Category Archives: Rail industry

Bakken Crude, Crude By Rail, Derailment, Explosion, Insurance and liability, Lac-Mégantic, Oil Industry, Rail industry

Court delays Lac-Mégantic settlement

[Editor: Liability is a huge – and lingering – issue when it comes to oil train derailments and catastrophic firey explosions.  There have been daily updates this past week on an announced settlement in the massive Lac-Mégantic disaster of July, 2013.  We watch and wait for potentially precedent-setting decisions.  See below.  – RS]

Court delays ruling on 2013 Quebec oil train crash settlement

(Reuters) — A Quebec judge reserved his decision on Wednesday on whether to grant a motion that would clear the way for a settlement between victims of the 2013 Lac-Megantic oil train disaster and dozens of companies and individuals linked to the crash that killed 47 people.  Read More >

Canadian Pacific asks judge not to approve Lac-Megantic derailment settlement

In this July 6, 2013 file photo, smoke rises from railway cars carrying crude oil after derailing in downtown Lac Megantic, Que.
In this July 6, 2013 file photo, smoke rises from railway cars carrying crude oil after derailing in downtown Lac Megantic, Que. Paul Chiasson / THE CANADIAN PRESS

(Calgary Herald) — SHERBROOKE, Que. – Canadian Pacific Railway Ltd.’s lawyers asked a Quebec judge not to approve a proposed $430-million settlement fund for victims of the Lac-Megantic train derailment because they say its terms are unfair to the company.  Read More >

Quebec court to hear arguments in $431 million settlement for Lac-Megantic victims

(Globalnews.ca) – WATCH: A settlement to compensate victims of the Lac-Megantic train disaster may be in danger. Lawyers for Canadian Pacific are questioning the legitimacy of the entire process, just two days before a judge was set to approve the deal. As Mike Armstrong explains, the last minute hiccup could mean a delay of months or even years.  Read More >

 

Canadian Pacific legal challenge plunges Lac-Mégantic settlement into question

(Montreal Gazette) – A lawyer for the defunct railroad at the centre of the Lac-Mégantic train derailment said Canadian Pacific Railway Ltd. is acting deplorably and offensively by attempting to shut down proceedings to distribute more than $430 million to victims and creditors of the 2013 tragedy.  Read More >

 

Crude By Rail, Derailment, Electronically controlled pneumatic braking (ECP), Massive increase in crude-by-rail, Oil prices, Rail industry, Rail Safety, Train braking systems, Union Pacific Railroad

Union Pacific chief threatens action on oil train brake rules

Repost from Financial Times

Union Pacific chief threatens action on oil train brake rules

Robert Wright in New York, May 31, 2015 4:55 pm
In this photo from Aug. 8, 2012, a Union Pacific train travels in Council Bluffs, Iowa. Union Pacific said Thursday, Oct. 18, 2012, that its third-quarter profit climbed 15 percent because price increases and more automotive and chemical shipments helped the railroad offset a 12 percent drop in coal shipments. The railroad reported $1 billion in net income, or $2.19 per share. That's up from $904 million, or $1.85 per share, a year ago. (AP Photo/Nati Harnik)
In this photo from Aug. 8, 2012, a Union Pacific train travels in Council Bluffs, Iowa. Union Pacific said Thursday, Oct. 18, 2012, that its third-quarter profit climbed 15 percent because price increases and more automotive and chemical shipments helped the railroad offset a 12 percent drop in coal shipments. The railroad reported $1 billion in net income, or $2.19 per share. That’s up from $904 million, or $1.85 per share, a year ago. (AP Photo/Nati Harnik)

The chief executive of Union Pacific, the US’s largest rail network, has vowed legal action over a provision of new rules for oil trains that he says would cost billions of dollars and provide little benefit.

The pledge from Lance Fritz threatens further delay to rules that have already been years in preparation.

The Federal Railroad Administration and Canadian regulators jointly announced the rules less than a month ago to improve the safety of oil movements by rail, which have risen sharply following the surge in US oil and gas production in recent years.

The surge — from only about 1m tonnes of traffic in 2007 to roughly 40m in 2013, the last year for which full data are available — has exposed the shortcomings of existing safety rules for tank cars, with several trains exploding following derailments.

