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U.S. mayors want surcharge on dangerous rail shipments

Mayor of Chicago Rahm Emanuel sits during the U.S. Conference of Mayors Winter Meeting in Washington January 23, 2014. REUTERS/Joshua Robert
Mayor of Chicago Rahm Emanuel sits during the U.S. Conference of Mayors Winter Meeting in Washington January 23, 2014. REUTERS/Joshua Robert

WASHINGTON (Reuters) - Rail shipments of crude oil and other dangerous goods should face a surcharge when they move through urban areas, Chicago Mayor Rahm Emanuel and several other big city mayors said on Thursday at the annual U.S. Conference of Mayors meeting.

A number of fiery derailments of crude-by-rail cargo in recent months have drawn attention from federal regulators who have vowed to keep train shipments safe.

Emanuel on Thursday proposed a freight fee on dangerous rail cargo moving through cities like Chicago and called on federal authorities to quickly set new safety standards for tank cars.

Philadelphia Mayor Michael Nutter joined the call along with the mayors of Milwaukee, Kansas City and several others.

Revenue from the surcharge would go to making the tracks safer, the officials said.

The rail industry, though, said new fees would lead to higher energy prices for consumers.

"Freight railroads each year invest roughly $25 billion of their own funds into the nationwide rail network so taxpayers don't have to, and the result is rail infrastructure that is the envy of the world," said the Association of American Railroads President and CEO Edward Hamberger in a statement. "With heating costs already expected to be high this winter, consumers should not be socked with potentially higher energy bills."

The association supports Emmanuel's suggestion for shippers to fully disclose hazardous contents, he added.

A crude-by-rail shipment in July 2013 derailed in a small town in the province of Quebec, Canada, killing 47 people. Two other cases where such trains have jumped the track and exploded have caused alarm among regulators.

A late December derailment in North Dakota led to an eighteen-car pileup on the sides of the tracks and a massive explosion that surprised officials for its force.

"We dodged a bullet in North Dakota," U.S. Transportation Secretary Anthony Foxx said at the meeting on Thursday. "There was an event that, had it happened in a different location, could have resulted in a tremendous loss of life."

Officials hope to soon have results of a study of crude oil produced in North Dakota's oil patch, known as the Bakken, which has been the source of many of the volatile fuel shipments.

"We're working as hard as we can and as fast as we can to get our arms around exactly what we're dealing with," he said at the meeting. "I welcome the ideas from this group of mayors on a solution you're proposing," Foxx said.

(Reporting by Patrick Rucker and Lisa Lambert; editing by G Crosse and Chizu Nomiyama)

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