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Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

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Barrage Of Lobbying On New Oil Train Rules

After a slew of oil train derailments over the past month, the Obama administration is under assault…from lobbyists that is.

A barrage of lobbying has descended upon the White House as it considers new regulations on trains carrying crude oil. And the petitioning is coming from all sides. EnergyWire reported that a day after a 105-railcar train jumped the tracks in Illinois and caught fire – which in turn came only two weeks after a massive train explosion in West Virginia – lobbyists from the rail industry visited the White House for private meetings. Related: Two Trains Carrying Crude Derailed, Exploded, In The Past Week

According to White House logs, representatives from CSX, BNSF, Canadian Pacific Railway, Kansas City Southern, and the Association of American Railroads (AAR) – the rail industry’s trade group – met with officials from the executive branch. The brass from the rail companies wanted to head off new regulations from the Department of Transportation that would require trains install new high-tech brake systems intended to reduce the chance of a derailment. The regulations are currently under review by White House officials. Related: State Of Emergency In West Virginia Following Oil Train Explosion

The so-called electronically controlled pneumatic (ECP) brakes would allow all railcars to slam on the brakes at the same time. Current brake systems occur sequentially, car by car. Ed Hamberger, CEO of AAR, says the rule would do very little for safety while adding costs onto the industry, and he called the Transportation Department’s analysis “flawed.” In fact, the trade group says, Transportation regulators “grossly overstate benefits and understate costs.” Related: Train Carrying Volatile Bakken Crude Derails In Canada

But all parties involved are not united on a way forward, and the series of derailments has led to a circling firing squad of sorts. The Railway Supply Institute (RSI) published a report finding that new regulations would impose $60 billion in costs on the industry. However, Greenbrier, a manufacturer of thicker tank cars (and member of RSI) disputes those findings. Greenbrier lobbied the White House on March 4 in a private meeting to shoot down the conclusions of the RSI study, according to EnergyWire.

And while the rail industry has called for a more gradual phase out of older rail cars than safety officials would like, the collapse in oil prices and expected slowdown in oil production could actually make a swifter transition to safer cars much easier. A fear of railcar shortages contributed to resistance to new rules within the industry, but if oil shipments slow down, such a possibility becomes less likely.

By Charles Kennedy of Oilprice.com

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