Railroad tankcars and possible regulations
According to the Association of American Railroads, there are 335,000 railroad tankcars. Of these, 225,000 were built to the DOT111 standard. Of these, 92,000 are moving flammable liquids such as crude, ethanol, diesel, etc. Greenbrier recently estimated 68,000 tankcars in crude service with 12,000 of these built to the later CPC-1232 standard. This seems sensible: at 700 barrels per tankcar and a cycle time of 25 days, this corresponds to 2mmb/d by rail...about right for North America.
There is widespread anticipation as to new regulations expected late this year or early next: Can the DOT111s survive for a few years? Can they be upgraded? At what cost? Will regulations be applied to flammable liquids other than crude, like ethanol (this would effect 170,000 cars, not just 58,000)?
Most of these cars are owned by financial leasing & management companies like GE Rail or Union Tank Car. Some of these are in business with manufacturers (TRN, GBX, ARII) who have been building up their lease fleets. 20% are owned by shippers like EOG, etc. The cost of replacing 58,000 tankcars would be about $6B (at original prices - the regulations would add perhaps 10% more). The industry builds about 35,000 tankcars per year but are sold out through year-end 2015 with 50,000 on the order books.
Recycling 58,000 cars into the non-crude fleet of 277,000 would certainly depreciate the whole fleet.
Platts has promised a discussion of upgrade possibilities and costs, perhaps later this week.