Oil Train

Safe as possible, in the history of man has never equaled perfect safety.

“no tank car can be built to survive a high speed derailment without breaching”

It is an immutable law of physics that when two objects of like mass and weight collide the weaker of the two will be damaged.

Any idea if the required replacement of the tank car valves noted in today’s newswire has any thing to do with explasions ?

The problem statement is pretty simple: The safety of hauing crude oil in tank cars needs to be improved.

The solution(s) are trickier and not yet clear. But, the gist of any solution will be two fold:

  1. The improvements have to be weighed against the direct and economic impact costs. That is, it balances the improvement benefit against the total costs. This is not easy to calculate, but good faith estimates are possible. This will not include any language like “prevents”, “always”, “will”, “won’t” or “safe”.

  2. A politically palatable one from the view of the public. There is a political demand to “do something” and that something has to be perceived as “enough”. This can have all sorts of absolute language in it.

If #1 and #2 have enough in common, we might actually wind up with a decent solution. So far, all we have is a bunch of flashy news video and some proposed regs still sitting with the FRA that are stalling any progress, whether it is “enough” or not, by either standard.

Nobody is advocating “perfect safety.” Of course that is impossible. What Secretary Foxx is advocating is “as safe as possible.” Obviously, the current situation is woefully inadequate; “near perfect” isn’t even on the horizon. However, we now know that the current situation is about as good as it is going to get. This is not going to fly with the regulators, the politicians, or the public.

Apparently the industry thought that they could get away with simply promising more safety even though the increment of improvement would be so small as to be practically meaningless. But nobody could debate the point as long as the industry did not divulge how much more safety they were going to provide with the new tank cars. Unfortunately, reality caught up with this tactic by the practical demonstration of several recent train wrecks.

Whenever there is an attempt to obfuscate, stall, minimize and generally belittle the concerns of the “general public” once reality catches up credibility is lost. The public is not interested in excuses for why it should permit ~10 oil train wrecks annually, since eventually one of those will be in a populated area. Silly posturings about no such thing as “perfect safety” will only fuel the fire and what will happen then will not be to the rails’ likings, with potentially ruinous liabilities and mandated shut downs as a hazard to public health. The time for the rails to act is now, no longer being dazzled by short-term riches. Embargo Bakken crude oil shipments until such time that the safety issues can be addressed, if possible.

“Embargo Bakken crude oil shipments until such time that the safety issues can be addressed, if possible.”

Can they legally do that? I was under the impression they, as a common carrier, must accept all cargo.

One of my favorite Simpsons quotes of all time came from Mayor Quimby in reference to the mob that was protesting the tax he had to enact to fund the Bear Patrol the citizenry wanted:

“Are these morons getting dumber or just louder?”

Ok, a bit extreme, but the basic point is there. On a local forum, someone was shocked about how crude train wrecks have gone up 37% since 2008, not understanding that the railroads are hauling something like 8000x more crude than in 2008. Lots of nasty stuff gets transported every day, but the crude oil trains are big and scary and a wreck or two that is widely shown gets them all worked up. Never mind the fact that certain factions are pushing hard for the KXL pipeline and these wrecks are great at promoting that - even in parts of the country that pipeline would not affect at all.

With so many people growing up in cul-de-sac neighborhoods and working white collared/service type jobs (and electing leaders of the same ilk), there is a major societal disconnect from real industry in the country anymore.

People want their cheap gas, but they don’t want the oil transported. (Or at least in a manner visible to them)

Mayor Quimby wasn’t that far off.

Alas, many people equate the two. Reality says otherwise.

People who don’t understand where the fuel for their Rolls Kanardly comes from are the same people who don’t know where their food comes from.

There is a lot of pie in the sky about the ability for solar, wind, and renewables to replace fossil fuels. And a lot of people who want Bakken oil to stay in the ground have bought that pie. They may eventually come to see that the promise can’t be delivered, but for now, they are convinced that it can. That is all it takes to be a political force in the movement to ban oil.

Zug, I was at best a lukewarm fan of the Simpsons, but that Bear Patrol episode was my all-time favorite. It had all the shallow maneuvering of the politicians and the people. ONE time, a bear wanders into town, the people demand protection, the bear patrol was started, a $5 tax was charged, the people rebelled about the tax, the mayor diverts their ire by blaming immigrants for high taxes, and somebody keeps hollering “but what about the children?” A very realistic representation of ourselves.

I see 3 different ‘interests’/ responsible parties in this - there may be some overlap, though - in sequential order:

  1. Producers, for not modifying their more volatile/ explosive crude oil;
  2. Shippers/ carbuilders, for not having cars that can better withstand derailments without leaking and exploding;
  3. Railroads, for not preventing derailments.

Note that if any 1 of these is ‘fixed’, then the other 2 don’t matter anymore, i.e.:

  1. If the oil is made less explosive (more molasses-like crude), then neither derailments nor subsequent car ruptures matter - nothing much happens.
  2. If the cars can be built to withstand crash forces and not rupture, then derailments can happen, with cargo of any degree of explosiveness - again, nothing happens.
  3. If the railroads can prevent derailments, then the strength of the cars and the nature of the oil won’t matter - the cars won’t have to withstand high forces, and the oil will never be spilled.

In a way this also reminds me of the ‘tragedy of the commons’* - no one owns enough of the problem to have an incentive to fix it, espcially since the fix is likely to be very expensive to that entity, and the other 2 would then benefit by not having to share the cost or do their own fix, too.

