Federal regulators propose new rules on oil trains

After a series of accidents involving oil trains in the US and Canada, the US Department of Transportation proposed new safety standards for oil trains on July 23. The proposed standards target older tank cars, requiring companies shipping flammable liquids to replace tank cars prone to rupturing or retrofit them to meet tougher design requirements. New design requirements include thicker steel shells, better brakes and rollover protection, which would make the tank cars safer in the event of an accident.

According to the Department of Transportation, the transportation of oil by rail has increased significantly in the past several years, from 9,500 railcarloads in 2008 to 415,000 in 2013. After the July 6, 2013 derailment in Lac-Megantic, Quebec, which killed dozens of people, concerns grew about the increase in oil transportation by rail. The US proposal is similar to the standards Canadian regulators implemented after the Lac-Megantic accident.

The proposed standards would also impose speed limits of 40 mph on trains with cars that do not meet the new design standards. Newer cars would have 50 mph speed limits. In addition, the proposal includes requirements for carriers to evaluate 27 safety and security issues before selecting a transportation route and to document that liquids have been sampled and tested. The public has 60 days to comment on the proposed standards, and the new rules could go into effect by the fall of 2015.

Read more about the proposal

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright's Energy Practice Group and Kathleen McNearney (katie.mcnearney@nortonrosefulbright.com or 713.651.5698).