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11/10/2014
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™36th Annual DGAC ConferenceNovember 5th, 2014Charlotte, North Carolina
2Brigham A. McCown
Chairman – Alliance for Innovation and Infrastructure (Aii)
Chairman and CEO – Nouveau, Inc.
Managing Shareholder – McCown, P.C.
Former Acting Administrator (CEO) USDOT / PHMSAUSDOT / PHMSA
Deputy Administrator (COO) USDOT / PHMSA
Chief Counsel (General Counsel) USDOT /FMCSA
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U.S. crude oil production reached 8.5 million BPD in June 2014
70% Increase In 6 Years
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In the first six months of 2014: 60% was transported by rail. (Source: ND Pipeline Authority)
North Dakota crude oil production rose from an average of 81,000 BPD in 2003 to over 1 million BPD in early 2014.
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Approx. 335,000 tank cars in the active fleet (pressure and non-pressure)
228,000 are DOT-111 non-pressure tank cars designed to carry a wide range of products
6Tank Fleet
y g pincluding hazardous and non-
hazardous materials.
Roughly 92,000 DOT-111 tank cars are used to move flammable
liquids, such as crude and ethanol, with approximately 18,000 are
DOT-111S (CPC1232).™
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Inadequate Pipeline Infrastructure
11.3 billion BPD of crude and refined products (2013)
2,658,656 miles (2013), increase of 86,954 since 2008
• 74 KXLs
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Limited permits for new constructionExample: Keystone XL pipeline
Permit approval delayed over five yearsShip up to 830,000 BPD 852 miles of additional pipeline
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AccidentsLac-Mégantic, QuebecJuly 6th, 2013
Unattended 74 car traincarrying crude oilderailed
• 47 dead
Casselton, N.D December, 30th 2013
400,000 gallons ofcrude spilled
Source: Radio Canada
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10By mid-May of 2014, damages from train accidents accounted for triple
the amount from the previous year or $10 million in property damages.
(Politico)
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11Environmental Activists
Source: Washington Times™
12Media Attention
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13Call to Action
January 2014Secretary Foxx asked for proactive steps in maintaining safety when transporting crude oil by rail.
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14Congressional Pressure
“Witnesses Backtrack on Report’s Claim that BakkenOil is More Flammable.”-House Science Cmte. (R)
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Input from Stakeholders is needed to ensure PHMSA remains a data driven safety organization whose mission is not unduly influenced by politics.
Thoughts on PHMSA:• USDOT Career Officers and
Members are highly skilled.
16PHMSA Needs Your Help
• Public Service is a calling.
• Very proud of those who have chosen to serve.
• Really proud of the Agency’s work.
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DOT ResponseDOT Response 17
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PHMSA Notice of Proposed Rulemaking (NPRM) in July 2014
Proposed rules:
• Defines “high-hazard flammable train” (HHFT)• A train carrying 20 or more tank cars of
flammable liquids
18Details of Proposed Rules
q• Better classification and characterization • Rail routing risk assessment• Notification to State Emergency Responders• Reduced speeds
• 40-mph maximum speed restriction• Enhanced braking• Enhanced standards for both new/existing
tank cars
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19Details of Proposed Rules cont.
PHMSA Advanced Notice of Proposed Rulemaking (ANPRM) in July 2014
Proposed rules:• Expanding comprehensive oil spill
response plans (OSRPs) to high-hazard flammable trains (HHFTs)( )
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20FRA Proposed Rules
Federal Rail Administration Notice of Proposed Rulemaking on September 9th, 2014
• Amendments to braking system requirements
• Additional securement requirements for unattended equipment
• Updated communication procedures• An operative exterior locking
mechanism installed on all unattended trains
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21Industry Recommendations
September 2014The American Petroleum Institute (API) proposed industry standard for shipments of crude by rail.
API and the American Association of Railroads (AAR) also recommended Railroads (AAR) also recommended allowing the industry six years to retrofit cars.
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22Cost-benefit Analysis
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• Whiting Oil & Gas• Marathon Oil
Company• Hess Corporation
Total: $93,000 in fines
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Reading the Tea Leaves
Source: PEOPLE™
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Q & ABrigham A. McCown
@
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(202) 808-3288
NouveauCorp.com
@bamccown
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