Federal Railroad Administration does not monitor or review railroad emergency response plans

Repost from Environment and Energy Publishing

Oil-by-rail loophole keeps U.S. emergency response plans in the dark

Blake Sobczak, E&E reporter | EnergyWire: Tuesday, April 22, 2014

U.S. transportation officials don’t review how railroads would handle worst-case oil train disasters like last summer’s derailment in Quebec, which killed 47 people in a fiery explosion.

While railroads must keep “basic” emergency response plans in their own files, the Federal Railroad Administration does not monitor or review those plans.

That’s because railroads are required to provide “comprehensive” oil spill response plans to the FRA only if they use tank cars that hold more than 42,000 gallons of crude. In an April 10 letter responding to a Freedom of Information Act request from EnergyWire, FOIA officer Denise Kollehlon said the FRA’s files “do not contain any records related to the active comprehensive ‘oil spill prevention and response plans’ for oil shipments.”

Safety experts and environmentalists say the 42,000-gallon threshold is too high. They stress that the 1996 rule that set the limit never applies in practice. Just five tank cars nationwide are designed to store that much oil in a single packaging, officials say, and the FOIA response confirms that none are hauling crude (EnergyWire, Feb. 19).

The threshold predates the recent surge in oil-by-rail transport, which has seen annual crude shipments jump from fewer than 10,000 carloads in 2008 to 415,000 carloads last year, according to industry data.

Tim Pellerin, fire chief of Rangeley, Maine, said “tangible, realistic” emergency response plans could help firefighters, who often reach remote disaster sites before railroads’ own hazardous materials crews.

“There’s got to be a system in place that checks this and oversees [railroads] to make sure that there are plans in place,” he said in an interview.

Pellerin led a group of U.S. firefighters 60 miles north into Canada after a 72-car oil train derailed and exploded in Lac-Mégantic, Quebec.

The disaster claimed 47 lives and put hazardous materials safety on the map for U.S. and Canadian transportation regulators.

Later derailments and fires in Alabama and North Dakota in the United States and New Brunswick in Canada kept the issue in the spotlight, although they injured no one. Earlier this month, Pellerin called on lawmakers to provide more funding for first responders at a Senate Appropriations subcommittee hearing.

Local fire departments can request hazardous materials shipping and emergency response information from railroads under voluntary industry standards. But picking out potential weak points in such plans “is an awful lot to expect from a small volunteer fire department with a $2,000-per-year budget,” Pellerin said, adding that his department lacks the specialized knowledge needed to gauge the adequacy of railroads’ response measures. “I’m not an expert in 10,000 things — I’m a fire chief,” he said.

The FRA, part of the Department of Transportation, did not respond to requests for comment, although it has previously said it is taking a “comprehensive approach to improving the safe transportation of crude oil by rail.” In February, the regulator reached a voluntary agreement with railroads to tighten oil train operating practices, lowering speed limits through urban areas and committing $5 million in industry funds to prepare first responders, among other measures.

Holly Arthur, spokeswoman for the Association of American Railroads, noted that railroads are also developing an inventory of oil spill emergency response resources under the terms of the agreement.

“This inventory will include locations for the staging of emergency response equipment and, where appropriate, contacts for the notification of communities,” Arthur said in an emailed statement yesterday. “When the inventory is completed [by July 1], railroads will provide DOT with information on the deployment of the resources and make the information available upon request to appropriate emergency responders.”

Emergency response ‘offloaded to local communities’

Safety officials have questioned whether voluntary arrangements go far enough to protect local communities.

Outgoing National Transportation Safety Board Chairwoman Deborah Hersman wrote in a Jan. 23 letter to FRA Administrator Joseph Szabo that without closely regulated response plans, “[rail] carriers have effectively placed the burden of remediating the environmental consequences of an accident on local communities along their routes.”

Hersman reiterated her crude-by-rail concerns yesterday in her farewell address at the National Press Club in Washington, D.C. Crude-by-rail “can be a worst-case-scenario event, and we don’t have provisions in place to deal with it, either on the industry side or for the first responders,” she said.

Experts at the NTSB and Canada’s Transportation Safety Board agree that the magnitude of the Lac-Mégantic disaster swamped the small railroad’s response resources, which can include hazardous materials crews and specialized firefighting foam. The railroad involved in the July 6 crash — Montreal, Maine & Atlantic Railway Ltd. — has since declared bankruptcy in the United States and Canada and is in the process of being taken over by the New York-based Fortress Investment Group (EnergyWire, Jan. 23).

