Tag Archives: Office of Management and Budget

Federal Regulation (U.S.), Tank car design, Tank car manufacture, U.S. House of Representatives Transportation and Infrastructure Subcommittee on Railroads Pipelines and Hazardous Materials

US House Committee: Members fume over delayed oil tank car rule

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 
Rep. Jeff Denham, R- Calif., chairman of the House Transportation Subcommittee on Railroads, Pipelines, and Hazardous Materials (Photo By Douglas Graham/Roll Call)
Rep. Jeff Denham, R- Calif., chairman of the House Transportation Subcommittee on Railroads, Pipelines, and Hazardous Materials (Photo By Douglas Graham/Roll Call)

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.

Bakken Crude, Crude By Rail, DOT-111, Ethanol, Federal Regulation (U.S.), Pipeline and Hazardous Materials Safety Administration (PHMSA), Pipeline transport, Tank car design

DeFazio Blasts U.S. DOT for Failing to Address Rail Tank Car Safety

Press Release from Congressman Peter DeFazio

DeFazio Blasts U.S. DOT for Failing to Address Rail Tank Car Safety

Will request an Inspector General audit of PHMSA safety programs

From Press Release, 22 Jan 2015

Washington, D.C. – Today, Ranking Member of the Committee on Transportation and Infrastructure Peter DeFazio (D-OR) sent a letter to U.S. Department of Transportation (DOT) Secretary Anthony Foxx, urging him to take immediate action to address rail tank car safety and other significant pipeline and hazardous materials safety hazards.

“Despite numerous incidents involving the transportation of crude oil and other flammable materials by rail, subsequent NTSB safety recommendations, and an industry petition for new tank car design standards, the Pipeline and Hazardous Materials Safety Administration (PHMSA) failed to take action until a train transporting crude oil in DOT-111 tank cars in Lac-Megantic, Quebec, killed 47 people and completely destroyed the town center,” said DeFazio. “Here we are almost 15 months later, and we still do not have a final rule.”

DeFazio also takes issue with PHMSA’s failure to address longstanding, significant safety issues that extend to pipelines.

In multiple pipeline accident investigations over the last 15 years, the NTSB has identified the same persistent issues–most of which DOT has failed to address. Each time, Congress has been forced to require PHMSA to take action, most recently in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011. Yet three years later, almost none of the important safety measures in the Act have been finalized, including requirements for pipeline operators to install automatic shutoff valves and to inspect pipelines beyond high-consequence areas.

“For these reasons, I will soon be sending a letter to the DOT Inspector General (IG), requesting a thorough audit of PHMSA’s pipeline and hazardous materials safety program, including an evaluation of the agency’s effectiveness in addressing significant safety issues, congressional mandates, and NTSB and IG recommendations in a timely manner; the process PHMSA utilizes for implementing such mandates and recommendations; the sufficiency of PHMSA’s efforts to coordinate with the modal administrations and address safety concerns raised by those administrations; and any impediments to agency action, such as resource constraints.”

DeFazio urges DOT to take immediate action to address these serious safety issues. He writes that the tens of millions of Americans who rely on the Federal Government to protect their safety and health and our nation’s natural resources rightly deserve more than proposed rules that languish in the Federal bureaucracy.

The full letter to Secretary Foxx is below:

January 22, 2015

The Honorable Anthony Foxx
Secretary of Transportation
U.S. Department of Transportation
1200 New Jersey Avenue, S.E.
Washington, D.C. 20590

Dear Secretary Foxx:

I write to express my serious concerns with the repeated failure of the U.S. Department of Transportation (DOT) to address longstanding and undisputed pipeline and hazardous materials safety issues.

The rule regarding Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains is a prime example. The DOT maintains finalizing this rule remains one of its highest priorities, yet the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) now reports that publication of a final rule is not anticipated until May 12, 2015. In fact, the DOT has not even transmitted a draft final rule to the Office of Management and Budget for review.

