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Refineries sue BNSF over tank car surcharge
“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”
Uhmmm… even allowing for the following sentence, I really don’t think the shippers are going to get a lot of sympathy from anyone on this.
And if the STB allows it, and they should, what business is it of the shippers anyway?
Who can blame BNSF or other railroads for imposing a surcharge to cover the additional risk? CN wants to opt out of even having to handle it. This particular crude (and is diluent added to it for shipment?) is proving to be an unusually volatile hazmat. I’m shedding no crocodile tears for the refiners.
Hasn’t the FRA addressed this in the past few days telling the oil and gas industry they have to step up and take responsibilities in regards to better and safer equipment. Here, I think BNSF, as a common carrier, has the right to add the surcharge or refuse the shipment. Oil and gas moguls…from small shareholders to major investors…can’t wait five to ten years to build a new pipeline, can’t afford the cost of highway tank trucks and drivers, can’t afford to do anything but pay the railroads who can move the crude now.
The railroad will just apply the $1000 surcharge to every trank car, DOT-111 and CPC-1232 if loaded with untreated crude to cover the new insurance rates. And you car drivers will see it in the double gasoline price you have to pay. There is no brand competition any longer which helped to controled pricing.
Yawn…guess what? The RR’s are discovering that the risk involved in hauling oil may outweigh the benefit to the bottom line. So, put a cost on the risk and charge it. This is not rocket science.
If the car in question stays on the track…there is no risk.
When are they going to send a fully loaded 120 car oil train to the test track in Colorado and make it explode? They should find out if the slouch in the cars actually can build up stress into some point of the train causing it to force itself off the rails. If this is the case, can multiple baffles down from the top of the tankcar cut the volume and weight of the slouch? Until they understand if slouch can be a derailment cause, they should run smaller trains and do more testing.
Are the surcharge and the rate reduction the same thing (in effect) or are both being utilized?
Ironically, in the last two derailment accidents, it was the NEW cars that burned. So one wonders.
I was in the Cost Department prior to retiring from the railroad (not BNSF). All costs included a risk factor depending on the experience we had with the commodity being shipped.
The bottom line here is to do what CN is doing and opt out of having these oil trains until a safer way at the refineries can have a less or no volatile mixture. In Minnesota alone BNSF can run five or more of these trains through populated areas. The latest stat, I believe, is that there are over 350,000 people that live within a half mile of where these trains run. Neighborhoods in St. Paul, for example are getting more than concerned. A meeting with six state senators will be meeting in Minneapolis along with a county commissioner to discuss the matter. Very simply put: we do not welcome these trains in our neighborhoods under the present circumstances where even the so called newer oil cars are not safe… It only takes one derailment and subsequent catastrophic explosion to cause a horrific situation. The risk factor is too high when it comes to lives and property.
@ W Cook - An extra cost of $1.50 per barrel, when crude oil is currently around $50 per barrel, will not double the price of gas at the pump. The oli companies are simply crying about maintaining their already-outlandish profits.
W Cook from New York I believe has a good approach for the problem of tank cars derailing. I also believe the sloching of crude oil needs to be addressed. Find a way to slow down the oil movement back and forth, sideways motion and redesign the truck bolster. Has any one thought of incorporating some fuel cells along with redesigning baffels for the more explosive product.
Mr. Mack you are a NIMBY.