Dec. 20, 2018

Error in Train Safety Rule Calculations Shows the Flaws, Dangers of Cost-Benefit Analysis

Statement of Amit Narang, Regulatory Policy Advocate, Public Citizen’s Congress Watch Division

Note: The Trump administration miscalculated potential damages from train derailments when it canceled an Obama-era rule requiring the installation of more advanced brakes by railroads hauling explosive fuels, the Associated Press reported today. Analysis used to justify the rollback omitted up to $117 million in estimated future damages that could be avoided by using electronic brakes.

This is exactly why critical safety regulations should never depend on cost-benefit analyses that are methodologically flawed and easy to manipulate. No one can count the benefits of avoiding catastrophic oil train derailments and explosions like the one that occurred in Quebec in 2012 and killed 47 people. Our country has been extremely lucky to avoid a similar disaster so far.

This was such a fundamental error in the agency’s cost-benefit calculation that it calls into question the quality, integrity and credibility of the entire analysis. In general, cost-benefit analysis is rigged to favor industry – vastly overcounting the costs and undercounting the benefits of proposed safeguards, many of which are impossible to monetize.

The U.S. Department of Transportation must immediately suspend the rollback of this safety regulation, and the department’s Inspector General must conduct a full audit of the agency’s cost-benefit analysis and rulemaking process that led to the rollback.