As long as America needs oil, there will be accidents

There have been several high-profile oil-by-rail accidents in the last couple of months.

Should we be worried about shipping crude oil by rail?

The short answer is yes.

The longer answer is that it's complicated. And this mode of transporting oil isn't going away anytime soon.

The rate of accidents has actually declined

Transporting crude oil involves a lot of different interests. On one hand, there's a lot of money involved. Oil is a huge part of the national economy, and it needs to get from its source, largely in the Midwestern and Southern US, to refineries on the East and West coasts. Pipelines can't transport it all, and rail is the next best option.

Even as use of rail is increasing, the rate of of accidents nationwide have actually been going down. This chart, from Reuters' analyst John Kemp, shows that train accidents have been declining pretty steadily since 2004:

On the other hand, even a 0.001% failure rate is a big deal. Rail cars carrying crude oil have a tendency to explode in flames when they derail. And the number of rail cars carrying crude has boomed in the last six years. Almost 500,000 carloads of crude oil were transported by rail in 2014, up from 9,500 in 2008. It now accounts for "1.6% of total carloads for U.S. railroads," according to the Association of American Railroads (AAR).

Rail tankers carrying crude go through cities and along rivers

Railroad infrastructure was built to connect cities. And because they connect people, they go through heavily populated areas rather than around them.

Railroads also often wind along rivers, because that's where it's easiest to build. When a train derailed in Illinois earlier this month, hundreds of thousands of gallons of crude threatened the Mississippi River.

Ed Greenberg, a spokesperson for the AAR told Business Insider, "no accident big or small is acceptable, anytime there is an incident the industry takes steps to learn from it to prevent it from happening." The AAR will spend $29 billion to upgrade rail infrastructure in 2015, and it has reduced maximum speeds for crude-carrying trains to 40 mph through high-threat urban areas.

The safety standards could improve

But an op-ed in the New York Times by Marcus Stern questioned the safety of the railroad infrastructure after the Illinois derailment:

...The only significant government intrusion into the railroads' self-regulation of the nation's 70,000 to 100,000 railroad bridges is a requirement that the companies inspect them each year. But the Federal Railroad Administration, which employed only 76 track inspectors as of last year, does not routinely review the inspection reports and allows each railroad to decide for itself whether or not to make repairs.

Crude oil wasn't even considered a hazardous material until a few years ago, according to David Willauer, who is the chair of the Subcommittee on Crude Oil Transportation at the Transportation Research Board and the transportation manager at IEM, a global security consulting firm. But because of the huge increase in the volume being transported, it now presents a problem for railroads. (The same can be said for ethanol - also newly produced and transported in large quantities, as well as highly flammable - by the way.)

Shale crude oil is more combustible

And the crude coming from the shale basins, a big part of American production, is typically lighter, with more butane gas in it than other kinds of oil, which makes it more flammable. When a train derails, it creates a ton of heat. If the steel outer shell of the car gets punctured, it's likely to be hot enough to start a fire, which causes the whole care to explode. The heat from that explosion causes the surrounding cars to warp and tear, leaking oil, which catches on fire, creating more explosions. Pretty soon you've got multiple cars exploding and a giant oil or ethanol fire.

"The kinds of fires we've been seeing have just been monumental," says Willauer. And that is the big problem. Fighting an oil fire isn't the same as fighting a house fire.

He says that the biggest concern for the TRB's crude oil subcommittee right now is getting information out there to emergency responders around the country about what to do if one of these fires happens in their response area.

The biggest crude-by-rail disaster in recent memory was at Lac-Mégantic, Quebec, where 47 people died in 2013. The largest source of casualties, Willauer explained, was at a bar near where the train derailed.

"People came out to watch the fired," he explained, and first responders "didn't get people out in time." When the cars exploded, it was too late.