Following the derailment in Iowa last month that spilled 230,000 gallons of oil into the waterway when several of the DOT 117R tank cars were punctured during the derailment, BNSF Railroad allegedly informed shippers, producers, and refiners that it would be banning the use retrofitted tank cars in all new contracts.
BNSF is the largest railroad in the country. Their decision to ban the retrofitted tank cars could take thousands of tank cars off a key rail line during a time when the need for them has surged. Oil production in the US and Canada has outpaced the pipeline capacity and has lead to higher freight prices and lower crude prices.
The American Fuel and Petrochemical Manufacturers said its members “have raised concerns with BNSF’s decision to refuse certain DOT-authorized tank cars and are currently considering options to address these concerns with the railroad.”
Some of the options being considered by oil industry leaders include legal action and meeting with the head of the rail company.
Jessa Lewis, spokeswoman for BNSF, stated all companies that are involved in oil transportation by rail need to work together in order to ensure only the safest tankers are being used. She would not confirm whether or not the company told its clients that the DOT 117R tank cars would be banned on all new contracts.
Oil industry concerned over BNSF’s move to limit retrofit tank cars