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Tank car backlog still large despite rail safety concerns

Keywords: Tags  Metals Service Center Institute, crude oil, rail shipments, tank cars, rail cars, Kenneth Kremar, IHS Global Insight, Lac-Megantic Corinna Petry

SCHAUMBURG, Ill. — The story of rail freight car build rates is all about tankers. Tank cars—which carry crude oil from shale plays to refineries, as well as chemicals, liquids and pressurized gases—account for about 80 percent of new rail car orders and order backlogs.

In the first half of this year, 12,967 tank cars were delivered, 26,211 new orders were placed and 61,350 were on backlog, Kenneth Kremar, a principal with IHS Global Insight’s Industry Practices Group, told the Metals Service Center Institute’s Economic Summit in Schaumburg Sept. 10.

"You’ve got a good couple of years before crude-by-rail tapers off as pipeline capacity comes on-stream," Kremar said. "Oil producers will still like the flexibility of rail," however, and are likely to continue to use trains to ship crude.

Tank cars, typically made of steel plate, will sell briskly through at least 2015, Kremar predicted, despite safety concerns that arose when a runaway train hauling tank cars carrying crude oil from the Bakken shale derailed in Lac-Mégantic, Quebec, on July 6, causing an explosion that leveled part of the town and killed 47 people (, Sept. 3).

That accident will lead railroads to retrofit older equipment with better valves, fittings and controls to contain volatile liquids and gases, Kremar said. But with the National Transportation Safety Board (NTSB) possibly phasing out certain types of cars—which it previously did for tank cars transporting ammonia—the railroads also will buy new, safer rail cars.

The Pipeline and Hazardous Materials Safety Administration, a division of the U.S. Transportation Department, is seeking public comment to further enhance the safe transportation of hazardous materials by rail tank cars. One example is the DOT 111 tank car, a type of non-pressure tank car commonly used in North America.

The administration issued an advance notice of proposed rulemaking that will reflect a collection of stakeholder input on rail car safety, including eight petitions for rulemaking and four NTSB recommendations. The agency expects to update regulations that apply to transporting hazardous materials by rail.

Freight railroads operating in the United States are currently working under an emergency order issued Aug. 2 by the Federal Railroad Administration to prevent the unintentional movement of hazardous materials, including crude oil and ethanol, on mainline tracks or sidings.

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    Sep 12, 2013

    Good article by Corinna. She obviously did some extra investigation beyond what was presented at the Economic Summit. Thanks, Ray

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