Federal officials and Democratic lawmakers are hinting that more regulation of the freight railroads is on the way as leaders explore the safety procedures surrounding trains that haul hazardous materials.
Federal scrutiny of rail safety comes as Norfolk Southern (NYSE: NSC), federal, state and local leaders, and the local community seek to recover from a Feb. 3 derailment involving an NS train near East Palestine, Ohio.
U.S. Transportation Secretary Pete Buttigieg told NS President and CEO Alan Shaw in a Sunday letter that NS — along with the other major railroads — should anticipate changes to rail safety regulations, including raising how much fines the railroads pay after a major incident.
“I will … be calling on Congress to raise the cap on fines against railroads for violating safety regulations, to ensure their deterrent effect is commensurate with the economic proportions of today’s large railroad companies,” wrote Buttigieg. The letter also refers to an increase in NS’ operating income and operating margin in 2022 versus 2021.
“Even as we await results from NTSB’s investigation into what caused the derailment in East Palestine, I expect that Norfolk Southern and other railroads will take action now, not later, to address public safety concerns and better prevent future disasters,” Buttigieg continued.
Buttigieg said the Federal Railroad Administration will conduct its own analysis of the derailment to see if any safety violations occurred, and the agency could hold NS accountable legally after it conducts its review and incorporates the findings from the National Transportation Safety Board’s investigation.
NS must also respect EPA’s authority to hold NS accountable for any violations, Buttigieg continued. NS is to outline its cleanup actions to EPA.
FRA confirmed to FreightWaves on Feb. 8 that the agency is a party to the NTSB investigation and is concurrently investigating the incident under its own authority.
Buttigieg’s letter also admonishes the railroad industry for lobbying against safety regulations: “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.
“As a result, Congress enacted language that undermined the ability of USDOT to sustain [electronically controlled pneumatic (ECP] brake requirements, and they were ultimately withdrawn from the Trump administration.” Buttigieg continued. “Also, the completion date for phase-in of more durable rail cars to transport hazardous material was delayed by years, to 2029 from an originally envisioned date of 2025.”
“While we do not yet know what the NTSB investigation will conclude regarding what caused the derailment in East Palestine, we do know that these steps that Norfolk Southern and its peers lobbied against were intended to improve rail safety and to help keep Americans safe.”
The industry has argued that overregulation can stymie potentially innovative solutions to address operational and safety issues, especially when it comes to use of technology.
The industry has also pointed to data illustrating the railroads’ safe operations. The Association of American Railroads says that 99.9% of all hazmat shipments reach their destination without incident, and that since 2012, the hazmat accident rate has declined by 55%. AAR also says that over the past 10 years, less than 1% of all train accidents have resulted in a hazmat release.
Meanwhile, FRA data from calendar year 2013 to calendar 2022 show roughly flat to lower totals of hazmat cars derailed or damaged among U.S. Class I railroad operations. Calendar year 2022 does not include data from December.
| Category | CY 2013 | CY 2014 | CY 2015 | CY 2016 | CY 2017 | CY 2018 | CY 2019 | CY 2020 | CY 2021 | CY 2022 |
| — HAZMAT RELEASES | 16 | 12 | 12 | 13 | 11 | 18 | 14 | 20 | 12 | 7 |
| — Cars carrying hazmat | 6,066 | 6,375 | 6,770 | 4,726 | 5,870 | 5,680 | 6,571 | 5,924 | 6,513 | 4,608 |
| — Hazmat cars damaged/derailed | 621 | 614 | 565 | 444 | 579 | 501 | 658 | 551 | 482 | 447 |
| — Cars releasing hazmat | 42 | 23 | 60 | 19 | 36 | 32 | 26 | 27 | 23 | 12 |
But Buttigieg is calling for the railroad industry to bring those totals as close to zero as possible.
“Until the number of derailments is zero and rail workers are confident in being fully equipped to do their jobs safely, everyone involved in our rail system must make safety improvements a priority,” Buttigieg said. “Given the statements of support you have made toward those impacted in this situation, I am writing to stress that the future must not resemble the past when it comes to your company’s and your industry’s follow-through on support for stringent safety policies.
“Major derailments in the past have been followed by calls for reform — and by vigorous resistance by your industry to increased safety measures. This must change.”
More senators want answers from NS
Buttigieg’s letter follows one by U.S. Sen. Maria Cantwell, D-Wash., asking the CEOs of the seven Class I railroads to explain their safety procedures for transporting hazardous materials.
Cantwell, chair of the Senate Committee on Commerce, Science and Transportation, wants to know how precision scheduled railroading (PSR), a method used by the Class I railroads to streamline operations, may have contributed to today’s rail safety environment. The letter requests information on procedures regarding rail car inspections, track-side defect detectors, emergency preparedness, and responses and train characteristics on topics such as the use of ECP brakes and longer trains.
Rail unions have argued that significant cuts to head count in recent years may have contributed to a lack of resources to conduct safety inspections. Union members have also said their duties may have changed under PSR because they have less time to perform the work or they are responsible for a larger territory.
“Over the past five years, the Class I railroads have cut their workforce by nearly one third, shuttered railyards where railcars are traditionally inspected, and are running longer and heavier trains. While some of these changes may be an improvement, they also come with new risks that current federal regulations may not consider,” Cantwell said. “Thousands of trains carrying hazardous materials, like the one that derailed in Ohio, travel through communities throughout the nation each day. Every railroad must reexamine its hazardous materials safety practices to better protect its employees, the environment, and American families and reaffirm safety as a top priority.”
Cantwell’s letter follows those from her Senate colleagues asking NS to detail its cleanup plans for East Palestine.
NS CEO pledges thorough cleanup in Ohio
As lawmakers demand answers, NS CEO Shaw promised the company would continue to ensure a successful cleanup of the area.
The company has set up a website detailing its progress, and Shaw visited East Palestine over the weekend to meet with community members, local leaders and area NS railroaders.
“In every conversation today, I shared how deeply sorry I am this happened to their home. We are going to do the right things to help East Palestine recover and thrive again.” Shaw said in a statement Saturday. NS said 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 are going to do the work thoroughly, completely, and safely.
“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 chance to hear their concerns and I asked them how Norfolk Southern could help. They want to know we are going to do the right thing for their community, and I am determined to earn their trust.”
Subscribe to FreightWaves’ e-newsletters and get the latest insights on freight right in your inbox.
Click here for more FreightWaves articles by Joanna Marsh.
