Evolving Regulations: An Interview with Tom Simpson

The article below is an interview of RSI President, Tom Simpson by Jaime Meyer, Communications Leader at Rail Services GE Capital, Americas. It was published in the GE 3rd Quarter Newsletter in October 2014.

Regulations pertaining to the rail transport for crude oil, ethanol and other flammable liquids are a hot topic in the industry and are continuing to evolve. This month, we met with Tom Simpson, President of the Railway Supply Institute (RSI) and asked him about the changes in store for the North American tank car fleet.

RSI is the international trade association for the rail supply industry, representing the nation’s leading companies involved in the manufacture of products and services in the freight car, tank car, locomotive, maintenance-of-way, communications and signaling, and passenger rail industries. The RSI Committee on Tank Cars (RSICTC) is focused on increasing safety of rail tank cars. The membership of the RSICTC includes major manufacturers and lessors of rail tank cars who build more than 95 percent and own or lease over 70 percent of tank cars operating in North America. GE Capital, Rail Services is a member of RSI and participates in the RSICTC.

Q: Can you give us a little background on what’s happening now in the tank car regulatory environment?

Simpson: In 2008 and 2009 there were some high-profile derailments in which tank cars caught fire. The US Department of Transportation (DOT) came to the industry (through the Association of American Railroads (AAR) Tank Car Committee) and asked us to consider designing a new tank car to reduce risk. The Committee recommended a new design, which is referred to as CPC-1232. In 2011, the AAR petitioned the DOT to adopt the new standard as federal regulation; however the DOT did not act on that recommendation. The industry adopted the new standards on a voluntary basis for crude and ethanol, and continued to urge the DOT to formally adopt new standards. In 2013, a derailment in Lac Megantic, Quebec killed 47 people and destroyed part of the resort town, bringing more urgency to the issue. TransportCanada then issued interim rules and directives on, among other things, tank cars and the US DOT issued an Advanced Notice of Proposed Rule Making (ANPRM).

Q: What is the status of the upcoming regulations?

Simpson: In July, TransportCanada adopted new regulations for the transportation of dangerous goods, including crude oil and ethanol. They are currently considering amendments to these regulations based on industry proposals and discussions with PHMSA in the US. In the US, a Notice of Proposed Rule Making (NPRM) and an additional ANPRM were released on Aug. 1, 2014, and comments were due Sept. 30, 2014. We expect to see new regulations in the US by the first half of 2015. We also expect the regulations to be settled in Canada by that time.

Q: Has RSI responded to the recent and proposed changes?

Simpson: The RSICTC immediately started to analyze the new proposals and on Dec. 5, we responded with comprehensive recommendations to the ANPRM. We submitted additional detailed comments to TransportCanada on Sept. 1 and to the DOT’s NPRM on Sept. 30. Our comments are very comprehensive and include economic information, engineering analysis and a survey of the industry to understand the feasibility of design changes for new and modified tank cars. We’ve also been meeting with the AAR and shippers, who were also doing their due diligence to determine their position on the varying issues.

Q: How does RSI view rail safety?

Simpson: We are urging both governments to take a holistic approach, focusing not only on tank car design but also accident prevention, including railroad policies and operations and proper classification of commodities being shipped. RSICTC supports a commodity-based approach for determining which cars should be modified, instead of an approach that is based on the make-up of a train. If they adopt our proposal, we can begin to move immediately on new car builds and modifications. We also believe the specifications and the timelines for modifications in the U.S. and Canada should be in sync and practical to avoid major disruptions of service. These disruptions could include the loss of a significant portion of the rail tank car fleet during the modification period, and unintended consequences such as a potential increase in truck shipments of flammable liquids on highways.

Q: What does RSI recommend for tank car standards and retrofits?

Simpson: We propose a comprehensive plan for new cars, legacy DOT-111 cars and CPC-1232 cars that will continue to reduce risk. The deadlines for the modification must tank into account the complexity of the modifications and the constraints of the shop network and provide sufficient time to avoid substantial unintended consequences.

For new tank cars, we recommend:
• 9/16” shell, for cars in crude and ethanol service
• 7/16” shell, for cars transporting other Class 3 flammable liquids
• Jacket
• Full height ½” head shield
• Top fittings protection
• Thermal protection system (which constrains fire, giving emergency responders more time to react)
• Reclosing pressure relief valve (PRV) (which helps to equalize pressure in the car)
• Reconfigured bottom outlet valve handle (BOV) (which doesn’t break off during a derailment)
• Normalized steel

For legacy tank cars, we recommend:
• Jacket (if not jacketed)
• Full height ½” head shield
• Thermal protection system
• Reclosing POV
• Reconfigured BOV

For CPC-1232 tank cars, we recommend:
• Jacket (if not jacketed)
• Thermal protection system
• Reclosing PRV
• Reconfigured BOV

For all existing tank cars in Packing Group 3 Service, we recommend:
• Reclosing PRV
• Reconfigured BOV

Q: Could they be different in US & Canada? How long before harmonization?

Simpson: It is important to have harmonization in regulations because trains travel between the two countries. If they don’t align, the country with the more stringent regulations will become the industry rule. That would then deplete the fleet of tank cars available for service, which would impact both safety and the broader economy.

Q: What are your views on the High-Hazard Flammable Train HHFT concept? Do you think it will be included in the new regulations?

Simpson: We don’t think that it is workable. It would ultimately mean that all cars need to be modified to these standards because shippers don’t know what the train that their cars are added to will look like at the end of the day. They could own 5 cars, but if the train has 15 other cars transporting crude or ethanol, then they’d have to meet different standards. Instead, we recommend a commodity-based approach.

Q: Do you foresee new regulations affecting the future of crude by rail?

Simpson: If modification of the current fleet isn’t feasible (because modifications are not cost-effective), then there could be a disruption in crude and ethanol transportation by rail. With the current new car build timing, it isn’t possible to immediately replace the current tank car fleet.

Q: How can your members best assist RSI’s advocacy efforts?

Simpson: It is important for our members to actively participate and share their experience. GE does a good job of this. Joe Lattanzio is on the Executive Committee of RSICTC; Patrice Powers is on the RSI Board of Directors, John Byrne is on the Technical subcommittee of RSICTC and Lou Mazzuca is on the State Tax Committee. We rely on our members to be thought leaders and to help us educate members of congress so that we can help the government pass good legislation to strengthen the rail supply industry.