The National Transportation Safety Board (NTSB) has raised concerns about the “high incidence of failure” of DOT-111 tank cars since 1991. In fact, over the last 10 years, the NTSB has investigated or is currently investigating seven accidents involving the transportation of crude oil and other flammable materials in DOT-111 tank cars, including an October 2006 train derailment in New Brighton, Pennsylvania, which caused the release of 485,278 gallons of ethanol that ignited and burned for almost 48 hours; an October 2007 ethanol train derailment in Painesville, Ohio; a June 2009 ethanol train derailment and fire in Cherry Valley, Illinois, which killed one person, injured nine others, and resulted in a mandatory evacuation of about 600 residences within a half-mile radius of the accident site; an October 2011 ethanol train derailment in Tiskilwa, Illinois; a July 2012 mixed freight train derailment in Columbus, Ohio, which released 53,000 gallons of ethanol; a December 2013 train derailment and fire in Casselton, North Dakota, which resulted in the release of 476,000 gallons of crude oil and the evacuation of 1,400 residents; and, an April 2014 train derailment in Lynchburg, Virginia, which spilled 30,000 gallons of crude oil in and around the James River.

The NTSB has been made aware of (but is not investigating) five additional train accidents that occurred between August 2008 and February 2014 in the U.S., which involved the release of crude oil, causing significant environmental damage and fires.

In March 2011, the Association of American Railroads petitioned PHMSA to conduct a rulemaking on new tank car design standards, which seemingly languished in the bowels of the agency until 2013, when a train transporting crude oil in DOT-111 tank cars in Lac-Megantic, Quebec, killed 47 people and completely destroyed the town center. Coincidentally, two months later, PHMSA issued a Notice of Proposed Rulemaking (NPRM) on new tank car design standards.

Here we are almost 15 months later, and we still do not have a final rule. Frankly, I am concerned that opposition to the more contentious portions of the rule will only lead to further delays, possibly even litigation. That will end up postponing implementation of a final rule while the concerns of States and local communities are growing.

Moreover, these delays have significant implications for rail car manufacturers. It will take time for them to adjust to the standards proposed in the rule, which in turn will have a rippling effect on shippers who are putting off purchases of new tank cars until the new design standards are finalized. As I have said before, I believe that you should seriously consider severing this rule and propose one rule on stronger tank car design standards and another rule to address the operational changes proposed in the NPRM. That is sure to move this issue forward and address the more immediate dangers posed by the current DOT-111 tank cars.

Additionally, my concerns regarding PHMSA’s failure to address longstanding, significant safety issues extend to pipelines, as well. In multiple pipeline accident investigations over the last 15 years, the NTSB has identified the same persistent issues, most of which DOT has failed to address on its own accord. Each and every time, Congress has been forced to require PHMSA to take action, most recently in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (P.L. 112-90). Yet, three years later, almost none of the important safety measures in the Act have been finalized, including requirements for pipeline operators to install automatic shutoff valves and to inspect pipelines beyond high-consequence areas.

For these reasons, I will soon be sending a letter to the DOT Inspector General (IG), requesting a thorough audit of PHMSA’s pipeline and hazardous materials safety program, including an evaluation of the agency’s effectiveness in addressing significant safety issues, congressional mandates, and NTSB and IG recommendations in a timely manner; the process PHMSA utilizes for implementing such mandates and recommendations; the sufficiency of PHMSA’s efforts to coordinate with the modal administrations and address safety concerns raised by those administrations; and any impediments to agency action, such as resource constraints.

In the interim, I urge you to take immediate action to address these serious safety issues. The tens of millions of Americans who rely on the Federal Government to protect their safety and health and our nation’s natural resources rightly deserve more than proposed rules that languish in the Federal bureaucracy. If you need additional information or have questions regarding this letter, please have your staff contact Jennifer Homendy of my staff at 202-225-3274.

Sincerely,

PETER DeFAZIO
Ranking Democratic Member

 

Crude By Rail, Hazmat notification, Rail industry, Rail routing, Train speed

Railroads oppose some oil train safety measures

Repost from Politico

Documents: Railroads want to hit brakes on some oil train safeguards

By KATHRYN A. WOLFE | 6/13/14 5:08 AM EDT
A fireball goes up at the site of an oil train derailment in Casselton, North Dakota, on Dec. 20, 2013.
The report previews what the administration may be considering to stop crashes. | AP Photo: A fireball goes up at the site of an oil train derailment in Casselton, North Dakota, on Dec. 20, 2013.

The railroad industry is warning the White House against some potential safety rules for trains carrying explosive crude oil, saying freight and passenger rail traffic could be disrupted for years if companies must obey 30 mph speed limits, install more sophisticated brakes and keep the trains manned at all times.

