Tanker Cars in Fatal Quebec Rail Crash Had Drawn Scrutiny

Photographer: Lucas Oleniuk/Toronto Star via Getty Images

Firefighters look at the smouldering remains of a derailed train in the town of Lac-Megantic, Canada. Close

Firefighters look at the smouldering remains of a derailed train in the town of Lac-Megantic, Canada.

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Photographer: Lucas Oleniuk/Toronto Star via Getty Images

Firefighters look at the smouldering remains of a derailed train in the town of Lac-Megantic, Canada.

U.S. and Canadian regulators have warned for years that the type of rail tanker involved in a fatal explosion in Quebec is prone to rupturing during derailments.

Officials investigating the runaway train hauling crude oil that crashed July 6 in Lac-Megantic, setting off a blast that killed at least 13, said they will examine the design of the widely used tanker rail cars.

The car, made by several manufacturers and known as DOT-111, ruptures more often in derailments than other models, according to regulators. The rail industry has opposed rules proposed by agencies such as the U.S. National Transportation Safety Board that would require retrofitting to make leaks and fires less likely.

“During a number of accident investigations over a period of years, the NTSB has noted that DOT-111 tank cars have a high incidence of tank failures during accidents,” NTSB Chairman Deborah Hersman said in a 2012 letter recommending tougher standards for the cars.

Railroad’s Record

The railroad, Montreal, Maine & Atlantic Railway Ltd., has had accident rates that exceeded the national average of commercial railroads operating in the U.S. in all except one of the past 10 years, according to federal records.

Since 2004, it has had annual accident rates as high as 75.9 reported incidents per million train miles, according to the U.S. Federal Railroad Administration, which collects and reports safety statistics for all railroads that operate in the U.S. In 2006, the year the railroad’s accident rate was 75.9, the average for the 730 railroads that operated in the U.S. was 16.6 incidents reported per million train miles.

Since 2004, Montreal, Maine & Atlantic has reported two derailments of cars carrying hazardous materials, in 2006 and in 2010. Two of the cars in 2010 released hazardous materials, according to the FRA, which didn’t specify what the substance was.

Edward Burkhardt, president of closely held Rail World Inc. of Chicago, which owns Montreal, Maine & Atlantic, wasn’t available for comment, Cathy Aldana, his assistant, said by telephone. He will travel to Lac-Megantic later today, she said.

70 Carloads

The train in the July 6 accident was hauling more than 70 carloads of crude oil from North Dakota to a refinery in New Brunswick. It crashed and burst into flames near the center of Lac-Megantic, in southeastern Quebec, forcing the evacuation of 2,000 people, police said.

Thirteen people were confirmed dead as of last night and a total of 50 were missing. Canadian Prime Minister Stephen Harper said the scene resembled a “war zone” after touring the town, 250 kilometers (155 miles) east of Montreal, and 10 miles from the U.S. border in Maine.

According to the NTSB, about 69 percent of the U.S. rail tank car fleet are DOT-111s. Canadian Transport Minister Denis Lebel told reporters yesterday that the cars involved in the accident make up 70 percent of the Canadian fleet.

“We’ve had a long record of advocating for further improvements to many these 111s because they are a very common type of tank car,” Donald Ross, the lead investigator of the incident for the Canadian Transportation Safety Board, told reporters at a briefing near the scene of the crash. “We advocate for stronger cars with better accident performance characteristics.”

Too Early

Asked if stronger rail cars could have lessened the impact of the weekend’s explosion, he said, “It’s too early to make that assessment.”

Keith Stewart, climate and energy campaign coordinator for the environmental group Greenpeace Canada in Toronto, said the accident would probably show that government regulations haven’t kept pace with expanding oil and gas development in North America.

“Up until now, the Canadian government has treated spills from pipelines and rails as a public-relations problem, and they need to start treating it as a safety problem,” Stewart said in an interview.

Cherry Valley

An NTSB investigation into a June 2009 freight-train derailment in Cherry Valley, Illinois, that killed one person concluded that flaws in the DOT-111 design probably worsened the spill. It noted that other models of tank cars designed to carry pressurized cargo have thicker shells and protected fittings and were less likely to leak in accidents.

