On May 7th, the U.S. Department of Transportation (DOT) issued an Emergency Order (EO) requiring all rail carriers to notify State Emergency Response Commissions (SERCs) regarding the expected routing of their unit trains of Bakken crude oil. The EO is effective in 30 days. The DOT issued the EO in response to the "startling" number of crude oil railroad accidents that have occurred during the last year, and the voluminous quantity of oil spilled as a result of the accidents.
Under the EO, railroads must provide a notice to the applicable SERCs including the following information:
- a reasonable estimate of the number of trains carrying 1,000,000 gallons or more of Bakken crude oil, per week and by county;
- with the crude oil identified and described in accordance with 49 CFR part 172, subpart C;
- with the emergency response information required by 49 CFR part 172, subpart G; and
- the routes over which the crude oil will be transported.
The DOT established the threshold quantity at 1,000,000 gallons based on the Federal Water Pollution Control Act mandate for regulations requiring comprehensive spill response plans. In addition, DOT explained that the 1,000,000 gallon threshold is lower than the volume carried by trains involved in recent accidents, but not so low as to cover volumes that have not posed the same safety and environmental concerns.
The DOT chose the SERCs as the most appropriate point of contact to convey written notifications because each state has previously designated a SERC in accordance with the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA). Further, each SERC is tasked with supervising and coordinating with local emergency planning committees in states and thus, is best positioned to transmit information regarding crude oil shipments.
DOT noted that railroads cannot always project the number of crude oil trains with precision and that is why the EO requires a "reasonable estimate." The EO requires railroads to update their estimates if there are material changes and DOT noted that it considers an increase or decrease of 25 percent to be a material change. FRA will audit railroad compliance with the EO.
The EO comes on the heels of a series of widely-publicized derailments and accidents involving crude oil trains, including an April 30th derailment in Lynchburg, VA; a December 30, 2013 collision between a crude oil train and a derailed grain train near Casselton, ND; a November 8, 2013 derailment near Aliceville, AL; and the tragic and catastrophic derailment involving an unattended freight train transporting crude oil in Lac-Mégantic, Quebec.
The EO is the most recent in a series of steps taken by DOT and the modal agencies (the FRA and the Pipeline and Hazardous Materials Safety Administration (PHMSA)) to address crude oil by rail safety and environmental concerns:
- Simultaneously with issuance of the EO, the FRA and PHMSA issued a Safety Advisory recommending that offerors and rail carriers of Bakken crude use the tank cars with the highest level of integrity "reasonably available" within their fleet. Further FRA and PHMSA advised offerors and rail carriers of Bakken crude to avoid the use of older, legacy DOT Specification 111 or CTC 111 tank cars for such shipments to the extent reasonably practicable.
- Shortly after the Lac-Mégantic derailment, FRA issued Emergency Order 28, which established certain securement requirements for unattended trains and rail equipment, including crude oil unit trains.
- On August 7, 2013, PHMSA and FRA issued Safety Advisory 2013-06, which included a recommendation that offerors evaluate their procedures to ensure that they properly classify and described hazardous materials (including crude oil) in accordance with the Hazardous Materials Regulations (49 CFR Parts 171-177).
- Shortly thereafter, on September 6, 2013, PHMSA issued an Advanced Notice of Proposed Rulemaking related to rail hazmat safety, including regulations for DOT specification tank cars most commonly used to move crude oil by rail. PHMSA received almost 150 substantive comments before the comment period closed on December 5, 2013. PHMSA, in cooperation with the FRA, has developed Notice of Proposed Rule Making based upon those comments and that rule making is under review by the Office of Management and Budget.
- On November 20, 2013, PHMSA and FRA issued Safety Advisory 2013-07, to emphasize the importance of proper classification of flammable liquids, including crude oil.
- On January 2, 2014 PHMSA issued a Safety Alert warning of crude oil variability and noted that crude oil from the Bakken region may be more flammable than traditional heavy crude oil.
- Honing in further on Bakken crude, on February 25, 2014, DOT issued an Emergency Order requiring all shippers to test product from the Bakken range to ensure its proper classification before transport. That Emergency Order was amended on March 6, 2014.