New tank car rules could disrupt S.D. agriculture

WASHINGTON – The federal government risks disrupting the movement of grain and other agricultural products from South Dakota if the White House moves too aggressively to overhaul how tank cars transport crude oil, ethanol and other hazardous materials by rail.

The safety of moving crude, ethanol and other flammable materials by train has come into question following accidents and derailments involving trains filled with oil from the Bakken Shale that is transported through South Dakota and other states. The biggest accident took place in July, 2013, when a tank car train derailed and exploded in Lac-Megantic, Quebec, killing 47 people.

Federal transportation officials have proposed a number of safety improvements, including stronger tank cars less likely to rupture in a derailment, and slower train speeds. The rules, currently under review by the White House, are expected to be finalized in May.

“What the DOT is coming out with, these changes, when fully implemented, will create safer transportation,” Sen. John Thune, R-S.D., who chairs the powerful Senate Commerce, Science and Transportation Committee that oversees the country’s railroads, said in an interview.

But Thune said transportation officials need to make sure the new rules don’t create more problems than they solve. He has urged the White House to delay the rules, citing what he calls “unattainable deadlines.”

“The additional congestion that could be created is something that would be very, very costly to states like ours that are so dependent upon rail service,” Thune said.

Rail is often the cheapest and most convenient way to move South Dakota’s farm products — the state is among the largest producers of ethanol, corn and soybeans in the country and ships much of its bounty to West Coast ports and other locations. About 50 percent of the South Dakota’s grain is transported outside the state.

“Anytime you bottleneck that infrastructure, that is going to affect the economics here in South Dakota, and our economy is built on agriculture,” said Lisa Richardson, executive director of the South Dakota Corn Growers Association.

Agriculture-related groups in South Dakota acknowledge the importance of making freight rail safer but have expressed concerns with the DOT’s proposals. They say transportation officials would unfairly subject ethanol, considered a high-hazard flammable liquid, to the tougher regulations even though the renewable fuel is less dangerous and easier to clean up following a spill.

Another area of concern is the federal government’s deadline for phasing out or improving thousands of older freight-rail tank cars. Critics of the deadline say it’s unrealistic and will require taking thousands of cars off the rails, pushing more oil and ethanol shipments onto roads.

In addition, agriculture shippers, railroads and lawmakers fear that cutting train speeds would cause significant delays, congestion and service interruptions on the country’s 140,000 miles of track.

Railroads and the DOT agreed in February 2014 on a 40-mph speed limit in urban areas for trains with 20 or more cars of Bakken crude oil. In its draft plan released last July, the department said it was considering the same limit on all tracks nationwide for trains carrying high-hazard flammable substances.

There are concerns that slowing trains could create backups that would hurt agriculture and other industries not subject to the speed limits.

“We would really caution that anything about speed be really thoughtful about what it does to the rest of the traffic,” said John Miller, vice president of agricultural products for BNSF Railway. “We’ve already made modifications to speed, and we think anything else out there has really serious consequences.”

Sarah Feinberg, acting administrator of the DOT’s Federal Railroad Administration, said the proposed changes drew thousands of comments from the public, members of Congress, state and local officials and first responders.

“Nothing is better in this country than being energy-independent,” Feinberg said. “(But) we have to make sure we are managing the transfer of this product in a safe way. There are so many towns and families and communities that are along crude routes.”

Transportation officials estimate the rule could cost as much as $6 billion and result in rail delays and out-of-service time for rail equipment. The American Petroleum Institute, a critic of the plan, said last year the change could cost consumers as much as $45.2 billion unless it is relaxed.

The Associated Press reported earlier this week that the DOT predicted trains hauling crude oil or ethanol will derail an average of 10 times a year during the next two decades, causing more than $4 billion in damage and possibly killing hundreds of people.

Doug Sombke, president of the South Dakota Farmers Union, said the DOT appears to be “moving in the right direction” so far with its new tank car proposals. He said all shippers, including those in the agriculture industry, must put public safety and the environment ahead of profits.

“We have to get over the fact that it’s all about making money,” Sombke said.