Seeking Alpha

U.S. takes voluntary approach on crude oil tank car rules

  • The U.S. Department of Transportation announces steps to improve the safety of shipping crude oil by rail, but unlike its Canadian counterpart, is taking a voluntary approach to the phase-out of older tank cars known to be vulnerable in derailments.
  • The agency recommends energy producers that ship by rail discontinue the use of older DOT-111 model tank cars; in contrast, Transport Canada two weeks ago required a three-year phase-out of older tank cars.
  • DOT is matching Canada’s requirement that railroads disclose to state and county emergency management officials the routing, volume and frequency of crude oil shipments.
  • Related rail/oil stocks: CSX, UNP, NSC, KSU, CP, GWR, OAS, NOG, KOG, CLR, WLL, EOX.
Comments (14)
  • Michael Bryant
    , contributor
    Comments (5585) | Send Message
     
    Ok, buy tank car makers. (TRN) comes to mind.
    7 May, 08:09 PM Reply Like
  • JMajoris
    , contributor
    Comments (1099) | Send Message
     
    BRK owns Union Tank Car

     

    <<buy tank car makers>>
    7 May, 08:57 PM Reply Like
  • chechako
    , contributor
    Comments (4) | Send Message
     
    Great call, JMajoris.
    7 May, 09:11 PM Reply Like
  • sdavid0419
    , contributor
    Comments (865) | Send Message
     
    I have tank car maker ARII and they took a huge hit yesterday because of this as they have a large fleet of leased cars that just became obsolete. They already have a 2 year backlog of new cars to be built.
    8 May, 07:18 AM Reply Like
  • just dan
    , contributor
    Comments (17) | Send Message
     
    Is the Bakken crude stabilized ?
    7 May, 09:03 PM Reply Like
  • Diggerdugit
    , contributor
    Comments (62) | Send Message
     
    Trinity Industries (TRN), American Railcar Ind. (ARII), and Greenbrier Co's. (GBX) come to mind. TRN has got to be the 'Best of Breed' in the tankcar market. It is also well diversified and trading around $78.00/sh currently. Icahn made a run at ARII a few years back so that may be a great trading stock. I think it is trading around $35.00/ Sh. I'm long TRN and was looking for a pullback to add to my position....looks like that ain't going to happen anytime soon. The other big player in the tankcar arena is Union Tank Car which is owned by BRK-A but they are leasing all of their production rather than selling to 3rd. parties. Read the leases are going for $2,500 / mo. per car
    7 May, 09:31 PM Reply Like
  • go-4-it
    , contributor
    Comments (668) | Send Message
     
    ARII is more like a $56 stock. I want to buy, but still pricey for now.
    7 May, 10:03 PM Reply Like
  • Blue22
    , contributor
    Comments (203) | Send Message
     
    I wouldn't bet on tank car builders. A better place to start might be rebuilding the entire track system, which is decrepit from a generation of pipeline networks doing an infinitely better, safer job. Oh yea, we don't have the steel plants any more to make the rails and cars needed! Let the Chinese do it!
    8 May, 02:35 AM Reply Like
  • sdavid0419
    , contributor
    Comments (865) | Send Message
     
    Based on the US phase out approach I would think CSX and the other railroads might do some research into where to position the older cars on the train so that they are apt to do the least damage. Infra structure is finally getting attention but as in Baltimore they just started a multi year plan to replace the obsolete tunnels and voila a months worth of rain came in 1 day and washed out a 125 year old retaining wall that the entire world watched go down on national news. Most of the news reported it as a landslide or sink hole cave in but in actuality it was the same major CSX artery that connects the entire east coast that was closed a few years back because of an underground derailment and fire. This is not just a Maryland problem and not just oil trains are derailing on a regular basis due to crumbling infra structure and too few inspections.
    8 May, 07:27 AM Reply Like
  • lldarthpaul
    , contributor
    Comments (12) | Send Message
     
    Finally some common sense. Don't blame fracking, don't blame the energy producers, APPROVE THE KEYSTONE XL PIPE LINE AND ALLOW THE CRUDE TO BE SHIPPED IN THE MOST ECONOMICAL AND THE SAFEST MANNER.
    8 May, 08:54 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5585) | Send Message
     
    I am fine with the Keystone pipeline, but I believe Nebraska is still against it going through their state. If true, why didn't they reroute it, instead of blaming Obama for going against it. If Obama held up Nebraska's wishes, I applaud him. He did the right thing by holding up state's rights.
    8 May, 03:23 PM Reply Like
  • rubel
    , contributor
    Comments (514) | Send Message
     
    this is a capitalist system, business and shareholders take risk, reap rewards, and if there is a train wreck, ship sinking, air plane crash, or pipe line rupture, this is the price for progress. it has been a crime what BP has been put through due to an oil leak in the gulf, all those that complain go off the grid.....walk or ride a horse, grow your own food, never use an electric light, then see how long you can live!
    8 May, 09:21 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5585) | Send Message
     
    If you are an oyster fisher, and you own the rights to oyster fishing in an area of Louisiana coast, and oil from a rig a hundred miles away invaded your waters, I think you have the right to sue.
    8 May, 03:29 PM Reply Like
  • Diggerdugit
    , contributor
    Comments (62) | Send Message
     
    Insanity!! The fact of the matter is it appears that anyone has the right to sue anybody for anything in a country that has 90% of all the Lawyers in the world.

     

    On the political side, Mr. Obama is a readily admitted socialist and I assure you is NOT a proponent of "state rights", unless it is the federal 'state', which is becoming the ""Nanny State".

     

    Not sure I am all that in favor of the Keystone pipeline myself, though it would create a lot of Jobs for Americans who are willing to still work for their dailey bread. I think the better question is why doesn't Canada build their own refinery rather than push that oily tar sand off on American refiners? Michael, I bet you would big time be a supporter of that, wouldn't you?? Of course we could build new refineries up in the New York New England areas of our country that would not only make US more energy independent but make those east coast harbors a great place to export those refined products to the EU etc.
    9 May, 11:46 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector