Mar 2, 2023 - Economy

How the derailment in East Palestine changes the calculus on railroad regulation

Illustration of a railroad light blinking on top of the Capitol building.

Illustration: Lindsey Bailey/Axios

A bipartisan group of senators unveiled legislation to address safety issues highlighted by the derailment of a Norfolk Southern freight train in East Palestine, Ohio.

Why it matters: Major freight operators have fended off tighter regulations for years, but the tragic derailment appears to have changed the calculus.

  • Some of the measures included in the Railway Safety Act of 2023 have long been on the agenda of the industry's unions and workers — particularly a provision requiring a crew of at least two people on each train.

Driving the news: The bill was introduced Wednesday by the two senators from Ohio, J.D. Vance (R) and Sherrod Brown (D), along with two Democratic senators from Pennsylvania, Bob Casey and John Fetterman. The derailment happened near the border between the two states.

  • Senators Marco Rubio (R-Fla.) and Josh Hawley (R-Mo.) also signed on.

Details: The legislation appears crafted as a response to many of the criticisms and reports that surfaced after the derailment.

  • It places more safety requirements on trains carrying hazardous chemicals; rail carriers, for example, would have to submit "gas discharge" plans for these chemicals. (In East Palestine, local authorities carried out a "controlled release" of toxic gas that led to a fire and "controlled explosion.")
  • The bill also significantly increases the maximum fine the Transportation Department can levy for safety violations to 1% of a railroad's annual operating income from $225,000.
  • That could amount to about $47 million for Norfolk Southern, for example, based on the company's 2022 earnings.

The bill also tightens the rules around what's sometimes called a "wayside hot box detector," which is a mechanism that's supposed to alert the crew to overheating on a train's bearings, axles and brakes.

  • The bill would allow the government to set the temperature at which a detector's alarm would be triggered, instead of leaving that to the railroad's discretion.

Zoom out: Labor leaders like the bill; the railroads are less positive. And it's unclear where pivotal Republican leaders stand as of now.

What they're saying: "It offers a chance for the nation to make the giant rail corporations take rational measures to get the industry to do what it’s designed to do — move freight through our nation safely and efficiently,” says Jeremy Ferguson, president of the International Association of Sheet Metal, Air, Rail and Transportation Workers, Transportation Division.

  • "Railroads have been clear that they support fact-driven policies that address the cause of this accident and enhance safety," says a spokesman for the Association of American Railroads, adding that some aspects of the bill wouldn't prevent an accident like the one in East Palestine. "Railroads look forward to working with all stakeholders to meaningfully advance real solutions," he says.

But, but, but: Federal investigators are still looking into what happened in East Palestine and some legislators may not be inclined to support a bill until the investigators' work is done.

  • The bill lacks the support of Republican congressional leaders — Sen. John Thune (R-S.D.) told CNN he's waiting for all the facts to come in before taking action.

The bottom line: The bill's fate will likely come down to Senate GOP Leader Mitch McConnell, whose office says he hasn’t taken a position on it, Axios' Andrew Solender reports.

What we're watching: Labor unions say East Palestine cleanup site workers are falling ill.

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