While Mr Fritz said that most of the new provisions were “great regulation”, he criticised provisions demanding that railways start controlling tank cars’ brakes via an electric signal either transmitted wirelessly from the lead locomotive or via electrical wires running along the train.

The new arrangement, known as electronically controlled pneumatic (ECP) braking, is intended to speed up the transmission of the braking command compared with current methods, which rely on pressure changes in a pipe running along the train. That should reduce the number of cars that derail in a crash.

Mr Fritz said, however, that virtually the same improvements could be gained by spacing locomotives out along a train, as Union Pacific frequently does, and the extra benefits of ECP did not justify the costs. The new equipment would cost about $75,000 for each of UP’s 6,500 locomotives, while there would also be substantial costs for fitting out tank cars, nearly all owned by oil shippers or leasing companies.

“The juice isn’t worth the press,” Mr Fritz said. “We think that’s very ill-considered. We provided that feedback and we will continue to provide that feedback.”

The industry could appeal against the rule both through administrative channels and in the courts, Mr Fritz said. “We as an industry are taking that path,” he added.

Railways have been pressing for improvements in tank car design to avoid a repetition of disasters like the Lac-Mégantic explosion in Canada in 2013, in which 47 people died when a poorly secured oil train broke lose, derailed and exploded in the centre of a small town.

Operators are barred from refusing to carry cargo that meets the minimum regulatory requirements but have been concerned that under existing regulations cars were excessively vulnerable in an explosion.

Mr Fritz also criticised the new rules’ standards for thermal protection for cars, meant to prevent their exploding in a fire, saying they were not strict enough.

The Federal Railroad Administration declined to comment publicly on Mr Fritz’s criticisms but looks determined to press ahead with the mandate for ECP brakes.

UP, which has a larger track network than any other US railway, has been a significant beneficiary of the surge in oil movements. Mr Fritz said he expected a strong continuing role for rail in transporting US-produced crude oil.

The sharp fall in the oil price in recent months has shifted traffic away from the routes that UP serves, however, pushing down crude oil movements on its network by 38 per cent in the first quarter compared with last year.

Rail industry, Railroad workers

BNSF Railway plans temporary layoffs with slipping freight demand

Repost from the Fort Worth Star Telegram

BNSF plans temporary layoffs with slipping freight demand

Associated Press, May 27, 2015
BNSF is furloughing some employees due to a decline in demand for shipping, including crude oil.
BNSF is furloughing some employees due to a decline in demand for shipping, including crude oil. Curtis Tate, MCT

BISMARCK, N.D.  –  BNSF Railway says it’s planning employee furloughs due to a drop in freight shipping demand across its rail network.

The Fort Worth-based company said Wednesday in a statement that it hopes to call back employees “as soon as business needs require.”

The railroad declined to say how many employees were being furloughed but that they are “at different locations across our network.” The company also said it’s reducing it’s hiring plans for the next several months.

“Customers’ volumes in the near term have come down somewhat from their prior estimates. As a result we are having to adjust our workforce demand numbers down to match volume and the work required to move that volume,” the statement said.

BNSF is part of Warren Buffett’s Berkshire Hathaway, based in Omaha, Nebraska.

The railroad is the biggest player in North Dakota’s oil patch, hauling most of the 1.1 million barrels that moves out of the region daily. Oil drilling has been curtailed significantly in North Dakota’s Bakken Shale and other fields following the collapse in oil prices.

The railroad also is the biggest hauler of freight in the Upper Great Plains.

Just last year, the railroad was expanding rapidly, adding 6,000 workers and 500 locomotives to meet demand for shipping and ease backups caused by severe winter weather.

Bakken Crude, BNSF Railway, Crude By Rail, Derailment, Explosion, Rail industry

Railroad President Greeted by Bomb Train Protestors in Chicago

Repost from DeSmogBlog

BNSF President Greeted by Bomb Train Protestors in Chicago

By Justin Mikulka, May 27, 2015 – 16:50

Today at the annual North American Rail Shippers Association, Carl Ice, president of rail company Burlington Northern Sante Fe (BNSF) had his keynote address interrupted by members of Rising Tide Chicago. The activists carried banners reading, “BNSF: Profits over Safety” and “BNSF: Bomb Trains Kill.”

