Oil slump could aid shift to new class of tank cars
Railways support new standards that reduce deadly derailments
Recent fiery derailments have raised fresh questions about the safety of the tank cars used to ship crude by rail, putting pressure on the government to speed up the introduction of new standards. And there may be no better time than the present, as oil’s collapse could perversely make the transition to a new class of cars easier on producers.
Four separate oil trains — two in Ontario and two in the United States — have derailed and caught fire in the past month and in each case the tank cars met what are supposed to be tougher, safer standards. Compared with the older cars that were involved in the deadly Lac- Mégantic disaster in 2013, these CPC- 1232 cars have thicker steel, safer pressure- release valves and shields that protect the bottom half from punctures.
Governments and industry are in consultations about developing a new, even sturdier class of car, but for the time being the CPC- 1232 cars are as good as it gets.
The railway industry has long supported the introduction of new standards, arguing they will reduce the risk of costly — and potentially deadly — derailments. Even outspoken critics of government regulation such as Hunter Harrison, CEO of Canadian Pacific Railway Ltd., support new standards.
“CP CEO Hunter Harrison has been a longtime vocal advocate for safer tank cars,” CP spokesman Marty Cej said in an email.
“CP has even taken steps to encourage shippers to work toward an upgraded tank- car standard for crude- by- rail shipments and has introduced a rate structure that is imposed on all crude shipments in any car type other than the safest cars.”
Canadian National Railway Co., whose trains were involved in two of the recent derailments, also stressed its support for “a reinforced standard for new tank cars built in the future that goes beyond the current CPC- 1232 tank- car design.”
Michael Bourque, president of the Railway Association of Canada, said there’s a lot of pent- up demand for tank cars as customers wait to find out what the new standards will look like.
“The people who make these cars are quite anxious for the standards to come out because they have a lot of confused customers,” Bourque said. “A customer doesn’t want to buy a car that’s obsolete.”
However, other industries are more ambivalent about the new rules. The Washington, D. C.- based Railway Supply Institute, which represents railcar manufactur- ers, commissioned a report late last year that found new standards could cost the U. S. economy $ 60 billion US due to “modal shifts from rail to highways, potential modifications to tank cars, early retirement of existing tank cars, and lost service time for tank cars under modification or awaiting modification.”
“When I wrote the report, I will confess that our feeling was that it probably made sense to allow more time ( to implement new rules),” said Kevin Neels, principal at the Brattle Group consultancy and one of the authors of the report, in an interview.