Article Title

Volatile crude and railroad regulation

Authors

Brian Gurney, Montana State University BillingsFollow
Joshua P. Hill, Montana State University BillingsFollow

Abstract

Newly discovered domestic crude oil has caused large increases in rail traffic and an associated increase in derailments. In principle, derailments expose railroads to liabilities that can be very large, but railroads are protected as long as they comply with federal guidelines. Despite this, the railroads took it upon themselves to design a safer rail car. The railroads have also lobbied federal agencies to make the new standards part of regulation. This paper addresses two puzzles. First, why would the railroads expend resources on self- regulation when protected from tort? Second, why would the railroads push to have these stricter standards enshrined in federal regulation? We conclude that the answer lies in regulatory and legal uncertainty coupled with using regulators to overcome a collective action problem.

Recommended Citation

Gurney, Brian and Hill, Joshua P. (2018). Volatile crude and railroad regulation. Journal of Transportation Management, 28(1), 7-13. doi: 10.22237/jotm/1530403320

DOI

10.22237/jotm/1530403320