Urban Wire Why Hazardous Train Derailments Happen, Who Pays, and How to Prevent Them
Anne N. Junod
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The catastrophic train derailment in East Palestine, Ohio, that released hundreds of thousands of pounds of vinyl chloride and other petrochemicals shone a national spotlight on high-hazard rail. Though details about the causes won’t be known until the National Transportation Safety Board (NTSB) releases its findings, my research on catastrophic train derailments points to four contributing factors.

What happened in East Palestine is one consequence of the United States’ commitment to hydrocarbon and petroleum resources, inadequate rail industry safety standards, a profit-maximizing railroad operational culture, and a broken rail disaster insurance market.

As a result, taxpayers often bear the costs of worst-case catastrophes, and residents in small towns like East Palestine—where most catastrophic derailments have occurred—experience the environmental, economic, and social costs but have limited resources to prepare, respond, and recover.

Without policy and targeted investments to address these problems, further disasters are likely.

The road to East Palestine

The East Palestine rail disaster and the many others like it over the past 15 years are the outcome of the United States’ ascendancy as a global leader in oil and gas production. Advances in hydraulic fracturing facilitated access to previously inaccessible shale plays, many in remote regions without pipeline infrastructure connecting them to refineries and export terminals. As a consequence, hazardous petroleum resources have been increasingly transported by train, precipitating a rise in catastrophic derailments.

Recent changes in federal rulemaking for rail safety technology also play a role. After the 2013 disaster in Lac-Mégantic, Quebec—which resulted in the death of 49 people—and numerous other petrochemical train disasters, the Department of Transportation (DOT) proposed requirements that railroads modernize braking systems for hazardous trains. With pressure from the rail industry, the final 2015 rule was narrowly scoped to trains transporting crude oil, exempting other hazardous freight, including vinyl chloride. In 2017, the DOT rolled back this rule entirely in response to continued pressure from railroad and petroleum industries, reverting to previous brake technology standards in place since the 1860s.

Most of the largest Class I railroads employ the Precision Scheduled Railroading (PSR) industry practice, which cuts staff, increases train lengths, and streamlines delivery routes to reduce costs and maximize profits. Opponents of PSR say rail workers are stretched thin, geographic inspection regions have been expanded beyond what is safe or possible, and inspection frequency and quality are diminished as a result. Many catastrophic derailments in recent years resulted from inadequate inspections, like the 2016 Mosier, Oregon disaster, which the Federal Railroad Administration (FRA) found was caused by broken lag bolts that Union Pacific’s inspections missed.

Finally, a broken rail insurance market means that railroads cannot access liability insurance adequate to cover worst-case disasters. The highest available coverage limit—about $1.5 billion—is far short of what actuarial experts say is needed in the event of a worst-case derailment. After the Lac-Mégantic disaster, lawsuits and cleanup costs far exceeded the smaller Class II railroad’s liability coverage, forcing them into bankruptcy and leaving Canadian taxpayers responsible for most of the more than $1 billion in costs.

Rural communities are most vulnerable to hazardous derailments

Ample news media coverage frames hazardous derailments as a greater risk to urban areas than areas outside of cities. In my research, I found most media reporting on subnational policies to regulate hazardous trains with speed limits and other measures centers on metropolitan areas, leaving smaller communities exposed.

Although all rail communities are at risk of derailments and a worst-case derailment in a city would be catastrophic, most of the more than 140,000 miles of US railroads run through rural communities and tribal lands—which are far less equipped than metros to respond to disasters—and which have also experienced the majority of catastrophic derailments in recent years.

What’s needed to prevent the incidence and harms of future derailments

Presuming no changes in market demand to move hazardous materials by rail, my research and the work of others highlights four solutions that can reduce the incidence and effect of catastrophic derailments.

  1. Target resources to rural and small-town rail communities outside of metros. Dedicated funding is needed to boost capacity for county- and municipal-level emergency managers and first responders outside major cities to support emergency planning, technical assistance, hazardous derailment response trainings, disaster response equipment, and emergency manager and first responder staff.
  2. Establish advanced warning requirements for railroads to communicate about hazardous cargo. In my interviews with emergency responders in rail communities, they reported no systematic, industry-wide requirement or practice that railroads communicate about hazardous materials when travelling through jurisdictions. The DOT is considering proposing a rule requiring railroads to provide cargo information in the event of an incident, but this information is needed before incidents occur so communities can prepare. For security, the system should incorporate restricted access and high-level credentialing for authorized personnel to view train movements in real time and receive alerts when hazardous freight is on the way.
  3. Instate modern, common-sense braking rules. Rail safety technology should account for the design standards and limitations of the United States’ aging rail system, yet NTSB and FRA officials have been calling for upgrades to current, archaic braking standards for years. DOT should consider reinstating the 2017 braking rule for hazardous trains and expanding the scope of “high-hazard” freight to include all highly flammable liquids and gasses, which would include trains hauling vinyl chloride like the one that derailed in East Palestine.
  4. Require railroads to pay into a retrospective premium fund that would reduce taxpayer burden and target payouts to communities. The unique safety risks and catastrophic nature of worst-case failure presented by hazardous trains are not dissimilar to the nuclear energy industry. In a worst-case nuclear disaster, losses far exceed what the private insurance market would cover. The Price-Anderson Act limits the amount of primary insurance nuclear operators carry but requires annual premium payments into a damage compensation fund that will quickly disburse recovery dollars in the event of a disaster. If a disaster exceeds an operator’s coverage, pooled payments from all operators subsidize remaining costs, reducing taxpayer burden. The act has come under scrutiny for protecting operators from primary responsibility, but proponents say it assures damage compensation that may not be otherwise available.

    In the case of rail, a retrospective premium fund designed not to limit industry liability but to prioritize community payouts could reduce taxpayer burden if a railroad’s liability coverage is inadequate. Policymakers could consider requiring railroads to pay annual premiums for this purpose, and Class I and high-risk operators with poor safety and inspection records could pay higher amounts than smaller operators and those that consistently meet safety and inspection standards.

In communities like East Palestine that have experienced catastrophic rail disasters, cleanup and recovery can last a long time, but by implementing these solutions, policymakers and regulators can reduce future rail disasters and minimize harms when they occur.


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Research Areas Climate change, disasters, and community resilience
Tags Environmental justice Infrastructure Rural people and places Transportation
Policy Centers Metropolitan Housing and Communities Policy Center