DOT Requires New Safety Test for Rail Shippers

In the wake of recent train debacles, the US Department of Transportation has issued new safety guidelines that reclassify shale crudes and the tank cars that can safely ship such cargoes.

The agency’s order was issued as railroad companies, refiners and oil producers gathered at the Crude by Rail 2014 conference in Glendale, California.

New rules will require US energy companies using railroads to carry crude must conduct tests to ensure that the oil cargoes will not explode or corrode holes through tank cars after train derailments.

The mandate requires oil explorers to test the chemical composition of all crude intended for shipment by rail. While the new rules are focused on volatile Bakken crude, they also require more robust tank cars for transporting crudes that are designated as lower risk.

The directive addresses what the Department of Transportation called an “imminent hazard” to the communities and environment through which crude-hauling trains move. Companies that ignore the order may be fined as much as $175,000 a day for each violation. Individuals may also be subject to fines and up to 10 years in prison, under the emergency order.

Crude-by-rail shipments have soared alongside US oil production as drillers using new technologies to “crack” shale formations faster than pipeline capacity to handle the outflows. The crude bonanza has increased the risk of explosions and fires because much of the new crude oils are more volatile than some traditional domestic oils. During the past year, there have been 10 derailments of trains carrying crude in North America.