INSIGHT: Proposals target rail, chem shipments after derailment

HOUSTON (ICIS)–A train derailment in the US that spilled vinyl chloride monomer (VCM) could lead to new regulations that could make rail shipment safer and possibly more expensive.

• The US Department of Transportation has already made some policy recommendations
• Other proposals focus on electronically controlled pneumatic (ECP) brakes, a measure that had been discarded because analysis found that the benefits did not justify the costs
• A preliminary report on the accident could be released on Thursday

Rail is important for the US chemical industry because it represents about 20% of transportation by tonnage.

BACKLASH FROM DERAILMENT
The derailment has created backlash because of the threat that the chemicals posed to people living nearby.

Norfolk Southern, the owner of the railroad, had purged VCM from the five derailed cars that contained the material, leading to immediate evacuation orders being issued to people living nearby.

The state of Ohio dammed both ends of the nearby Sulphur Run stream to prevent contamination.

The state also published updates of a chemical plume made up of butyl acrylate (butyl-A).

The governor of Ohio noted “the tremendous toll the train derailment has had on residents in East Palestine”.

DERAILMENT ADDS TO COMPLAINTS ABOUT US RAIL
The derailment is adding to the ill will that US railroad companies have attracted for more than a year.

The American Chemistry Council (ACC) has maintained a periodic survey that measures how unhappy chemical companies were with the service they receives from railroad companies.

The service from train companies had gotten so unreliable in 2022, some chemical producers declared force majeure.

“That tells you how non-competitive the rail industry is, when they are telling their customers they want less of their business,” said Chris Jahn, CEO of the ACC, at the time.

Late in 2022, unions and the railroad companies entered tense negotiations for new labour contracts, raising fears of a strike when supply chains still had not recovered from pandemic disruptions.

To avoid a strike, the US government forced the unions and railroad companies to accept an earlier agreement.

At the same time, Congress introduced resolutions to grant union members additional sick leave. Tellingly, the sick-leave resolutions attracted bipartisan support in both legislative chambers, although not enough to meet the three-fifths majority threshold required for passage in the Senate.

BIPARTISAN CALLS TO ADDRESS DERAILMENT
One of those Republican senators who supported the sick-leave resolution, Marc Rubio (Florida), is requesting information from the US Department of Transportation about its oversight of the country’s freight train system. Rubio was joined by another Republican senator, JD Vance (Ohio), who was recently elected.

Their letter expressed concerns about safety since the railroad companies have adopted precision scheduled railroading (PSR), a practice that has led to cost-cutting and margin expansion.

Vance has issued his own calls to make sure that the company is not let off the hook.

The derailment could create enough bipartisan support for new rail regulation that could overcome the three-fifth threshold in the Senate.

PROPOSALS SO FAR
US Transportation Secretary Pete Buttigieg called on railroad companies to take the following steps:

• Join the Freight Railroad Administration’s (FRA) whistleblower programme, which allows employees to report dangerous conditions without fear of retribution
• Adopt new inspection technologies without abandoning live inspections from people
• Adopt DOT 117 tank cars before a 2029 deadline
• Provide advance notice to state emergency response teams about tank cars carrying hazardous gas
• Provide paid sick leave

Buttigieg called on Congress to adopt the following policies:

• Increase the size of the fines that the Department of Transportation can impose on rail companies for safety violations. Right now, the maximum amount is $225,455
• Expand and strengthen the rules governing high-hazardous shipments, including high-hazard flammable trains
• Increase the use of electronically controlled pneumatic brakes
• Update brake regulations
• Make railroad companies adopt DOT 117 tank cars sooner than the current 2029 deadline. Earlier legislation called for a 2025 deadline
• Increase funding to train emergency teams on how to handle hazardous materials.

CALLS TO REVISIT EARLIER PROPOSALS
The derailment in Ohio has brought attention to an earlier 2015 rule from the Department of Transportation, which required trains carrying high-hazard flammable liquid to use electronically controlled pneumatic brakes.

Such materials are classified as Class 3 flammable liquids such as crude oil and ethanol.

In 2018, the rule was rescinded after another analysis found that the costs would outweigh the benefits.

Legislators and policy makers may revisit the 2015 rule. They may choose to expand it to cover other materials beyond Class 3 flammable liquids.

Much of the policy response will depend on the cause of the derailment. The National Transportation Safety Board (NTSB) is expected to release a preliminary report on the accident on Thursday.

STRICTER REGULATIONS RESHAPING CHEM INDUSTRY
Stricter regulations could make it more impractical and expensive to ship some chemicals over longer distances.

Such restrictions for chlorine shipments have led a Brazilian company to pioneer a new business model for producing the material.

The company, called Chlorum Solutions, is developing small modular chlor-alkali plants that can provide downstream customers with chlorine without the expense and uncertainty of shipping it by truck or rail.

Chlorum already operates plants in Brazil and it plans to expand in the US.

Stricter regulations could make the model more attractive or expand it to other materials.

RESPONSE FROM CHEMICAL INDUSTRY
In a statement about the derailment, the American Chemistry Council stressed the need to constantly focus on safety while still shipping materials needed for everything from safe drinking water to medicine.

“The safe transportation of chemicals is a responsibility shared between chemical manufacturers, our transportation partners and the government,” the ACC said. “The transportation of chemicals requires a full range of safety measures to help prevent derailments, reduce the risk of a material release and mitigate the impacts of an accident.”

REPONSE FROM RAILROADS
The American Association of Railroads (AAR) has earlier warned that electronically controlled pneumatic brakes have high failure rates and would not make trains significantly safer.

Such brakes are among the key proposals made by the Department of Transportation, and a focus of other policy recommendations.

The AAR stressed the need for investigators to continue their review of the accident without political interference so the rail industry can take any steps that could prevent a similar derailment.

“All stakeholders – railroads along with federal, state and local officials – must work to restore the public’s trust in the safety and security of our communities,” the AAR said in a statement. “We can only do that by letting the facts drive the post-accident response.”

Norfolk Southern’s CEO, Alan Shaw, has visited East Palestine, and the company has pledged money to help families and to clean up the area.

“In every conversation today, I shared how deeply sorry I am this happened to their home,” Shaw said in a statement. “We are going to do the right things to help East Palestine recover and thrive again.”

Insight article by Al Greenwood

Thumbnail shows a railroad. Image by Shutterstock.