The Shale Production Boom Has Led To A Historic Rise In Crude-By-Rail Shipping.
This growth, though, may be jeopardized due to recent high-profile derailment incidents. Midland is working to develop equipment that will address these concerns and satisfy any new tank-car regulations.
According to a recent report by the Association of American Railroads (AAR), U.S. Class I railroads shipped a record 108,605 carloads of crude oil in the second quarter of 2013, more than double the 51,474 crude-by-rail shipments that occurred in the second quarter of 2013.
Unfortunately, the increase in crude-by-rail shipping has led to a corresponding increase in the number of high-profile derailment accidents that have occurred among trains transporting shale oil. In the past six months, there have been at least four high-profile, high-energy incidents:
July 6, 2013: A parked crude-oil train rolls away from a siding, crashes and explodes in the Canadian town of Lac-Megantic, Quebec, killing 47 people.
- Nov. 8, 2013: An oil train derails near the town of Aliceville, AL, with explosions occurring in three tank cars, while as much as 750,000 gallons of oil are spilled.
- Dec. 30, 2013: A train pulling more than 100 crude-oil tank cars crashes into a derailed grain car near Casselton, ND, causing explosions the release of nearly 400,000 gallons of crude oil.
- Jan. 7, 2014: A train carrying crude oil and propane derails in Plaster Rock, New Brunswick, causing the evacuation of 150 nearby residents.
To their credit, the railroads and agencies like the AAR and the Railway Supply Institute (RSI) have been quick to investigate these incidents and call for operational rule changes, improved classification of crude types, and increased regulation of rail tank cars that ship crude oil and other hazardous materials, which are most commonly the DOT-111 models.
In fact, both the AAR and RSI have proposed regulatory changes that will make crude-by-rail shipping safer:
The AAR calls for the retrofitting of 78,000 of the 92,000 tank cars that currently carry flammable liquids, while new cars would require an outer steel jacket and thermal protection, full-height head shields and high-flow-capacity pressure-relief valves (PRV).
- The RSI proposes the modification of the current tank-car fleet in a manner that substantially enhances safety while minimizing engineering risks. Specifically, RSI is working with manufacturers to develop a safety valve that further protects the tank against over-pressurization, and a bottom outlet valve that ensures full containment in the event of a derailment.
Midland Manufacturing agrees the safety level of crude-by-rail shipping needs to be increased and is actively participating in the RSI effort to develop new high-flow PRV technologies. Midland supports a comprehensive approach to new regulations that will improve railcar and valve design, as well as regulations designed to prevent further derailments. Midland is moving forward—regardless of the final scope of any pending regulation—with the development and production of new high-flow PRVs. We are confident that having this technology commercially available will be critical in generating support for the new regulations and the upgrading of the crude-by-rail tank-car fleet.
NOTE: This Midland Edge Newsletter is a quick read on the railcar market as it pertains to opportunities or "need to know" news related to Midland products. If you have news to share, please send an email (with a link) to Darren Wight at email@example.com.