“Railroads have for decades offloaded to local communities the responsibilities for emergency response,” said independent hazardous materials consultant Fred Millar, who has worked with environmental groups including Friends of the Earth.

Millar said he was not surprised by the fact that the FRA does not keep tabs on railroads’ oil spill response plans. “Nobody even has a measure of what would be an adequate emergency response capability,” he said.

By contrast, crude pipelines, storage facilities and waterborne oil tankers must comply with lengthier emergency response requirements laid out by the Pipeline and Hazardous Materials Safety Administration, U.S. EPA and U.S. Coast Guard, respectively.

The 1996 rules for oil-by-rail emergency response plans were crafted by the Research and Special Programs Administration, the precursor to PHMSA.

The agency said then that “on the basis of available information, no rail carrier is transporting oil in a quantity greater than 42,000 gallons in tank cars.”

NTSB has since questioned why the benchmark for comprehensive plans exists if it never actually applies. Officials at the Department of Transportation have until tomorrow to respond to NTSB’s criticisms.

“By limiting the comprehensive planning threshold for a single tank size that is greater than any currently in use, spill-planning regulations do not take into account the potential of a derailment of large numbers of 30,000-gallon tank cars, such as in Lac-Mégantic where 60 tank cars together released about 1.6 million gallons of crude oil,” NTSB’s Hersman wrote in her letter to PHMSA, also part of DOT.

In the wake of the Lac-Mégantic derailment, PHMSA has also faced pressure to update decades-old crude tank car rules. Critics say the outdated federal tank car standards and the FRA’s lack of oil spill emergency planning oversight point to the difficulty of keeping pace with the fast-growing crude-by-rail business.

The FRA and the railroad industry cite improving safety statistics, noting that more than 99.9 percent of all hazardous materials shipments reach their destination safely.

But despite declining accident rates over the past decade, regulatory consultant and attorney Paul Blackburn said, “citizens need to be concerned about … what happens over time.”

“After a big event like the Lac-Mégantic disaster, you’d expect the industry to be more cautious,” he said of recent voluntary safety measures. But “as these events fade from memory, there’s nothing to stop the industry from backing off on its commitment to improve spill response” barring federal action.

Reporter Mike Soraghan contributed.


    Outgoing chair of NTSB: U.S. not prepared, not enough NTSB investigators

    Repost from Bloomberg News

    Communities Not Prepared for Worst-Case Rail Accidents: NTSB

    By Patrick Ambrosio Apr 22, 2014 7:38 AM

    Bloomberg BNA — Deborah Hersman, the outgoing chairman of the National Transportation Safety Board, said April 21 that U.S. communities are not prepared to respond adequately to worst-case accidents involving trains carrying crude oil and ethanol.

    Answering questions following her farewell address at the National Press Club in Washington, Hersman said U.S. regulators are behind the curve in addressing the transport of hazardous liquids by rail. She said federal regulations have not been revised to address the increase in rail transport of crude oil and other flammable liquids—an increase of over 440 percent since 2005.

    Hersman, who is leaving her post at NTSB April 25 to serve as president of the National Safety Council, said the petroleum industry and first responders don’t have provisions in place to address a worst-case scenario event involving a train carrying crude oil or ethanol. She said several catastrophic accidents have involved crude oil, including a July 2013 train derailment in Lac-Mégantic, Quebec, that resulted in 47 fatalities.

    The NTSB, in conjunction with the Transportation Safety Board of Canada, identified regulatory steps that could be taken by the Transportation Department to address safety risks, including expanded route planning requirements for crude oil shipments, the addition of a requirement for carriers to develop response plans for incidents involving crude oil shipments and increased audits of shippers and carriers to ensure that hazardous liquids are properly classified.

    Hersman said the NTSB scheduled a two-day forum to hear from first responders and the petroleum and rail industries on safety issues. The forum, which will be held on April 22-23 in Washington, will include discussions on tank car design, emergency response to releases of flammable liquids and federal oversight of crude oil and ethanol transport, according to an agenda posted on the NTSB’s website.

    Tank Car Safety

    When asked about the adequacy of the DOT-111 rail tank car to carry crude oil, Hersman reiterated the NTSB’s position that the tank cars are not safe to carry hazardous liquids.

    The NTSB recommended in 2009 that all new and existing tank cars in crude oil and ethanol service be equipped with additional safety design features, including enhanced tank head and shell puncture resistance systems, top fittings protection and bottom outlet valves that remain closed during accidents.

