Oil Industry Goes to Court to Block Oil Train Safety Rules

A U.S. oil industry group has launched a legal challenge to federal rules aimed at tightening safety standards in oil-by-train transport, the New York Times reported on Tuesday.

The American Petroleum Institute on Monday petitioned the U.S. Court of Appeals for the District of Columbia to block important provisions of the rules presented earlier this month by Transportation Secretary Anthony Foxx, the newspaper said.

The United States and Canada announced on May 1 long-awaited safety rules for trains carrying oil, as regulators seek to reduce risks after a series of explosive accidents that accompanied a surge in crude-by-rail shipments.

The rules call for a rapid phase-out of older tank cars considered unsafe during derailments, and are more aggressive than even some of the toughest proposals yet put forward.

The petition filed on Monday seeks to bar a rule requiring older tank cars to be fitted with new safety features, and that such cars be fitted with new electronic braking systems or face operating limits.

The rail and energy sectors have already expressed concern that the required speed of the phase-outs is not feasible and the potentially billions of dollars in costs will be too high for the small safety improvements they deliver.

The tougher standards came nearly two years after a train carrying crude oil came off the rails in the Canadian town of Lac Megantic, Quebec, in July 2013, exploding and killing 47 people. Since then, a series of fiery accidents involving crude trains has occurred in rural areas across North America.

The new regulations are expected to cost an estimated $2.5 billion to implement over the next two decades, two-thirds of that to retrofit or retire existing tank cars, according to estimates contained in the rules. The benefits could range from $912 million to $2.9 billion, according to the estimates.

Charles Drevna, president of the American Fuel & Petrochemical Manufacturers, a leading voice for the refining industry, has said a five-year phase-out of existing tank cars – a timetable endorsed by the U.S. National Transportation Safety Board – was unrealistic.

(Additional reporting by Randall Palmer, Jarrett Renshaw and Chuck Mikolajczak; Writing by Eric Walsh; Editing by Peter Cooney)