Tag Archives: Texas refineries

Texas quietly moves to formalize acceptable cancer risk from industrial air pollution

Public health officials say it’s not strict enough.

The Valero oil refinery near the Houston Ship Channel, part of the Port of Houston, on March 6, 2019 in Houston, Texas. | Photo by Loren Elliott / AFP via Getty Images.

Without public hearings, the Texas Commission on Environmental Quality is proposing to adopt its 17-year-old standard that scientists and public health officials say fails to account for cumulative air pollution.

Inside Climate News, by Dylan Baddour, October 13, 2023
State of Denial: Third in a series about Texas’ environmental regulators.

The Texas Commission on Environmental Quality has quietly proposed maintaining a target cancer risk level for air pollution permits that scientists and public health officials consider inadequate to protect public health, especially for communities like those east of Houston that are exposed simultaneously to many sources of industrial emissions.

The move comes after a state commission on accountability last year found “a concerning degree of general public distrust and confusion focused on TCEQ,” and the Texas Legislature adopted directives this year instructing the TCEQ to transparently review and approve “foundational policy decisions” that had never been publicly approved, including “the acceptable level of health-based risk” used in pollution permitting.

In response, TCEQ proposed, without public hearings or additional study, to formalize its existing target cancer risk level of 1 in 100,000, meaning that only one excess case of cancer among 100,000 similarly exposed people would result from each individual pollutant from each individually permitted site.

The agency has been using that risk level since 2006, said a TCEQ spokesman, Richard Richter. He said TCEQ’s target “is reasonable from a regulatory perspective and is protective of human health.” It “insignificantly contributes to an individual’s lifetime cancer risk,” he said.

But by looking at each site and chemical separately, scientists and public health officials say, the assessment method drastically under-represents the actual risks faced by communities situated near industrial complexes, like the great conglomerations of fuming refineries and chemical plants that dot the Texas coast.

“TCEQ should be proactive and change their cancer risk to protect individuals living in high risk communities,” wroteLatrice Babin, executive director of Harris County Pollution Control Services, in official comments. She asked for a target risk level of one in 1 million.

“TCEQ is scrambling to adopt work from nearly 20 years ago with no analysis,” wrote a coalition of Texas environmental groups led by Air Alliance Houston.

The City of Houston, the nation’s fourth largest city and home to its largest petrochemical complex, has also asked the TCEQto tighten standards. Bill Kelly, Houston’s director of government relations, said TCEQ should “absolutely” lower its target cancer risk level.

Richter did not respond to a request for interviews with TCEQ’s politically appointed leadership, but said that the agency, to satisfy the Legislature’s directives on public participation, sent its proposal for a target risk rate, along with instructions on filing comments, to more than 3,300 email addresses on its toxicology listserv, which goes to subscribers from both industry and the general public. The proposal also appeared Sept. 1 on page 182 of the Texas Register, a weekly journal of state agency rulemaking.

In response, the TCEQ received more than 200 official comments asking the agency to lower its target risk level to one in 1 million. Just one response came in support of its proposed risk level: the Texas Chemical Council, a chemical industry lobbying group, wrote, “the proposed level is protective of public health.”

Target Risk Levels

The target risk level helps determine the volumes of carcinogenic emissions that industrial operators are allowed to release in Texas, seat of the nation’s oil, gas and petrochemical industry.

The U.S. Environmental Protection Agency sets the upper limit of cancer risk level from permitted air pollution at 1 in 10,000, and sets a target level at 1 in 1 million. Richter called the TCEQ’s target rate the “logarithmic center” of that range, and said it allows ample space for corrective action before permitted pollution sources exceed the EPA’s upper limit for cancer risk.

He said the agency has used its target risk level since 2006 when it formalized its guidelines for toxicity standards. Those guidelines attribute the figure to standards set by California in 1986. Those guidelines also produced a broad loosening of air pollution health standards in Texas, according to a 2014 investigation by Inside Climate News and the Center for Public Integrity.

Richter pointed to a 2010 survey of state air permitting policy by Michigan’s environmental regulator, which found that 20 U.S. states didn’t evaluate cancer-causing “air toxics” when permitting new pollution sources. Of the 28 that did, 14 states used target risk levels to set limits. Eight used 1 in 1 million, including California. Just one, Louisiana, used the upper end —1 in 10,000.

