DELAY ANNOUNCED FOR FINAL RULES FOR RAILROAD TANK CARS CARRYING OIL

By TONI ELLINGTON

The U.S. Department of Transportation (“DOT”) announced last week that it was delaying the issuance of final rules on updated safety standards for transporting oil by rail.  The new date for the updated standards for tank cars carrying crude oil and ethanol to be released is May 12, 2015.

The previous deadline of March 31, 2015, for issuing the final rules was established in December as part of the “Comnibus” spending bill.  Under that bill, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration was to finalize rules for transporting oil by rail.  The delay apparently resulted from comments and filings from railroad and oil and gas industry groups that the proposed phase-out of DOT-111 tank cars for carrying Class 1 flammable materials by October 2017 and the proposed phase-out of tank cars carrying Class 2 liquids by October 2018 would result in a shortage of tank cars.

Organizations such as the American Petroleum Institute and the Association of American Railroads contend that the tank car industry does not have the capacity to retrofit the number of tank cars needed to meet new specifications by the proposed deadlines.  Also, these groups and other opponents contend that the tank car industry cannot manufacture new tank cars fast enough to comply with the proposed deadlines.

The proposed rule changes are partially in response to a July 2013 accident in Quebec in which a tank car containing crude oil exploded and killed 47 people.  According to DOT, because of increased production in areas such as the Bakken shale, the number of carloads of crude oil being shipped across the country by rail increased significantly in 2013.

For assistance, please contact Toni Ellington at (504) 599-8500.