UPDATE 2-CSX's CEO: tough rules would not dent crude rail transport

Thu Jan 16, 2014 4:48pm EST
 
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* CEO sees no impact on crude-by-rail from regulations

* Industry awaiting word from regulators on heightened safety regulations

By Kristen Hays

HOUSTON, Jan 16 (Reuters) - Potentially tougher safety regulations for tank railcars that haul crude could be costly but not dent growing volumes in transport giant CSX Corp's oil hauling business, Chief Executive Michael Ward told analysts on Thursday.

U.S. regulators are weighing new rules to better safeguard railcars from punctures or leaks in light of recent accidents involving trains carrying crude.

Ward and other CSX executives said on the company's quarterly earnings call that they are working with railroad regulators and customers as the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) considers tougher rules, which the agency said this week likely won't be finished before January 2015.

The expense of retrofitting older railcars, "while large, won't impact our ability to move this crude by rail," Ward said.

He also said CSX expects to increase crude by rail shipments by 50 percent this year.

He said CSX moved about 46,000 loads of crude in 2013, mostly to U.S. East Coast refiners, running a single train per day throughout the year. That increased to two trains late in the year.   Continued...