Tag Archives: Tank car retirement

Bakken Crude, Canadian regulation, CPC-1232, Crude By Rail, DOT-111, Tank car design, Tank car retirement, Tar sands crude, Track maintenance

Canada Transport Watchdog to Introduce New Tank Cars Ahead of Schedule

Repost from Insurance Journal (Reuters)

Canada Transport Watchdog to Introduce New Tank Cars Ahead of Schedule

By David Ljunggren | March 18, 2015
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IN PHOTO: Tanker rail cars burn after a crude oil train derailment 50 miles (80 km) south of Timmins, Ontario, in this picture from the Transportation Safety Board of Canada taken in Gogama, Ontario, February 16, 2015. Canadian National Railway Co is still cleaning up spilled oil and removing damaged rail cars after a weekend derailment on its line at a remote site. The company said 29 of 100 cars on the train heading from Alberta’s tar sands to eastern Ontario derailed late on Saturday and seven caught fire. There were no injuries. Picture taken February 16, 2015. REUTERS/Transportation Safety Board of Canada/Handout via Reuters

Canada’s transportation watchdog said that recent fiery derailments of trains hauling crude oil mean a new generation of stronger tanker wagons should be introduced ahead of schedule.

The Transportation Safety Board (TSB) is probing two accidents within the last month involving Canadian National Railway Co. oil trains which came off the tracks and caught fire near the small northern Ontario town of Gogama.

Both trains were hauling CPC-1232 crude tankers, meant to be safer than the older DOT-111 models that blew up in downtown Lac-Megantic, Quebec in 2013, killing 47 people. Canada last week unveiled tough standards for a new generation of tanker cars that would replace the CPC-1232s by 2025 at the latest.

“While the proposed standards look promising, the TSB has concerns about the implementation timeline, given initial observations of the performance of CPC-1232 cars in recent derailments,” the agency said in a release.

“If older tank cars, including the CPC-1232 cars, are not phased out sooner, then the regulator and industry need to take more steps to reduce the risk of derailments or consequences following a derailment carrying flammable liquids,” it said, but gave no details.

The agency said track failures may have played a role in each of the Gogama derailments as well as in the case of an oil train that left the tracks near Minnipuka, also in northern Ontario. No crude caught fire in that accident.

The TSB has issued a safety advisory letter asking the federal transport ministry to review the risk assessments conducted for the area.

“Petroleum crude oil unit trains transporting heavily-loaded tank cars will tend to impart higher than usual forces to the track infrastructure during their operation,” said the agency.

“These higher forces expose any weaknesses that may be present in the track structure, making the track more susceptible to failure.”

It noted trains traveling in the area were under orders to travel slowly to protect against various infrastructure and track maintenance issues.

CN spokesman Jim Feeny said the company “has enhanced its already rigorous infrastructure and mechanical inspection procedures on this northern Ontario rail corridor.”

The office of Transport Minister Lisa Raitt – which has overall responsibility for regulating the rail industry – was not immediately available for comment.

(Additional reporting by Allison Martell in Toronto; editing by Chizu Nomiyama and Marguerita Choy)

Related article:
Canada Proposes Tough New Oil Tank Car Standards

Bakken Crude, CPC-1232, Crude By Rail, Derailment, DOT-111, Explosion, Tank car design, Tank car retirement, Tank car retrofit

REUTERS: Derailed CSX train in West Virginia hauled newer-model tank cars

Repost from Reuters

Derailed CSX train in West Virginia hauled newer-model tank cars

By Jonathan Leff, Feb 17, 2015 5:18pm EST 
The charred remains of a house and a vehicle are shown below a derailed CSX Corp train in Mount Carbon, West Virginia, Tuesday, February 17, 2015. REUTERS-Marcus Constantino
1 of 11. The charred remains of a house and a vehicle are shown below a derailed CSX Corp train in Mount Carbon, West Virginia, Tuesday, February 17, 2015. Credit: Reuters/Marcus Constantino

(Reuters) – An oil train was still on fire and leaking in West Virginia on Tuesday, a day after it derailed and erupted in flames, according to CSX Corp, which said the train was hauling newer model tank cars, not the older versions widely criticized as prone to puncture.

The train, which was carrying North Dakota crude to an oil depot in Yorktown, Virginia, derailed in a small town 33 miles southeast of Charleston, causing 20 tank cars to catch fire. Several were still leaking oil on Tuesday. All the oil tank cars on the 109-car train were CPC 1232 models, CSX said late Monday.

The CPC 1232 is the newer, supposedly tougher version of the DOT-111 car manufactured before 2011, which was faulted by regulators and operators for a number of years. U.S. and Canadian authorities, under pressure to address a spate of fiery accidents, are seeking to phase out the older models. The U.S. Transportation Department has recommended that even these later models be updated with improved braking systems and thicker hulls.

The fires, which destroyed one house and resulted in the evacuation of two nearby towns, were left to burn out on Tuesday, CSX said in a statement. No serious injuries were reported.

