Improve Railway Safety, But Don't Blame the Cargo
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By Robert L. Bradley Jr.
In early February, the U.S. Department of Transportation levied the first fines under an enforcement operation known as the "Bakken blitz," a series of flash inspections to determine whether oil and gas companies were properly labeling their products for transportation by rail.
The enforcement action was a response to the horrific derailment in Lac-Mégantic, Quebec last July, when a runaway train carrying crude oil from North Dakota's Bakken fields jumped the tracks and exploded in flames, killing 47 people and destroying much of downtown Lac-Mégantic.
A criminal investigation into the crash is ongoing, but reports have indicated that the oil on the train may have been mislabeled to indicate a lower risk of fire. Hence the heightened scrutiny of shipments from the Bakken fields by the federal Pipeline and Hazardous Materials Safety Administration. In February, federal officials released an emergency order requiring flammability testing of all crude from North Dakota set for rail shipment.
Reasonable, up-to-date regulations -- and inspections therein -- in the pursuit of safety are one thing. But it is quite another when propagandists scapegoat the oil industry writ large because of transitory, solvable rail-safety issues.
Lac-Mégantic appears to have been caused by latticework of factors, possibly including human error on the part of rail operators in the area. The final report will tell us more.
Nevertheless, media reports have begun to connect train derailments carrying Bakken crude as if the cargo itself makes a train more likely to crash. Without evidence, one critic suggested that oil companies' financial success has corrupted regulatory oversight: "North Dakota elected officials and regulators have been so giddy about this newfound wealth they just pass on everything the industry wants," he claimed.
As it happens, the current private/public structure has made shipping oil by rail generally very safe; 99.9 percent of deliveries are without incident. Accidents are down 40 percent over the past two decades, even as oil transport continues to increase.
In the months leading up to the Quebec derailment, the volume of oil shipped by rail increased nearly 50 percent. Since 2010, rail shipments of oil in North America have increased nine-fold, from about 100,000 barrels a day to 900,000. Stresses resulted in problems that in turn have triggered operational reform. Major accidents are financially ruinous, not only tragic in human terms, after all.
Texas, New York, Ohio, and Pennsylvania are all expected to see increases in oil production over the next few years. Rail will continue to be essential in moving these resources from oil fields to refineries. And fortunately, railway infrastructure can be safely adjusted to accommodate the increased oil traffic, giving producers and refiners much-needed flexibility.
America's railways continue to benefit from our booming oil industry. While regulations are necessary to ensure that crude transport occurs safely, it's a mistake to blame the oil industry when accidents take place.
The Lac-Mégantic disaster has lessons for oil companies, rail companies, and regulators alike. But July 6, 2013, was hardly a typical day in the transportation of oil by rail in North America. Those who pretend otherwise are all too often agenda-driven against affordable, plentiful oil for our transportation and heating needs. Accidents happen and must be learned from, but the golden goose should be allowed to continue to lay her eggs.
Robert L. Bradley Jr. is CEO and founder of the Institute for Energy Research and the author of seven books on energy history and public policy.