Federal officials and Democratic lawmakers are hinting that more freight railroad regulation is on the way as leaders investigate the rail safety procedures surrounding trains transporting hazardous materials.
The federal investigation into rail safety comes as Norfolk Southern (NYSE: NSC), federal, state, and local officials, and the local community work to recover from a derailment involving an NS train near East Palestine, Ohio, on February 3.
In a letter sent on Sunday, U.S. Transportation Secretary Pete Buttigieg told NS President and CEO Alan Shaw that NS, along with the other major railroads, should expect changes to rail safety regulations, including increasing the amount of fines the railroads pay after a major incident.
Public Safety Demands Immediate Action
“I will… be calling on Congress to raise the cap on railroad fines for violating safety regulations, to ensure their deterrent effect is commensurate with the economic proportions of today’s large railroad companies,” Buttigieg wrote. The letter also mentions an increase in NS’ operating income and margin in 2022 compared to 2021.
“Even as we await the results of the National Transportation Safety Board’s investigation into what caused the derailment in East Palestine, I expect Norfolk Southern and other railroads to take action now, not later, to address public safety concerns and better prevent future disasters,” Buttigieg continued.
Buttigieg stated that the Federal Railroad Administration will conduct its own investigation into the derailment to determine if any safety violations occurred, and that the agency may hold NS legally accountable after conducting its own investigation and incorporating the findings of the National Transportation Safety Board’s investigation.
Buttigieg went on to say that NS must also respect the EPA’s authority to hold NS accountable for any violations. NS will outline its cleanup plans to the EPA.
On February 8, the FRA confirmed to FreightWaves that it is a party to the NTSB investigation and is also investigating the incident under its own authority.
“Norfolk Southern and other rail companies spent millions of dollars in the courts and lobbying members of Congress to oppose common-sense safety regulations, stopping some entirely and reducing the scope of others,” Buttigieg writes.
Impact of Regulation Changes
“As a result, Congress enacted language undermining USDOT’s ability to sustain [electronically controlled pneumatic (ECP) brake requirements, which were eventually withdrawn from the Trump administration.” Buttigieg went on. “In addition, the completion date for the phase-in of more durable rail cars to transport hazardous materials has been pushed back to 2029 from an originally planned date of 2025.”
Although we do not yet know the outcome of the NTSB investigation into what caused the derailment in East Palestine, we know that Norfolk Southern and its peers opposed steps intended to improve rail safety and keep Americans safe.
Overregulation, according to the industry, can stymie potentially innovative solutions to operational and safety issues, particularly when it comes to the use of technology.
The railroad industry has also pointed to data demonstrating the safety of its operations. According to the Association of American Railroads, 99.9% of all hazmat shipments arrive at their destination without incident, and the hazmat accident rate has dropped by 55% since 2012. According to AAR, hazmat releases have occurred in less than 1% of all train accidents over the last ten years.
Meanwhile, FRA data from 2013 to 2022 show roughly flat to lower totals of hazmat cars derailed or damaged among Class I railroad operations in the United States. Data from December 2022 are not included in the calendar year 2022.
More senators want NS to respond.
Buttigieg’s letter follows one from U.S. Sen. Maria Cantwell, D-Washington, in which she asked the CEOs of the seven Class I railroads to explain their hazardous material transportation safety procedures.
Cantwell, the chairman of the Senate Committee on Commerce, Science, and Transportation, is interested in learning how precision scheduled railroading (PSR), a method used by Class I railroads to streamline operations, may have contributed to today’s rail safety environment. The letter requests information on rail car inspection procedures, track-side defect detectors, emergency preparedness, and responses, as well as train characteristics such as the use of ECP brakes and longer trains.
Rail unions have argued that recent reductions in head count may have contributed to a lack of resources to conduct safety inspections. Union members have also stated that their responsibilities under PSR may have changed because they have less time to complete the work or are responsible for a larger territory.
Over the past five years, the Class I railroads have reduced their workforce by nearly one-third, closed railyards where workers traditionally inspect railcars, and increased the length and weight of their trains. While some of these changes may be beneficial, they also introduce new risks that current federal regulations may not account for,” Cantwell said. “Every day, thousands of trains carrying hazardous materials, such as the one that derailed in Ohio, pass through communities across the country. To better protect its employees, the environment, and American families, every railroad must reexamine its hazardous materials safety practices and reaffirm safety as a top priority.”
Cantwell’s letter follows those of her colleagues in the Senate who have asked NS to detail its cleanup plans for East Palestine.
The CEO of NS promises a thorough cleanup in Ohio.
As lawmakers demand answers, NS CEO Shaw pledged that the company would continue to work diligently to ensure the successful cleanup of the area impacted by the rail incident.
Shaw visited East Palestine over the weekend to meet with community members, local leaders, and NS railroaders. The company has established a website detailing its progress in enhancing rail safety and environmental recovery.
“In every conversation today, I expressed how deeply sorry I am that this rail-related incident happened to their home. We will do everything possible to help East Palestine recover and thrive again,” Shaw stated Saturday in a statement. According to NS, this is Shaw’s second visit to the derailment site.
“We are working closely with Ohio environmental and health agencies on the long-term plan to protect the environment and the community. We will complete the work thoroughly, completely, and safely, ensuring rail safety throughout the process.
“I also went to the home of one of our Norfolk Southern railroaders who lives in East Palestine, where I talked with a group of his friends and neighbors. I appreciated the opportunity to hear their concerns and asked how Norfolk Southern could assist. They want assurance that we will do what is best for their community, and I will earn their trust by actively demonstrating our commitment to rail safety.”
