AFPM ’14: BNSF executive outlines rail safety priorities to handle volatile crude

By MELANIE CRUTHIRDS
News Editor, World Oil

ORLANDO, Florida -- During this week's industry leadership breakfast at the AFPM Annual Meeting, BNSF Railway executive chairman Matthew Rose spoke to the concerns many people, whether they are in the industry or not, have about rail shipping: safety. 

Even with heightened media coverage surrounding derailments last year, including BNSF’s crash in Casselton, North Dakota, Rose said both 2012 and 2013 were record safety years for his company, and the larger rail industry.

As BNSF prepares this year to purchase new locomotives and expand terminal capacities, in addition to growing its coverage areas, the issue of best practices surrounding the safe transportation of crude within its network is still evolving. Especially in US shale plays, like the Bakken, today’s crude is arriving with more volatile gases and vapors than ever.

Rose said his company, and railroads across the country, are concerned with three critical safety components: preventing derailments, mitigating their severity and mobilizing response measures effectively. 

While BNSF meets current US Department of Transportation standards, it goes beyond by maintaining its own broad-based risk reduction program. Rose said the company has seen record capital investment to ensure a reliable network, supported by employee training, compliance, and the proactive identification of track and equipment defects.

“Our actions will ensure that we transport crude safely and build public confidence in our efforts,” said Rose. “That’s the price of admission for the benefit of domestic energy production.”

In the process of working to make crude shipping by rail as safe as possible, even with lagging and unclear regulatory guidelines in some areas, the next major question to be addressed is how best to handle volatile compounds. According to Rose, the industry has two options to proceed: reduce vapors prior to transport, for shipping in existing cars, or strengthen new cars appropriately.

While regulators are currently working to produce rules for new tankcar standards, there are still questions as to which way the industry, and the government, will go. When comes to gas extraction, or the beefing up of cars used to carry crude, there are a host of economic consequences and EPA issues with which to contend.

Rose estimated that 30,000 to 50,000 next-generation tankcars will be needed to handle crude in the future, with the production of the first cars possible by January. A full roll-out and transitioning of the existing fleet would take several years, but, Rose said, that is normal for new technology.

 “At the end of the day, we’ve got to be able to look at communities in which we operate and say, ‘We get it, it’s all about preventing derailments,’” said Rose. “But, our second leg is mitigation. And we think that improving the tankcar standard would go a long way, while, and this is really important, we’re choosing not to reduce the volatility of the crude at origin. If we want to change that volatility, then, quite frankly, I will have a much different conversation around the quality of the tankcar that we need to haul it. If we want to change the commodity stricture to something that looks like that, we don’t need this next generation tank car.”

While BNSF is kick-starting progress on the next generation of tankcars at this point, Rose said it still remains an act of faith as to whether or not the government will follow suit in the future, when it comes to regulations.