The arguments, contained in documents posted after a meeting this week between railroad officials and the Office of Management and Budget, also offer a preview of what steps the Obama administration may be considering in response to oil train crashes that have struck the U.S. and Canada in the past year. Those include a disastrous July 6 explosion that killed 47 people in Lac-Mégantic, Quebec, after an engineer left a train packed with North Dakota crude oil parked on a steep incline with brakes that may not have been properly set.

The Department of Transportation declined to comment on the documents. DOT submitted a draft rule proposal to OMB in April but has offered no details about what’s in it.

Companies represented at Tuesday’s OMB meeting included the four major freight railroads — BNSF, Union Pacific, Norfolk Southern and CSX — as well as other industry groups and Amtrak, according to White House records.

While Amtrak doesn’t haul crude oil, a BNSF handout arguing against lower speed limits said the passenger rail’s travel schedules on one 1,815-mile route could be lengthened by two hours if oil trains’ top speeds are lowered to 30 mph from 50 mph. That route stretches between Aurora, Ill., and Spokane, Wash., which BNSF called its primary route for crude oil.

Slowdowns would cause “severe” impacts for the railroad’s operations, including both oil and grain shipments, BNSF said in the handout, calculating six-hour delays for freight trains along the same route. All told, the railroad said it would have to spend $2.8 billion to rebuild its lost shipping capacity during the next four years, while facing $630 million in additional annual expenses such as additional crew wages and lost productivity.

The Association of American Railroads, the freight railroad industry’s main trade group, offered a similar document on the speed limit issue.

None of the documents address the main issue people are expecting the DOT rule to address: increased safety requirements for the tanker cars that carry the oil.

Oil train traffic across the U.S. has increased 40-fold since 2008 because of booming production in places like North Dakota and western Canada. It’s also become an increasingly contentious issue for communities from California and Washington state to Albany, N.Y., and Lynchburg, Va.

The documents may not accurately reflect DOT’s undisclosed draft — the railroads may have been blindly making a case for what they don’t want to see happen. But they reveal that industry insiders have given thought to potential regulations that would go much further than the mostly voluntary measures DOT has imposed so far.

Earlier this year, DOT announced that railroads had voluntarily agreed to restrict some oil trains to 40 mph in certain populous areas.

But lowering the speed limit to 30 mph would harm “delivery capability” for BNSF’s oil customers, the railroad said in the document. To keep up with demand, it said, it would have to add an additional 11,280 tank cars to its crude oil fleet.

In the other documents posted on OMB’s website:

— A handout from CSX argues against requiring electronically controlled pneumatic braking systems, saying the technology is “expensive and only works if the entire train is equipped.” The company says the brakes would have “limited use and minimal safety impact.”

As part of an existing voluntary agreement between the industry and DOT, railroads agreed to equip all trains pulling 20 or more carloads of crude oil with other types of advanced braking systems — either distributed power or two-way telemetry end-of-train devices.

— And a final handout, whose authorship is unclear, argues against requiring that crude oil trains never be left unattended. It says “attending crude oil trains from origin to destination will increase congestion, require additional handling, and significantly drive up costs,” including $96 per hour for a two-person crew.

It also says that “appropriate securement and security measures are already in place to ensure safe movement of crude oil shipments.”

Bakken Crude, DOT-111, Federal Regulation (U.S.), Reid vapor pressure levels, Volatile gases

Oil field developer proposes to strip Bakken crude of volatile natural gas liquids

Repost from EnergyWire, E&E Publishing
[Editor: Two significant quotes: “We’re not really taking a position on the tank car rule.  All we’re saying is, in making the rule, please consider what’s going in the car in addition to the car itself.” and “‘Right now, they [American Petroleum Institute] are kind of the lone soldier among the players involved here saying volatility isn’t an issue.  Everyone else is saying, “We know it’s an issue — now we have to figure out how we solve it.”‘”  Well, one way to solve it is to leave the stuff in the ground and invest in renewable energy.  Duh.  – RS]

Oil groups line up at White House over tank car standards

Blake Sobczak  |  E&E News  |  Tuesday, June 10, 2014

Quantum Energy Inc. claims to have no position on proposed oil tank car standards — yet the oil field developer stopped by a White House office last week to discuss them anyway.

Russell Smith, Quantum’s executive vice president of public affairs, said he met with the small but influential Office of Information and Regulatory Affairs to make sure regulators knew about the company’s plans for “stabilizing” hot-to-handle crude from North Dakota’s Bakken Shale play.

