Rail CEOs to Investors: "Bomb Trains" Safe At Almost Any Speed

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Burlington Northern Santa Fe (BNSF) recently said it would proceed with plans to increase speeds for oil-by-rail unit trains in Devilโ€™s Lake, N.D. toย 60 MPHย from 30 MPH, despite opposition from local officials.ย 

BNSFโ€™s announcement came merely a week after the Obama Administration announced itsย proposed regulationsย for trains carrying oil obtained via hydraulic fracturing (โ€œfrackingโ€) from North Dakota’s Bakken Shale basin.ย ย 

The rail industryโ€™s position on speed limits for โ€œbomb trainsโ€ is simple: they continuously claim velocity has nothing to do with oil-by-rail accidents orย safety.

For example, Big Rail โ€” as revealed by DeSmogBlog โ€” lobbied against all proposed oil train speed reductions in its dozen or so private meetings at the Obama White House before the unveiling of the proposed oil-by-railย regulations.ย 

Recent statements by rail industry CEOs during investor calls put the heads of many companies on record opposing oil-by-rail speed limits for the firstย time.

Time isย Money

The position of the rail companies regarding speed and safety on their recent quarterly investor calls was consistent, coming just before the release of the new oil-by-railย regulations.ย 

โ€œI donโ€™t know of any incidents with crude thatโ€™s being caused by speed. We keep slowing down in this North American network over the years. We donโ€™t get better with speed. We get worse,โ€ E. Hunter Harrison, CEO of Canadian Pacific, stated during the companyโ€™s investor call.ย 


E. Hunter Harrison; Photo Credit: YouTubeย Screenshot

โ€œNow you canโ€™t get growing the country for example, growing the economy, growing the population, and continue to move stuff on rail, cutting the speed back, but donโ€™t want to add any infrastructure. That doesnโ€™t work. Thatโ€™s a timetable toย disaster.โ€

Charles โ€œWickโ€ Moorman, CEO of Norfolk Southern and also on Chevronโ€™s Board of Directors, sang a similar tune in response to a query about excessive train speeds potentially causing crude-by-railย accidents.ย 

The question about whether that was the case came from analyst Jason Seidl of Cowen and Company.

โ€œNone to my knowledge,โ€ Moorman stated bluntly.ย 


Charles โ€œWickโ€ Moorman; Photo Credit: YouTubeย Screenshot

Moorman also argued on the call for a much higher speedย limit.

โ€œWeโ€™ve had a lot of discussion with the regulators and I believe that weโ€™ll be able to make our case that a minimum speed in the 40 to 45 mile an hour range isโ€ฆsafe,โ€ Moorman continued. โ€œ[A]ny significant speed restriction would be in fact disruptive to the point of almost shutting down the North American railย network.โ€

CSX Corporation โ€” whose oil-by-rail train exploded in Lynchburg, Va. in April โ€” stood in solidarity with its rail industry colleagues on its recent investorย call.ย 

โ€œWe think [30 MPH speed limits] wouldโ€ฆseverely limit our ability to provide reliable freight service to our customers,โ€ Michael Ward, chairman, president and CEO of CSX, stated on the companyโ€™sย call.ย 


Michael Ward; Photo Credit: YouTubeย Screenshot

โ€œI would hope as we look at this with the federal government, we can show them the modeling of how disastrous that could be to the entire fluidity of the U.S. rail system as well as the adverse impact that will have as trucks deliver on to the highway system. So our view is that it would be very bad, but our view is also that cooler heads will prevail when they see the facts behindย it.โ€

Unmentioned by Ward: CSXโ€™s oil train that exploded in Lynchburg and spilled into the James River was rolling along at 24 MPH, below the 30 MPH limit he advocated against on theย call.


April 2014 Lynchburg, Va. oil-by-rail explosion; Photo Credit: Erin Ferrell – ABC 13 News |ย Twitter

Spokespeople from CSX, Canadian Pacific and Norfolk Southern did not respond to repeated requests for comment fromย DeSmogBlog.ย 

โ€œWill Cooler Headsย Prevailโ€?

Ward is not the only insider who thinks โ€œcooler heads will prevailโ€ on the issue of oil-by-rail speed limits goingย forward.

Cowen and Companyโ€™s Jason Seidl โ€” also a contributing editor at Railway Age โ€” recently hosted a conference call on the new proposed oil-by-rail regulations. The highlights of that call showed up in an August 7 Railway Age editorial titled, โ€œWill Cooler Headsย Prevail?โ€

โ€œWe believe that the final draft of the [Notice of Proposed Rulemaking on High-Hazard Flammable Trains and DOT 111 tank cars] could be more friendly to shippers than the first proposal,โ€ Seidl said in that call, according to Railwayย Age.

โ€œDwellย Timeโ€

In addition to expectations that the new final regulations will be watered down to make them industry friendly, Seidl introduced the term โ€œdwell timeโ€ as the proposed new focus for the rail industry regarding oil train speeds near populatedย areas.ย 

โ€œThe consensus opinion seemed to be that enforcing broad speed restrictions may not be the right approach,โ€ Seidl also stated on theย call.


Jason Seidl; Photo Credit:ย YouTubeย Screenshot

โ€œThe panelists indicated that emphasis should be placed on reducing the total time that High Hazard Flammable Trains (HHFTs) spend in populated areas, and slower trains do just the opposite. Additionally, reduced train speeds would require more cars and detrimentally impact the supply chain, potentially resulting in higher dwell times in populatedย areas.โ€

Paraphrased then, speed is not the issue for Big Rail, but the time it takes for the oil train to pass through aย community.

โ€œUnsafe at Anyย Speedโ€?

However, asย previously reported on DeSmogBlog, even rail industry insiders admit speed limits are a major factor for improving rail safety.ย 

Gregory Saxton, chief engineer for rail tank manufacturer Greenbriar, made this clear at a National Transportation Safety Board conference on oil-by-rail safety inย April.ย 

โ€œKinetic energy is related to the square of velocity. So if you double the speed, you have four times as much energy to deal with,โ€ argued Saxton. โ€œSpeed is a bigย deal.โ€


Cover of โ€œUnsafe at Any Speedโ€; Photo Credit: Wikimediaย Commons

But the CSX oil train explosion in Lynchburg, which involved โ€œsaferโ€ CPC-1232 rail cars going only 24 MPH, begs the question asked by Ralph Nader about the auto industry decades ago: is oil-by-rail โ€œunsafe at any speedโ€?ย 

Photo Credit: Wikimediaย Commons

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