Railroads use new oil shipment rule to fight transparency

Repost from McClatchy DC 

Railroads use new oil shipment rule to fight transparency

By Curtis Tate, McClatchy Washington Bureau, 6/25/15
A CSX oil train moves east through Selkirk Yard near Albany, N.Y., on May 26, 2015. The Albany area has become a hub for crude by rail shipments as East Coast refineries have replaced imported oil with mid-continent sources. CSX and other railroads continue their push to keep routing and volume information about the shipments from the public. CURTIS TATE — McClatchy

— Railroads may have found a new weapon in their fight to keep information about oil train shipments from the public: a federal rule that was supposed to increase transparency.

The U.S. Department of Transportation insists that its May 1 final rule on oil trains, which mostly addresses an outdated tank car design, does not support the railroads’ position, nor was it intended to leave anyone in the dark.

But in recent court filings in Maryland, two major oil haulers have cited the department’s new rule to justify their argument that no one except emergency responders should know what routes the trains use or how many travel through each state during a given week.

Those details have been publicly available in most states for a year, though some sided with the railroads and refused to release them. The periodic reports have helped state and local officials with risk assessments, emergency planning and firefighter training.

The department’s rule was expected to expand the existing disclosure requirements. In its 395-page rule, the department acknowledged an overwhelming volume of public comments supporting more transparency. But ultimately, it offered the opposite.

The final rule ends the existing disclosure requirements next March. Railroads no longer would be required to provide information to the states, leaving emergency responders to request details about oil train shipments on their own, and the public would be shut out entirely.

The switch floored those who submitted comments in favor of increased transparency.

“The justification was not consistent with the comments given,” said Denise Rucker Krepp, a former senior counsel for the House Homeland Security Committee and chief counsel for the U.S. Maritime administration. “They’re supposed to be the same.”

Facing push-back from Capitol Hill, Transportation Secretary Anthony Foxx assured lawmakers in a May 28 letter that “we fully support the public disclosure of this information to the extent allowed by applicable state, local and tribal laws.”

Foxx added that the department was not attempting to undermine transparency.

“That was certainly not the intent of the rule,” he wrote eight Senate Democrats.

But Foxx’s assurances differ sharply from the assertions of Norfolk Southern and CSX in court documents filed last month in Maryland. The documents are related to a case last summer when the railroads sued the state to block the release of oil train reports to McClatchy.

The final rule provides “clear and unequivocal guidance” that information about oil train routes and volumes are security- and commercially-sensitive, attorneys for the railroads wrote on May 5 to Judge Lawrence Fletcher-Hill of the Circuit Court for Baltimore City.

That classification would trigger an exemption from the state’s Public Information Act.

A trial is scheduled for August, though Fletcher-Hill could decide before then whether to dismiss the case in favor of the railroads or the state.

Both companies declined to comment on the case.

Last May, the Transportation Department issued an emergency order requiring railroads to notify states of large shipments of Bakken crude oil after a series of fiery derailments involving the light crude from shale formations in North Dakota. The worst of those derailments killed 47 people in Quebec in July 2013.

Railroads have insisted that the oil train details are sensitive from a security and business perspective and should be exempt from state open records laws. They attempted to shield the data from public view last year by asking states to sign nondisclosure agreements.

Some states initially agreed, but most declined. McClatchy sought oil train reports from 30 states through open records laws. All but half a dozen states released at least part of what McClatchy requested.

Last fall, two rail industry trade groups lobbied the Transportation Department to end the reporting requirement. In a notice published in the Federal Register in October, the department rebuffed the request.

“DOT finds no basis to conclude that the public disclosure of the information is detrimental to transportation safety,” the Federal Railroad Administration wrote, adding that the trade associations “do not document any actual harm that has occurred by the public release of the information.”

But when the department unveiled its final rule in May, the requirements more closely aligned with what the railroads sought.

“Under this approach,” the regulation states, “the transportation of crude oil by rail can . . . avoid the negative security and business implications of widespread public disclosure of routing and volume data.”

The Maryland Attorney General’s Office has cited the department’s October Federal Register notice to support its position that the state can release the oil train information.

But the final rule is the last word, attorneys for the railroads say. They wrote Fletcher-Hill on May 29 that the state “relies on non-final comments published by the Federal Railroad Administration” and “fails to acknowledge the highly persuasive guidance articulated in the final rule.”

Unlike other arguments put forth by the railroads and their trade groups that have swayed few state or federal officials – including speculative claims of terrorism, competitive harm and even insider trading – the final rule may prove more persuasive to a judge.

The eight Senate Democrats wrote to Foxx on May 6, the same day another oil train derailed and caught fire in North Dakota. It was the fifth such incident in North America this year. They asked the department to reconsider the rule.

“The onus for obtaining detailed crude-by-rail information should not be on the local jurisdiction,” they wrote, and they called on the department “to clarify that broader crude-by-rail information will remain accessible to the public.”

Apparently backing away from the final rule’s expiration date for the emergency order, Foxx replied that it would remain “in full force and effect until further notice” and that the department would be looking for ways to codify the disclosure requirement.

But Krepp said that’s exactly what everyone was expecting in the rule.

“If they wanted that,” she said, “they would have put that in the rule-making.”

Krepp said the department made its intentions clear in the final rule.

“They have the final rule now,” she said. “They have to live with it.”