Inspector General Report: Rail Hazmat Safety Violations should be prosecuted
By Joan Lowy, Associated Press, February 28, 2016
WASHINGTON (AP) — Federal regulators are failing to refer serious safety violations involving freight rail shipments of crude oil and other hazardous cargo for criminal prosecution, and are going lightly on civil fines, according to a report released Friday by a government watchdog.
The Federal Railroad Administration routinely applies only modest civil penalties for hazardous materials safety violations, even though inspectors request penalties only for serious or repeated infractions, said the report by the Department of Transportation’s inspector general.
Instead, the agency’s attorneys have made it a priority to process penalties quickly and avoid legal challenges, the report said.
And, although the agency processes hundreds of safety violations each year, it appears that not a single case has ever been referred for criminal investigation, the report said. After examining a random sample of safety violations over five years, the inspector general’s office found 17 cases it said should have referred for criminal investigation.
Based on that sample, the inspector general’s office estimated 20 percent, or 227 out of 1,126 violations, may have warranted criminal referral. The agency’s attorneys told the watchdog that they didn’t make criminal referrals because they didn’t know the procedures for doing so, and they didn’t think it was part of their job.
“As a result, penalties have little deterrent effect, and criminal penalties aren’t being pursued,” wrote Mitchell Behm, assistant inspector general for surface transportation.
Concern about rail shipments of hazardous cargo has been heightened in recent years by a series of fiery oil train explosions in the U.S. and Canada, including one just across the border in Lac-Megantic, Quebec, that killed 47 people. More than 400,000 tank cars of oil are shipped across the country annually.
Rep. Peter DeFazio of Oregon, the senior Democrat on the House Transportation and Infrastructure Committee, said the report confirms “that the federal government has failed to provide the necessary oversight to protect communities across the country from serious accidents involving the rail transportation of hazardous materials.”
One case the report said should have been referred for criminal investigation involved a company that produced tank car valves that hadn’t been put through a required design approval process. The valves subsequently leaked hazardous liquids. In another case, a company may have deliberately failed to disclose that a shipment included radioactive containers.
Matt Lehner, an FRA spokesman, said most of the inspector general’s recommendations are being implemented. He noted that the agency collected $15 million in fines for violations in the 2015 federal budget year, a 12 percent increase over the previous year and the most in the agency’s history
The inspector general’s office also found that the agency doesn’t have a complete understanding of the risks of hazardous cargo shipments because the agency makes safety assessments by looking narrowly at operations in specific regions, not the nation as a whole.
The regional evaluations also don’t include an assessment of the risks of transporting highly volatile and hazardous materials like crude oil near cities and major population centers, the report said.
Without an accurate national assessment, the railroad administration can’t be sure that all the appropriate risk factors are being considered when deciding which operations are most in need of inspections, the report said.
The inspector general also faulted the agency’s complex records system, saying it makes difficult for inspectors to access safety information on rail operations outside their region. As a result, the railroad administration and a sister agency, the Pipeline and Hazardous Materials Safety Administration, don’t share critical and up-to-date information with safety inspectors and investigators in different regions throughout the country.
Deadline for train safety technology undercut by industry lobbying
By Ashley Halsey III and Michael Laris October 25 at 10:13 PM
Until a train barreled off the tracks at 9:26 p.m. on May 12, it had been business as usual on Capitol Hill. Among the bills quietly making their way toward a final vote was one that would postpone by several years a multibillion- dollar safety-enhancement deadline facing the railroad industry.
A victory for the railroads, which maintain one of the most powerful lobbying efforts in Washington, seemed all but certain and likely to be little noticed outside of the industry.
But at that moment, an Amtrak train hurtling toward New York City derailed in Philadelphia, turning into a tangle of crushed metal that killed eight passengers and injured 200 more.
Everyone — including the railroad and federal investigators — agreed that the catastrophe could have been prevented by a single innovation called Positive Train Control (PTC). It’s an automatic braking system that federal regulators call “the single-most important rail safety development in more than a century.”
Now, after a period of reflection and several inquiries, Congress once more is on the brink of postponing the deadline for use of PTC. The proposed delay — until at least 2018 — comes in a new regulatory era for the railroads. Trains filled with volatile natural gas or oil have derailed seven times so far this year, and there is fear that one could cause catastrophic explosions as it passes through a city.
A mighty lobby
What has taken place since May provides insight into the influence that effective lobbyists wield in Washington and how ready access to members of Congress has helped one industry fend off a costly safety mandate.
Seven years ago, Congress ordered railroads to have PTC installed by the end of 2015. It was an uncomfortable deadline for the industry, one it argued should be postponed. PTC technology was too complex, the railroads said, and the $14.7 billion cost to equip freight and commuter lines was prohibitive. Federal economists put the cost-benefit ratio at about 20 to 1.
