U.S. Senate Commerce chair seeks quick rail safety action

[March 23, 2023]  By David Shepardson

WASHINGTON (Reuters) -The chair of the Senate Commerce Committee said on Wednesday she would push for quick passage of rail safety legislation after a Feb. 3 Norfolk Southern derailment in East Palestine, Ohio, that sparked a fire and released over a million gallons of hazardous materials and pollutants into the environment.

Senate Commerce Committee chair Maria Cantwell said she wants the committee to debate and approve rail safety legislation in April. Senators questioned Norfolk Southern Chief Executive Alan Shaw for the second time this month and he backed calls for rail safety reform but did not endorse a bipartisan bill.

"We can't have railroads adopt operating models focused on just cutting costs to achieve higher profits and then have higher accident rates," Cantwell said. "We need to invest in the modernization of equipment that will provide the safety we need."

This month, a bipartisan group of senators led by Ohio's Sherrod Brown, a Democrat, and J.D. Vance, a Republican, introduced legislation to prevent future train disasters.

The bill would require enhanced safety procedures for trains carrying hazardous materials, as well as require wayside defect detectors, a minimum of two-person crews and increased fines for wrongdoing.

Vance ridiculed suggestions by industry groups that the bill was a "big government solution" and said it was "insulting to the people of East Palestine."

Shaw did not endorse major provisions of the legislation such as requiring two-person crews or hiking maximum civil penalties for railroads from $225,000 to 1% of annual operating income. He said the railroad supports regulator reviews of rules for rail car inspections and standards for freight car safety and accelerating the phase-out of older tank cars.

U.S. Senator Maria Cantwell (D-WA) listens during a Senate Commerce, Science and Transportation Committee hearing titled "Improving Rail Safety in Response to the East Palestine Derailment" in Washington, U.S., March 22, 2023. REUTERS/Evelyn Hockstein

Brown said Norfolk Southern had 579 violations in a recent 12-monht period in closed cases and an average fine of less than $3,300. Brown said the fines are "meaningless. It’s not even a cost of doing business – it’s a rounding error."

Senator Ted Cruz, top Republican on the Commerce Committee, said he thinks Congress can pass legislation to boost rail safety without damaging supply chains or imposing unreasonable costs.

Senator Peter Welch pressed Shaw to suspend Norfolk Southern's stock buyback program but the CEO did not endorse the suggestion. "We spend a $1 billion a year on capital on safety," Shaw said. "Stock buybacks never come at the expense of safety."

Norfolk Southern repurchased $3.1 billion in stock in 2022 after buying back $3.4 billion in 2021. The company in March 2022 announced a buyback authorization of up to $10 billion.

(Reporting by David Shepardson; Editing by David Gregorio)

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