The American Petroleum Institute said federal proposals for safer transit of oil by rail are not feasible, though its program can provide a reasonable solution.

API said proposals outlined by the U.S. Department of Transportation for safer oil transit could stifle North American crude oil production.

"We have instead proposed an aggressive yet achievable program for retrofitting the crude oil fleet to get stronger cars onto the tracks as fast as possible while limiting the most adverse economic consequences for consumers," API President Jack Gerard said in a Tuesday statement.

API said it was proposing a railcar with walls about 1/16 of an inch less than the federal guidelines for rail cars carrying crude oil.

The Department of Transportation in July called for the elimination of older rail cars designated DOT-111 for the shipment of flammable liquids like crude oil. Regulators in January warned oil from the Bakken reserve area of North Dakota, which lies at the heart of the shale boom, may be more prone to catch fire than other grades of oil.

API points to study by ICF International that finds federal proposals for rail could lead to $22.8 billion in consumer costs over ten years.

The increase in North American oil production is more than the existing network of pipelines can handle. Without Keystone XL, a pipeline designed for Canadian crude, API said consumer costs would reach $45.2 billion under federal rail proposals.