Two, Texas and Minnesota, used 1 in 100,000. (Georgia and Rhode Island used 1 in 1 million for some toxins and 1 in 100,000 for others.)

Cumulative Impacts of Pollution

That figure doesn’t represent the target cancer risk for entire states. It’s the target cancer risk resulting from each individual pollutant from each individually permitted facility. Where many facilities emit chemicals across vast industrial landscapes, scientists say, all those supposedly insignificant contributions can add up — or even multiply when they interact.

“These numbers often underestimate the true risk,” said Tracey Woodruff, director of the Environmental Research and Translation for Health Center at the University of California San Francisco.

That’s why, scientists say, tighter standards are needed to account for the cumulative impacts of pollution that disproportionately impact underserved and vulnerable populations.

“The old way of doing things is to look at one pollutant at a time, one emissions source at a time, but in reality no one is exposed to one pollutant at a time,” said Jill Johnston, director of the Environmental Justice Research Lab at the University of Southern California in Los Angeles. “There’s been a shift in moving towards cumulative risk characterization.”

The science isn’t new, said Wilma Subra, an environmental consultant in Louisiana who studied cumulative impacts of air pollution for the National Environmental Justice Advisory Council in the early 1990s. But it has been difficult to incorporate into air permitting.

“Sometimes you have 20, 30, 40 or more chemicals, some of which have standards and some of which do not, all in the air and crossing the fenceline,” she said. “You can make statements that each of these chemicals are meeting the standard in the air, and you just ignore the cumulative impacts.”

TCEQ guidelines say the agency assesses cumulative risks from pollution in accordance with state and federal law. But outside experts say that’s not always what happens.

“Right now when it comes to air toxics, TCEQ looks at one air contaminant, one site. Each air contaminant is evaluated on its own coming from one site,” said one air permitting consultant who used to work for the TCEQ and requested anonymity to preserve his business relationship with the agency. “If you’re only looking at benzene at just one site, but you’re surrounded by refineries that have a high concentration of benzene liquids being stored, that may not be a comprehensive view.”

The mixture of different pollutants can drastically increase toxicity, according to Dr. Bruce Lanphear, a clinician scientist at the British Columbia Children’s Hospital and a professor of health sciences at Simon Fraser University in Vancouver.

The effect has been shown with tobacco, which is relatively easy to study, Lanphear said. Smoking tobacco can increase a person’s risk for lung cancer by a factor of 10, while exposure to arsenic can increase the risk by a factor of two. But the combination of smoking and arsenic exposure has been shown to increase risk by a factor of 25.

“There is a big multiplicative risk because you have two toxic pollutants that magnify the effect of each other,” he said. “That’s got huge implications if you’ve got lots of different chemical plants in a place like Houston.”

A playground at San Jacinto Elementary School, located in Deer Park a few miles from the highly industrialized Houston Ship Channel. On March 31, 2019, air quality inspectors from the Environmental Protection Agency recorded extremely high levels of benzene in the air as they drove past the elementary school. Residents were not warned about the pollution present in the community that day. | Mark Felix for The Texas Tribune / Public Health Watch.

With tobacco users, he said, it’s easy to measure individuals’ exposure and compare that with non-smokers. For the plethora of industrial air pollutants, gauging exposure and effects is much more complicated — and studying their combinations is even more so.

“It’s challenging, but the regulatory agencies should be doing it,” he said.

A Tradeoff of Costs

Short of modeling cumulative impacts for every new permit, agencies can lower their target levels to acknowledge that cumulative effects generally raise the overall cancer risk from emissions, scientists say.

The EPA’s risk assessment framework for air toxics permitting calls for “an ample margin of safety to protect public health.”

“I prefer a target risk of 1 in a million,” said David Ozonoff, chair emeritus for environmental health at Boston University.

When the cumulative effects of pollution are poorly understood, Ozonoff said, erring toward caution “is more in line with public health philosophy.” But it comes with an additional financial burden to the businesses that need air pollution permits to operate.

