The Transportation Department’s proposed rules to improve railcar safety could lead to a shortage of cars, a development that could hinder the transport of domestic oil, the Wall Street Journal reported.
The department’s proposed rules would call for the the current DOT-111 railcars, involved in a number of recent crashes, to be phased out by 2018. Additionally, newer rail car models would require significant retrofits, estimated by regulators to cost a total $1 billion.
Though the rail car industry currently produces 35,000 new cars annually, analysts told the paper that producers likely won’t be able to match the demand for new cars.
Additionally, the Railway Supply Institute, an industry trade organization, reported the industry had more than 52,000 backlogged orders at the end of the second quarter.
The rules may also boost costs to ship domestic oil and fuel as crude-by-rail transport surges to meet increasing U.S. production, the paper reported.