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John Kemp, Reuters, Published February 25 2014

Column: Railroads act to reduce crude-by-rail risks

LONDON - U.S. railroad operators have agreed new safety procedures to reduce the number of fiery derailments involving crude-carrying trains and cut the risk of a catastrophic explosion in a densely populated urban center.

The agreement between the Association of American Railroads (AAR) and the U.S. Department of Transportation (DOT), announced on Friday, builds on safety enhancements many rail operators had already implemented individually.

Most of the major railroads in the United States and Canada had already agreed to designate trains carrying 20 or more tank cars of crude or ethanol as "key trains" following a series of train fires.

The designation, which is also used for trains carrying explosive, toxic and nuclear materials, gives them priority over all other traffic on the network, limits them to a maximum speed of 50 miles per hour, and requires comprehensive risk assessment and route-planning procedures.

From the end of March, however, the railroads will step up track inspections along routes which are used by trains carrying 20 or more carloads of oil.

Cracked or broken rails are one of the most common causes of derailments. Crude shippers and the oil industry have complained that railroads have not done enough to keep their trains on the rails, and blamed the train companies for the recent spate of fires.

Enhanced inspections - including high-tech measurements of track geometry, such as curvature and alignment - will go beyond current standards set by the Federal Railroad Administration (FRA) and are meant to demonstrate rail operators are doing all they can to avoid accidents.

Railroads have also agreed to use better braking systems on all 20-car crude-carrying trains that will enable brakes to be applied from both ends of the train to stop it faster in the event of an emergency.

SPEED LIMITS

Speed has been identified as a major contributor in crude-by-rail (CBR) accidents. The faster the train or trains are moving when an incident occurs, the more likely tank cars are to rupture and lose some or all of their contents, heightening the fire risk.

From July 1, any 20-car crude-carrying train that includes at least one tank car of the old Class 111 design will be subjected to an even lower speed limit of 40 miles per hour when traveling through any one of 46 high-threat-urban areas (HTUAs) designated by the U.S. Department of Homeland Security.

The full list of high-threat-urban areas is published in Title 49 Part 1580 of the Code of Federal Regulations, but it includes the metropolitan areas of New York, Detroit, Chicago, Washington DC, Houston and New Orleans, all of which are major destinations or transit points for the crude-by-rail business.

Derailments in one of these areas pose the greatest risk to life and property, as well as the biggest potential liability for the railroads, so it makes sense to reduce train speeds, and kinetic energy on impact, even further in them.

ROUTE PLANNING

From the beginning of July, all railroads have promised to start using the Rail Corridor Risk Management System (RCRMS) for 20-car trains to determine the safest route.

RCRMS was developed in the wake of September 11, 2001, to keep trains carrying the most hazardous materials away from urban centers as much as possible.

It takes account of 27 risk factors (including population density along the route, trip length, local emergency response capability, track quality and signal systems) to identify the safest route.

So far RCRMS has been used for the most dangerous class of hazmat (inhalation poisons, radiological materials and explosives) but it will now be extended to crude trains.

OIL TANK CARS

The explanation for so many fiery train derailments involving unit trains carrying crude oil is becoming much clearer.

There are two related problems: the old tank cars being used to carry most crude are not strong enough to resist the forces involved in a crash, and the crude is more volatile and flammable than previously thought.

For two decades, the U.S. National Transportation Safety Board (NTSB) has been warning that the Class 111 tank car design is not strong enough to resist impact forces.

More than two-thirds of Class 111 tank cars involved in recent accidents have been punctured or suffering damage to their valves, leading to containment failure.

Pressurized tank cars, built to Class 105 and 112 designs and used to carry hazardous liquids like chlorine, are far less likely to rupture on impact.

The design limitations of the Class 111 tank cars were not an issue when they were used mostly to carry harmless products like milk. And the potential risks were hidden because so little crude actually traveled by rail before 2009.

But once Class 111 tank cars entered routine crude-by-rail service, especially in unit trains, the risks rose substantially and became far more apparent.

OIL VOLATILITY

The risks of unsafe tank car designs have been worsened by the unusually high volatility of the crude being transported from North Dakota and some of the other shale plays.

North Dakota's Bakken crude has a Reid Vapour Pressure (RVP) of 8.6 pounds per square inch (psi), roughly double the volatility of other crudes processed by U.S. refineries, according to research by the Wall Street Journal ("Bakken shale oil carries high combustion risk" Feb 23).

Other crudes typically have an RVP of 3-6 psi. But some Bakken crude has hit RVP readings of 10 or even 12 psi, according to the newspaper.

That makes Bakken oil almost as volatile as gasoline. Gasoline volatility is normally kept well below 14.7 psi. The U.S. Environmental Protection Agency limits the RVP of reformulated gasoline supplies in areas with poor air quality in summer to 9.0 or even 7.8 psi.

RVP matters because it is a measure of the tendency of crude, gasoline or other flammable liquids to evaporate and form a flammable or explosive cloud around the train.

If the tank car cannot contain the crude safely in an accident, there is a strong likelihood oil and vapors will start to escape forming a dangerous vapor cloud and significantly heightening the risk of a fire or explosion.

SAFETY RESPONSE

Railroad operators want Class 111 tank cars taken out of a service on an accelerated timetable because of the risks.

Canadian National Railway is already charging shippers more to transport crude oil in older Class 111 tank cars to reflect the increased risk and to encourage them to use more modern, and safer, designs.

"CN has structured its rates to create an economic incentive for customers to acquire, over time, more robust tank cars that meet the higher safety standard of the more recent CPC 1232 design," according to a company spokesman.

"What we do to help ourself is we price crude differently for different car types ... The CPC-1232 is our favorite car when it comes to pricing or attracting business," the company said in a presentation on Feb 10.

Canadian Pacific has now followed suit and imposed a $325 "general service tank car safety surcharge" on each car of crude shipped in any container other than the CPC 1232 model.

Burlington Northern-Santa Fe, the railroad owned by Warren Buffett's Berkshire Hathaway, has confirmed plans to order 5,000 tank cars built to updated designs for use in crude service.

But as long as substantial numbers of Class 111 tank cars remain in service, carrying high volatility oil, they remain a severe risk to communities along the route, as well as to train crews and the railroad companies themselves, which are liable in the event of accidents.

The new agreement between the AAR and the Department of Transportation recognizes the scale of the threat by insisting that having just one Class 111 tank car on a 20-car crude-carrying train will be enough to invoke the special 40-mile per hour speed limit in high-threat-urban areas from July 1.