(Reuters circulated the following article on June 13.)
WASHINGTON — A senior Republican lawmaker influential on transportation matters said on Tuesday he will explore options for reducing the financial risk to railroads when they carry hazardous materials.
Rep. Steven LaTourette, chairman of the House of Representatives railroad subcommittee, told industry officials at a hearing that insurance coverage is expensive and limited.
Hazardous materials, like chlorine, ammonia and some resins, are important to operating many industries and are often or nearly exclusively shipped by freight rail. These goods make up less than 1 percent of total carloads but 50 percent of insurance costs.
“Due to the expense and lack of available coverage, most railroads are only able to insure a fraction of their net worth,” the Ohio Republican said. “For a smaller carrier, a single hazmat accident might force the company into bankruptcy.”
LaTourette plans to explore news ways of addressing risk exposure for very hazardous commodities. He suggested that Congress could limit liability for accidents, which is done when railroads haul nuclear material.
“Other alternatives might be a federal liability compensation fund, a national (insurance) program or perhaps even a tort cap,” LaTourette said.