Rail CEOs to Investors: “Bomb Trains” Safe at Almost Any Speed
Burlington Northern Santa Fe (BNSF)recently said it would proceed with plans to increase speeds for oil-by-rail unit trains in Devil’s Lake, N.D. to 60MPH from 30 MPH, despite opposition from local officials.
BNSF’s announcement came merely a week after the Obama Administration announced its proposed regulations for trains carrying oil obtained via hydraulic fracturing (“fracking”) from North Dakota’s Bakken Shale basin.
The rail industry’s position on speed limits for “bomb trains” is simple: they continuously claim velocity has nothing to do with oil-by-rail accidents or safety.
For example, Big Rail — as revealed by DeSmogBlog — lobbied against all proposed oil train speed reductions in its dozen or so private meetings at the Obama White House before the unveiling of the proposed oil-by-rail regulations.
Recent statements by rail industry CEOs during investor calls put the heads of many companies on record opposing oil-by-rail speed limits for the first time.
Time is Money
The position of the rail companies regarding speed and safety on their recent quarterly investor calls was consistent, coming just before the release of the new oil-by-rail regulations.
“I don’t know of any incidents with crude that’s being caused by speed. We keep slowing down in this North American network over the years. We don’t get better with speed. We get worse,” E. Hunter Harrison, CEO of Canadian Pacific, stated during the company’s investor call.
“Now you can’t get growing the country for example, growing the economy, growing the population, and continue to move stuff on rail, cutting the speed back, but don’t want to add any infrastructure. That doesn’t work. That’s a timetable to disaster.”
Charles “Wick” Moorman, CEO of Norfolk Southern and also on Chevron’s Board of Directors, sang a similar tune in response to a query about excessive train speeds potentially causing crude-by-rail accidents.
“None to my knowledge,” Moorman stated bluntly.
Moorman also argued on the call for a much higher speed limit.
“We’ve had a lot of discussion with the regulators and I believe that we’ll be able to make our case that a minimum speed in the 40 to 45 mile an hour range is…safe,”Moorman continued. “[A]ny significant speed restriction would be in fact disruptive to the point of almost shutting down the North American rail network.”
CSX Corporation — whose oil-by-rail train exploded in Lynchburg, Va. in April — stood in solidarity with its rail industry colleagues on its recent investor call.
“We think [30 MPH speed limits] would…severely limit our ability to provide reliable freight service to our customers,” Michael Ward, chairman, president and CEO ofCSX, stated on the company’s call.
“I would hope as we look at this with the federal government, we can show them the modeling of how disastrous that could be to the entire fluidity of the U.S. rail system as well as the adverse impact that will have as trucks deliver on to the highway system. So our view is that it would be very bad, but our view is also that cooler heads will prevail when they see the facts behind it.”
“Will Cooler Heads Prevail?”
Ward is not the only insider who thinks “cooler heads will prevail” on the issue of oil-by-rail speed limits going forward.