CSX said the cleanup of oil will begin when it can safely reach the site. In the meantime, delays are expected on the line.

None of the 25 tank cars that derailed fell into the nearby Kanawha River, CSX said. On Monday, officials said at least one car had entered the river.

Water tests along the Kanawha River have so far come up negative for traces of oil, according to a spokeswoman at the West Virginia Department of Environmental Protection. A nearby water treatment plant has been closed, she said.

This accident followed the Feb. 14 derailment in Ontario of a Canadian National Railways train from Alberta. It was also the second derailment in a year along this CSX line. A similar incident in Virginia involved a train also headed to Plains All American Pipelines LP’s oil depot in Yorktown, Virginia.

A boom in oil rail shipments rail across North America has heightened focus on safety. In July 2013, 47 people were killed in the Quebec town of Lac-Mégantic after a train carrying crude oil derailed and exploded.

Derailment, DOT-111, Ethanol, Fire, Tank car retirement, Tank car retrofit

Latest Derailment: near Dubuque, Iowa, involving outdated tank cars

Repost from KCRG.com, Cedar Rapids, IA
[Editor: apologies for the video’s commercial ad, but otherwise a good report.  See also coverage with another photo and perhaps better information on Reuters.  – RS]

Fiery derailment near Dubuque involved outdated tank cars

DOT-111s prone to puncture, but still heavily used

By Erin Jordan, The Gazette, Feb 4, 2015


DUBUQUE COUNTY — A train derailment Wednesday near Dubuque that caused three tank cars to erupt in flames and three others to plunge into the icy Mississippi River involved outdated cars prone to punctures and spills.

The Canadian Pacific freight train headed southeast derailed around 11:30 a.m. Wednesday in a remote area north of Dubuque. Eleven cars left the track, with 10 of those carrying ethanol, officials reported. Three of those cars caught fire and three slipped into the river.

An aerial shot of the derailed train north of Dubuque. (Charlie Schurmann/KCRG-TV9)

“I can confirm that DOT-111s were involved, how many of the derailed cars were DOT-111s I am not sure yet,” Canadian Pacific spokesperson Jeremy Berry reported Wednesday evening.

DOT-111s, black, tubed-shaped tank cars, make up about 70 percent of the U.S. tank car fleet. The outdated cars have been blamed for explosions and spills during derailments across North America. In the worst of these crashes, 47 people died when a runaway train of crude oil in DOT-111 cars exploded in Lac-Megantic, Quebec, July 6, 2013.

In July, the U.S. Department of Transportation proposed a two-year phase out of DOT-111s for carrying some flammable liquids, such as crude oil and ethanol, unless the tanks are retrofitted. The rail car supply industry has so far built more than 17,000 upgraded tankers that include thicker steel, stronger end caps and more protection for top fittings, Tom Simpson, president of the Railway Supply Institute, a trade group that acts on behalf of suppliers to North American railroads, told The Gazette in April. The group expect to have 55,000 by the end of 2015.

Tens of thousands of the cars are still in use because of the high volume of crude oil being shipped from the Bakken region or North Dakota, Montana and Canada.

Nine Iowa counties, including five along the Mississippi River in Eastern Iowa, see rail shipments of one million gallons or more of extra-flammable Bakken crude, The Gazette reported in June.

“You have these older cars that don’t meet the specs carrying these flammable liquids, this is what you’re going to get,” Albert Ratner, a University of Iowa associate professor of mechanical engineering who studies fires during train derailments, said about Wednesday’s crash.

No one was injured in the derailment. Because the tracks run between the river and a steep, snow-covered slope, fire crews were not able to put out the blaze Wednesday, the Dubuque County Sheriff’s Office reported.

The derailment could have caused more damage in a metropolitan area, Ratner said. The snow also likely reduced the potential for nearby trees catching fire. But because DOT-111s are notorious for breaking apart in derailments, ethanol could have spilled from the tank cars into the Mississippi, Ratner said.

“You could have problems with it going downstream and spreading out the environmental effect,” he said.

Canadian Pacific officials were still gathering information Wednesday evening.

“Safety is the priority and we take these incidents seriously,” Spokeswoman Salem Woodrow wrote in an email. “CP’s emergency protocols were immediately enacted and all safety precautions and measures are being taken as our crews respond to the incident.”

Bakken Crude, DOT-111, Federal Regulation (U.S.), Oil Industry, Oil prices, Rail industry, Tank car manufacture, Tank car retirement, Tank car retrofit

Rail Tank-Car Orders Threatened by U.S. Crude’s Collapse

Repost from Bloomberg News

Rail Tank-Car Orders Threatened by U.S. Crude’s Collapse

By Katherine Chiglinsky, January 22, 2015

(Bloomberg) — Add tank-car makers to the list of U.S. industries bracing for the effects from the plunge in crude prices.While 2014’s record orders, including an all-time high 42,900 in the third quarter, will drive deliveries this year, according to Susquehanna International Group, manufacturers from Carl Icahn’s American Railcar Industries Inc. to Warren Buffett’s Union Tank Car Co. are facing a decline. New bookings in 2015 may plunge 70 percent, Macquarie Capital USA Inc. said, putting earnings at risk when scheduled deliveries drop in 2016.

