Senators Propose Tough Fees on Least-Safe Rail Cars as U.S., Canada Tighten Transportation Rules

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Researched by Industrial Info Resources (Sugar Land, Texas)--U.S. senators from the states of California, New York, Ohio, Oregon, Pennsylvania and Virginia want the government to fine companies that ship oil and other flammable liquids in older railroad tank cars. The proposal follows new U.S. and Canadian safety standards for trains carrying crude oil, ethanol and other flammable liquids that were announced Friday by authorities in both countries.

Industrial Info is tracking 273 rail-related projects in North America worth more than $20 billion.

The proposed fee starts at $175 and increases to $1,400 per car by 2018. It would raise an estimated $600 million to train first responders, clean up spills, and relocate rail tracks around populated areas. The $175 fee would be imposed on energy transport shippers using older DOT-111 tank cars.

Other proposals include a mandate on the rail industry to adopt electronically controlled pneumatic (ECP) brakes, an advanced braking system that sends a signal to all axles simultaneously. The current design sends them to only one brake at a time.

Large rail operators told U.S. regulators last month the brakes "would not have significant safety benefits" and "would be extremely costly." Safety advocates say that the brakes are a critical component of the rules for transporting flammable materials.

Many lawmakers--including U.S. Sen. Chuck Schumer (D-New York), who introduced the legislation that would fine the least-safe tank cars--have been pressuring the Obama administration to finalize long-anticipated crude-by-rail regulations.

Similar to oil companies, rail providers enjoyed solid profits during the shale boom, but are now looking at profit declines amid collapsing commodity prices.

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