With their lobbyists in overdrive in 2008, the railroads might have persuaded Congress to delay the mandate. But in the middle of that debate, a head-on train collision in California killed 25 people and injured 102 others. The National Transportation Safety Board said PTC could have prevented the accident, and that moved lawmakers to settle on the Dec. 31, 2015, deadline.
The NTSB says it has investigated 145 rail accidents since 1969 that PTC could have prevented, with a toll of 288 people killed and 6,574 people injured.
In the years since Congress moved to finalize the deadline in 2008, the railroad industry has spent $316 million, according to the Center for Responsive Politics (CRP), to maintain one of the most savvy lobbying teams in Washington. It also contributed more than $24 million during the same period to the reelection efforts of members of Congress, targeting in particular the chairmen and members of key committees that govern its business.
In 2011, the chairman of the House subcommittee on railroads spoke out at a hearing, denouncing the PTC mandate as “an example of regulatory overreach.” He said PTC would have “a very, very small cost-benefit ratio.”
Since then, that chairman, Rep. Bill Shuster (R-Pa.), has risen to lead the full House Transportation Committee. Late last month, he introduced a bipartisan bill to extend the PTC deadline to at least 2018, and beyond if the “railroads demonstrate they are facing continued difficulties.”
“Railroads must implement this important but complicated safety technology in a responsible manner, and we need to give them the necessary time to do so,” Shuster said in a statement announcing the bill.
Since taking office in 2001, Shuster has received campaign contributions of $446,079 from the railroad industry, according to the CRP, with $141,484 of it coming in the 2013-2014 election cycle.
Money flows readily to the chairs of powerful committees, but other members of the House Transportation Committee also have benefited from railroad contributions. In the 2013-2014 election cycle, committee members received more than $1.25 million in direct contributions to their campaigns. As of the end of September, the railroads had pitched another $721,742 at the House committee members.
The Senate also has benefited from the railroad industry’s largesse, according to the CRP, with 77 senators receiving nearly $1.5 million in campaign contributions in 2013-2014.
Outside the Beltway, massive contributions may sound like the cost to buy a vote in Congress. But in this era of mega-money politics, campaign contributions win something almost as valuable for railroad lobbyists: face time with a member of the House or Senate.
“They call and they get a member meeting right away,” said a senior Senate staff member familiar with the process. “They have a lot of access.”
And that access brings into play what are described as some of the best lobbyists on Capitol Hill, including several dozen who once were staff members or lawmakers in Congress.
Rep. Peter A. DeFazio (Ore.), the ranking Democrat on the Transportation Committee and the recipient of more than $70,000 in railroad campaign money since 2013, says it’s the footwork of the lobbyists, not the campaign contributions, that wins the day.
“In these days, when you have one Wall Street billionaire spend a million bucks [on a campaign], getting a few thousand dollars from a railroad?” he said with a shrug. “The railroads invest a lot of time on the Hill, and they present a pretty good story for the most part.”
Oil boom raises the stakes
Rail safety has never been a more pressing issue than it is today. So far, the people who have died in U.S. accidents that PTC could have prevented have generally been crew members or passengers. That could change in dramatic, catastrophic fashion.
The number of rail tank cars carrying flammable material in the United States has grown from 9,500 seven years ago to 493,126 last year, thanks to the boom in domestic oil produced in the Bakken oil fields.
Those trains rumble from the oil fields in Montana, North Dakota and Saskatchewan, Canada, to refineries on the East, West and Gulf coasts.
This year, seven trains have derailed, either leaking their contents or exploding. All of the U.S. explosions have come in remote rural areas where the erupting fireballs did little damage.
Canada was not so lucky.
In July 2013, a runaway freight train carrying 74 tank cars full of Bakken oil derailed in the town of Lac-Mégantic, setting off an inferno that destroyed 30 downtown buildings and killed 47 people.
Coastal states in the United States and the city of Chicago, the most important railroad hub in the nation, have come up with scenarios that depict the potential damage and death tolls should a train explode in different sections of their urban areas. Chicago, fearing that the plan’s release could cause panic, has declined to make it public.
Sarah Feinberg, acting head of the Federal Railroad Administration, says that worries of a train exploding in the middle of a city have caused her sleepless nights.
“If PTC is not fully implemented by Jan. 1, 2016, we can and should expect there to be accidents in the months and years to follow that PTC could have prevented,” she told the House subcommittee on railroads in June.
Bob Gildersleeve Sr., whose son Bob, a Maryland father of two, was killed in the May crash, said rail companies seem to be evading the mandate with an attitude of: “What are you going to do about it?”
