Tag Archive for bakken

How to execute a world class solution to complex DOT tank cars rules

How to execute a world class solution to complex DOT tank cars rules.

Railway Age has a very important message about regulatory confusion. So many regulations. How do corporations cope?

http://www.railwayage.com/index.php/regulatory/survey- says-complex-hazmat-transport- regs-would-even-challenge-einstein.html

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Regulators tell you what to change or to do. They don’t tell you how to execute..

“They in fact seldom give advise about the myriad choices of how to comply”. They do not provide training either.

There is a company called STARS that can help you. Starting with training, like I received this past week.

From the RAILWAY AGE current issue :– here is added background discussion this week..

“Is complying with the multitude of regulations for the transport of hazardous materials—also known as dangerous goods (DG)—truly a challenge? According to 136 shipping executives surveyed online in April 2015 by Labelmaster , a provider of solutions for hazardous material transport compliance, even Albert Einstein would have had problems figuring out some of the rules.

More than half of the 136 executives polled—56%—said the brainy Einstein would have difficulties figuring out the 49 CFR, one of the government’s primary reference books that cover regulations, requirements and standards for U.S. hazmat transportation via highway, rail, air and water.

The survey also revealed a majority—59%—find it a challenge to keep with the ever- changing dangerous goods regulations.

As one example, 14% say that “the regulations are confusing—everyone has a different interpretation.” And the regulatory inspectors provide no or little help. Most DG professionals are looking for training and integrated solutions to simplify their role as to what to do now.

_BEYOND TRAINING__

There is a real quandary as to “should we retrofit” or “should we abandon what migh be a suitable sunk capital fleet and switch to all new tank cars”?

Washington safety agencies lack the skills to give you guidance. Who pays for the retro fits? Washington has no idea. Why?

Because the thousands of already operating cars are subjects of complex lease agreements. Regulators don’t live in that complex world.

As a business example, if you use DOT type CPC-1232 tank cars, and your lease expires before the mandatory April Fools date of 4/1/2020, how do you handle the financial accounting for any improvements/modifications made between the lessor and the lessee? And exactly what technical modifications should you consider given the liability issues of a failure?

Who do you turn to to for such critical advise? The car manufacturers? Or a source of independent due diligence? Remember that on average you might pay around $60,000 a car for a retro-fit on a tank car with more than 20 years remaining life. But on a new tank car the cost might be more than $135,000.

As an insurance question to your broker, how would the insurance risk be perceived between the retro fit and the new car option? Do they calculate that value difference for you?

The economics are so complex that a special survey is being conducted with the results to be published in an upcoming Railway Age issue. You can contact dnahass@railfin.com for more about this. Or contact http://www.starsconsulting.org/ for a second professional opinion.

Confused by crude oil by rail tank car choices? Contact STARS for practical solutions

There is a great deal of confusion about the technical choices facing shippers as to what to do with their tank car fleet.

The basic choices are to 1) buy all new tank cars at prices probably north of $130,000 each?  Which means writing off maybe as much as $90,000 in the value of each existing tank car?

Or 2), modify with safety appliances the existing tank cars with perhaps 30 years economic life left on them at a cost upwards of $40,000 each?

The regulators like the FRA and the NTSB or the STB can not help you.  They draft and issue safety rules.  They give you no economic or technical help in making the choice of “how to execute”.

There is, however, a specialized independant company composed of experienced former railway tank car professionals and FRA inspectors that you can turn to for help.

STARS

This Maryland based consultancy called STARS can give you the technical help that regulators can’t.

The company’s formal name is “Specialty Transportation and Regulatory Services”.  The President,Wendy Buckley, and her skilled staff has already found ways to help both crude oil and chemical hazmat shippers execute safety improvements in ways that represent a significant return on investment for their fees.

I have interacted directly with STARS and found their client business cases to be exceptional examples of “value delivered.”

Contact me if you need a specific reference.

Or contact STARS directly at their web site www.STARSConsulting.org.

 

 

 

 

 

Rail Competition: “Always keep your eye on emerging competition vs. rail”

Competition for the Bakken crude by rail trains may change the pattern.

There is an interesting technical report today that shows how a possible Canadian crude new pipeline investment might within three or so years change the pattern of using crude oil trains to reach eastern seaboard US and Canadian refineries.

