(John Kemp is a Reuters market analyst. The views expressed are his own)
By John Kemp
LONDON, Jan 24 (Reuters) - Accident investigators have told regulators in the United States and Canada that safety regulations have failed to keep pace with the risks of moving large volumes of crude oil by train.
The U.S. National Transportation Safety Board (NTSB) and Canada's Transportation Safety Board (TSB) wrote on Thursday to the Pipeline and Hazardous Materials Safety Administration (PHMSA), the Federal Railroad Administration (FRA) and Transport Canada.
The investigators made three new safety recommendations and reiterated one old one.
The new recommendations would require crude-carrying trains to be routed away from densely populated areas, with their cargoes properly risk assessed and classified, and a oil spill response plan drafted for a worst-case scenario in which the train loses its entire load.
But the accident investigators also reiterated their previous concerns about the unsuitable design and poor performance of Class 111 tank cars for carrying highly flammable liquids such as shale oil.
The NTSB and TSB have been highlighting risks with the Class 111 design for 20 years. In 2012, the NTSB recommended all Class 111 tank cars used for carrying crude oil or ethanol be retrofitted with new safety features or phased out.
The rail industry has taken steps to improve the design of new tank cars, but remains divided over what to do with the old Class 111 tank cars currently in service. And regulators have dithered about introducing new rules.
"Although the PHMSA has initiated a rulemaking to address the safety issue, it has not issued any new rules," the NTSB observed.
"If unit trains of flammable liquids are going to be part of our nation's energy future, we need to make sure the hazardous materials classification is accurate, the route is well planned, and the tank cars are as robust as possible," NTSB Chairwoman Deborah Hersman said in a statement.
Writing to the PHMSA and FRA, the NTSB emphasised it is "vitally interested" in these recommendations and demanded a response within 90 days.
Until now, the action from regulators has not been good enough. It is time for the White House and Congress to step in and insist on an accelerated timetable for phasing out old and unsuitable Class 111 tank cars before another serious accident occurs.
KEY TRAIN ROUTE PLANS
Under existing regulations, rail operators must take special care with trains carrying explosive, poisonous and radioactive substances.
Special requirements include making a careful risk assessment of the route. Railroad operators must take into account 27 separate risk factors, including track type, curvature and the maintenance schedule as well as population density and emergency response capability along the route.
Where possible, carriers must route high-risk trains away from urban areas. The primary concern is to prevent a "catastrophic release or explosion in proximity to densely populated areas, including urban areas and events or venues with large numbers of people in attendance, iconic buildings, landmarks or environmentally sensitive areas," according to the NTSB.
But the rules do not apply to flammable substances such as crude and ethanol because rail regulators judged "the risks are not as great".
Following a spate of recent derailments and train fires, however, railroad operators have already taken some voluntary steps to improve safety.
The Association of American Railroads (AAR), which represents the major carriers, issued Circular OT-55-N in August 2013.
The circular extends the definition of a "key train" to include any train carrying 20 or more car loads of hazardous material, including flammable liquids like crude.
Key trains are subject to a speed limit of 50 miles per hour (80 kilometres per hour), have priority over all other trains on the network, and are subject to stringent safety rules to minimise the risk of derailment.
The NTSB now wants the PHMSA and FRA to expand the route planning and selection requirements to any train identified as a key train under OT-55-N, including those carrying flammable liquids. Where feasible, trains carrying large volumes of crude or ethanol would be re-routed to avoid populated areas.
WORST-CASE SPILL PLANS
In a bizarre loophole, unit trains carrying dozens of tank cars full of crude oil are subject to fewer safety controls than pipelines, road tankers, ships or barges.
Other modes of transport must prepare detailed spill response plans, which are reviewed by regulators. But in the case of rail "current regulations do not require railroads transporting crude oil in multiple tank cars to develop comprehensive spill response plans and have resources on stand-by for response to worst-case discharges," according to the NTSB.
Current regulations, effective since 1996, only require a comprehensive plan if a single tank car carries 42,000 gallons. Class 111 tank cars carry only about 30,000 gallons each. But they are now being strung together in unit trains consisting of dozens of tank cars carrying as much as 1 million or even 2 million gallons in total.
Problems arise when a train carrying multiple tank cars derails and they all breach. According to the NTSB: "spill planning regulations do not take into account the potential for a derailment of large numbers of 30,000 gallon tank cars, such as at Lac-Megantic (Quebec) where 60 tank cars together released about 1.6 million gallons of crude."
"Although no one tank car meets the current threshold for comprehensive spill planning, the Lac-Megantic accident and the well-known poor lading retention performance history of Class 111 tank cars have demonstrated the worst-case release potential of these unit trains, in many cases greater than 2 million gallons."
The NTSB has therefore recommended PHMSA to revise its regulations to require comprehensive spill plans based on worst-case scenarios for all unit trains and trains carrying blocks of tank cars.
UNSAFE TANK CAR DESIGNS
The NTSB and its Canadian counterpart both highlighted the need for crude cargoes to be properly tested and classified as medium or high-risk, something regulators in the United States and Canada have already implemented.
But both accident investigation agencies reiterated their concerns about the design and safety performance of Class 111 tank cars and demanded they be retrofitted with enhanced safety features or be phased out of service.
Until now, there has been an unedifying battle about what to do with the old tank cars. The NTSB and AAR have accepted they pose a safety hazard and must be retrofitted or phased out quickly. But tank car owners and the oil industry want much longer to upgrade them or take them out of service, as much as 10 years.
The two sides blame each other. Railroad operators point to the poor safety performance of Class 111 tank cars involved in accidents. The oil industry, shippers and tank car owners insist the design would be perfectly adequate if the train operators could cut the number of derailments and actually keep tank cars on the tracks.
In this instance, it is the shippers and tank cars owners that are wrong. Some derailments are inevitable even on the most well-run railroad. So it is vital that when they occur, tank cars contain their contents safely.
Unfortunately, Class 111 tank cars have a lousy performance. Even at comparatively slow speeds, more than half will rupture and release some or all of their contents in an accident. That does not matter so much when they are carrying innocuous cargoes. But it makes them unsuitable to carry dangerous loads like crude.
The Canadian accident investigators' report presents some frightening numbers. The train that derailed in Quebec was carrying 72 Class 111 tank cars. In total, 63 tank cars derailed. Of those, 60 tank cars (95 percent) released some or all of their contents.
Reported damage included 33 tank cars with punctured shells, 26 with punctured heads, 20 with damaged top fittings, 12 with damaged pressure relief valves, 7 with impacted bottom fittings, as well as 4 with thermal tears and 2 with damage to manways.
Better designs and retrofits could have prevented flammable liquids from being released from many of these tank cars.
TIME FOR ACTION
Class 111 tank cars full of crude are quite literally an accident waiting to happen.
Designating them in key trains, routing them away from urban areas and requiring comprehensive spill plans can reduce the risks of a catastrophic accident. But it is imperative they are retrofitted or removed from service as quickly as possible.
Removing all of them from service immediately would cause enormous disruption. But a decade is too slow to wait for improvements given what we now know about the risks.
Retrofits are expensive and there are capacity constraints at tank car manufacturers. However, the engineering is not that complicated. Three years ought to be more than enough for Class 111 cars in crude and ethanol service to be upgraded, replaced or retired.
If the industry and regulators cannot reach an agreement, the White House, Congress and Canada's minister of transport should step in to force the pace of change. (Editing by Jason Neely)