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Railroads Fought to Crush Rules That Biden Aims to Revive After Ohio Derailment

Published 24/02/2023, 07:36 am
Updated 24/02/2023, 07:36 am
© Reuters.

(Bloomberg) -- Long before this month’s fiery derailment, railroad industry leaders battled regulations meant to boost freight train safety, including plans to bolster some of the very same tank cars that ruptured and released chemicals in eastern Ohio.

Norfolk Southern Corp (NYSE:NSC). joined in fighting proposed speed limits and brake system requirements spawned by a series of high-profile accidents, including a lethal 2005 collision involving one of the operator’s own trains. 

The intense lobbying campaign — which unfolded over years of direct appeals to lawmakers, regulators and White House officials — underscores the industry’s political sway in Washington and illustrates the challenge now facing Congress and the Biden administration as they vow a new crackdown.

Our experience is that “the rail industry pushes back hard on both safety and public disclosure rules — and keeps that opposition up long after the public scrutiny of tragic accidents abates,” said Kristen Boyles, managing attorney for the environmental group Earthjustice. “There should be a renewed push for safer trains and safer rail cars following the disaster in Ohio, and that pressure will need to be applied for as long as it takes to get new safety requirements and regulations in place.”

Norfolk Southern pledged in a Tuesday statement it would “learn from this terrible accident and work with regulators and elected officials to improve railroad safety.” And the company’s chief executive officer, Alan Shaw, said it will rip up tracks that had swiftly returned to use, so chemical-soaked soil under the rails can be removed.

On Thursday, the National Transportation Safety Board released its preliminary report on the accident, citing an overheated wheel bearing as the likely cause.

  • Read more: Train-Wheel Overheating Alert Came Moments Before Crash, US Says

Roughly a decade ago, Norfolk Southern was among the rail companies combating a host of proposed requirements for high-hazard flammable trains — generally those transporting at least 35 tank cars carrying particularly combustible liquids or 20 of them in a single block. The train that derailed Feb. 3 in East Palestine, Ohio, did not fall under that category, though the accident still unleashed a torrent of toxic chemicals, including vinyl chloride used in PVC pipes and the solvent ethylene glycol monobutyl ether. 

The Transportation Department’s Pipeline and Hazardous Materials Safety Administration had moved to propose tank car standards in response to a number of incidents in which they ruptured and released their contents. That included a 2005 crash in which a Norfolk Southern train hauling chlorine plowed into another, killing nine people in Graniteville, South Carolina. Regulators also sought to require the use of electronically controlled pneumatic braking systems that are designed to rapidly halt trains by applying brakes across their entire span simultaneously, instead of each car individually. 

The industry’s top lobbying group, the Association of American Railroads, argued the technology would yield “minimal” safety benefits at a “tremendous” cost. 

And in a March 2015 meeting with the White House, the industry doubled down, with representatives of Norfolk Southern and other major railroad operators — including CSX Corp (NASDAQ:CSX)., Union Pacific Corp (NYSE:UNP). and BNSF Railway Co. — insisting that the brake requirement “would not have significant safety benefits, would not have significant business benefits” and “would be extremely costly.”

“There was tremendous pushback,” recalled Cynthia Quarterman, who played a major role crafting the rules as head of the Pipeline and Hazardous Materials Safety Administration. “It was intense.”

Though the industry supported more stringent tank car standards, it took issue with the methodology and cost-benefit analysis underpinning the government’s plan for bolstering specific rupture-prone DOT-111 models with prescriptions for thicker walls and more robust pressure-relief valves. At least 16 of the tanker cars that went off the tracks in Ohio were those older models. 

The Obama administration still imposed speed limits, braking system mandates and new tank car standards in 2015, but only after they were narrowed in response to industry pressure. The government also rejected a bid by the AAR (NYSE:AIR) to expand the new tank car standards so they applied evenly — even when a train is using only a few to haul hazardous material. 

But the industry didn’t stop fighting the braking mandates.

When former President Donald Trump ordered federal agencies to winnow rules two years later, Norfolk Southern offered encouragement. Railroads operate under a “mountain of safety regulation,” the company told the Transportation Department in 2017, and “the substantial costs” of the brake requirements “cannot be justified.”

The Trump administration rescinded the brake mandates a year later. 

The episodes reflect a classic power dynamic in the nation’s capital, where the balance is tilted in favor of industry, said James Goodwin, a senior policy analyst at the Center for Progressive Reform. 

“There is not a single step of the rulemaking process that industry does not dominate,” Goodwin said. Businesses and industry groups wield unmatched influence and economic might to shape federal rules, he said, one that dwarfs the voice of other public stakeholders, such as workers and community residents.

Read more: Trump’s Ohio Visit Puts Spotlight on His Rail-Safety Record

The rail industry also successfully won more time to phase in more durable rail cars — until 2029 “from an originally envisioned date of 2025,” Transportation Secretary Pete Buttigieg said in a Sunday letter to Norfolk Southern’s chief executive officer. “These steps that Norfolk Southern and its peers lobbied against were intended to improve rail safety and to help keep Americans safe.”

Buttigieg, who is visiting the eastern Ohio community on Thursday, is vowing that can’t happen again. 

“Major derailments in the past have been followed by calls for reform – and by vigorous resistance by your industry to increased safety measures,” he told Norfolk’s Shaw. “This must change.”

(Updates with NTSB’s preliminary report on Feb. 3 derailment.)

©2023 Bloomberg L.P.


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