New oil-by-rail regulations to boost costs

Font Size:
Default font size
Larger font size

Posted: Sunday, October 20, 2013 12:00 am

New rules will boost costs to transport crude by rail in North America as trains are forecast to carry as much as 2 million barrels a day.

“You’re going to see a massive flood of spending to get ahead of these government regulations,” Jerry Swank, managing partner at Dallas-based Swank Capital, said last week during the Bloomberg Link Oil & Gas Conference in Houston.

Regulators in Canada and the U.S. imposed emergency requirements and may seek stiffer rules after a runaway train carrying crude derailed and exploded on July 6 in Lac-Megantic, Quebec, killing 47 people.

Energy companies are transporting more oil on rail cars as improved drilling methods extract more North American oil and new pipelines are delayed. Across the continent, trains are forecast to move as much as 2 million barrels a day of crude by the end of 2014, according to pipeline operator Trans- Canada Corp.

Transport Canada issued emergency directives for transporting hazardous cargoes after the July derailment of a train operated by Montreal, Maine & Atlantic Railway Ltd. in Quebec, including requiring two train operators, locks on cabins and ensuring that brakes are properly applied.

Copyright ©2014 Omaha World-Herald. All rights reserved. This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald. To purchase rights to republish this article, please contact The World-Herald Store.



Inside Business
To submit an announcement for "Inside Business", click here. For questions call (402) 444-1371 or e-mail

World-Herald Alerts

Want to get World-Herald stories sent directly to your home or work computer? Sign up for's News Alerts and you will receive e-mails with the day's top stories.