Pulling mass quantities of older tank cars off the tracks for retrofitting and upgrades may soon be required. And if that happens, it could ultimately slow the transport of crude by rail, according to a Union Tank Car Co. sales executive.

“It could happen,” Don Flowers, Union Tank Car Co.’s western region sales vice president, said during Hart Energy’s recent Crude In Motion conference.

“Depending upon the timeframe in which cars are required to be retrofitted, the number of cars to be worked on in the available repair shop network could overwhelm the shops, causing cars to be out of service for extended periods of time,” said Flowers. “That situation would reduce the number of cars available to carry on commerce.”

Right now, there are an estimated 65,000 tank cars in crude oil service in North America. Of those, 18,000 have new safety enhancements.

Flowers said the industry could see new hazardous material rules through the federal Department of Transportation (DOT), which may require upgrades to some cars. While not all cars can be retrofitted, it will costly to upgrade those that can. Flowers said it will cost $17,000 a piece to add headshields to cars.

“Depending upon the final DOT rules for the car type, cars may need to be retrofitted, if feasible, to meet any new requirements,” said Flowers. “Some cars may be removed from service if it is uneconomical to retrofit or repurpose for another commodity service that would not be subject to any new regulations.”

Since a DOT ruling has not yet been finalized, it’s not clear what safety enhancements will be required for tank cars.

“The cars being built today are equipped with additional safety features, such as thicker and stronger steel, headshields and top fittings protection,” said Flowers. “Other items mentioned in DOT’s announcement of proposed rulemaking also included thermal insulation and better protection of bottom outlet valve handles, just to name a few.”

During the same panel, Genesee & Wyoming Railroad Service Inc.’s (GWR’s) Ryan Fischer spoke about industry best practices.

Before beginning a rail project, he said companies should be prepared to engage in “fact-based dialogue with the public,” which would include information on safety, jobs and infrastructure improvements.

“You have to make sure you’re all on the same page and seeing eye-to-eye on the same issues,” said Fischer, GWR’s assistant vice president of emerging markets. Any issues should be addressed at the project start, he said.

While some projects are completed on time and on budget, others can face challenges. The obstacles can emerge at various phases, from start-up and planning to construction, Fischer said. Companies should be prepared to face the possibility of cost overruns and delays, he said. Contingency plans can come in handy under such circumstances.

“There certainly are things that come up,” he said. “Certainly, the planning process can take a lot longer than anticipated.”

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