Analysis of the Potential Costs of Accidents/Spills Related to Crude by Rail

In November 2013, TGG prepared an expert report entitled Analysis of the Potential Costs of Accidents/Spills Related to Crude by Rail for Oil Change International (OCI). The report demonstrates that the economic costs of crude by rail accidents can be very large and concludes that a major crude by rail (CBR) unit train accident/spill could cost $1 billion or more for a single event. The expert report was incorporated into Comments filed by Natural Resources Defense Council (NRDC), Sierra Club and OCI (on behalf of a numerous other environmental and community groups). The Comments were filed in December 2013 before The Pipeline and Hazardous Materials Safety Administration (PHMSA), U.S. Department Of Transportation (DOT) as part of the Advance Notice of Proposed Rulemaking Hazardous Materials: Rail Petitions and Recommendations To Improve the Safety of Railroad Tank Car Transportation.

Update: In May 2015, PHMSA introduced new rules with the objective of improving the safety of CBR and reducing the risk of catastrophic events. These rules include a new tank car standard with better protections (DOT-117), and a requirement for electronically controlled brakes.

However many environmental and public safety groups criticized the new regulations for not going far enough to protect the public. In particular, critics believed that the phase-out period of three years for the old (less crash-resistant) tank car standard (DOT-111) was too long. Critics have also been concerned that the safety of the DOT-117 design is still unproven. In 2017, the Trump Administration repealed the brake modernization requirement.

There is continuing controversy surrounding CBR. Moreover, since the introduction of the new PHMSA rule, there have been numerous CBR accidents (including some serious ones), with many involving Bakken crude. These ongoing accidents underscore the continuing risks of CBR, specifically in the transportation of Bakken crude. In December 2020, a train carrying over 100 tank cars of Bakken crude derailed in Washington State, causing the evacuation of the town of Custer. There were no fatalities, and this accident seems to have been far less severe than it might have been. Still, it is notable that two of the seven derailed tank cars caught fire.

Crude by rail disaster, Lac-Mégantic, Québec