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Oil-train safety kept secret is Headline News Business Report in Philadelphia

"Industrial" by woodleywonderworks from Flickr.com via Creative Commons License

Read the front page business section of the Philadelphia Inquirer Sunday. The railroad/hazardous materials secrecy theme is still being hammered by news media.

Is secrecy really possible with such huge train movements?

Ironically, by trying to play “the secret card” with responsible state and local emergency responders that would have keep that intelligence close, the story line about actual repeating train moves has been pretty much been fully vetted as to routes by the free press.

Read more

Jim Blaze quoted in State Impact Pennsylvania NPR story on tank cars near Amtrak 188 derailment

NTSB Chairman Sumwalt surveys scene of Amtrak derailment, Philadelphia

Jim was quoted in Susan Phillips report for State Impact Pennsylvania, a National Public Radio project, about the tank cars narrowly missed by the locomotive of Amtrak #188 during the recent tragic derailment near Frankford Junction in Philadelphia.

 

Objections to new crude oil regulations noted by New York Times

"Industrial" by woodleywonderworks from Flickr.com via Creative Commons License

“Oil trains — with as many as 120 cars — have become common sights in cities like Philadelphia, Albany and Chicago as they make the movement from the upper Midwest Bakken region of North Dakota, towards US refineries. Local and state officials from the Pacific coast to the Atlantic coast have complained that rail-friendly rules protecting business confidentiality make it difficult to predict when trains will pass through their local jurisdictions,” reports The New York Times

Missing from the discussion of this “what is in the train” emergency responder issue is the fact that by working together at the State DOT or Safety Department level, the affected states could effectively by pass this lack of rail safety information by collecting necessary sampled train movement origin – destination data as a collective effort.

This could be done using available technology and private terminal data that does not interfere with the primary federal mandate over interstate commerce. The states considering themselves at risk need to be creative in the face of bureaucracy and private rate railway confidentiality. There are sufficient “known” pieces of movement intelligence to fill in the blanks of the unknowns at a reasonable state cost. Given that possible but extra work technical solution, the rail managers might want to consider a more cooperative selective state by state info sharing approach. Why?

Because as part of their everyday businesses they do need to have cooperative and productive liaison with these states on many normal matters.

ALBERTA hit hard by dependency on oil…who’s next?

Oil price crash hits Provence budget hard. Forced to jack up other taxes

Bloomberg report: Alberta Budget Deficit Soars to Record on Oil Collapse

HOW BIG? The hit from plunging oil prices is estimated at a whopping C$7 BILLION Revenue will fall 11 percent to C$43.4 billion this fiscal year while spending is forecast to be little changed at C$48.4 billion.

WITH OIL… “We had the best tax structure in North America,” said Scott Hennig, a spokesman for the Canadian Taxpayers Federation, in an interview in Edmonton. “The government didn’t want to make the tough decisions. Are they spending too much? Absolutely.”

ARE MONGOLIA and South Africa listening?

Government greed and poor due diligence based on state resource windfalls set up a lot of great government plans for failure. They never evaluate for down cycles.

Alberta’s dependence on petroleum revenue had fed an expectant population of 4.2 million people with visions of prosperity. Alberta, with the lowest taxes in the country, now instead faces more job cuts as corporate profits for its leading industry sink 50 percent this year and energy investment falls 30 percent.

That is from a Bloomberg evaluation of Alberta’s budget documents.

To wean itself off the oil habit, Alberta will now have to devote only 50 percent of its energy revenue to finance its budget by 2019-20. That is down from 100 percent curently. The recent oil collapse forced the government to draw down C$4 billion from its contingency fund for fiscal year 2015-16, reducing the balance to C$2.5 billion. “We need to get off the roller coaster of oil,” Campbell said.

Alberta relied on royalties from oil and gas for almost a fifth of its revenue this current fiscal year. In the next fiscal year it will account for less than 7 percent, “It MIGHT rebound to 17 percent in a decade.” Maybe. Higher Fees Higher local taxes and fees will help fill the budget gap, bringing in a combined C$11.4 billion over the next five years. The province’s income tax rate of 10 percent will increase to 10.5 percent for those earning more than C$100,000 starting in January That will rise to 11.5 percent by 2018. Albertans earning more than C$250,000 will see their tax rates rise to 12 percent over three years. Gasoline taxes will increase by 44 percent to 13 cents a liter, effective tonight. Buyers of wine and cigarettes will pay more, while traffic fines and motor vehicle fees will also increase.