    “We have said that they are not safe enough to carry hazardous liquids,” Hersman said about the DOT-111 legacy cars. “Carrying corn oil is fine, carrying crude oil is not.”

    The Pipeline and Hazardous Materials Safety Administration and the Federal Railroad Administration is working on a proposed rule to update the federal design standards for DOT-111 rail tank cars used to transport hazardous liquids. The consensus among industry and regulators is that new design standards are needed, but there is disagreement over whether the new safety requirements should be more stringent than the CPC-1232 standard, a voluntary industry standard adopted for all new tank cars ordered after Oct. 1, 2011.

    Staffing Limitations Said to Delay Work

    NTSB staff needs support from Congress to fulfill their mission, Hersman said. At present, she said the NTSB is involved in more than 20 rail accident investigations but only has “about 10 rail investigators.”

    “We’re going to have to turn down accidents that occur in the future because we have too much on our plate.”


      The legal quagmire of Lac-Mégantic

      Repost from The Montreal Gazette

      Plans are finally taking shape for financial compensation of derailment victims

      By Monique Beaudin, Gazette environment reporter April 20, 2014
      The legal quagmire of Lac-Mégantic
      The light fades over the Appalachian Mountains in Lac-Mégantic a couple of weeks after the train derailment in July 2013. Eight months later, plans for compensation are coming together. Photograph by: Allen McInnis , Montreal Gazette

      Nine months after a runaway oil train derailed in Lac-Mégantic, killing 47 people and destroying a large chunk of the town, a plan for financially compensating disaster victims is taking shape.

      Judges in Quebec and Maine have approved a joint cross-border process for victims of the accident to file claims against Montreal, Maine and Atlantic Railway and its Canadian operations, Montreal, Maine and Atlantic Canada. The two companies have been under bankruptcy protection since August.

      Thousands of claims related to the derailment are expected to be filed against MMA. Public information meetings on the financial-claims process are to begin in Lac-Mégantic next week. Claims must be filed by the middle of June.

      People who lost family members, homes and businesses have turned to Canadian and American courts for financial compensation, but the process has been slow. The estates of several of the 47 people killed on July 6 have filed wrongful-death lawsuits in the U.S. Lawyers have also begun proceedings to bring a class action in Quebec. Quebec has already ordered six companies to clean up and decontaminate the town, a move that is facing a legal challenge.

      The American lawyer overseeing MMA’s U.S. bankruptcy proceedings himself admits figuring out how victims will be compensated is “quite complicated”.

      One of the biggest questions is who has the money to pay for the accident — compensating victims and secured creditors, covering cleanup costs and paying damages that several companies are claiming as a result of the derailment.

      MMA was sold in January to New York-based Railway Acquisitions Holdings, for $14.25 million, less than what it owes its secured creditors.

      That leaves a $25-million insurance policy and the possibility of a settlement fund composed of contributions from several companies targeted by legal action after the accident, said Robert Keach, MMA’s U.S. Chapter 11 trustee.

      Another possible source of financial compensation for victims could come from a lawsuit Keach filed against World Fuel Services, Western Petroleum and Petroleum Transport Solutions, the companies that arranged for the shipment of the crude oil on the train. Keach argued they were to blame for the accident since the oil had been mislabelled as being less volatile than it actually was.

      New York-based lawyer Luc Despins is counsel to a victims’ committee made up of residents, the town of Lac-Mégantic and the Quebec government. The committee represents victims’ interests in MMA’s American bankruptcy proceedings, offering input on issues like the compensation process, he said.

      Despins said the committee’s goal is to get as much money as possible to the Lac-Mégantic victims as quickly as possible. But, he cautioned, not all claims filed may be accepted.

      “If someone agrees their house was worth $600,000 and they got the full $600,000 from their insurance company, and that’s their only claim, they should not be recovering twice, this is not a lottery,” he said. “They may have other claims, but as far as the house I gave as an example is concerned, they can’t recover twice.” The courts will decide who has a valid claim, Despins said.


      Victims of the accident have until June 13 at 5 p.m. to file a proof of claim against Montreal, Maine and Atlantic.

      Public information meetings on the claims process are to be held in Lac-Mégantic between April 22 and May 5, and assistance will be provided to help people complete the claims forms, according to an order issued by Quebec Superior Court. Victims who do not file a claims form by June 13 will not be permitted to participate in the Canadian or U.S. bankruptcy proceedings or receive any payment made available in those proceedings.

