INSIGHT-Buffett may benefit as train lobby bids to weaken safety rule
By David Morgan
WASHINGTON, July 14 (Reuters) - Billionaire investor Warren Buffett is set to be a chief beneficiary of a bid by Senate Republicans to weaken new regulations to improve train safety in the $2.8 billion crude-by-rail industry, a key cog in the development of the vast North American shale oil fields.
A series of oil train accidents, including the July 2013 explosion of a train carrying crude in Lac-Megantic, Quebec, that killed 47 people, led U.S. and Canadian regulators to announce sweeping safety rules in May. Among other things, U.S. oil trains are required to install new electronically controlled pneumatic (ECP) brakes.
But in late June, the Republican-controlled Senate Commerce Committee approved a measure to drop that requirement, and order years of new research to confirm the safety benefits of ECP brakes.
On Wednesday, the panel will decide whether to send the measure to the full Senate, setting the stage for a fight with Democrats who say the repeal would delay the use of feature that can help avoid catastrophic derailments and minimize the consequences of accidents that do occur.
The looming debate pits Democrats, federal regulators, safety advocates and environmentalists against the crude-by-rail industry, which claims that installing the brakes would slap an unnecessary $3 billion cost on railroads, oil refiners and other owners of rolling stock, and potentially jeopardize safety.
BNSF Railway Co, the No. 2 U.S. railroad, which Buffett owns through his Berkshire Hathaway Inc holding company, is the leading U.S. railroad for crude oil shipments, controlling three-quarters of the carload volume in 2013. Along with CSX Corp, it's also associated with the most oil train accidents, according to a Reuters analysis of incident reports.
Environmental groups estimate that 25 million Americans live near tracks traversed by crude oil shipments, making ECP brakes and other federal requirements essential to ensuring safety. Because the brakes act simultaneously on all cars and locomotives, they give train operators greater control and allow trains to stop more quickly than conventional air brakes, which slow rail cars in succession, advocates say.
"To walk away from what we know to be the best technology is pretty crazy," said Sean Dixon, an attorney with clean water advocacy group Riverkeeper. Continued...