordered after October 2011 meet tough requirements recommended by federal transportation experts following a deadly ethanol train derailment and explosion in Illinois two years earlier.
“The soda-can shaped car, known as the DOT-111, has come under scrutiny from safety experts because of its tendency to split open during derailments and other major accidents.”
This will be an interesting battle, but whether or not regulations and safety rules are addressed, crude oil likely will keep traveling by rail. There’s simply too much oil coming out of U.S. shale fields in places such as North Dakota, which do not have the kind of pipeline network in place to get the oil to market. The crude will move out by rail or truck.
“As long as I have more volume than pipeline capacity, I’m going to have to put it on a train and get it out,” said Skip York, principal analyst in oils research at Wood Mackenzie in Houston. “We don’t see a dramatic abandonment of the rail option. It’s difficult to see how you could completely abandon the rail option at this point and going forward.”
You can read our story about crude-by-rail here.