Property Damage Makes Up 40 Percent of Train Hazmat Accident Costs

The recent crash of a Norfolk Southern train in East Palestine, Ohio and the explosion of vinyl chloride gas highlighted not just the concern of how many rail accidents there are in a year, but also how many involve hazardous materials.

Norfolk Southern has already pledged $6.5 million to help alleviate the damage but a full estimate of costs is not yet known.

While the accident is one of a thousand derailments that happens a year, it’s also one of 25,000 accidents a year that involves hazardous materials based on incident data from the Pipeline and Hazardous Materials Safety Administration (PHMSA).

The large majority of those are on highways—about 17 highway hazmat accidents per rail accident. Historically, there are more incidents that happen via air shipping than by rail. But rail hazmat incidents are much more expensive—7 times more expensive on average.

The number of hazmat accidents continues to increase each year. The numbers increased significantly in 1990 when the U.S. passed the Hazardous Materials Transportation Uniform Safety Act and then the Hazardous Materials Transportation Authorization Act four years later. Both would standardize and require more hazmat transportation incident reporting. But since 2010, the numbers have continued to increase by another 67 percent.

Property Damage From Hazmat Accidents

What makes rail hazmat accidents that much more expensive, besides the size of a multi-railcar accident, is that property damage is much higher—40 percent versus 14 percent for highways. Train tracks regularly run closer to private land as opposed to accidents on highways.

The most expensive hazmat experience on record was the 2010 Burbank California highway gasoline spill, which would cost over $27 million. Twenty million of that was property damage. For rail, it was the 2015 Mount Carbon, West Virginia derailment, wherein a CSX train with 107 cars of crude oil crashed and burned from a broken rail leading to over $23 million in damages—$10 million of which was property damage.

Other locations of multiple high cost rail accidents include Painesville, Ohio, Baltimore, Maryland, Doon, Iowa, and Elkhorn City, Kentucky.

Regulation changes for incident reporting would include property damage and other details beginning in 2004. No data on property damage exists before that.

Other Costs and Risks

Environmental remediation of hazardous materials—something that can be contentious, leading to court battles with the Environmental Protection Agency (EPA)—accounts for less than 1/10th of one percent of costs.

Material loss and response costs—funding for the emergency crews that respond to such accidents—are substantially higher for highway accidents. The costs to the carrier—the railroad or the truck delivery company—are about equivalent.

Fatalities related to hazmat transportation are relatively uncommon compared to the number of events based on PHMSA data—43 in the last 20 years and none occurred between 2007 and 2014.

Serious injuries are going down—there were only 8 recorded so far for 2022. Compare that to 124 a year 10 years ago.

Which Commodities

Petroleum and its derivatives, like petroleum distillate and diesel fuel, are often the most expensive material spilled. Crude oil spills from trains accounted for over $23 million in property damage by itself, and that doesn’t include response costs and material loss.

The only other commodity that’s anywhere close to petroleum are the general category of “alcohols,” which accounted for $17 million in property damage from train spills.

Which is odd. On average, accidents involving alcohol had few resulting costs. Labeling is not consistent in the data, and some chemicals e.g. isopropyl alcohol) are labelled differently in different incidents.

For highway spills, alcohols were less than $1 million in property damage and nowhere near the top of the list. The average total damage per accident was less than $11,000—less than 1/30th of the most expensive commodities like chlorobenzol, sodium chlorate, or uranium hexafluoride—a radioactive substance used for producing fuel for nuclear reactors and weapons. They incurred 1/20th the damage of diesel fuel. The vast majority of accidents involving alcohols resulted in zero costs.

Somehow, accidents involving transport of chemical alcohol by train leads to large property damage, but not by highway. By damage costs, 73 percent of those incidents occurred since 2010.