The news in 2014 for crude oil shipped by rail has been cluttered with accidents and conversations with a focus on safety. About 10 percent of current crude oil production is being shipped by rail each day from the Bakken region, much of which is now prominently under the watch of the media, often making front page headlines. With U.S. crude oil production forecasted to reach 8.5 million barrels a day by the end of this year, up from 5 million a day in 2008, we should be paying attention to U.S. and Canadian plans and rulings.
To understand the conversation we have summarized, from a variety of news sources, several significant headlines from the past 2 months.
Canadian Transport Minister announced plan to remove the worst tank cars.
April 23, 2014 - Canadian Transport Minister, Lisa Raitt, announced the plan to remove the worst 5,000 DOT-111 tank cars within the next 30 days. The remaining 65,000 tank cars in the fleet are to be either retrofitted or removed within the next three years, commencing from the date that the ruling is approved. Currently, there are approximately 18,000 DOT tank cars that do meet the post 2011 standards.
Seventeen tank cars derailed.
April 30, 2014 - Seventeen out of a total of 105 tank cars derailed in the heart of downtown Lynchburg, VA, three of which tumbled into the James River. This caused one of those three to start leaking, and then ignite. The ignition of the tank car lead to the burning of an estimated 30,000 gallons of spilled crude oil. Plumes rose over 80 feet into the air. This 17-mile oil slick resulted in the river beginning to boil. Results from the investigation conducted by the National Transportation Safety Board (NTSB) confirmed that the train was traveling at 24 mph, which is below the local limit, and all cars had been fully inspected and found to be working perfectly. There was no evidence pointing to any type of mechanical, operational, signal or human error involved in this accident and the track had been inspected only days before. Final conclusion from the investigation may take up to a year. Also that day, North Carolina and Maryland faced derailment occurrences as well. All three incidents have one common factor, torrential rains earlier in the week. These rains are being considered while investigations continue.
Emergency order issued by U.S. Transportation Secretary.
May 7, 2014 - Transportation Secretary, Anthony Foxx, issued an emergency order requiring all railroads to inform state emergency management officials before moving any large shipments, consisting of approximately 24,000 barrels or an average of 35 tank cars of crude oil, through their states. He also urged railroads not to use tank cars older than 2011 that can easily rupture in the case of an accident, even if the railroads continued at an even slower speed. This emergency order was announced just a week after sending new safety proposals to the White House.
The AAR responded to the emergency order with the following statement:
“Freight railroads have, for years, worked with emergency responders and personnel to educate and inform them about the hazardous materials moving through their communities. These open and transparent communications will continue as railroads do all they can to comply with the Department of Transportation’s emergency order.”
Results of AFPM survey published.
May 15, 2014 - The American Fuel & Petrochemical Manufacturers Trade Association published the results of its recent survey stating the Bakken crude is no different than other light crudes. Analysis of approximately 1,400 samples showed that Bakken crudes are within pressure, flashpoint, boiling point and corrosivity standards for use in rail cars approved by the DOT.
U.S. vs Canadian obstacles
At full capacity, with a current lead time of anywhere between 12 and 18 months for a new tank car, the anticipated five year supply is only an additional 100,000 tank cars for all of North America. With these numbers, along with repair shops already being packed servicing current fleets, it seems there is simply an insufficient supply to meet the Canadian timetable as outlined by Canadian Transport Minister, Lisa Raitt in her April 23, 2014 announcement.
How will this Canadian ruling coincide with the United States governmental efforts, which currently is being scheduled for a seven year retrofit timeline? Will U.S. trains be stopped at the borders for being non-compliant?
The American Petroleum Institute estimates that approximately 60 percent of railcars will be of superior standard by 2015, however does this mean that post 2011 tank cars are sufficiently safe or that they too need to be retrofitted to a higher standard? How will these compare to Canadian requirements?
While speaking with industry-related colleagues, it is clear that no one knows for sure when or how potential regulations will affect their businesses. Millions of dollars are constantly being spent on safety improvements on the railways, the terminals, the tank cars, in shipping, in training as well as in communications. Some even argue that they are being delayed in implementing further measures of safety for fear that they may be incorrect or inadequate with standards and regulation.
Using a DOT report from February, proponents of increasing the network of pipelines claim their mode to be safer and estimate that tank cars will generate an additional 49 injuries and six additional fatalities every year compared to an estimated one additional injury and no fatalities for the pipeline.
Historically speaking, 2013 was a terrible year for crude-by-rail due to the amount of accidents. However, when looking at the long-term trends, it clearly shows an industry that is focused on safety and an industry that is always improving on its procedures. It shows an industry that completes over 99.9 percent of its journeys without incident.
Another area of tank car safety that continuously causes issues concerns the Non-Accident Releases (NARs) specifically, the Manway. Whether the tank cars breach or not, it is inevitable that steel on steel will cause sparks to fly. These sparks will ignite any possible leaks in the tank cars.
Parker has worked to put a halt to this growing trend of NARs. With its Manway Nozzle Gasket, Parker was able to immediately resolve 95 percent of all Manway related NAR issues. This resolved approximately 50 percent of all NARs while also reducing loading times and cut costs by as much as 90 percent.
For more information, please visit the Integrated Sealing Systems Division.
This article contributed by Emanuel Guerreiro, Industrial Market Development Manager, Parker Hannifin Integrated Sealing Systems Division.
Additional articles related to Railway Tank Car Safety and Manway Gaskets