Combative Oil, Ethanol Industries Find Common Ground over Tank Cars

Business News/Analysis, Federal Agency, Federal Regulation, Infrastructure, Terminals Transport, Transportation

February 28, 2014

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by Blake Sobczak and Amanda Peterka (E&E Publishers Energy Wire) Orlando, Fla., was home to a rare occurrence last week: The oil and ethanol industries, usually at each other’s throats, publicly agreed on something.
Addressing an ethanol industry conference there, American Petroleum Institute Downstream Director Bob Greco and Renewable Fuels Association President and CEO Bob Dinneen stood united on how federal regulators should approach rail car safety.
Greco and Dinneen both said they worried that the Department of Transportation is putting too much emphasis on improving rail cars after high-profile oil accidents, instead of focusing on keeping the trains on the tracks.
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The ethanol industry went from shipping 40,000 carloads of ethanol a year in 2000 to 340,000 carloads in 2011, while the oil industry moved 415,000 rail cars of oil in 2013 compared to 9,500 in 2008, thanks to booming production in places such as North Dakota’s Bakken Shale play.
“There’s a real concern out there that DOT, in the name of political expediency, is trying to strengthen existing tank cars without focusing on what’s causing the accidents or, to quote Bob Dinneen, keeping the cars on the track,” Greco said. “It’s a really big challenge because both of our industries have invested billions of dollars in brand-new tank cars to move increased amounts of ethanol, increased amounts of crude oil.”
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AAR (Association of American Railroads) spokeswoman Holly Arthur said the industry is “learning from both” oil and ethanol following recent accidents. Her group reports that more than 99.9 percent of all hazardous materials shipments reach their destination safely.
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But the ethanol industry feels it is being unfairly swept up in the recent regulatory focus on rail safety, given the lack of recent ethanol incidents. Dinneen sought to distinguish between the properties of crude and ethanol.
“You have a highly volatile, highly explosive product that you’re now moving, that truly is different than the product that had been shipped on the traditional DOT-111A car,” Dinneen said last week, referring to Bakken crude oil. READ MORE

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