Transload and storage news: Canada speeds up transition from DOT-111 tankcars

July 27, 2016

Federal transportation officials in Canada and the United continue their push for safer tankcars used to transport crude oil. In the latest development, Canadian officials have announced an expedited timeline for removing DOT-111 tankcars from crude oil service.

A Thomson Reuters report on July 26 indicated that Canada will take older tank cars out of crude-by-rail service much earlier than originally planned in the government's latest move to toughen rail safety after a deadly 2013 crash. The decision, which moves Canada's retrofit schedule further ahead of the United States, was partly prompted by a sharp drop in oil prices since 2014 that has cut the volume of crude transported by rail.

On July 25, Marc Garneau, Canada’s Minister of Transport, issued Protective Direction 38, which accelerates the phasing out of DOT-111 tank cars for crude oil service to November 1, 2016, according to Morningstar Inc. The accelerated timeline will phase out unjacketed legacy DOT-111 tank cars six months early and legacy jacketed DOT-111 cars 16 months early. Legacy DOT-111 tank cars are considered to be the least crash resistant tank cars still being used in crude oil service. They will be replaced by tank cars such as the TC-117, which is designed with a number of additional safety features, including thicker steel, head shields, thermal protection and top fitting protection.

In other news, Blueknight Energy Partners has bought nine asphalt terminals from Ergon after the company agreed to buy Blueknight GP Holding, according to Tank Storage magazine. The nine terminals are located in Kansas, Texas, Arizona, Alabama, Tennessee and Mississippi and include around two million barrels of storage capacity. Once the transactions have closed, Blueknight will own a network of 54 asphalt terminals in 26 states with a combined capacity of 10.2 million barrels of asphalt and residual fuel oil storage.