Ethanol Industry Objects to Rail Safety Rules that Lump Ethanol in with Crude Oil

by Henry Kaplan | Jul 29, 2014 |

 

Last week the U.S. Department of Transportation proposed sweeping new safety requirements for oil trains. They would that mean that tens of thousands of railroad tank cars would have to be upgraded or replaced in the next few years. These new regulations treat ethanol differently from crude oil, but not that differently. They categorize crude oil and ethanol as the two most hazardous flammable liquids that are transported heavily by rail.

The ethanol industry is unsurprisingly critical of these new requirements. The ethanol industry is heavily dependent on railways for transportation – remember their woes when weather delayed rail shipments? That close relationship with rail means that the cost of retrofitting or replacing ethanol-carrying train tanks would hit the ethanol industry hard.

The Iowa Renewable Fuels Association decries what they call a “one-size-fits-all approach”:

“Ethanol is a fundamentally different product with fundamentally different characteristics than crude oil, especially the volatile crude oil coming out of the Bakken,” Monte Shaw, executive director of the Iowa Renewable Fuels Association, told Bloomberg BNA… “What the ethanol industry needs to do to ensure a safe situation for transporting our product is different then what the crude oil industry needs to do,” he said.

The Bakken oil referred to is particularly volatile oil from the Bakken shale in North Dakota, which has been linked to several rail accidents. The ethanol industry is quick to distance themselves from those accidents.

But while ethanol advocates complain that they are being treated the same as much more dangerous crude oil producers, the Department of Transportation would likely argue that that’s not true. These proposed new regulations would at least give ethanol a slightly more relaxed deadline:

Crude-carrying tank cars would need to upgraded by 2017. The proposed regulations would also give the ethanol industry until 2018 to improve or replace tank cars that carry that fuel.

 


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