*"The tragedy of the commons is an economic theory by Garrett Hardin, which states that individuals acting independently and rationally according to each’s self-interest behave contrary to the best interests of the whole group by depleting some common resource. " - from:

PDN - As succinct an explanation as I’ve seen.

I really don’t see that happening. Be political suicide.

I must clarify that when I say “ban oil,” I mean ban Bakken oil by putting a hold on oil by rail. The pretext for a ban based on fossil fuels is public safety in terms of transport. So, for the most part, it only involves Bakken and tar sands. But the opposition will take what they can get. I don’t think that would be political suicide at all. We have the most anti-fossil fuel Adminstration and much of Congress in American history.

Certainly banning all oil would be political suicide, but not just banning CBR. The country was living without Bakken up until recently. The opposition would like to ban all oil, but the public safety pretext does not extend to all oil, so there is no support to ban all oil. But they know how to get things done incrementally.

Anti-fossil fuel? Yeah, right. Keep believing that.

It’s not going to be a ban, but costs will be such that it won’t be worth pumping or shipping. Will have nothing to do with “public safety”. That’s just a smoke screen certain factions throw up to seem like they care. (they don’t).

To sort of add to the conversation and remarks by Paul of Covington:

The TRAINS Newswire of this date carries the following headline:

“Refineries sue BNSF over tank car surcharge”

**FTA:“…**FORT WORTH – A trade group representing 400 U.S. oil refineries and chemical makers is suing BNSF Railway because the railroad has started charging $1,000 each time an older tank car is used to move crude oil, Bloomberg reports…”

“…The surcharge applies to DOT-111 tank cars that were at the center of the deadly Lac-Megantic, Quebec, oil train wreck that killed 47 people in 2013. BNSF began charging customers the surcharge in January 2015 and shippers say that it’s adding a $1.50 to every barrel of fuel. The shippers accuse the railroad of trying to force them to buy newer, safer tank cars that are jacketed and, until recently, were thought to be less prone to rupturing in the event of a derailment. However, a series of recent oil train wrecks, including one on BNSF in Illinois, has shown that the newer tank cars, specifically the CPC-1232 tank cars are not as secure as the industry once thought…”[snipped]

It would seem that the ‘intersted parties’ that PDN mentioned are arming themselves for what could

Zugmann,

What you refer to as a “smoke screen” is what I am calling a “pretext.” Whether it is a smoke screen or a genuine concern for public safety makes no difference to the objective.

It might not be an outright ban. I tend to think it will be more complicated than that; more along the lines of making it uneconomical as you mention. But if there is a oil train fire with many deaths, I would expect an executive order to halt until a solution can be found.

Seems like that’s what BNSF has done - $1,000 per car - and now the litigation has begun:

http://www.bloomberg.com/news/articles/2015-03-16/refiners-sue-bnsf-railway-over-1-000-oil-tank-car-surcharges

The case is American Fuel & Petrochemical Manufacturers v. BNSF Railway Co., 15-00682; U.S. District Court, Southern District of Texas (Houston).

http://www.wsj.com/articles/u-s-refiners-suing-bnsf-over-tanker-car-charge-1426624272

My ‘take’/ prediction: Refiners lose, for 2 reasons:

  • Any such rate challenge belongs in front of the STB instead - which has primary jurisdiction in such disputes - not the U.S. District Court, which is for general litigation matters.

  • DOT/ PHMSA tank car standards are safety-related “minimums”, neither maximums nor exclusive (not pre-empting other standards that are stronger). Other parties (RRs) have the power to exceed those standards - or require the shippers to do so - and in lieu thereof, to charge accordingly for the risk that the RRs are assuming by hauling the stuff in the less-safe cars.

  • Paul North.

A couple of days back TRAINS Newswire of 3/16/2015 carreid the following story reference a case where the FRA inspectors had found leaking valves on BNSF trains of tank cars carrying crude oil.

“FRA issues directive to replace unapproved tank car valves” March 16, 2015

FTA:[snipped] "…The FRA inspector observed each of the tank car’s top fittings and found product leaking from the liquid line ball valves and around each valve’s closure plug. Further tests conducted by the FRA found that certain closure plugs installed on the 3-inch valves caused mechanical damage and led to the destruction of the valves’ seal integrity. In addition, testing found that when a 3-inch closure plug was applied and tightened in the 3-inch McKenzie valve, the plug contacted and damaged the ball. Further testing revealed that the application of downward force on the valve ball applied by the 3-inch plug resulted in the over-compression, damage, and misalignment of the inboard seal, causing the valve to leak.

While additional tests conducted by FRA concluded that McKenzie 1-inch and 2-inch ball valves do not appear to present the same safety concerns as the 3-inch valves, they are not approved for use on railroad tank cars and must also be replaced. To date, FRA is not aware of any non-accident releases or other releases from railroad tank cars involving the 1-inch or 2-inch McKenzie valves…"[snipped]

[snipped]"… The Directive requires all tank car owners to remove, within 60 days, any 3-inch McKenzie UNNR ball valves in tank cars used to transport any hazardous material described in 49 CFR 172.101. Further, the Directive requires all tank car owners to remove the 1-inch and 2-inch valves within 90 days. The FRA estimates that about 6,000 DOT-111 tank cars are