      Claims forms and information about the claims process are posted on the website of Montreal-based Richter Advisory Group, the company’s Canadian bankruptcy monitor, at www.richter.ca under “Insolvency Cases” or  http://bit.ly/mmamonitor.


      A request has been filed to approve a class-action lawsuit in Quebec against MMA, World Fuel services, Irving Oil, Canadian Pacific, the federal government and others. More than 1,550 people have registered with the class action so far.

      A committee of three Lac-Mégantic residents, a representative of the Quebec government and the town of Lac-Mégantic represents victims’ interests in MMA’s U.S. bankruptcy proceedings.

      The estates of 19 people killed in the Lac-Mégantic train derailment filed wrongful-death lawsuits in Illinois, naming several defendants, including MMA, company chairman Edward Burkhardt, MMA’s parent company Rail World, and World Fuel Services, which arranged for the transportation of the crude oil on the train. All except two of those lawsuits have been withdrawn while American courts decide where they will be heard. A law firm representing the estates says it plans to appeal a recent decision from a U.S. federal judge ordering the cases transferred to Maine, where MMA’s bankruptcy proceedings are being held. One of the issues at play is the amount of money that could be awarded as damages. Illinois has no cap on such payments, while Maine limits them to $500,000 in wrongful-death cases.


      A $25-million insurance policy MMA has with XL Insurance. Many people and companies are interested in the insurance policy. They include:

      – Victims of the Lac-Mégantic derailment, such as the families of people killed in the accident, those who were injured or those who suffered losses to their businesses or homes.

      – CIT Group, a company that owned some of the locomotives and tank cars involved in the accident. CIT has said it plans to settle any claims against it from wrongful-death lawsuits tied to the derailment with the XL insurance policy.

      – MMA chairman Edward Burkhardt, who has been named in several legal actions linked to the derailment, argued in U.S. bankruptcy court that he is covered by the policy.

      Settlements from legal action taken by MMA’s bankruptcy trustee against World Fuel Services.

      The creation of a settlement fund made up of financial contributions from companies that may be liable for the accident.


      July 6, 2013: A 72-car oil train pulled by five locomotives unexpectedly rolls down railway tracks into the town of Lac-Mégantic. Most of the cars derail, leading to explosions and a fire that kills 47 people and destroys much of the downtown core. Nearly 6 million litres of crude oil spill in the accident.

      July 15, 2013: Lac-Mégantic lawyer Daniel Larochelle and two other law firms file a request in Quebec Court to begin class action proceedings against MMA and 14 other companies and individuals.

      July 22, 2013: Annick Roy files a wrongful-death lawsuit in Illinois court on behalf of the estate of Jean-Guy Veilleux and their daughter. Veilleux was killed July 6.

      Aug. 7, 2013: MMA files for bankruptcy protection in Canada and the U.S.

      Aug. 14, 2013: A total of 19 wrongful-death cases have been filed in Illinois court.

      Aug. 22, 2013: The Quebec government announces the creation of a victims’ committee to represent Lac-Mégantic residents, the government and the town in the U.S. bankruptcy proceedings.

      Jan 23, 2014: Bankruptcy judges in Canada and the U.S. approve the sale of MMA to Railway Acquisitions Holdings of New York for $14.25 million U.S.

      Feb. 12, 2014: Lawyers for the proposed Quebec class action add Transport Canada to the list of more than 50 organizations and people it plans to sue.

      Feb. 26, 2014: A joint Canada-U.S. bankruptcy meeting between creditors tries to speed up the pace of the claims process.

      April 2014: The MMA sale to RAH is expected to be finalized.

      June 13, 2014: This is the proposed deadline for victims and creditors to file claims against MMA in the Canadian and U.S. bankruptcy proceedings.


      The railway company whose runaway oil train derailed in Lac-Mégantic on July 6, 2013. It is in the process of being sold to Railway Acquisition Holdings, a New York City -based company, for $14.25 million U.S. RAH plans to change the name of the company to Central Maine and Quebec Railway, and offer rail service on MMA’s 800 kilometres of tracks in the two countries.

      RAH is acquiring two companies:

      Montreal, Maine and Atlantic Railway

      • Parent company of Montreal, Maine and Atlantic Canada.
      • Operates a shortline railroad in Vermont and Maine.
      • Under Chapter 11 bankruptcy protection since August.

      Montreal, Maine and Atlantic Canada

      • Railway operating in Quebec.
      • Under bankruptcy protection since August.

        For safe and healthy communities…