Feds tell oil shippers to inform states when transporting crude

A train is derailed west of Casselton, North Dakota
Source: Tyler Spriggs

U.S. companies moving crude oil via rail must tell state officials when a cargo is moving across their jurisdiction, the U.S. Transportation Secretary said on Wednesday, the latest response to a string of fiery derailments.

Transportation Secretary Anthony Foxx, at a hearing of the Senate Commerce Committee, also said DOT-111 tank cars, currently the workhorse of the fast-growing oil-by-rail sector, were not fit for such cargo and should be avoided or reinforced wherever possible.

"Today's actions, the latest in a series that make up an expansive strategy, will ensure that communities are more informed and that companies are using the strongest possible tank cars," Foxx said.

CSX train derails in Virginia: Reuters

Officials have been under pressure to respond to a series of oil-by-rail mishaps in which tank cars derailed and then caught fire or exploded with surprising force. The latest such incident was a week ago in downtown Lynchburg, Virginia.

Shipments from North Dakota have come under particular scrutiny since the state's Bakken energy patch has been the origin of many of the doomed trains.

Officials have warned that Bakken fuel could be more volatile than crude oil produced in other parts of the country. In February, the Department of Transportation ordered shippers to more thoroughly test their shipments.

Wednesday's move, though, is the first time that federal officials have asked the oil industry to answer to communities that have complained that they know little about cargoes increasingly moving through their area.

DOT issues emergency order on Bakken shipments

The safety alert discouraging the use of the older tank cars known as DOT-111 lacks the force of an order but that kind of "jawboning" has been used in the past as a way to reach industry with official concerns.

The alert may also push the oil-by-rail sector to begin retiring older tank cars while a comprehensive rule works its way through a bureaucratic process that is expected to take several months. A proposal on tank car standards is now under review at the White House's Office of Management and Budget.

Shipments of oil by railroad has grown in step with expanded production in North Dakota where shippers often opt to reach distant refiners by moving the fuel on the tracks.

--By Reuters

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