OAK BROOK, Ill. Recent accidents involving railroad tank cars carrying petroleum products have grabbed headlines, obscuring the safety improvements that North American railroads have achieved over time, rail industry participants said.
"This has to get off the front page," Anthony B. Hatch, owner of New York-based ABH Consulting, said Jan. 15 at a Midwest Association of Rail Shippers meeting. ABH offers transportation and logistics advice.
Referring to a front page story in the Jan. 15 edition of the Wall Street Journal, Eric Butler, Union Pacific Corp.s executive vice president for marketing and sales, agreed that such incidents are "highly publicized" but noted there are typically fewer accidents and injuries on railroads than in all other private industry.
"We had a great year for safety (in 2013)," Butler said, although Omaha, Neb.-based Union Pacific reported a slight uptick in rail crossing accidents. "Most of those happened in the shale region, where trucks and drilling equipment are crossing tracks in non-approved places. We are focused on lowering those accidents, too."
"Train accidents are down 43 percent over the past decade," Joe Szabo, administrator for the Federal Railroad Administration, said at the meeting. "2013 will set a record for fewest accidents, fatalities and injuries."
Regarding tank car design regulations, Butler said that when existing tank cars derail they present "a risk factor higher than anticipated." But Union Pacific is aware of prototypes of newer, ostensibly safer, tank car designs. "The idea is to get (a vessel) that can handle the worst-case scenario," he said.
Hatch, who visited rail car and pipeline industry personnel in the Bakken region, said all stakeholders are concerned about safety. "They know the numbers support the idea that rail is safe (for the movement of crude)," he said. By comparison, "chlorine gas discharged in downtown Houston would not be a picnic."
After his presentation, Hatch told AMM that manufacturers are already producing tank cars that comply with proposed standards, which is necessary with their large order backlogs. In fact, he believes the timing will be good for them as the regulations are likely to take effect within a year, just as redesigned models come to market.
A steel plate mill source attending the meeting confirmed that tank car construction should continue to be a robust end market.
Butler also spoke about how the boom in U.S. energy production will make the country more competitive globally. "Estimates are out there that the United States will surpass Saudi Arabia (in oil production) in 2020. In 2009, the rail industry moved 10,000 cars of crude. In 2013, I wouldnt be surprised if it was 300,000 cars. We believe this (market) will be here a while," he said.
"The indirect benefits of (the U.S. energy boom) include expansion of manufacturing. Steel production is one (beneficiary)," Butler said. Low energy costs have attracted "huge foreign investment in U.S. manufacturing, particularly in metals and steel."