June 2015 Bar Bulletin
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June 2015 Bar Bulletin

Federal Agencies and States Pursue New Regulations for Oil Trains; Face Court Challenges

By Richard Allan and Zachary Kearns

 

Second of Two Parts

III. Legal and Regulatory Issues

The combination of the significant increase in shipment of crude oil by rail and a number of high-profile derailments has moved federal agencies, state regulators and private entities to act.1

A. Recent Federal Rulemaking

A focus of rail car regulatory concern is the nation's fleet of DOT-111 rail cars. According to the Association of American Railroads,2 there are approximately 335,000 tank cars in the active fleet, of which 228,000 are "DOT-111" tank cars: "non-pressurized tank cars designed to carry a wide range of products including hazardous and non-hazardous materials." Of the 92,000 DOT-111 tank cars used to move flammable liquids (including crude oil and ethanol), "approximately 14,000 [are] built to the latest industry safety standards."

The Federal Railroad Administration (FRA) (rail safety) and Pipeline and Hazardous Materials Safety Administration (PHMSA) (hazardous materials) have been exploring regulatory options. A proposed PHMSA rule3 would do the following:

  • Require those shipping "mined gases and liquids" to have written sampling and testing plans to determine the classification and characterization of the material being offered for shipment.
  • Require trains carrying more than one million gallons of Bakken crude to notify state emergency response commissions or other appropriate state-delegated entity about the operation of the trains through the states.
  • Define a "high-hazard flammable train" (HHFT) as a train comprised of 20 or more carloads in a continuous block loaded with a Class 3 flammable liquid such as crude oil or ethanol, and establish requirements for HHFTs. An HHFT also includes a train with 35 or more tank cars total loaded with Class 3 flammable liquids.

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