2015 Electronically Controlled Pneumatic Brake Rule: Comparison of DOT Forecasts for Selected Data Points for 2015 and 2016 to Preliminary Data for Those Years

What GAO Found

Based on preliminary data, the Department of Transportation's (DOT) forecasted values for selected variables in 2015 and 2016 in its analysis supporting DOT's 2015 rule on electronically controlled pneumatic (ECP) brake may be higher than values realized for those years. DOT's 2015 ECP brake rule requires certain trains carrying crude oil and ethanol--two flammable liquids--to be equipped with ECP brakes. ECP brakes send an electric brake signal instantly and simultaneously to each individual car in a train, allowing for faster brake application than on trains with conventional air brakes. If a derailment occurs, this faster brake application can reduce the likelihood of cars on the train derailing and releasing their contents.

Selected variables include freight shipments of crude oil and ethanol, based on the number of carloads, and several derailment-related variables including the number of derailments of trains carrying crude oil and ethanol, and the average amount of product released and injuries and deaths resulting from such derailments. DOT's forecast for shipments of crude oil and ethanol in 2015 was slightly higher than DOT's estimated value for that year; 2016 data on shipments are unavailable at this time. Due to limitations in DOT's collection and validation of data on derailments, 2015 and 2016 data on derailments and their effects are preliminary and subject to change as DOT completes its validation procedures and railroads have the opportunity to submit additional data regarding derailments that occurred in 2016. Preliminary data suggest that for each of the derailment-related forecasts GAO reviewed for 2015 and 2016, DOT's forecasts may be higher than railroads' actual derailment experiences. Because these data are preliminary, it is difficult to be conclusive about the precision of DOT's forecasts. Forecasts by their nature involve uncertainty; therefore, it is expected these forecasts would not be found to exactly match actual data realized in these years. In addition, as DOT forecasted cost and benefits of the rule over 20 years, it is possible that in other years some actual data realized will be higher than DOT forecasted. GAO is not making recommendations in this report. DOT and the Surface Transportation Board made technical comments that GAO incorporated as appropriate.

Why GAO Did This Study

In May 2015, DOT issued a final rule requiring certain trains carrying flammable liquids to equip with ECP brakes by 2021 or 2023 depending on what they carry. In October 2016 GAO reported on DOT's ECP brake rule and the analyses DOT conducted in support of that rule, including its analysis of the rule's potential costs and benefits. GAO found that in forecasting the potential costs and benefits of the ECP brake rule, DOT used single point forecasts for some variables, such as for annual rail shipments of crude oil and ethanol, instead of providing a range of possible scenarios. In doing so, GAO found that DOT did not take into account the potential uncertainty inherent in such forecasts, which can affect the estimated costs and benefits of the rule. GAO recommended, among other things, that DOT take into account, in an updated analysis of the potential costs and benefits of the ECP brake rule, the potential uncertainty in key variables and assumptions, discuss this uncertainty, and present ranges of possible forecasts.

GAO was asked to compare selected forecasts for 2015 and 2016 in DOT's ECP brake rule to actual data realized in those years. This report examines how DOT's forecasts for selected data points for 2015 and 2016 compare to actual values realized during those years. GAO reviewed DOT's 2015 ECP brake rule and its supporting economic analysis to determine selected forecasts and compared those forecasts to preliminary or final data for 2015 and 2016 provided by DOT.