Ethanol impacts questioned in comments to rail safety rule

By Susanne Retka Schill | October 07, 2014

Growth Energy and the Renewable Fuels Association outlined multiple issues in their comments to the proposed rail transportation safety rules. The comment period for the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration’s proposal for tank cars and new operational requirements closed Sept. 1.

In their comments, the ethanol industry organizations pointed out that in its proposal, PHMSA underestimated the cost of compliance and overestimated the benefits. “PHMSA’s cost-benefit analysis is based on several flawed assumptions,” Growth Energy’s comments said. RFA noted that the data used in preparing the proposals was unavailable for review, and said, “We feel PHMSA used unfair analyses in numbers and the costs of derailments in coming up with benefits data.”

The industry comments delve into the details of the proposed retrofits to be required of tank cars, suggesting that the retrofits will be far more costly than estimated in the proposal and the proposed timeline for making those retrofits is far too short, given the capacity for completing retrofits or building new cars. PHMSA proposed that DOT-111 tank cars could no longer be used in longer trains after Oct. 1, 2018. “Ethanol has 29,780 cars in service, crude oil has 42,550 and remaining other flammables have 25,470 cars that will need to be retrofitted,” the RFA comments said. “This program will take a minimum 10 to 15 years or longer depending on the shop space and experience labor availability.”  The Railway Supply Institute estimates there are only 100 qualified shops in the U.S. and Canada and an estimated 500 cars per month could be retrofitted. In addition, at the same time, there will be a bump in the number of tank cars requiring requalification inspections, many of them cars brought into ethanol service during the industry expansion.

The RFA further argued that ethanol is vastly different than crude. “Ethanol should not be included with volatile crude oil when considering rulemaking for tank car packaging designs or timelines for those designs. Ethanol is a low vapor pressure product made to specification,” the comments stated. “Ethanol has a low volatility, manufactured to a strict ASTM consumer specification and is always the same load to load” and the “properties are known and predictable.”

The tragedy at Lac Megantic, Ontario, would not have been prevented by these retrofits, both organizations point out. “The proposed tank car regulations are designed to limit punctures up to 19 mph,” Growth Energy’s statement said pointing out that the Lac Megantic derailment occurred at 65 mph and even PHSMA has said the proposed tank car standards would not be sufficient to prevent puncture at this speed and force. “Similarly, all but one of the other derailments cited by PHMSA is support of the new standards involved speeds of 19 mph or greater.” 

 “PHMSA should step back from its broad approach and instead focus on crafting targeted, incremental regulations that provide clear safety benefits without causing significant disruption to the ethanol industry,” Growth Energy’s stated. “Our members believe that PHMSA’s proposed new tank car and retrofit standards should exclude ethanol—ethanol is less volatile than crude oil and safer to transport.”

The RFA suggested, “Regulatory priorities should focus on preventing the derailments and specifically the root cause. New or retrofitted tank cars will take years to fix and cost billions of dollars, and won’t solve the problem,” the organization stated. “The major causes of incidents are substandard track integrity, switching failures, inspection errors, maintenance problems, or lack of communication between train crews. Thus, the most prudent approach to mitigate rail incidents would be to invest in initiatives that address these root causes and keep the railcars on the tracks.”

Over 3,000 comments have been made to the proposal. They can be found on the PHMSA website here