By Kenneth P. Green
and Taylor Jackson
The Fraser Institute
On May 1, 2015, an interesting thing happened. The United States and Canada came to agreement about transporting oil and other flammable liquids.
No, they did not agree to build more pipelines – rather, they agreed to implement just under 400 pages worth of new standards that are intended to reduce the risk of transporting oil by rail, a mode of hydrocarbon transport that has seen rapid growth in the last few years.
The new standards include new tank-car design standards; retrofit standards and timelines; new operational protocols that touch on routing, speed restrictions and government notifications; new testing and labelling requirements; and, perhaps most controversially, a requirement for installing electronically-controlled pneumatic braking systems
As always, government and industry are at odds over the cost and timeline for the adoption of the new rules, though industry seems to be accepting the costs, and is mostly wary of the new rules “aggressive” schedule for replacement/retrofitting of the rail car fleet. And undoubtedly (as one of us wrote last year), the new cars will be costly, and the timeline hard to achieve. But the interesting question is, will the new rules make us safer?
Research on rail accidents has found human error to be a leading cause. In a study of 237 rail accidents in the United Kingdom from 1945 to 2012, researchers found that:
“[rail] accidents . . . primarily occur during the peak hours and at the end of a week, i.e. Friday. Train drivers are responsible for the majority of the accidents. This result is in agreement with previous studies . . . [a]pproximately 73 per cent of the accidents were attributed solely to train drivers, while the majority of the accidents were related to signal passed at danger (more than 70 per cent).”
The U.K. study conveys the fact that, whether we like it or not, human error is what most often leads to accidents, something evermore regulation will be hard pressed to completely eliminate.
Indeed, in one of the recent oil-by-rail accidents in Northern Ontario, the railway cars involved in the accident had upgraded safety features, which weren’t present on the cars in the tragic Lac-Mégantic disaster. In this situation, “safer” cars yielded similar results.
The problem may not be in the nature of the crude, or the nature of the cars, but rather in the ongoing war over pipelines.
Crude oil exports by rail from Canada to the U.S. have increased from 42,000 barrels a year in 2010 to almost 42 million barrels per year in 2014, according to data from the U.S. Energy Information Administration. Much of this increase can be attributed to the absence of new pipeline infrastructure.
Yet pipelines continue to be the safest method for transporting oil. A review of oil transportation methods in the U.S. found that oil transport by pipeline was associated with fewer incidents, fatalities and injuries per ton-mile transported, when compared with rail and truck.
Rail and roadway transport of oil have always (and will always) have some applicability for the transport of oil, but the choice of transport mode has consequences. While the new regulations may make some aspects of transporting oil by rail safer, it would be unfortunate indeed if the proposed new rules divert us from the more important question: what’s the best way to move oil safely and efficiently to market?
Kenneth P. Green is Senior Director and Taylor Jackson is a Policy Analyst in Natural Resource Studies at The Fraser Institute.