The writing has been on the wall since the disastrous train derailment last July near Lac-Megantic in Quebec and subsequent incidents involving the release of flammable liquids during railroad accidents. The issue of rail safety has also gotten a lot of press recently, as crude oil shipments by rail reportedly increased 400% since 2005.

Now the US and Canadian national transportation boards have called for stricter regulations governing crude shipments by rail. The process will undoubtedly take time, but as North American liquids production continues to ramp up, producers using railroads in the absence of economic pipeline options will be watching closely. Additionally, as pointed out in a recent RBN Energy post, the cost of insuring crude oil shipments on railroads could be on the rise, particularly for older tank cars.

“If North American railways are to carry more and more of these flammable liquids through our communities, it must be done safely,” said Canada’s TSB Chairwoman Wendy Tadros. “Change must come and it must come now.” – Oil & Gas Journal