According to a BBC news article that I have read today, Canada says that it will phase out the type of rail tankers involved in a deadly train derailment last July.
Transport Minister Lisa Raitt said the DOT-111 oil tankers, which are believed to be prone to rupture, must be retired or overhauled within three years.
She said 5,000 older cars considered to be the most vulnerable must be removed from service immediately.
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And Transport Minister Raitt is dreaming if she thinks this is possible without having a seriously negative impact on the Canadian economy.
The first part of this directive which bans non-normalized steel tank cars used in flammable service shouldn't be much of a problem. The second part, requiring that all 111 tank cars in flammable services either be retrofitted, replaced or retired within 3 years is impossible.
There are roughly 72,000 DOT 111 tank cars in flammable service in North America right now that do not meet the January 2014 Transport Canada specification. These cars currently travel freely back and forth across the U.S. and into Canada and Mexico. The current backlog to have a new tank car built is two years. Further complicating matters, the U.S. PHMSA has not determined which spec new tank cars entering a flammable service must be built to, although I suspect this directive in Canada will hasten a decision here in the U.S.
Given the current tank car manufacturing backlog, it is not possible to replace all or even a significant portion of the 72,000 DOT 111 tank cars in flammable service within 3 years. Insofar as retrofitting these cars to the new Canadian standard, tank car shops are already backed up with DOT qualification and repair work at this time. Additionally, all the tank cars built during the ethanol boom in 2005 and 2006 begin coming due for their HM201 inspections next year, which will further backlog the shops. In short, even assuming all 72,000 cars would be candidates for retrofitting, it would be impossible to get a meaningful number of them done within the 3 year time frame.
If Canada sticks to this time frame, it will seriously curtail the movement of crude by rail to Canadian refineries or from the Canadian oil fields to the U.S. Additionally, any chemical company that manufactures flammable products in both the U.S. and Canada would likely be forced to shift that production to their U.S. sites. Obviously, the impact of either or both of these occuring would be harmful to the Canadian economy.
What I suspect will happen here is the U.S. PHMSA will come out with a new requirement for tank cars used in flammable service. While it will substantially mirror what Transport Canada has directed, PHMSA will allow a longer time frame for compliance, most likely 8 - 10 years. At that point, I expect Transport Canada to back off the 3 year period for compliance.
Curt
Good info. Thanks for posting Nicole.
Whether or not this is the right decision, it sounds very expensive!
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