“Is a deadline a deadline?” Gildersleeve asked. “We’re talking about fixing things that will eventually save lives, and you guys haven’t done it. Why?”
Many railroads far behind
The railroads’ pitch for an extension — both loudly in the media and quietly to Congress — has been straightforward. Unless the deadline is postponed:
“Transportation of all goods over freight rail grinds to a halt; the U.S. economy loses $30 billion; household incomes drop by $17 billion; 700,000 Americans lose their jobs; millions of commuters are stranded.”
That was the message Oct. 19 when officials from three commuter rail lines and Association of American Railroads President Ed Hamberger held a conference call with reporters to add their voices to a chorus calling for an extension of the PTC deadline.
“If the congressionally mandated deadline of Dec. 31 is not extended, there will be a transportation crisis in the country with severe economic consequences,” said Michael Melaniphy, president of the American Public Transportation Association.
The call had an unintended subtext; all three of the commuter rail lines represented — Virginia Railway Express, Chicago’s Metra system and California’s San Joaquin Regional Rail Commission — said their installation of PTC would be substantially complete by the end of 2015. Amtrak also promises to have PTC operating in the Northeast Corridor rails that it owns by the current deadline.
But most passenger trains operate on track that’s owned by the freight railroads, and the freight rail lines are far from ready to meet the deadline. The freight companies say that without an extension, all traffic on their lines must halt to comply with the law.
The railroads say they’ve already spent $5.7 billion on PTC installation and are committed to finishing the job. None will meet the Dec. 31 deadline.
“It doesn’t matter how fast the bear is that’s chasing you, if you’re running as fast as you can, you can’t run any faster,” said Frank Lonegro, vice president of the freight rail carrier CSX, which operates more than 21,000 miles of rail in 23 eastern states, Washington and two Canadian provinces.
Some of the big railroads have made progress, while others lag far behind.
One of the largest, the BNSF Railway, has made substantial progress. At the other end of the spectrum, Union Pacific hasn’t fully equipped any of its 6,532 locomotives, according to a Federal Railroad Administration report released in August.
“Union Pacific is pretending [the deadline] is not happening,” said one federal official who reviewed the report.
Union Pacific spokesman Aaron Hunt says that “integrating these technologies into an interoperable system is very difficult,” much like merging medical records into a computerized system, and that the company already has made a $1.7 billion investment, including work on the bulk of its locomotives.
Lonegro’s colleague, CSX spokesman Rob Doolittle, said railroad lobbyists have been telling Congress for years that a 2015 deadline wasn’t realistic.
“In the early conversations, before the law was passed, the industry was identifying 2018 as a reasonable deadline that we thought we could achieve,” he said.
A federal official familiar with those 2008 negotiations offered a different perspective.
“The railroads were in the room, and [Association of American Railroads] and those guys were the ones who said 2015 was doable. They did not embrace the deadline, but they said it was a fair bill,” said the official, who spoke on the condition of anonymity because of involvement in the current negotiations.
“It certainly wasn’t, ‘Oh, we sprung it on the railroads at the last minute,’ as they would like some to believe,” said a staff member who was in the room while the deal was being struck.
When the final regulations were put in place nearly six years ago, federal officials tallied up the expected benefits of having the automatic braking system in place. The cost-benefit analysis put a price tag on crumpled locomotives, train delays, track damage, evacuation costs, the cleanup of hazardous spills and other consequences of the crashes that could be prevented.
Government economists also sought to calculate the human costs in injuries and deaths, using a figure of $6 million for each life that was expected to be saved. Over 20 years, there would be $269 million in savings, they figured, or the equivalent of 45 lives spared. There would be another $200 million in prevented injury costs.
In all, they projected $674 million in safety benefits from the PTC system. It would cost $13.2 billion over 20 years, including maintenance costs, to net those benefits, the economists calculated.
That came out to a cost-benefit ratio of about 20 to 1, a disconnect seized on by railroad executives, lobbyists and lawmakers sympathetic to their needs, such as Rep. John J. Duncan Jr. (R-Tenn.).
“Now, everybody has tremendous sympathy for those families that lost loved ones in the Amtrak accident, but my goodness, now we’re going to be spending billions to make something that already is one of the safest things in the entire world [safer]?” Duncan, who has received $303,250 in railroad campaign support during a 27-year career in the House, said at a June hearing. “And I’m thinking that we would be better off to spend those billions in many, many other ways — cancer research, and everything else.”
But federal rail officials and some outside experts argue that the technology needed to prevent crashes ultimately can transform the future of railroading. More frequent trains, more efficiently deployed across the country, could move more goods while cutting down on expensive fuel costs, dramatically increasing potential benefits.