BNSF moves significantly more oil by rail than any other rail company and much of that oil passes through the Chicago area.

In March, a BNSF oil train derailed and caught fire in Galena, Illinois. In May, another BNSF oil train derailed and caught fire in North Dakota.

“BNSF makes billions of dollars putting our communities and climate at risk,” said protester Kevin Oliver. “So we took this action to take a stand against the obscene wealth that is being generated at the expense of our safety.”

Oliver was correct about BNSF making billions of dollars for its parent company Berkshire Hathaway, run by famed investor Warren Buffett. Berkshire Hathaway purchased BNSF in 2009 and it has turned out to be an amazing investment, if you don’t mind the occasionally exploding oil train.

The success of the investment was summed up best by Jeff Mathews who has written books about Berkshire Hathaway.

“He [Buffett] stole it,” Matthews told Bloomberg. “He’s got to feel really good that he bought it when he did, because it’s a wonderful asset, and it’s done nothing but get more valuable in the time that he’s owned it.”

And that increase in value is directly related to the huge increase in moving Bakken crude oil in BNSF unit trains in the past several years. Trains that do not have modern braking systems, which is one of the issues raised by Rising Tide Chicago. And BNSF is certainly in no hurry to part with any of their profits to install modern braking systems.

As reported on DeSmog, BNSF and the rail and oil industries have lobbied extensively against requirements that the industry upgrade the oil trains to use a modern electronically controlled pneumatic (ECP) braking system.

And while the new regulations released earlier this month will require some oil trains to use ECP brakes by 2021 and all of them by 2023, the American Petroleum Institute has filed a lawsuit against the Department of Transportation challenging this requirement, which is likely to delay even that long timetable.

The length of time the oil and rail industries have been allowed by the new regulations to implement safer technologies even surprised the former chair of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Cynthia Quarterman. PHMSA is the agency responsible for the new regulations and Quarterman led that agency for most of the time the regulations were being developed.

“That was the biggest surprise, by far,” Quarterman said in an interview with Argus after the regulations were released. “The push-back for five years for most things, I thought it was a substantial push-back in terms of dates.”

Extending the timeline for the regulations has been a top priority of the oil and rail lobbyists and their partners in congress in their efforts to weaken the new regulations and protect profits.

Prior to release of the new regulations Quarterman told USAToday that she thought ECP brakes were a top priority when it came to improving oil-by-rail safety.

“The more I think about it, the more I think that the ECP brakes may be more important than the tank car itself,” Quarterman said. “Because it would stop the pileup of the cars when there’s a derailment or when there’s a need to brake in a very quick fashion.”

And it isn’t just Quarterman who believes in the safety benefits of ECP braking systems. In 2007, long before the oil-by-rail boom, BNSF was touting the impressive safety benefits of ECP brake systems according to this press release.

ECP brakes have the potential to reduce train stopping distances by as much as 50 to 70 percent over conventional air brake systems. ECP brakes utilize electronic signals to simultaneously apply and release throughout the length of a freight train. This differs from conventional brake systems in which each car brakes individually as air pressure moves in a series from car to car.

But since the existing highly profitable and known to be flawed fleet of DOT-111 and CPC-1232 tank cars being used to move Bakken oil do not have ECP braking systems currently installed, BNSF and their allies at the American Petroleum Institute are now against ECP technology. An approach succinctly captured in today’s banner reading, “Profits over Safety.”

In 2006, the Federal Railroad Administration released a report on ECP brakes prepared by Booz Allen Hamilton which stated that the brakes are a “tested technology” that offers “major benefits” and could “significantly enhance” rail safety.

The question raised by today’s protest and the one that is really at the heart of the whole oil-by-rail discussion is how long will companies like BNSF get to continue to put profits over safety? The answer to that question is most likely the one given by former head of the National Transportation Safety Board Deborah Hersman. Hersman said that we’ve “seen a lot of difficulty when it comes to safety rules being implemented if we don’t have a high enough body count.”

So in all likelihood, the only way that there will be significant safety improvements in the oil-by-rail industry is when the next fatal accident increases the pressure on regulators and the industry to finally part with some of their profits to protect the public.