Gov. Cuomo announces rail inspections

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ALBANY,
N.Y. – Governor Andrew M. Cuomo has announced that state officials have
launched a series of inspections to safeguard the state from “potential serious
incidents involving the shipment of volatile crude oil by rail throughout the
state.”

The New
York State Department of Transportation participated in a series of inspections
at the Port of Albany and its adjacent rail yard, as well as inspections in
Albany and Buffalo along rail tracks and in rail cars. In addition, the New
York State Department of Environmental Conservation is conducting inspections Friday
at the Port of Albany.

“We are taking action to safeguard our communities from the potential risk of
crude oil shipments by launching more aggressive and enhanced enforcement of
rail safety,” said Gov. Cuomo. “This inspection blitz has resulted in immediate
improvements to some of the State's busiest rail sites. In addition to
performing these and other inspections with our federal partners, my
administration will continue to urge Washington to enact improved rail and port
safety practices that are both mandatory and enforceable.”

These inspections stem from the growing concern regarding the volatility of
crude oil from the Bakken oil fields in North Dakota and its significantly
increased shipment by rail throughout New York State.

This inspection initiative will continue in the weeks and months to come and
will also serve to help inform the state's ongoing review, as directed in
Governor Cuomo's executive order.

As part of the inspection effort, federal and state officials engaged in
multiple inspections throughout the week:

Kenwood Rail Yard (Albany) and Frontier Rail Yard (Buffalo)

On Feb. 27, inspectors from the NYSDOT spearheaded an inspection blitz at two
major rail yards with officials from the Federal Railroad Administration (FRA).

The
inspectors did a mechanical inspection of brakes and other safety equipment,
including tanker cars that carry crude oil, as well as the rails, ties and
other equipment. They also performed a hazardous materials inspection to ensure
that equipment is in line with regulations, including valves, valve closures,
and placards and decals that describe the cargo being shipped. They also
checked dates for the last tank inspection and pressure test.

The inspections on this date took place at the Kenwood Rail Yard in Albany , owned
by Canadian Pacific Railroad, and the Frontier Rail Yard in Buffalo, owned by
CSX. These two rail yards are two of the most heavily utilized rail locations
in New York State for the transport of crude oil. The Kenwood rail yard,
adjacent to the Port of Albany, serves as the critical transfer site of crude
oil from rail cars to ships and barges. The findings of that examination are
considered typical for the type of inspection, and were either addressed
immediately or are in the process of being remedied.

At the Kenwood Yard in Albany, the NYSDOT-FRA team inspected 120 T-111 type
tank cars, and found three defective wheels and 3 defective brake shoes. Those
defects must be addressed before the cars can leave the yard. The team also
inspected two miles of track and 31 switches, and found 36 defects, including
loose rail joints, fasteners and a broken joint bar. All of these defects were
immediately repaired by railroad personnel.

The team at the Frontier Rail Yard in Buffalo inspected 198 T-111 type tank
cars, three locomotives and one yard switcher. Two of the tank cars had wheel
defects, and a few others were found with brake shoe defects. The team also
inspected four miles of track and 13 switches. Seven defects were found,
including a broken rail that may require that section of rail to be taken out
of service. The railroad has 30 days to remediate the track defects.

In addition, the FRA has issued a violation to Green Plains Renewable Energy of
Nebraska for two non-compliant tank cars. Inspectors found the two tank cars,
which were carrying ethanol, did not have their bottom outlet nozzle caps
secured. The violations could result in a civil penalty. Green Plains is the
shipping company, and not the rail carrier.

Kenwood Rail Yard – Albany

On February 25, DOT participated in inspections at the Kenwood Rail Yard
adjacent to the Port of Albany with the FRA, Canadian transportation officials
(Transport Canada) and CP Rail to inspect rail wheels.

The
inspection focused on wheel defects that have been identified on tanker cars
currently in use for crude oil transport. The observed defects are
characterized by excessive ware of the steel wheel surfaces on these tanker
cars, which is an issue of concern in both the U.S. and in Canada.

The inspections uncovered “shell type” wheel defects, a condition observed on a
number of steel wheel sets which have recently been removed from tank cars in
the Kenwood yard. This condition is characterized by the degradation and loss
of the hardened steel wheel surface, resulting in flat areas which can cause a
pounding effect on the rails. Although these wheel conditions are not known to
have contributed to any derailment incidents to date, federal, state and
Canadian officials are examining the specific cause of these shell defects out
of an abundance of caution for potential collateral defects.

Port of Albany

On Friday, DEC initiated a thorough, multi-week inspection process of Global
Partners' major oil storage facility at the Port of Albany.

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