Posted on 10/26/2014 6:53:44 AM PDT by thackney
BNSF Railway Co. plans to apply a $1,000 surcharge for each older tank car that hauls oil, as the railroad owned by Warren Buffett’s Berkshire Hathaway Inc. encourages shippers to scrap the puncture-prone cars.
The charge, which will take effect Jan. 1, will add about $1.50 per barrel to the cost of shipping oil across the country. It’s the first surcharge announced by a major U.S. railroad for older cars known as DOT-111s, and won’t apply to cars called CPC-1232s that are built to higher standards adopted in October 2011, according to a BNSF notice.
The Obama administration in July proposed phasing out thousands of the older tank cars within two years and lowering speed limits as part of new rules to reduce the risk of hauling crude by rail.
The extraction of oil from shale fields with limited pipelines, such as in North Dakota’s Bakken, caused U.S. rail carloads of crude to surge to 415,000 last year from 9,500 in 2008, according to the Transportation Department.
Berkshire Hathaway railroad adds surcharge on older oil tank cars
http://fuelfix.com/blog/2014/10/25/berkshire-hathaway-railroad-adds-surcharge-on-older-oil-tank-cars/
Canada did the same earlier but for less.
Exclusive: Canadian Pacific follows CN, to slap surcharge on older oil tank cars
http://www.reuters.com/article/2014/02/14/us-oil-rail-surcharge-idUSBREA1D1QD20140214
Feb 14, 2014
CP Rail will add a $325 "general service tank car safety surcharge" on each car of crude that is shipped in any container other than the CPC 1232 model, effective March 14, it said in a notice issued to customers and seen by Reuters. The CPC 1232 model refers to those manufactured since tougher safety standards were voluntarily adopted in October 2011.
Of course. He has them by the nuts due to his political connections.
Yep. Doing the EPA’s bidding for them.
Yeah, and he also owns a chunk of the steel industry. That’s who will really benefit from this policy. The northern unions will also benefit. That’s why the Democrats are behind this.
He has them by the nuts because he owns the railroad, the shippers own the cars, and he's adding terms to the shipping contracts to cover the added risks associated with fuel spills for the older tank cars.
It's really no different than FedEx charging more money to ship hazardous cargo.
No, they are passing on the cost for not keeping the bloody trains on the tracks.
For the railroad industry, there's also a huge difference between a derailment of an older tanker car and a newer one.
The whole discussion is kind of silly. This is no different than the transition to double-hulled tankers for ocean transport of crude oil.
Funny you should mention that. The Casselton, ND derailment occurred when the oil bearing train collided with derailed grain cars from another train on adjacent tracks.
I have no problem with building stouter cars, but the bottom line is that they have to stay on the rails. Every one of these accidents is a derailment, something that could happen with any cargo, from chlorine to anhydrous ammonia to HF, or even soybeans.
And he’s got his political connections limiting their shipping options. That’s the point. A lot of the companies would rather use a pipeline but he’s pushed to restrict that.
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