PHMSA’s 2015 Tank Car Rule: Should It Stay or Should It Go?

Jul 20, 2018 | Alan J. Krupnick, Justine Huetteman, Arthur G. Fraas


As part of a series examining US oil and gas sector regulations, this report analyzes the costs and benefits of repealing or modifying a Department of Transportation rule to improve the safety of railroad tank cars carrying crude oil and ethanol.

Key Findings

  • We find that repealing the tank car rule would result in very large net costs to society when factoring in benefits from avoided damages from both minor and major derailments prevented by this rule.
  • Given uncertainty about the severity of derailments and because this rule was promulgated in response to a major derailment, we believe it is prudent to factor in the potential avoided damages from major derailments.
  • We also find that the braking provision, which the Trump administration has proposed rescinding, yields net benefits using our baseline assumptions.
  • The decision to rescind the braking provision likely hinges on how major derailments are valued, which the Trump administration dramatically decreased in the provision’s updated RIA from the original RIA under the Obama administration.