“The cost of more protection might be in terms of profits or jobs while the cost of less protection is in lives and suffering,” Ozonoff said. “The costs and the benefits usually accrue to different groups of people. One group gets the benefits and another group pays the costs.”

In Texas, public health advocates call the costs a reasonable burden to place on big industry, especially with major operators like ExxonMobil, which runs one the nation’s largest pollution sources east of Houston and posted a record $56 billion profit last year.

“I can’t throw trash over my fenceline. Why can industry throw trash over its fenceline?” said Jen Powis, managing attorney for Earthjustice’s gulf regional office in Houston. “Industry has the financing and the dollars to make it less with pollution control equipment.”

In their comments requesting a lower target risk level, the Texas environmental groups said TCEQ had not “provided any evidence that this would be cost prohibitive to applicants across the broad range of air permitting programs.”

The Texas Chemical Council, in its comments, said it “commends the TCEQ for its consideration of risk/benefit tradeoffs in establishing its [target risk levels] which make levels achievable.”

‘A Concerning Degree of General Public Distrust’ 

The standard is up for discussion in Texas because Texas Sunset Commission, which reviews each state agency every 12 years, found in its 2022 report on TCEQ “a concerning degree of general public distrust and confusion focused on TCEQ and its ability to effectively regulate in the public interest.”

Distrust, the report said, stemmed from a lack of transparency and of opportunities for public input. Many of TCEQ’s core policies, like its target cancer risk level tucked into its 347-page toxicology guidelines, are encoded in lengthy scientific documents that had never been publicly approved.

“This scientific information must ultimately be transformed into regulatory standards,” the report said. “Deciding the acceptable level of exposure and effects on the public… is a policy decision that governs what facilities may be built, what technology they must employ, and what level of safety monitoring must occur.”

It recommended that TCEQ “affirmatively and publicly adopt these policies” and “provide opportunities for the public to make comments before the commission on what those standards should be.” The Legislature adopted the recommendation as a directive this year.

Carolyn Stone, a 62-year-old community advocate who lives nearby Houston’s industrial sector and regularly engages with the TCEQ, didn’t find out about the proposed cancer risk level until late September, when local environmental groups began to spread the word. Her area of Channelview is in the 94th percentile of cancer risk from air pollution nationally according to EPA screening tools.

Stone, a retired office worker who runs a group called Channelview Health and Improvement Coaltion, said, “TCEQ has not sent me a flyer notifying me. And you would think that as a community in that high of a percentile, we would have been some of the very first they’d attempt to notify.”

The omission didn’t surprise her. She has lived in Channelview since 1981 and persistent frustration with environmental regulators finally moved her to start her group in 2019. In public meetings with the TCEQ, Stone has told the regulators that pollution from nearby facilities harms locals’ health, and she’s asked them to require better pollution control technology on applications for new pollution permits in the area.

“Their response is basically that the companies ran their tests and according to their tests, their actions won’t be above the limits,” she said. “I really haven’t had any positive interactions with TCEQ, I’m thoroughly disappointed in them.”

Alejandra Martinez of The Texas Tribune contributed to this report.

North Dakota man relentless in push for safer oil by rail shipping

Repost from the Billings Gazette
[Editor: This is not a fluffy human interest story, but an important offering on the oil industry and regulators in North Dakota. Significant quote: “‘If you want to fix a problem, you go to the source of the problem,’ he said.  ‘You don’t prepare for something that doesn’t have to happen.’”  Another good quote: “Pressure to make North Dakota crude oil safe for interstate shipment is mounting on several fronts.”– RS]

North Dakota man relentless in push for safer oil by rail shipping

November 02, 2014, by Patrick Springer, Forum News Service
Ron Schalow of Fargo
Ron Schalow of Fargo has been an outspoken advocate of stabilizing Bakken oil to remove volatile gases before it is shipped by rail. | David Samson / Forum News Service

FARGO, N.D. — Ron Schalow isn’t bashful about expressing his caustic opinions. He once wrote a book scolding President George W. Bush for failing to prevent the 9/11 terrorist attacks.

Part of the title can’t be printed here, but the subtitle read, “The 9/11 Leadership Myth.”

