Trains Carrying Oil Keep Exploding, but Will the Energy Lobby Allow More Regulation?

Freight trains are the little engine that could of the transportation industry -- really janky-looking and slow, but resolutely refusing to die. In fact, the freight train industry is doing better than ever in states sitting on top of shale, enjoying a massive increase in business thanks to fracking. There are over 10,000 miles of railroad tracks across Texas, more than any other state, and the tracks are carrying more and more tanks of crude oil every day. The state-owned South Orient Rail line saw a 2,214 percent increase in crude oil car shipments between 2011 and 2012.

One minor hiccup: The trains keep exploding.

The latest near-disaster happened on December 30, courtesy of Fort Worth-based Burlington Northern Santa Fe Railway Company. A BNSF train carrying grain collided with a mile-long BNSF train carrying crude oil. The oil train derailed and a massive fire followed. Nearby, in Caddelton, North Dakota, more than 2,000 residents were told to evacuate. No one was hurt.

BNSF declined to comment, citing a federal investigation. Shortly before the accident BNSF's executive chairman bragged to the Dallas Business Journal that the company expects to be hauling 1 million barrels of crude oil per day by the end of 2014. It's already hauling 750,000 barrels, with stops at the Bakken formation in North Dakota and the Permian Basin in West Texas.

The recent derailment follows a few other fiery crashes that made the news last year. The most devastating one happened in July, when an unattended train full of crude oil fell off the tracks, exploding in the Canadian town of Lac-Mégantic. Forty-seven people were killed, and the city's downtown was flattened.

"When an accident happens, the odds of that accident becoming a disaster increase dramatically" on long trains carrying crude oil, says Anthony Swift, an attorney at the National Resources Defense Council.

It's not just environmentalists pushing for extra caution in shipping oil by rail. In November, the Association of American Railroads pressed the U.S. Department of Transportation to improve its tank car regulations. The trade group, which represents the freight train industry, said the majority of tank cars carrying flammable liquids are too old, and asked the transportation department to phase the tank cars out for newer models.

"We believe it's time for a thorough review of the U.S. tank car fleet that moves flammable liquids, particularly considering the recent increase in crude oil traffic," AAR President and CEO Edward R. Hamberger said in a statement at the time.

The Railway Supply Institute Committee on Tank Cars made a similar request of the U.S. Department of Transportation in December.

But regulators dragged their feet, and the industries that own those cars aren't too keen on extra regulation. The tank cars themselves belong to the people who profit off of the flammable stuff, such as the oil industry and the chemical industry. And they've generally been resistant to the idea of retrofitting old cars. (At one recent hearing, Dow Chemical, which spends millions lobbying Congress, reportedly contended that retrofitting its cars was "impractical if not impossible.")

More recently, the oil industry has dismissed the North Dakota crash as the inevitable result of an increase in business. The answer, they said, is to build more oil pipelines.

"Trains need to be a supplement, not a replacement" for pipelines, Michael Whatley, executive vice president of Consumer Energy Alliance, told Bloomberg News in response to the crash.

Yet pipelines, which come with their own safety risks, don't seem to be overtaking railroads in popularity anytime soon.

In October of 2012, Kinder Morgan Energy Partners, the biggest pipeline operator in the country, announced plans to build a 740-mile pipeline from West Texas oil fields to a California refinery. The project never happened. Kinder Morgan canceled it because it turned out that the oil companies that would have used the pipeline were perfectly happy with the train.

Perhaps rail won't be so popular anymore when word gets around that the feds may soon be cracking down on old freight cars. On Wednesday, The Wall Street Journal reported that federal investigators are finally looking into why crude-oil-filled trains keep exploding.

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Amy Martyn
Contact: Amy Martyn