Senators Propose Fees for Shipping Oil by Rail Car

Courtesy of The NY Times.

Senators from six states on Thursday proposed that the government charge companies a special fee to ship oil, ethanol and other flammable liquids in older railroad tank cars. The proposal would be paired with tax breaks for companies that use new tank cars built to better withstand derailments. Ron Wyden, Democrat of Oregon, said the intent was to offer market-based incentives for companies to improve safety. The senators’ proposal comes a day before federal transportation regulators, and their counterparts in Canada, are expected to announce rules calling for up to 155,000 flammable liquid tank cars to be retrofitted or replaced. There have been several fiery accidents involving the older tank cars, known as DOT-111s. According to the senators’ plan, the fee would increase to $1,400 a car by 2018, potentially raising an estimated $600 million. The tax breaks would apply to cars constructed since 2011 under a voluntary industry standard meant to improve safety that has proved insufficient. It would cover up to 15 percent of the expense of upgrading cars. Sponsoring the legislation were six Democrats: Dianne Feinstein of California, Charles E.. Schumer of New York, Sherrod Brown of Ohio, Bob Casey of Pennsylvania, Mark Warner of Virginia and Jeff Merkley of Oregon.

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