Yet another incident involving hazardous crude oil rail transport has occurred in the United States.

This week’s West Virginia train derailment involving a CSX train hauling a 109-car oil tanker train of crude oil from the Bakken North Dakota fields has significant repercussions.  News media and the CSX itself have confirmed that this train was hauling the newer CPC 1232 tank cars, those that have been billed as being far more explosion resistant and safe.

This CSX train was enroute to an oil depot facility located in Yorktown Virginia. As of this Supply Chain Matters commentary, reports indicate the fire is still burning, two days after the accident, inhibiting further recovery efforts.

The train derailment that occurred near Mount Carbon West Virginia, a small town 33 miles southeast of that state’s capital of Charleston, caused fiery explosions that engulfed a reported 25 tank cars.  Initial reports immediately after the accident indicated far fewer tank cars aflame. The accident reportedly caused the destruction of one house and prompted the immediate evacuation of two nearby towns. Fortunately, no lives were lost and the real possibility for polluting the adjacent Kanawha River, a drinking water supply source seems to further been averted. According to a published Reuters report, this was the second derailment accident this year along this particular CSX rail routing. The other involved a crude by rail derailment near Lynchburg Virginia.  At the time of that accident, outgoing National Transportation Safety Board chairperson Deborah Herseman made her rounds of various U.S. media talk shows and news programs and communicated that other accidents will occur without stepped-up action. This latest accident will most likely turn federal regulator focus more toward rail line operating standards when crude oil transport is involved.

This accident will further place a new spotlight on the efficacy and overall safety standards of CPC 1232 category tank cars. The predominantly older DOT-111 tank cars have been targeted for replacement in favor of the upgraded CPC 1232 version.  However tank car lessors and oil industry interests have balked at the overall time scale for upgrading existing older specification tank cars. According to the Association of American Railroads (AAR), rail shipments of petroleum and petroleum products increased 12.7 percent during 2014. This is also a high margin business for rail operators. No doubt, various industry interests will be in active communications regarding the implications.

In a prior Supply Chain Matters commentary, we questioned whether the current plunging price levels for crude oil can potentially change the cost dynamics for “crude by rail” shipments as well as overall industry directives to upgrade crude carrying tank cars to new safety standards. This latest accident more than likely adds more concern for changing economics related to operating safety. New technology mandates outlined in the Rail Safety Improvement of 2008 further calls for the full implementation of Positive Train Control (PTC) by the end of this year, which the rail industry has been balking.

The picture seems very changed at this juncture.

Bob Ferrari