The U.S. Department of Transportation has taken another hesitant half-step toward regulating the out-of-control boom in oil shipments by rail. But in doing so, it showed its extreme reluctance to take any strong measures that would effectively address the problem.
The feds' latest move, in the form of an emergency order Feb. 25, mandates stricter standards for oil shippers. It bans a certain type of oil tanker car, the AAR-211, which comprises about 3 percent of the total crude-oil fleet.
In doing so, the DOT continued its practice of ignoring a March 2012 recommendation by the National Transportation Safety Board that the department issue a ban -- or a mandate for phased withdrawal -- of a much more prevalent tanker car, the DOT-111A, which comprises the vast majority of the oil tanker fleet. As I've written previously, DOT has said it will not even give a formal response to that recommendation until sometime in 2015.
Today, Feb. 26, the department went into stonewall mode. Cynthia Quarterman, administrator of the DOT's Pipeline and Hazardous Materials Safety Administration, told a hearing of the House Transportation and Infrastructure Subcommittee that she wouldn't even commit to an answer on the DOT-111A next year. The tanker car phaseout isn't “a silver bullet” and is only “one piece of the mitigative puzzle” in making crude oil transportation safer, she told lawmakers.
The DOT's emergency order also requires oil shippers to do the following: "prior to offering into transportation, or transporting, ensure that the petroleum crude oil is properly tested and classed." That's the entire operative clause -- one sentence. Whether the clause has muscle or is simply feel-good rhetoric is unclear. Crucial details were curiously omitted.
As the National Journal reported, this omission was criticized at Wednesday's hearing by none other than Jack Gerard, the president of the American Petroleum Institute.
"The emergency order says that we need to look at proper testing with sufficient frequency and quality. We don't know what that means," he said. Quarterman treated the issue like a hot potato, saying the order's ambiguity was intentional. "We specifically left those terms to be determined by the shippers. We did not want to say for each and every instance before a shipment occurs that testing needed to occur."
Not discussed at the House hearing was another weakness -- that the emergency order fails to include any requirement that the testing results be disclosed publicly, thus leaving local government officials, watchdog groups and the general public in the dark.
All in all, not exactly a show of rippling regulatory muscle.
The DOT's new step comes on the heels of last week's curious statement by Transportation Secretary Anthony Foxx that certain mystery companies had taken vaguely defined voluntary measures for rail safety, with no verification or enforcement.
All of which begs the question of why federal regulators aren't being more aggressive in seeking information and protecting public safety amid the oil-by-rail boom. It's a question raised in perfect, almost Zen-like simplicity by Amy Myers Jaffe, an oil policy expert at the University of California at Davis:
What would the Feds find if they subpoenaed the real assays of Bakken rail deliveries to US refiners ?— Amy Myers Jaffe (@AmyJaffeenergy) February 26, 2014
It's a haiku. Think about it for a while. A subpoena? It's almost a foreign concept, exotic and forbidden. Just one tiny piece of the broader picture.