More recently, the Fargo man, a frequent writer of letters to the editor, has focused his attention on explosive Bakken crude oil and rail safety – an issue that has drawn national attention after a series of fiery train derailments, including an accident that killed 47 people in Canada and one late last year near Casselton.

Schalow launched a petition drive originally called the “Bomb Train Buck Stops in North Dakota,” which he renamed the “Coalition for Bakken Crude Oil Stabilization,” a reference to the process for removing volatile gases.

Improbable activist

Schalow’s background makes him an improbable activist. His early career was spent managing restaurants and bars, with a stint as a minor league baseball manager.

More recently, he worked for software companies including Microsoft in Fargo, but said he grew weary of corporate culture and office politics and turned to freelance work.

He has assembled a loose network of people concerned about the crude oil stabilization issue, including local officials in Minnesota and other states, but laments he has found little support for his crusade in North Dakota.

Still, North Dakota leaders have been under pressure from the federal government and other states, including Minnesota, to treat crude oil before shipping it around the country by rail to refineries.

The North Dakota Industrial Commission is preparing new standards, likely to take effect Jan. 1, to “condition” crude oil before transport to address safety concerns. Separately, federal officials are drafting more stringent safety standards for tanker cars.

“I think we have to take some responsibility over what’s going over the tracks into Minnesota and the rest of the country,” Schalow said. “It has a lot to do with this is a product that’s coming out of my state.”

By his own admission, 59-year-old Schalow is not a consensus builder. A freelance writer for marketing clients, he isn’t a joiner by nature. Bespectacled, with a goatee, he is soft-spoken but adamant in expressing his views.

He has peppered North Dakota officials, including petroleum regulators and the three-member Industrial Commission, with emails calling for action and asking who is in charge of what he sees as a vital issue of public safety.

“I’ve badgered them relentlessly,” he said.

He is dismayed by what he regards as a sluggish state response, even after an official “tabletop exercise” last June that estimated 60 or more casualties if an oil train derailed and exploded in Fargo or Bismarck.

The exercise simulated a disaster similar to the blast that killed 47 and destroyed much of the town of Lac-Mégantic, Quebec, in July 2013.

For Schalow, the key to ensuring the oil is safe is to remove the volatile gases before shipping. Anything else, in his view, is passing along a potentially deadly problem for others to face.

“If you want to fix a problem, you go to the source of the problem,” he said. “You don’t prepare for something that doesn’t have to happen.”

Derailments costly

Dealing with an explosive derailment can be costly. New York officials estimated, for example, it would take $40,000 in foam to extinguish one tanker car.

In the rail accident near Casselton last December, 20 tanker cars derailed, 18 of which were breached, unleashing a series of explosions and an enormous fireball. Intense heat kept the firefighters far from the flames, which they had to allow to burn out.

No one was seriously injured or killed in the crash.

“They can’t be prepared for combat explosions,” Schalow said, referring to the explosive fires that Bakken crude derailments have produced. “What would they do?”

North Dakota officials in the governor’s office and Department of Mineral Resources declined to talk about Schalow’s advocacy, but said the state is moving ahead to improve the safety of crude oil transportation.

“Gov. (Jack) Dalrymple takes rail transportation safety very seriously and he believes it’s important to have the public weigh in on this important issue,” said Jeff Zent, a spokesman and policy aide for the governor, the highest-ranking member of the Industrial Commission.

“That’s why the Industrial Commission will announce further regulations aimed at improving the safety of oil rail transportation,” he added.

“Our goal has always been to make crude oil as safe as possible for transport, within our jurisdiction,” said Alison Ritter, a spokeswoman for the North Dakota Department of Mineral Resources, which regulates oil and gas production.

The department is also working with “the appropriate federal agencies to better communicate our role to make crude oil as safe as possible for transport,” Ritter said.

In contrast to North Dakota, most crude oil in Texas is stabilized before shipment. Pipeline companies routinely require stabilization before accepting shale oil.

“How hard is it to stand up and say I’m against trains blowing up in my town?” Schalow asked, referring to public officials’ initial reluctance to impose tougher standards.

