Feds warn railroads to comply with oil train notification requirement | McClatchy Washington Bureau

The U.S. Department of Transportation warned railroads that they must continue to notify states of large crude oil shipments after several states reported not getting updated information for as long as a year.

The department imposed the requirement in May 2014 following a series of fiery oil train derailments. It was designed to help state and local emergency officials assess their risk and training needs.

In spite of increased public concern about the derailments, railroads have opposed the public release of the oil train information by numerous states. Two companies sued Maryland in July 2014 to prevent the state from releasing the oil train data to McClatchy.

The rail industry fought to have the requirement dropped, and it appeared it got its wish three months ago in the department’s new oil train rule.

But facing backlash from lawmakers, firefighters and some states, the department announced it would continue to enforce the notification requirement indefinitely and take new steps make it permanent.

There have been six major oil train derailments in North America this year, the most recent last week near Culbertson, Mont. While that derailment only resulted in a spill, others in Ontario, West Virginia, Illinois and North Dakota involved fires, explosions and evacuations.

In a letter to the companies Wednesday, Sarah Feinberg, the acting chief of the Federal Railroad Administration, told them that the notifications were “crucial” to first responders and state and local officials in developing emergency plans.

“We strongly support transparency and public notification to the fullest extent possible,” she wrote. “And we understand the public’s interest in knowing what is traveling through their communities.”

The letter was written after lawyers for Norfolk Southern and CSX used the new federal oil train rule to support their position in the Maryland court case that public release of the information creates security risks and exposes the companies to competitive harm.

Feinberg added that the notifications must be updated “in a timely manner.”

States such as California, Washington and Illinois have received updated reports regularly from BNSF Railway, the nation’s leading hauler of crude oil in trains. Most of it is light, sweet crude from North Dakota’s Bakken region and is produced by hydraulic fracturing of shale rock.

But to get to refineries on the East Coast, BNSF must hand off the trains to connecting railroads in Chicago or other points. Illinois, Kentucky, Ohio, New York and Pennsylvania told McClatchy last month that they had received no updated oil train reports from CSX since June 2014.

The emergency order requires the railroads to report the weekly frequency of shipments of 1 million gallons or more of Bakken crude, the routes they use and the counties through which they pass. The railroads must update the reports when the volume increases or decreases by 25 percent.

Railroads found to be in violation of the requirement face a maximum penalty of $175,000 a day for each incident. The Federal Railroad Administration periodically audits railroads for compliance.

Though publicly available data on the exact volume of crude oil moved by railroads is difficult to come by, in an April earnings call, Norfolk Southern, the principal rival of CSX, reported that its crude oil volumes increased 34 percent from the first quarter of 2014 to the first quarter of 2015.

That’s not a reliable indicator of the increase in Bakken crude oil on any one route, but Illinois, Ohio and Pennsylvania did say they received updated oil train reports from Norfolk Southern in the past year.

Of the states on the CSX crude oil network that McClatchy sought information from, only Virginia reported receiving an update in the year between June 2014 and June 2015, and that was a week after a CSX oil train derailed and caught fire in February near Mount Carbon, W.Va.

Rob Doolittle, a spokesman for CSX, said the railroad continues to be “in full compliance” with the emergency order. He added that the railroad recently sent new notifications to the affected states, “regardless of whether there was any material change in the number of trains transported.”