Senators propose bill to penalize use of older rail cars

After the Lac-Mégantic derailment, several groups have advocated for the strengthening of regulations governing the transportation of crude oil by rail. A group of Democrats in the United States Senate have responded by proposing a new bill—the Hazardous Materials Rail Transportation Safety Improvement Act of 2015. The new bill contains a number of measures targeted at reducing the use of older rail cars.

Specifically, the new bill would impose a fee of $175 each time a DOT-111 railcar is used to ship crude oil. In its current form, the fee would escalate each year. The bill would also grant tax credit to parties to upgrade their rail cars to comply with the latest standards promulgated by the United States Department of Transportation (DOT). The bill specifies that money collected from violations would be reserved for the cleanup costs associated with derailments as well as the training of first-responders. In addition, the bill would use the collected funds to hire additional train inspectors and fund the tax credits. Furthermore, the bill contains provisions mandating that the DOT provide first responders with real-time information with respect to the transportation of crude oil by rail and implement more stringent maintenance requirements for tracks. The bill also provides for studies of the methods first responders use when faced with derailments.

The sponsors of the bill are Senators Ron Wyden, Chuck Schumer, Sherrod Brown, Mark Warner, Bob Casey, and Dianne Feinstein. According to Senators Wyden and Brown, the DOT’s attempts to increase the safety of the transportation of crude oil by rail have fallen short of achieving the goal of safe transportation of crude oil by rail. This new bill, in Senator Wyden’s opinion, represents a new approach to convincing companies to switch to safer rail cars.

Read the bill.

This post was written by Barclay Nicholson ( or 713 651 3662) and Johnjerica Hodge ( or 713 651 5698) from Norton Rose Fulbright's Energy Practice Group.