A recent Forum Communications poll found that 60 percent of respondents were concerned about the safety of shipping crude oil by rail, but there has been no real clamor from residents, Schalow said.

“It’d be nice if someone stood up and defended me once or twice,” he said. As for holding a meeting of supporters, well, “Who would I call and who would dare show up? There’s no political will in this state except for that anonymous 60 percent.”

In Minnesota, Gov. Mark Dayton has urged North Dakota to stabilize oil before loading crude onto trains. An estimated 50 North Dakota oil trains roll through Minnesota each week, many with 100 tanker cars.

Pressure to make North Dakota crude oil safe for interstate shipment is mounting on several fronts.

Other states, including New York and California, where refineries take Bakken crude, are considering safety requirements.

“There’s a lot more angst across the country than there is here,” Schalow said, adding that most of his contacts are from other states, including New York, California and Washington state.

“I think he’s a pretty straight shooter,” said Tim Meehl, mayor of Perham, Minn., who is concerned about oil trains traveling through his town. “I think everything he says has a lot of merit to it.”

Meehl has not met Schalow, but saw him at a meeting in Moorhead earlier this fall attended by Dayton and local officials, and has exchanged emails with Schalow.

“They don’t want to step on toes out there,” Meehl, a native of Oakes, N.D., said of North Dakota officials’ deference to oil interests. “We need the oil. We just need to do it in a safer way.”

In North Dakota, residents and politicians seem reluctant to do anything that risks discouraging energy production, a powerful economic engine, Schalow said.

‘Quiet acceptance’

“You can’t say anything that might impact business, no matter what,” he said, describing what he regards as North Dakota’s curious culture of quiet acceptance.

Regulators aren’t alone in singling out oil tanker cars. BNSF announced last week that it will charge a $1,000 fee for each older crude oil tank car, more prone to puncture than newer models. By one estimate, that would add about $1.50 a barrel to the transportation cost.

In Texas, energy companies have invested hundreds of millions of dollars to make crude safer to handle. The cost of stabilizing crude oil could trim potential revenue by perhaps 2 percent, according to the estimate of an unidentified industry executive interviewed by The Wall Street Journal.

Schalow has been an outspoken critic of the Bush presidency and North Dakota leadership, but said he really has no allies in either political party.

A conservative blogger once described him as a “truther” for his criticisms of Bush, whom he castigated for failing to take pre-emptive action against al-Qaida despite warning signs of their terrorist ambitions. Schalow dismisses the “truther” label as unfair, saying he offered no conspiracy theories in his book.

He said the paperback sold 4,000 or 5,000 copies after it came out in 2006. No book is forthcoming on the issue of Bakken crude safety, but Schalow is unlikely to stop writing his letters, emails and Facebook posts.

“I don’t think it’s a political issue,” he said. “I think it’s a public safety issue.”

National Geographic series on Energy: New Oil Train Safety Rules Divide Rail Industry

Repost from The National Geographic

New Oil Train Safety Rules Divide Rail Industry

Many railroad companies want more time to retrofit cars in the U.S. and Canada, but some are forging ahead.
By Joe Eaton for National Geographic, October 31, 2014
Smoke rises from railway cars that were carrying crude oil after derailing in downtown Lac Megantic, Quebec, Canada, Saturday, July 6, 2013.
Smoke rises from railway cars that were carrying crude oil and derailed in downtown Lac-Megantic, Quebec, in 2013. Regulators in Canada and the United States have been working on new standards for trains that carry flammable fuel. – Photograph by Paul Chiasson, Associated Press

Three days after an oil train derailed and exploded in 2013 in Lac-Mégantic, Quebec, killing 47 people, Greg Saxton wandered through the disaster site inspecting tank cars.

For Saxton, the damage was personal. Some of the tank cars were built by Greenbrier, an Oregon-based manufacturer where he’s chief engineer. Almost every car that derailed was punctured, some in multiple places. Crude oil flowed from the gashes, fueling the flames, covering the ground, and running off into nearby waterways.

Each day, as Saxton returned to the disaster zone, he passed a Roman Catholic church. “We never came and went when there wasn’t a funeral going on,” he said.

