Dems intensify fight for oil train regulations

Source: By Timothy Cama and Keith Laing , The Hill • Posted: Friday, March 27, 2015

Senate Democrats unveiled an effort Wednesday to expand the scope of forthcoming regulations on trains carrying crude oil, countering a push from business groups to soften the rules.

Four senators are pressing legislation that would require the Department of Transportation (DOT) to regulate the volatility of oil being moved in trains, a proposal that goes beyond plans to focus on the design of tank cars.

The bill faces strong industry opposition, and oil, ethanol and freight rail interests have been meeting with White House officials in an effort to dial back the DOT’s upcoming regulations.

Apart from beefing up design standards for tanker cars, regulators want to phase out older cars in two years, enhance braking systems and reduce rollovers, and impose new speed limits in urban areas.

Sen. Maria Cantwell (Wash.), the top Democrat on the Energy and Natural Resources Committee, said the Obama administration should go further. She disputed assertions that the Transportation Department’s Pipeline and Hazardous Material Safety Administration (PHMSA) lacks the legal authority to regulate the volatility of crude oil.

“I believe that with DOT, PHMSA has the ability to do this,” Cantwell told reporters Wednesday. “They should set a standard on volatility. They are currently not in the process of doing a rule-making on it.”

Cantwell’s bill, backed by Sens. Tammy Baldwin (D-Wis.), Patty Murray (D-Wash.) and Dianne Feinstein (D-Calif.) would require PHMSA to regulate the content of gases like butane, propane, methane and ethane in crude oil extracted from the Bakken region of North Dakota, the center of the recent boom.

Those gases’ contents add to their volatility, which determines how easily the oil will explode when a tank car is breached. Environmentalists say Bakken crude is more volatile than oil from elsewhere.

“As more and more volatile crude oil moves through Wisconsin and through our country via rail, it’s critical that appropriate safety measures are in place to reduce the risk of having accidents,” Baldwin said.

Meanwhile, the industries involved in oil trains have been rushing to meet with Office of Management and Budget (OMB) officials as the agency conducts its final review of the DOT regulations.

The various business interests agree that parts of the proposal, such as car standards and the phaseout timeline, go too far.

A presentation by the Association of American Railroads (AAR) to the OMB focused on the costs associated with the proposal to require electronically controlled pneumatic brakes.

“[That type of brake] has been in very limited service for over 15 years and has yet to meet the reliability standards required in the tough outdoor environment that we operate,” the AAR wrote in the presentation, adding that the mandate would not bring substantial safety or business benefits and would be extremely costly.

The AAR and the American Petroleum Institute (API) previously filed formal comments with regulators saying that phaseout timeline for old cars is too aggressive and asking for a total of seven years.

The railroad group has problems with the regulations, including the braking mandate, but it would rather let the regulatory process play out than have Congress step in and impose stricter rules.

“The freight rail industry shares Sen. Cantwell’s vision for the safer movement and handling of crude by rail and believes that many of the issues outlined in her proposed legislation are soon to be addressed in the long-awaited PHMSA rule-making,” said Ed Greenberg, a spokesman for the group.

API spokesman Brian Straessle said his group was still reviewing the Democrats’ legislation.

Environmental group ForestEthics meanwhile, applauded the bill.

“I’m actually super supportive of and impressed by the bill that came from the Senate Democrats,” said Matt Krogh, the leader of ForestEthics’s oil campaign.

Krogh said regulators need to take volatility into account better than they currently do.

“I think there’s an immediate need for understanding what’s actually being transported,” he said.

Public Citizen said the bill is a great opportunity to rein in unsafe oil trains.

“We can’t let oil and railroad companies make their own rules,” Tyson Slocum, director of the group’s energy program, said in a statement. “Sen. Cantwell’s bill wouldn’t let them, and instead would — rightly — put public safety ahead of corporate profits.”