Railroad lobby calls for manufacturers to replace older tank cars that haul oil, other flammables

In response to recent explosions in Quebec and Alabama, "the Association of American Railroads is urging U.S. regulators to require retrofits for roughly 72,000 older tank cars that haul flammable substances such as crude and ethanol, plus minor upgrades for an additional 14,000 newer cars," Blake Sobczak reports for Energy Wire. The AAR, "which projects major railroads will carry 400,000 carloads of crude this year, compared to 4,700 carloads in 2006, also recommends an 'aggressive phase-out' of cars that can't meet retrofit requirements, the group said in comments filed with the Pipeline and Hazardous Materials Safety Administration." (Salem Communications photo: The train explosion in Alabama)

The AAR recommendations may not sit well with those to make and lease tank cars, because they "are expected to bear the initial costs from any tougher standards," Sobczak writes. "By contrast, freight railways rarely own the cars moving on their tracks, so they wouldn't have to devote much capital to upgrading tank cars Ultimately, shippers will absorb the expenses brought by new regulations, potentially affecting railways' competitiveness in the oil sector."

Jonathan Kletzel, U.S. transportation and logistics leader for consultancy PricewaterhouseCoopers, said in an interview last week: "If you put in regulations that take supply of cars off the market, you're absolutely going to see an increase in prices. I think trucking has a short opportunity during this window where rail can't keep up to potentially pick up some market share." (Read more) For more on oil trains click here and here. (AAR graphic: Projected 2035 train volumes relative to current capacity)