“Of the 15 derailed DOT-111 tank cars that piled up in this accident, 13 cars lost product from head and shell breaches or through damaged valves and fittings, or a combination of the two,” the NTSB wrote in its recommendations. “This represents an overall failure rate of 87 percent and illustrates the continued inability of DOT-111 tank cars to withstand the forces of accidents.”

The agency recommended thicker shells and other modifications to strengthen the rail cars.

If retrofits couldn’t be done, the NTSB suggested phasing out DOT-111 use for transporting hazardous materials. It has cited other accidents in which the performance of the tankers was called into question, including a 1992 derailment in Superior, Wisconsin; a 2003 one in Tamaroa, Illinois; and a 2006 incident in New Brighton, Pennsylvania.

Only Recommends

The NTSB can only recommend changes to regulations to other agencies, such as the Pipeline and Hazardous Materials Safety Administration. The pipeline agency, part of the Department of Transportation, said it was still reviewing the NTSB recommendations on tank cars. There are about 45,000 of the tank cars in use carrying ethanol and crude oil, according to the agency. Each car carries up to 30,000 gallons of liquid.

“We need to review these regulations and maybe increase them,” Representative Henry Waxman, a California Democrat, said today in an interview in Washington. “This ought to be a wake-up call.”

In 1994, 23 freight cars on a Canadian National Railway Co. (CNR) train derailed northwest of Sudbury, Ontario, and three DOT-111 tank cars spilled vinyl acetate, a liquid with a high fire hazard when exposed to heat or flame, according to the Transportation Safety Board of Canada.

Sudbury Spill

“The susceptibility of 111A tank cars to release product at derailment and impact is well documented,” the Canadian safety board said in a report on the Sudbury spill. “The transport of a variety of the most hazardous products in such cars continues.”

In 2011, the Association of American Railroads told the U.S. Pipeline and Hazardous Materials Safety Administration that it supported updated rules for new tank cars, though it wanted existing ones exempt.

Patti Reilly, a spokeswoman for the association, said the group worked with tank car manufacturers on safety improvements to models built after October 2011 that will reduce the probability of a spill release during a derailment by 50 percent.

It could cost more than $1 billion to make some safety improvements to existing cars, according to the group.

$63 Million

By comparison, from 2004 through 2008, “derailments resulted in one fatality and eleven injuries, the release of approximately 925,000 gallons of these hazardous materials, and cleanup costs totaling approximately $63 million,” the group said in a March 2011 filing with the pipeline safety agency.

Richard Streeter, an attorney representing the Village of Barrington, Illinois, said the rail group is overestimating the cost of upgrades. Canadian National Railway runs through the heart of Barrington, which filed a separate petition with the U.S. Transportation Department last year asking that new and existing tank cars be built to higher standards.

“We took the position that the new rules should also require retrofitting,” Streeter said in an interview. “Canadian National is building up the transportation of ethanol and crude oil, hauling it out of Canada. Guess where they’re going through. It’s kind of a scary proposition.”

The debate comes as U.S. oil companies are relying more on rail lines to ship crude from places including North Dakota where pipeline construction hasn’t kept pace with production. It wasn’t until 2008 that producers in North Dakota began shipping crude via railroads. Now as much as 675,000 barrels of oil a day leaves the state by rail, according to Justin Kringstad, director of the North Dakota Pipeline Authority, which oversees pipeline development in the state.

North Dakota

Rail carries about 75 percent of the oil from North Dakota, now the second biggest producer in the U.S. behind Texas, with pipelines accounting for the rest. The Keystone XL pipeline proposed by TransCanada Corp. (TRP) could carry as much as 100,000 barrels of oil a day from the state’s Bakken formation.

Montreal, Maine & Atlantic said in a statement yesterday that the train, which was parked outside the town, was shut down by someone after the engineer left for the evening.

This “may have resulted in the release of air brakes on the locomotive that was holding the train in place,” the company, a short-line carrier owned by closely held Rail World Inc. of Chicago, said.

“Until we know what happened it’s hard to say with certainty that there is a regulatory lapse,” Christine Tezak, managing director of ClearView Energy Partners LLC, said in an interview. “When you look at the phenomenal exponential growth of oil volumes moved by rail up until Saturday, the record was fantastic.”

A spokesman from the Railway Association of Canada, an industry group representing 50 rail businesses including Montreal, Maine & Atlantic Railway, didn’t return a call yesterday seeking comment.

To contact the reporters on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net; Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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