In the evening hours on Tuesday, an Amtrak passenger train with 243 people onboard derailed outside of Philadelphia.
Eight people have been confirmed dead as a result of the crash, with nearly 200 other passengers injured in the disaster.
We don’t yet know the precise cause of the derailment, but the NTSB has said the train was speeding over twice the limit before it hit the disastrous curve where it left the tracks.
The NTSB also stated that engineer Brandon Bostian, who was in charge of the train, attempted to apply emergency brakes just before the train hit the dangerous left turn and derailed.
Bostian has yet to discuss the incident publicly, and, according to comments from his lawyer released to several news outlets, the engineer has no recollection of the accident.
Perhaps he forgot in a fit of trauma or some other instance of blacking out before the derailment, but there are many questions that have been left unanswered…
Did he fall asleep as the train sped out of control? Was there a malfunction with the equipment? Was foul play involved, as we so tragically saw in the Germanwings plane crash earlier this year?
Truly the best question: How could this disaster have been prevented?
It’s easy for commentators like myself to expound on all the possible solutions or ways in which this derailment — and the many others in recent years — could’ve been prevented. However, no matter how much talk is done, it seems the railways in the U.S. are unsafe.
Accidents are on the Rise
We do a lot of talking at Energy and Capital about crude-by-rail incidents, but it’s also worth looking at the rise in passenger train incidents.
Thanks to some information supplied by the American Enterprise Institute and the BBC, we are able to get a better look at U.S. rail “safety”…
According to this data, it is painfully obvious that the United States lags behind its counterparts in Europe.
Statistically, in the United States between 2004 and 2012, the average amount of miles between accidents where passenger injuries were reported was just 84,300 miles.
Compare that to 4.9 million miles in France or 4.1 million miles in Germany. Heck, we’re even less safe on the rails here than in Lithuania, a country with a GDP of just $45 billion.
When you examine the incident on Tuesday and the many other rail accidents in recent years — whether they be crude-by-rail cargos or passenger trains — the reasons for incidents in the U.S. are that the rails are overcrowded and under-maintained.
The map above shows the high density of Amtrak train accidents in the Northeast, which also turns out to be the busiest stretch of rail in the country.
Some analysts commented that the stretch of rail between New York and D.C. is so busy that it’s difficult to keep up with regular maintenance on the tracks there.
According to CNN, over three times as many people per day travel via train between D.C. and New York than they do by plane. And yet our trains and tracks are outdated and, quite frankly, much less safe than air travel.
What’s more is there’s a technology called Positive Train Control that could’ve prevented the disaster had it been installed on the tracks in Philadelphia.
Positive Train Control automatically slows down a locomotive that’s moving too fast near dangerous turns such as the site of the accident on Tuesday — a known problem area for years.
It’s these serious lapses in technology and execution coupled with overcrowded and overused tracks that have propelled U.S. railways of all stripes into the negative spotlight.
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Solutions are on the Way
Although this crash and the many other derailments on U.S. rails are terrible, the changes that are going to be enforced because of them will be very important for investors…
You can bet that all rails, in the Northeast especially, will be equipped with PTC technology as soon as possible because of the bad press from Tuesday’s derailment.
As far as investments go, it’s a sure thing, but as far as I’m concerned, I don’t know enough about PTC or passenger train technologies to be able to recommend the best way to play this important safety measure.
Instead, I know the specter of disaster still hangs over the oil industry and the trains that carry crude through major eastern cities like Philadelphia.
And I’m confident — and have been for some time — that the solution to the problems on railroads is as simple as making them less crowded.
For passenger trains, this transition will be difficult. It will take time to construct more rails and for passengers to choose other means of travel.
For crude oil trains, the solution has been there for years, but as accidents become mainstream news more often, investors are going to see the solution become a white-hot play on the markets.
I’m talking about pipelines.
Rail will still play a role in oil transport, but companies are eager to find pipelines that are cheaper and more efficient than rail to move their oil to the refineries.
As investors grow more aware of this fact, they’re going to flock to a certain type of company that makes money off the construction of pipelines and the decrowding of railways…
The type of company Warren Buffett recently bought to rectify his mistakes with BNSF Railroad.
You can learn more about them here.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
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