Boston, MA 05/08/2014 (wallstreetpr) – CSX Corporation (NYSE:CSX) crude-train derailed in downtown Lynchburg, Virginia recently and sparked off a huge fire with videos of flames and billowing smoke circulating all over the world. Railroads and tank-car owners along with regulators have come under immense pressure enhance existing safety measure for oil shipment. New York Governor Andrew Cuomo has already reported the turn of events through a letter to White House and requested for tougher regulations for crude oil transport. Although, there were no reported injuries, the Lynchburg accident managed headlines and huge attention.
According to analysts, “This incident will add an emotional twist to the entire story and the officials will be under pressure to act and act quick. Railroads are not happy with the turn of events.”
Railroad safety for oil shipment was already in the radar of U.S. Department of Transportation with regular accidents. In fact, railroads agreed in February to implement additional safety measures. Sensors will be installed on tracks used to transport crude and oil trains will run at minimum speed in urban areas. Canada ordered a gradual elimination of older tank cars by May 2017 after a Quebec derailment killed 47 people on July last year.
As per the latest EIA Report there has been a jump of 32 percent crude production over last two years. U.S. crude production stood at a daily average of 7.5 million barrels in December2013 and is expected to reach 9.1 million barrels by 2015, a surge by more than 20 percent. Lack of concrete pipeline access to handle oil extraction from U.S. shale formations has further helped in the increase of crude-by-rail volumes.
Oil Shipment Safety assuming prominence
“The stakes are huge. Increased oil production in North American will require additional rail transport,” as per market analysts tracking CSX Corporation (NYSE:CSX) “Safety vigilance increased due to accidents last year. This incident is bound to create repercussions and the implementation safety regulations will be closely monitored.
Politicians like Senator Hillary Clinton have recommended a Federal safety review of CSX operations after sporadic accidents including two derailments in New York.
Andrew Cuomo already sent a letter and the New York report on crude safety to White House. The recommendations will help in preventing disasters and improving railroad infrastructure to meet the rising crude production. Crude oil transport through railroads is on the rise and the safety measures will be closely monitored by government and railroad owners alike.