Oil prices down 49 percent since June have crimped investment in U.S. fields including the Bakken range, where horizontal drilling and hydraulic fracturing is more expensive than conventional oil drilling. That has hurt industries from steel to heavy equipment. It also has slowed the boom in oil-by-rail shipping, which along with new federal safety rules, had fueled the record orders.

“The confidence of the industry has been shaken quite seriously,” Cleo Zagrean, a New York-based analyst for Macquarie Capital said by phone Jan. 15.

Tank-car maker stocks have suffered amid the oil price decline, with shares of Trinity Industries Inc. dropping 40 percent in the fourth quarter, according to data compiled by Bloomberg. American Railcar shares fell 30 percent and Greenbrier Cos. dropped 27 percent.

“It’s having an impact already,” said Art Hatfield, a managing director of equity research at Raymond James & Associates Inc. in Memphis, Tennessee. “I think the forward-looking minds are realizing that we may have hit a cyclical peak within the industry.”

New freight-car orders fell to 37,431 in the fourth quarter, down 13 percent from record highs, according to data from the Railway Supply Institute, reported Thursday. Leasing company GATX Corp.’s deal with Trinity added 8,950 new car orders in the fourth quarter. Those cars will be delivered over a four-year period beginning March 2016.

Backlogs swelled to a record 142,837 orders the Washington-based RSI said. These may bolster the industry through 2015.

Throughout last year, buyers piled on requests for cars amid an oil boom in North Dakota and Texas. Freight-car bookings and backlogs swelled to record highs even as West Texas Intermediate crude oil prices fell 14 percent between July and the end of September, according to data compiled by Bloomberg.

Orders for cars that carry cement and frac sand, a resource instrumental in the U.S. shale boom, declined in the fourth quarter from a record, according to Bascome Majors, an Atlanta-based transportation and rail-equipment analyst for Susquehanna International. Falling oil prices might temper future demand for frac-sand cars, he said.

Significant Hit

Oil prices tumbled 18 percent in November and 19 percent the next month, ending the year with the steepest monthly loss in six years, data compiled by Bloomberg show.

“The oil price drop is a significant hit” to the tank-car industry, Macquarie’s Zagrean said. As customers re-evaluate the cost of new cars, even extensions on orders can weaken manufacturers’ earnings, she said.

Freight-car producer Greenbrier has dodged order cancellations as oil prices fell. Only one customer approached the company about canceling an order but has yet to call the deal off, William Furman, chief executive officer, said in a conference call Jan. 7.

Trinity had not seen any “appreciable impact” on its business from the low oil prices in the third quarter, Stephen Menzies, group president of the company’s rail and railcar leasing group, said in an earnings call October 29. The company stands by those comments, spokesman Jack Todd said in a Jan. 21 e-mail.

Union Tank Car spokesman Bruce Winslow declined to comment on the company’s orders. GATX’s director of investor relations Jennifer Van Aken didn’t return phone calls seeking comment.

In addition to concerns that low oil prices will threaten demand, the industry faces new regulations spurred by accidents including the July 2013 derailment and explosion in Lac-Megantic, Quebec, that killed 47 people.

Phase Out

The U.S. Pipeline and Hazardous Materials Administration plans to issue rules to phase out older rail cars that carry crude in the coming month, Susan Lagana, a PHMSA spokeswoman, wrote in an e-mailed statement Jan. 15. The type of tank car most implicated in spills, known as the DOT-111, would be phased out or rebuilt to meet the new standards within two years for the most volatile crude oil, according to the proposal.

New rules may create “quite a lot of replacement demand,” Greenbrier CEO Furman said in the earnings call. Currently, the Lake Oswego, Oregon-based company’s tank-car orders comprise just slightly more than a quarter of its backlog, according to company spokesman Jack Isselmann.

Owners are expected to scrap more than a fifth of an estimated 117,000 tankers that would require modifications. The work, which may include adding full height steel shields at the ends and adding a metal jacket around the body, is estimated to cost between $27,000 and $46,700 per car, an RSI study said.

Safety Concerns

BNSF Railway Co., which like Union Tank Car is owned by Buffett’s Berkshire Hathaway Inc., delayed an order of 5,000 new and safer oil-tank cars until the new safety standards are set. The railroad said last year that it would buy the new cars because of safety concerns even though railroads typically don’t own the cars that their locomotives haul on the track.

Many of the orders for safer tank cars might already be included in the backlog as buyers line up in anticipation, Hatfield of Raymond James said.

“This industry has really earned a lot of money in the last few years due to this tank-car boom and when that goes away, it’s going to have an impact on peoples’ businesses,” he said.