State and Local Communities Respond to Crude-by-Rail Safety Issue

by Nossaman LLP
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July 6 marked the one year anniversary of the crude oil derailment in Lac Megantic Quebec, which significantly heightened throughout North America the awareness about safety issues surrounding crude by rail.  This heightened attention is particularly reflected in the initiatives that states and local communities have adopted since the accident to address safety concerns about crude oil by rail shipments. 

California state legislators have added several safety provisions to this year's budget.  In particular, the state will charge oil companies 6.5 cents per barrel of crude oil that arrives in California by rail.  The money generated will be used on oil spill prevention and measures to address emergency clean-ups.  In addition, the state budget provides for the funds to hire seven additional rail safety inspectors for the state. 

In North Dakota, Public Service Commissioner Julie Fedorchak announced that she is crafting a plan which would create the state's own railroad inspection program in order to increase the number of safety inspections already performed by the Federal Railroad Administration.  North Dakota Governor Jack Dalrymple stated that he would likely to support the plan in his own budget recommendations.

In January, Chicago Mayor Rahm Emanuel went on the record in support of a fee for rail cars carrying hazardous materials.  He "said the fee would go to three areas: to invest in rail safety, to fund the costs borne by first responders and to pay for a reinsurance policy that would help communities hit by rail disasters get back on their feet."  The Mayors of Philadelphia, Milwaukee, Kansas City and several others have expressed support for such a fee.

Several states and localities are also taking steps to better prepare and inform emergency responders on crude oil shipments and the tank cars they move in.  New York State has increased emergency preparedness training, including taking advantage of CSXT's "safety train" training for local emergency responders on the newer tank car features and handling.  Other communities are holding drills and preparedness exercises to ensure they are as prepared as possible to address hazardous materials  accidents.  

In addition, states and localities are seeking more information about crude by rail shipments in order to improve preparation for an incident.  In Iowa, state Homeland Security officials will be disseminating to county level emergency responders information received from railroads on the state's crude by rail shipments. 

As the states await the anticipated proposals from the Federal Department of Transportation, we should continue to expect more safety initiatives at the state and local level.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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