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Transportation & Infrastructure Issues: March 18, 2015

-- Refiners sue BNSF over fee on oil loaded in older tank cars. A trade group representing oil refiners has sued the nation’s largest hauler of crude oil in trains over a surcharge for oil loaded into older tank cars that have punctured and ruptured in numerous derailments. The American Fuel & Petrochemical Manufacturers, a trade association for producers of gasoline, jet fuel, home heating oil and other refined products, sought an injunction last week in US District Court in the Southern District of Texas to block BNSF Railway from imposing a $1,000 surcharge for every DOT-111 model tank car loaded with crude oil. BNSF hauls 600,000 barrels a day of crude oil, mostly from North Dakota’s Bakken region, to refineries on the east and west coasts. In October, the railroad announced it would impose a $1,000 surcharge on oil shipped in DOT-111 tank cars, effective Jan. 1. But the trade group, which represents more than 400 companies, said in its complaint that BNSF asserted “unlawful regulatory authority” when it began imposing the surcharge. One DOT-111 tank car holds about 30,000 gallons, or 700 barrels of oil. The complaint says the $1,000 surcharge adds $1.50 per barrel in rail transportation costs. The trade group’s complaint says that BNSF’s surcharge causes “direct and substantial harm” to its clients and “breaches BNSF’s common carrier duty to ship hazardous materials.” By law, railroads must provide rail transportation on reasonable request. The Pipeline and Hazardous Materials Safety Administration submitted a new design for tank cars to the White House Office of Management and Budget for review in January. Four crude oil trains have derailed and caught fire across North America since mid-February. One of them was a BNSF train that derailed earlier this month near Galena, Ill.



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