Some industry executives have embraced this future, while others have pushed back. In a conference call with Wall Street analysts just 19 days before the Amtrak derailment, Union Pacific’s president and chief executive, Lance M. Fritz, predicted Congress would extend the deadline, adding that his company’s lobbyists were “giving feedback and input into our thoughts to help navigate that process.”
“Oh Ira, why can’t you work more quickly?” That might’ve been what tunesmith George Gershwin said to his lyric-writing brother Ira Gershwin. But for transportation purposes, it’s essentially what Sen. Heidi Heitkamp, D- N.D., said Thursday to OIRA – pronounced “oh-Ira” – the Office of Information and Regulatory Affairs, within the Office of Management and Budget.
OIRA is where proposed regulations go for a final vetting and it now has under review a series of proposed rules on more robust oil tank cars and safer transport of crude oil.
In a letter to OMB director Shaun Donovan, Heitkamp urged OIRA to “quickly finalize” the regulations so that shippers and first responders can know what they must do to more safely ship crude oil. Much of that oil comes from the Bakken formation in Heitkamp’s state and in Montana and is carried by rail to refineries on the East Coast and the West Coast.
She cited the December 2013 derailment, explosion and fire in Casselton, N.D., noting that while no one was killed in that incident “we were lucky… but we cannot depend on luck.”
Meanwhile House Transportation and Infrastructure Committee ranking member Peter A. DeFazio, D- Ore., has asked the Government Accountability Office to report to him on what railroads and the federal government are doing to prepare for an oil train derailment and fire “particularly in the most remote and environmentally sensitive areas”
DeFazio specifically asked the GAO to examine what the railroads are doing to preposition “critical resources necessary to respond to spills in both urban and rural areas, including forest lands, with limited road access, prone to catastrophic fire, or at-risk due to long-term drought” and to preposition “critical resources to contain and clean-up oil spills into rivers or other water bodies.”
Repost from CQ Roll Call [Editor: Significant quote by Oregon Rep. Peter DeFazio on new tank car safety rule: “Get it done, get it done now. Start the production. Create jobs here in America.” – RS]
Members Fume Over Delayed Oil Tank Car Rule
By Tom Curry, Feb. 3, 2015
Another House hearing and another regulatory agency under bipartisan fire for its slowness in issuing an eagerly awaited rule that will have sweeping effects on several industries.
Tuesday’s hearing of the House of Representatives Transportation and Infrastructure Subcommittee on Railroads Pipelines and Hazardous Materials was a chance for members and industry spokesmen to assail the Pipeline and Hazardous Materials Safety Administration (PHMSA) not issuing a rule that would tell railroads and rail car manufacturers the standard they need to meet for new oil tank cars.
Transportation and Infrastructure Committee ranking member Peter DeFazio said that even though PHMSA has known that the older tank cars, designated as DOT-111’s, “are not adequate or safe since 1993, PHMSA has yet to promulgate a rule for new standards. In fact, the industry itself is so frustrated that they’ve proposed a new standard to the agency.”
But the agency couldn’t act quickly, he said and the rule is “lost somewhere in the bowels of the administration between the agency and the trolls over at the Office of Management and Budget who will further delay the ruling.”
PHMSA has “managed to mangle the rule by merging it together with operational issues which are much more difficult to deal with and controversial,” DeFazio said.
PHMSA should simply issue a rule on tank cars: “Get it done, get it done now. Start the production. Create jobs here in America,” he said.
What’s on people’s mind is the possibility of another Lac Megantic accident, the Quebec oil tank car derailment and explosion that killed 47 people in 2013.
Greg Saxton, senior vice president of rail car manufacturer Greenbrier, said “if we were to have additional derailments that caused more fatalities, I think we could lose our franchise, the trust that the American people put in us to do this.”
Saxton said, “You’ve got to get beyond this uncertainty” about the tank car standard.
He added that “economic forces, the market, will crush an over-packaged commodity,” meaning that market forces will lead shippers to use the older, less safe, and less costly DOT-111 cars until PHMSA requires that they upgrade to a more crash-resistant model.
Greenbrier has urged PHMSA to quickly adopt what’s called the “Option 2” design of a tank car with thicker steel tank shells and other safety features.
Subcommittee Chairman Jeff Denham, R-Calif., told Saxton that he, too, wants to see PHMSA and OMB move quickly on the rule.
But he said he wanted to make sure “that there is not a misperception” among the American people that “our current tank cars are not safe” and “that our industry does not have a safe record.”
He noted that Greenbrier, the leading car manufacturer, could only build 8,000 new cars a year, so it would take perhaps a decade for that company and others to build new cars to replace all the DOT-111 cars.
Denham also said the public shouldn’t think “that there’s some magic, quick, fast track to get all of these new tank cars” on the nation’s railroads very quickly.