In the wake of this and other recent accidents as energy production soars in North America, Canadian and U.S. regulators are proposing new safety rules for tank cars that carry oil, ethanol, and other flammable liquids. Saxton and Greenbrier have pushed for swift changes, but others in the industry are asking for more time to retrofit cars like the type that exploded at Lac-Mégantic. (See related stories: “Oil Train Derails in Lynchburg, Virginia” and “North Dakota Oil Train Fire Spotlights Risks of Transporting Crude“)

“If you don’t set an aggressive time line, you won’t see improvements as quickly as the current safety demands require,” Jack Isselmann, a Greenbrier spokesman, said. “We’ve been frankly just perplexed and confused by the resistance.”

Industry Pushes for More Time

The tank cars that derailed at Lac-Mégantic were built before October 2011, when the American Railway Association mandated safety enhancements to the oil and ethanol tankers known in the industry as DOT-111 cars. The cars lacked puncture-resistant steel jackets, thermal insulation, and heavy steel shields, all of which could have lessened the destruction, experts say.

In July, the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) proposed rules that, if finalized, would require higher safety standards for new oil cars. The rules also require owners to retrofit older cars or remove them from the rails by October 2017.

Canadian regulators in July mandated that DOT-111 tank cars built before 2014 be retrofitted or phased out by May 2017. Transport Canada, which regulates rail safety, has also proposed aggressive safety standards for new tank cars and will seek industry comment this fall before finalizing its rules.

Saxton and others at Greenbrier support the proposed regulations, which could be tremendously lucrative to the company. However, others in the rail supply industry say the proposed retrofit time line cannot be met.

The Railway Supply Institute—a trade organization that represents the rail industry—has asked DOT to allow legacy cars in the oil and ethanol fleet to remain on the rails until 2020.

Thomas Simpson, the institute’s president, said a survey of rail maintenance and repair shops found that only 15,000 of the roughly 50,000 non-jacketed legacy tank cars in the crude oil and ethanol fleet can be modified by the proposed 2017 deadline.

For many cars, the retrofit process would include adding thermal protection systems, thick steel plates at the ends, and outer steel jackets, as well as reconfiguring the bottom outlet valve to ensure it does not break off and release oil during a derailment.

That’s too much work to complete before the deadline, and the regulations have not yet been finalized, Simpson said.

The proposed deadline, he said, will “idle cars waiting for shop capacity and adversely affect the movement of crude and ethanol.”

Tying in the Keystone XL Debate

The American Petroleum Institute, which represents the oil and natural gas industry, also says the 2017 deadline to retrofit tank cars is too aggressive and could slow oil and gas production. (See related story: “Blocked on Keystone XL, Oil-Sands Industry Looks East“)

In comments to U.S. regulators and the press, API tied the safety upgrades to approval of the proposed Keystone XL pipeline, which would transport Alberta’s tar sands oil through the Midwest to Texas refineries.

Workers stand before mangled tanker cars at the crash site of the train derailment and fire in Lac-Megantic, Quebec
The deadly oil train accident at Lac-Megantic, Quebec, raised awareness of the potential dangers of transporting crude by rail. – Photograph by Ryan Remiorz, Associated Press

If Keystone is not built, API president Jack Gerard said in September that the cost of the proposed oil tank rules would nearly double to $45 billion because demand for transporting crude by rail would be higher.  (See related story and map: “Keystone XL: 4 Animals and 3 Habitats in Its Path” and “Interactive Map: Mapping the Flow of Tar Sands Oil“)

Both API and the Rail Supply Institute have also warned regulators that a short time line for retrofitting oil cars could cause a spike in truck shipments of oil and ethanol.

But Anthony Swift, an attorney with the Natural Resources Defense Council, an environmental group opposed to Keystone XL, called these arguments misleading. Swift said Keystone XL would have little impact on retrofitting tank cars, because most train traffic from the Bakken oil fields in North Dakota moves to East Coast and West Coast refineries. He said that traffic would not be affected by the pipeline.

