2014-01-31
By Curtis Tate
McClatchy Washington Bureau

WASHINGTON — The U.S. Department of Transportation collects relatively small civil penalties against the railroads it regulates, as concern grows over the safety of shipping large volumes of crude oil and ethanol in tank cars long known to be deficient, federal documents show.

A McClatchy review of annual enforcement reports shows that the Federal Railroad Administration rarely fines any company more than $25,000, though it’s authorized to collect a maximum of $175,000 per violation. Some fines are as little as $250, and most settlements are substantially lower than the agency had first proposed.

Additional documents obtained by McClatchy reveal that the agency agreed to a $17,000 settlement in September 2010 with the Canadian National Railway over a June 2009 derailment in Cherry Valley, Ill. The accident killed one person, injured nine – including two firefighters – spilled more than 300,000 gallons of ethanol and caused the evacuation of more than 600 nearby residents.

Two inspection reports filed in the weeks after the accident also show that the violations that resulted in the fine didn’t directly contribute to the accident or its severity, including faulty equipment on cars that didn’t derail or spill their cargo and incorrect documentation of the placement of cars in the train. Such defects would have been violations even if the accident hadn’t occurred.

The agency originally proposed a $25,000 fine for the accident, in which 13 tank cars of ethanol derailed, leaked and caught fire.

In contrast, the railroad reached a $36 million settlement in October 2011 with the family of the woman who was killed when the fire engulfed her car at a road crossing.

“The Federal Railroad Administration uses a variety of tools to ensure that railroads are operating safely, including civil penalties, enforcement actions and partnerships to drive change within safety culture,” said Kevin Thompson, a spokesman for the agency. “These tools are an integral force in driving continuous safety improvement, resulting in significant declines in all measureable safety indicators.”

Patrick Waldron, a spokesman for Montreal-based Canadian National, said the company agreed to pay the fine and, as with any report it discusses with its U.S. regulators, “continually reviews our own internal procedures for regulatory compliance and safety improvements.”

The railroad administration collected $13.9 million in civil penalties last year.

The small settlement amounts demonstrate a “symbiotic” relationship between railroads and their federal regulators, said Mary Schiavo, a former DOT inspector general during the Clinton administration.

“Fines are a cost of doing business,” she said.

The Cherry Valley accident prompted a warning in 2012 from the National Transportation Safety Board about the inadequacy of the DOT-111A tank car, the most common type in service on North American railroads. The NTSB is an advisory board that has no enforcement power. Agencies within the Department of Transportation may accept or ignore its recommendations.

Since October 2011, tank car manufacturers have voluntarily built DOT-111A tank cars to a higher standard, with features that help prevent punctures and ruptures that could release hazardous materials, and heat damage due to fire exposure.

But that still leaves tens of thousands of vulnerable older tank cars that are carrying massive quantities of crude oil from North Dakota’s Bakken region to refineries and transfer terminals across the continent.

After fiery derailments in Quebec, Alabama and North Dakota, regulators concluded that the Bakken crude, which is extracted from shale rock through hydraulic fracturing, is more volatile than conventional oils.

No one was killed or injured when Bakken crude oil trains derailed near Aliceville, Ala., in November and Casselton, N.D., in December, but the accidents together spilled more than 1.15 million gallons of oil.

The derailment of an unmanned, runaway crude oil train killed 47 people last July in Lac-Megantic, Quebec.

Philadelphia had a close call last week, when a CSX crude oil train derailed on a bridge over the Schuylkill River but didn’t spill any of its cargo.

State and local officials, members of Congress, rail companies and petroleum producers have called on the federal government to issue new guidelines for the safe handling of crude oil by rail and to update the safety standards for tank cars.

The Association of American Railroads, an industry group, estimates that railroads moved 400,000 carloads of crude oil in 2012, mostly Bakken. Railroads moved 325,000 carloads of ethanol in 2010, according to industry estimates.

The tank cars in the Quebec, Alabama, North Dakota and Illinois accidents weren’t considered defective under federal guidelines.