Increased Crude Oil Rail Shipments Drive Boost in Funding for DOT HazMat Programs

by Bergeson & Campbell, P.C.

Senate Appropriations Committee Boosts Funding For DOT Hazardous Materials Programs:  By a vote of 29-1, on June 5, 2014, the Senate Appropriations Committee passed legislation (S. 2438) funding fiscal year (FY) 2015 activities for the U.S. Department of Transportation (DOT).  DOT’s programs for crude oil and other hazardous materials shipments received a healthy boost in the package.  Committee Chair Senator Barbara Mikulski (D-MD) stated that the production of domestic energy resources has increased dramatically in recent years, providing more affordable oil and natural gas, and helping to make the country less dependent on foreign energy imports.  The sharp increase in domestic energy production, however, has also meant a rapid increase in oil shipments by rail.  This change in the shipment of crude oil poses new challenges for DOT as it works to ensure the safety of our railroads and the communities close to their tracks, Mikulski stated.

The bill provides funding for the following activities at DOT to protect the safety of energy shipments:

Tank Car Design -- The Committee stated that there is indisputable evidence that the existing DOT-111 tank car design is inadequate to ensure the safe transportation of Packing Groups (PG) I and II hazardous flammable liquids, including crude oil.  The Pipeline and Hazardous Materials Safety Administration (PHMSA) began regulatory action to change the tank car design standards in September 2013 in response to recommendations from the National Transportation Safety Board (NTSB) and several regulatory petitions.  78 Fed. Reg. 54849 (Sept. 6, 2013).  The bill directs PHMSA to issue these revised standards no later than October 1, 2014.  This is a daunting challenge for both PHMSA and the regulated community.  PHMSA estimates that there are approximately 130,000 DOT-111 rail tank cars in service for PG I and PG II hazardous materials.  In a May 30, 2012, letter to NTSB, PHMSA stated that “[r]equiring all new and existing DOT-111 rail tank cars to comply with enhanced design standards will no doubt be a very costly endeavor.”

Classification Activities -- Each classification of flammable liquids has different requirements for packaging, hazard communications, operational controls, and safety and security planning throughout the supply chain.  The bill provides funding for testing shale crude oil to determine the most appropriate criteria, sampling methods, and testing procedures for energy products.  These activities will also help identify any safety gaps in current regulations for the safe transportation of energy products.

Inspectors -- The bill provides funds to hire 20 new rail and hazardous materials inspectors, and it fully pays for the 45 new rail safety positions that were provided in FY 2014.

Track Inspections -- The bill provides $3 million to expand the use of automated track inspections to ensure proper track maintenance on crude oil routes, covering 14,000 miles of track nationwide.

Short Line Safety Institute -- Short line railroads operate on more than 50,000 miles of track, one-third of the national railroad network.  Short line railroads use a wide variety of safety management systems and many companies lack the resources to conduct hazardous materials safety training.  The bill supports the establishment of a Short Line Safety Institute to perform safety compliance assessments and safety training for short line railroads that transport crude oil.

Training -- The Committee recommendation includes funding for a web-based hazardous materials emergency response training curriculum to train public sector emergency response personnel based on or near rail lines that transport significant amounts of high-risk energy products or toxic inhalation hazards.

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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