Keystone XL would have the capacity to carry 830,000 barrels of oil-sands crude a day, with up to 100,000 barrels a day set aside for crude from the Bakken. By 2016, the rail industry in Canada is expected to carry about as much oil as Keystone XL would. The U.S. rail industry is already there: Almost 760,000 barrels a day of crude had traveled by rail by August.

Swift said the costs to the oil industry are worthwhile if lives are saved. “The argument that we need to wait until the oil industry does not need tank cars until we can make them safe is ridiculous on its face,” he said.

Greenbrier Gears Up to Meet Demand

In February, Greenbrier introduced a beefed-up tanker with a 9/16-inch steel shell (1/8-inch thicker than many DOT-111 cars), 11-gauge steel jacket, removable bottom valve, and rollover protection for fittings along the top of the cars.

Greenbrier calls the tanker the “car of the future,” saying it’s eight times safer than the DOT-111. Isselmann said Greenbrier has received more than 3,000 orders for the new car and plans to double its manufacturing capacity by the end of the year.

In June, Greenbrier and Kansas rail-service company Watco joined forces to form GBW Railcar Services, creating the largest independent railcar repair-shop network in North America. Isselmann said the company plans to hire 400 workers and start second shifts at its factories to meet demand for retrofitting DOT-111 tank cars.

In comments to U.S. regulators, GBW said it currently has the capacity to retrofit more than 10 percent of the fleet of DOT-111 tank cars.

Isselmann said that number will grow as other companies take advantage of the market once regulators release final rules. For that reason, he said the industry’s current capacity to meet regulations is less important than its ability to ramp up quickly to capture the increased business that new safety standards could bring.

“This notion that the status quo is going to remain—it’s diversionary at best,” Isselmann said.

An oil tanker car at Lac-Megantic, Quebec
Almost every tanker in the Lac-Megantic accident was punctured. New standards would mandate stronger cars, among other measures. – Photograph by Ryan Remiorz, Associated Press

Some in the industry are responding to public concern before rules are finalized. In April, Irving Oil—the owner of Canada’s largest refinery, in Saint John, New Brunswick, where the Lac-Mégantic train was headed before the disaster—completed a voluntary conversion of its crude oil railcar fleet.

Also in April, Global Partners, one of the largest U.S. distributors of gasoline and other fuels, began requiring all crude oil unit trains making deliveries at its East and West Coast terminals to meet October 2011 safety standards for tank car design.

“As an industry, we have both an opportunity and a responsibility to maximize public confidence in the safety of the system that carries these products across the country,” Eric Slifka, Global Partners’ CEO, said in a press release.

A Push to Harmonize Regulations

As the U.S. and Canada consider train safety regulations, oil and rail companies are pushing to ensure that the same tank cars can be used to haul flammable liquids in both countries.

Regulators say they are working together to make that happen. Lauren Armstrong, a spokeswoman at Transport Canada, said the department is holding technical discussions on new tank car standards with the U.S. Department of Transportation and the Federal Railroad Administration.

However, coordinating tank car regulations between the two countries would have to overcome current gaps, industry representatives say.

In April, Transport Canada banned the use of the oldest and least crash-resistant DOT-111 tank cars, which lacked bottom reinforcement.  The U.S. so far has not banned the cars from carrying oil and ethanol.

Canada also set a 2017 deadline for retrofitting the cars. In the U.S., regulators are expected to release final rules by early 2015. The process, however, could continue much longer.

The strongest standards will carry the day, said Thomas Simpson, the president of the Railway Supply Institute. Given the large amount of oil that moves between the two countries, Simpson said it makes no business sense for companies to keep two different sets of cars to meet the two sets of rules.

Communities Concerned About Safety

But as final rules are being hammered out in the U.S., some train safety advocates and community groups worry they are being left out of the process.

Karen Darch, co-chair of TRAC, a coalition of Illinois communities concerned about train congestion and rail safety, said she is hopeful that final rules will include a fast deadline to retrofit old cars. (See related story: “Illinois Village Leads Charge for Tougher Train Rules“)

But she said rail and oil industry lobbyists have had much more access to policymakers than community advocates, and she’s concerned they will have a greater impact on final rules.

“The inside players, the guys in the industry,” she said, “they seem to be able to be in front of the decision-makers more than we have been.”

The story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.