Bakken crude has earned a volatile reputation after a string of oil train derailments and fires. A 72-car oil train jumped the tracks and exploded in downtown Lac-Mégantic, Quebec, last July, killing 47 people and prompting regulators to warn that Bakken crude may be less stable than other types.

The deadly crash also set the stage for the “comprehensive” oil-by-rail rulemaking package now weaving its way through OIRA, part of the Office of Management and Budget. White House records show several oil companies, refiners and industry groups have met with administration officials and transportation regulators to shape new standards for the type of DOT-111 tank car long faulted for its puncture-prone design.

“We’re not really taking a position on the tank car rule,” said Smith, who attended June 2’s meeting with lobbyists from FTI Consulting, OIRA representatives and Department of Transportation regulators. “All we’re saying is, in making the rule, please consider what’s going in the car in addition to the car itself.”

Smith’s company hopes to set up “21st-century energy centers” in North Dakota’s Williston Basin capable of stripping the most volatile natural gas liquids out of Bakken crude before the commodity is loaded onto rail cars.

Oil producers have contested claims that Bakken crude is more volatile than other types, and the North Dakota Petroleum Council has conducted tests that it says show the crude is safe (EnergyWire, May 21).

Last month the oil industry’s top lobbying group, the American Petroleum Institute, met with OIRA to air its views on tank car rules that could have a big impact in the Bakken, where well over 600,000 barrels of oil leaves the state daily by rail (EnergyWire, May 28). API said in a later statement that it is “critical” that the proposed rule should “achieve measurable safety improvements by using science and data to address accident prevention, mitigation and response.”

Since then, several refiners, chemical companies and trade groups, including the American Chemistry Council and the American Fuel & Petrochemical Manufacturers (AFPM), have also met with OIRA about the tank car rules.

AFPM has conducted its own study of Bakken crude volatility and concluded even older-model DOT-111 rail tank cars can safely handle the oil, although the refining group detected Reid vapor pressure levels as high as 15.4 pounds per square inch (absolute) in some samples.

Reid vapor pressure offers a good indication of flammable gas content in a liquid such as crude. While 15.4 psi is well within even the oldest DOT-111 tank cars’ safe pressure capacity, AFPM said in its survey of Bakken crude characteristics that vapor pressures of 10 psi or lower “are in the best interests of AFPM members.”

Smith said Quantum intends to strip Bakken crude down to a Reid vapor pressure of 6 psi or lower and sell the separated gas liquids. The Tempe, Ariz.-based holding company also hopes to set up five micro-refineries modeled after a new joint project run by MDU Resources Group Inc. and Calumet Specialty Products Partners (EnergyWire, April 11, 2013). Once completed, that diesel facility will mark the first new refinery built in the United States in nearly 40 years.

“Since we’re stabilizing [Bakken oil] upstream of our refineries, our refineries will actually be receiving ‘stripped’ crude,” Smith said. “With a reasonably small increase in investment, we could be capable of stripping every drop of oil coming out of the Bakken.”

The API said in a statement that “NGL removal is among the topics being considered by the experts who are developing with [the Pipeline and Hazardous Materials Safety Administration’s] participation the new standard for classifying, handling, and transporting crude by rail, and API intends to review their work on the issue before taking a position.”

API has repeatedly emphasized that Bakken crude poses no greater risk than other light oil varieties, a position Smith called “short-sighted.”

“Right now, they are kind of the lone soldier among the players involved here saying [volatility] isn’t an issue,” Smith said of API. “Everyone else is saying, ‘We know it’s an issue — now we have to figure out how we solve it.'”

Blake Sobczak

Reporter, EnergyWire

bsobczak@eenews.net

202-446-0400 (p)

202-737-5299 (f)

@BlakeSobczak (Twitter)

Environment & Energy Publishing, LLC

122 C St. NW, Suite 722, Washington, DC 20001

www.eenews.net

www.eenews.tv

EnergyWire, ClimateWire, E&E Daily, Greenwire, E&ENews PM, E&ETV

About Quantum Energy, Inc.

QUANTUM ENERGY, INC. is a development stage, publicly traded, diversified holding company with offices in Williston, North Dakota. Quantum places an emphasis in refinery development, land holdings, oil and gas exploration, drilling, well completion and fuel distribution www.quantum-e.com.