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Accidents surge as oil industry takes the train

Clifford KraussThe New York Times,Jad MouawadThe New York Times

CASSELTON, N.D. -- Kerry's Kitchen is where Casselton residents gather for gossip and comfort food, especially the caramel rolls baked fresh every morning. But a fiery rail accident last month only a half mile down the tracks, prompting residents to evacuate the town, has shattered this calm, along with people's confidence in the crude-oil convoys that rumble past Kerry's seven times a day.

What was first seen as a stopgap measure in the absence of pipelines has become a fixture in the nation's energy landscape -- about 200 "virtual pipelines" that snake in endless processions across the horizon daily. It can take more than five minutes for a single oil train, made up of about 100 tank cars, to pass by Kerry's.

"I feel a little on edge -- actually very edgy -- every time one of those trains passes," said Kerry Radermacher, who owns the coffee shop. "Most people think we should slow the production, and the trains, down."

Casselton, a bedroom community 20 miles west of Fargo, is near the center of the great oil and gas boom unleashed these last few years. It has a front-row seat to another significant revival: the growing use of trains to carry the oil from the new fields of Colorado, Wyoming and North Dakota, in part as a result of delays in the approval of the Keystone XL pipeline. About 400,000 carloads of crude oil traveled by rail last year to the nation's refineries, up from 9,500 in 2008, according to the Association of American Railroads.

But a series of recent accidents -- including one in Quebec last July that killed 47 people and another in Alabama last November -- have prompted many to question these shipments and have increased the pressure on regulators to take an urgent look at the safety of the oil shipments.

In the race for profits and energy independence, critics say producers took shortcuts to get the oil to market as quickly as possible without weighing the hazards of train shipments. Today about two-thirds of the production in North Dakota's Bakken shale oil field rides on rails because of a shortage of pipelines. More than 10 percent of the nation's total oil production is shipped by rail. Since March there have been no fewer than 10 large crude spills in the United States and Canada because of rail accidents. The number of gallons spilled in the United States last year, federal records show, far outpaced the total amount spilled by railroads from 1975 to 2012.

Railroad executives, meeting with the transportation secretary and federal regulators recently, pledged to look for ways to make oil convoys safer -- including slowing down the trains or rerouting them from heavily populated areas. (Trains go up to roughly 35 miles an hour through towns and at higher speeds outside populated areas.) They also agreed to speed up a review of tougher standards for the train cars used for oil. And last Thursday, safety officials urged regulators to quickly improve industry standards.

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"This is an industry that has developed overnight, and they have been playing catch-up with the infrastructure," said Deborah A.P. Hersman, the chairwoman of the National Transportation Safety Board, which is investigating the Casselton accident. "A lot of what we've seen could have been a lot worse."

But given the fragmented nature of the business - different companies produce the oil, own the rail cars, and run the railroads -- there is no firm consensus on what to do. And few analysts expect new regulations this year.

"There was no political pressure to address this issue in the past, but there clearly is now," said Brigham A. McCown, a former administrator of the Pipeline and Hazardous Materials Safety Administration. "Producers need to understand that rail-car safety can become an impediment to production."

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The stakes are high. In five years, domestic oil production has jumped by 50 percent, to reach 7.5 million barrels a day last year.

But with little pipeline infrastructure, energy producers had to scramble for new ways to get their oil to refiners. Rail was the answer.

"The reality is that this came out of nowhere," said Anthony B. Hatch, a rail transport consultant. "Rail has gone from near-obsolescence to being critical to oil supplies. It's as if the buggy-whips were back in style."

Far more toxic products are shipped on trains. But those products, like chlorine, are transported in pressurized vessels designed to survive an accident. Crude oil, on the other hand, is shipped in a type of tank car that entered service in 1964 and that has been traditionally used for nonflammable hazardous liquids like liquid fertilizers.

Safety officials have warned for more than two decades that these cars were unsuited to carry flammable cargo: their shell can puncture and tears up too easily in a crash.

In 2009, a train carrying ethanol derailed and exploded, killing one person in Cherry Valley, Ill. The National Transportation Safety Board said the inadequate design of the tank cars made them "subject to damage and catastrophic loss of hazardous materials."

After that accident, railroads and car owners agreed in 2011 to beef up new cars with better protections and thicker steel. But they resisted improving safety features on the existing fleet because of cost. They also argued that thousands of new cars were being ordered anyway, so it would be just a matter of time before the fleet was replaced.

But analysts said that time has run out; railroads and car owners can no longer ignore the liabilities associated with oil trains, which could reach $1 billion in the Quebec accident.

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"Quebec shocked the industry," Hatch said, adding that while rail safety has improved over all, "the consequences of any accident are rising."

Last November, the Association of American Railroads said it would support requiring that the 92,000 tank cars used to transport flammable liquids, including crude oil, be retrofitted with better safety features or "aggressively phased out."

Still, other groups have resisted. The Railway Supply Institute, which represents freight car owners, told regulators three weeks before the Casselton accident that existing cars "already provide substantial protection in the event of a derailment" and suggested minor modifications to be phased in over 10 years.

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While the safety record of railroads has improved in recent years, the surge in oil transportation has meant a spike in spill rates. From 1975 to 2012, federal records show, railroads spilled 800,000 gallons of crude oil. Last year alone, they spilled more than 1.15 million gallons, according to the Pipeline and Hazardous Materials Safety Administration. And that figure does not include the Casselton spill, estimated at about 400,000 gallons.

The accidents have also created a sense of weariness among elected officials and even staunch oil backers.

North Dakota Gov. Jack Dalrymple, a Republican, insisted that the first priority was improving tank cars. "These exploding tank cars are obviously very powerful and very dangerous," he said.

The accidents have brought another problem to light. Crude oil produced in the Bakken appears to be a lot more volatile than other grades of oil, something that could explain why the oil trains have had huge explosions.

Here too, the warnings came too late.

Federal regulators started analyzing samples from a few Bakken wells last year to test their flammability. In an alert issued Jan. 2, PHMSA said the crude posed a "significant fire risk" in an accident.

The Federal Railroad Administration also pointed to rising numbers of oil cars that showed a "form of severe corrosion" on the inside of the tanks, covers and valves.

After the recent meeting with regulators, the American Petroleum Institute pledged it would share its own test data about the oil, which they have said is proprietary.

While the tank cars themselves have not caused any accidents, they failed to contain their cargo. That happened on the outskirts of Casselton when a 106-car oil train crashed into a soybean train that derailed on a parallel track.

In a preliminary report, the NTSB said 18 of the 20 oil tank cars that derailed were punctured. Much of the oil spilled was incinerated by the explosions, and some soaked into nearby corn fields.

Aside from evacuating nearby farms, there was little the fire department could do but watch the train burn.

Tim McLean, Casselton's fire chief, pictured what the town would look like if an oil train derailed. The large propane supply tank would explode "like a bomb" and incinerate two multifamily houses next to it. Five blocks to the west are a lumber yard and two gasoline stations. Oil might accumulate in storm sewers and possibly spread a fire underground.

"There's virtually no way we could protect these buildings," he said as he passed the barber shops, drugstore and pizza parlor, all occupying sturdy brick buildings more than a century old. "It would be too hot."

The terror of what might have happened hit many here immediately.

Adrian Kieffer, the assistant fire chief, rushed to the accident and spent nearly 12 hours there, finishing at 3 a.m. "When I got home that night, my wife said let's sell our home and move," he said.

 


By CLIFFORD KRAUSS and JAD MOUAWAD
The New York Times