By Robert L. Bradley Jr., CEO & Founder, Institute for Energy Research
On a cool night in July, 73 pressurized oil tankers began an unmanned descent into the tiny town of Lac-Megantic, Quebec. The Montreal, Maine & Atlantic Railway train cars detached from their locomotives, barreled four miles downhill, and exploded in town.
Forty seven people perished. The annihilation was so complete that not a single person could be treated by emergency personnel. Visiting Canadian Prime Minister Stephen Harper described it as a “war zone.”
Experts have speculated that the tanker accident was caused by a brake problem and understaffing, indicating a failure of railway management and gross negligence. MM&AR has declared bankruptcy, and the town has spent $8 million on cleanup with little chance of reimbursement.
There is ever-greater stress on railroads to keep up with booming oil shipments in the United States. What was 11,000 carloads of crude oil in 2009 reached 234,000 last year. This summer averaged 243,725 weekly carloads. Petroleum accounts for most of this increase.
In Maine, shipments have soared. Last January, 14,300 barrels of crude oil came into Maine - and by December, that number rose to a whopping 1.1 million.
Facing record-breaking fuel loads, railway operators have sometimes employed older rolling tanker cars, even though they are at higher risk for leaks. Tank corrosion and misclassification of shipments also potentially jeopardizes public safety. To the extent that cost concerns were responsible for Lac-Megantic, the company saved just enough to destroy itself – and a lot more.
Brisk, even unprecedented, business is never an excuse for accidents. It is reason for greater prudency. The Lac-Megantic disaster has naturally stoked calls for new safeguards to ensure that rail car transport is safe.
However, it’s imperative that new government edicts, in addition to reformed best-practices, improve performance – and not unintentionally act as a safe harbor for negligence.
The Department of Transportation’s Federal Railway Administration, as well as the Pipeline and Hazardous Materials Safety Administration, have launched a series of safety checks. The agencies are conducting inspections at key railway junctures, collecting data, and ensuring that the volatile crude oil is being transported safely and in compliance with federal regulations.
In Congress, Maine Rep. Mike Michaud has introduced a bill mandating that freight trains keep at least two crew members. Sounds good, but top-down, one-size-fits-all federal edicts add cost and could get captured by labor unions to artificially inflate jobs. In a free market, industry best-practices, informed by insurance requirements, can improve safety protocols.
The growing energy supply is good news for everyone. It’s boosting profits at energy companies, thus helping retirees. It’s expanding the supply of oil and gas, thus lowering prices for consumers. It’s creating jobs. Unfortunately, the transportation sector has fallen behind in meeting its new challenges.
Last year alone saw 88 railway incidents in the United States involving crude oil, up from only one or two yearly a decade ago.
Fortunately, some rail companies are taking proactive steps to alter this trend. BNSF Rail Co., the biggest shipper of crude in the Bakken region, has pledged $4.3 billion toward track infrastructure upgrades and tougher safety standards to boost its capacity to transport crude oil. The railway giant even plans to stay ahead of proposed federal rule changes by reviewing how it handles hazardous materials to ensure their safety.
But some railroad operators have tried to shift blame from themselves to the oil producers, unhelpfully calling the federal reaction to this and other accidents as “the Bakken Blitz.” But new federal safety rules are not reason to scapegoat one’s best customers. Blaming the oil industry for rail accidents, as one industry expert observed, is akin to “blaming a car accident on the fact that there were groceries in the trunk.”
The Lac-Megantic tragedy is a wakeup call for a different, better future. Train companies, under the harsh eye of customers, investors, and regulators, should not decry America’s energy boon but embrace it for profit and safety.
Robert L. Bradley Jr. is the CEO and founder of the Institute for Energy Research and author of numerous books on energy history and public policy.