KLS Kelso Technologies Inc

Kelso Technologies Inc. (TSX:KLS)(OTCQX:KEOSF) - The Company reports that the
Association of American Railroads (AAR); U.S. Pipeline and Hazardous Material
Safety Administration (PHMSA); and the U.S. Federal Railroad Administration
(FRA) has put forth new requirements recommended for rail tank cars used in the
transport of dangerous goods. These requirements establish a minimum threshold
for rail cars transporting dangerous goods, including petroleum crude oil and
ethanol. It covers High Flammable Trains defined as trains with more than 20
tank cars carrying Packing Group I or II commodities.


This regulatory proposal (HM251) presents the proposed engineering requirements
and deadlines for a new class of tank cars that would be used for the transport
of flammable liquids including petroleum crude oil and ethanol by rail. There
are three tank car construction options under final consideration:




1.  PHMSA/FRA Tank Car (DOT117) to include full head shields, TIH top
    fittings protection, 9/16" shell, thermal protection, 11-gauge jacket,
    reclosing pressure relief valve, bottom outlet valve handle removed and
    ECP brakes. 
2.  AAR 2014 Tank Car to include full head shields, standard top fittings
    protection, 9/16" shell, thermal protection, 11-gauge jacket, reclosing
    pressure relief valve and bottom outlet valve handle removed. 
3.  CPC1232 Tank Car to include full head shields, TIH top fittings
    protection, 7/16" (jacketed car) or 1/2" shell, thermal protection, 11-
    gauge jacket, high-flow reclosing pressure relief valve and bottom
    outlet valve handle removed. 



New tank cars built after October 1, 2015 will have to be built to the new final
standard.


Existing tank cars will have to be retrofitted to meet the new standard (except
for the top fittings protection) under the following time guidelines:




1.  Legacy DOT 111 tank cars are not authorized for Packing Group I after
    October 1, 2017. 
2.  Legacy DOT 111 tank cars are not authorized for Packing Group II after
    October 1, 2018. 
3.  Legacy DOT 111 tank cars are not authorized for Packing Group III after
    October 1, 2020. 



Relevant to Kelso in these proposals is that the tank car must be equipped with
one or more reclosing pressure relief valves with a start-to-discharge pressure
of equal to or greater than 517 kPa (75 psi). The total relieving capacity and
start-to-discharge pressure must be optimized to insure the structural integrity
of the tank in a 100 minutes pool fire and 30 minutes jet fire while minimizing
the amount of dangerous good that is released by the pressure relief device and
if the tank car is equipped with a bottom outlet valve, the valve must be of a
type and be arranged in such a way that the valve remains closed during railway
incidents, including derailments.


As previously announced Kelso has filed a patent application for a new
externally mounted dual-rated high-flow pressure relief valve ("DR5010") design
for use on new rail tank cars and retrofits of existing rail tank cars as
proposed by Transport Canada. 


Kelso initiated its DR5010 design strategy based on regulatory concerns and as a
result we have created a new DR5010 that based on mechanical engineering
innovations that provide safety benefits in both accident and non-accident
environments. In general terms in an accident involving fire the DR5010 will
significantly lower its operating pressure rating to a level that will keep the
valve open in order to evacuate the tank car in less than 100 minutes as
required by the Transport Canada recommendations. This is a dramatic change to
current technology capability. The DR5010 will enter the AAR approval process
shortly after the prototypes complete testing. The Company will announce AAR
approvals by press release when they are received.


In addition Kelso has a patent application pending for a new bottom outlet valve
(BOV) design for use on new rail tank cars and retrofits of existing rail tank
cars. The new BOV involves detailed proprietary and engineering knowledge based
on specific customer specifications and adoption criteria. Our new BOV design
features several materials and mechanical engineering innovations that are
intended to meet all new regulations being proposed by regulators in both Canada
and the United States.


Kelso calculates that there is potential demand for approximately 50,000
pressure relief valves per year through October 1, 2017 and another 20,000
pressure relief valves per year from October 1, 2017 through October 1, 2020.
Based on our knowledge of the market and expertise Kelso is setting its annual
production rates to meet the expected annual market volume to handle the demands
of the retrofit requirements and new tank car builds. Production rates can be
increased if market share is greater than expected. This is a very large revenue
opportunity for Kelso to capitalize on over the next six years.


About Kelso Technologies

Kelso is a railroad equipment supplier that designs, produces and sells
proprietary tank car service equipment used in the safe loading, unloading and
containment of hazardous materials during transport. Products are specifically
designed to provide economic and operational advantages while reducing the
potential effects of human error and environmental harm during the transport of
hazardous materials. The Company is experiencing rapid multi-million dollar
revenue growth based on its expanding commercial product catalogue and increased
concerns about railroad safety in North America.


For a more complete business and financial profile of the Company, please view
the Company's website at www.kelsotech.com and public documents posted on
www.sedar.com.


On behalf of the Board of Directors,

James R. Bond, CEO and President

Legal Notice Regarding Forward-Looking Statements: This news release contains
"forward-looking statements" within the meaning of applicable Canadian
securities legislation. Forward-looking statements are indicated expectations or
intentions. Forward-looking statements in this news release include that the new
proposed AAR/PHMSA/FRA regulations are advantageous to the future business of
Kelso, including without limitation that they represent a very large revenue
opportunity for Kelso to capitalize on over the next six years; potential demand
for relief valves and bottom outlet valves will be as stated in this news
release; Kelso will be able to increase its production rates to meet market
demand; our new DR5010 and BOV will meet new regulations and are a dramatic
change to current technology capability; our new DR5010 will provide the
intended safety benefits as stated in this news release; timing for entry of the
DR5010 in the AAR approval process; we will receive patents for our patent
applications; tank car orders in coming quarters could remain very strong as the
initial drafts of regulatory changes are incorporated into regulations later
this year; the particulars of the new regulatory requirements and related timing
guidelines will be as stated in this news release; and the Company is
experiencing rapid multi-million dollar revenue growth based on its expanding
commercial product catalogue.

Although Kelso believes its anticipated future results, performance or
achievements expressed or implied by the forward-looking statements and
information are based upon reasonable assumptions and expectations, they can
give no assurance that such expectations will prove to be correct. The reader
should not place undue reliance on forward-looking statements and information as
such statements and information involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of Kelso to differ materially from anticipated future results,
performance or achievement expressed or implied by such forward-looking
statements and information, including without limitation the risk that the new
regulatory requirements may not result in a large revenue opportunity for Kelso
over the next six years or that Kelso may not be able to capitalize on such
opportunity if presented; the projected demand for relief valves and bottom
outlet valves may be lower than expected; the Company's products may not provide
the intended economic, safety or operational advantages; or reduce the potential
effects of human error and environmental harm during the transport of hazardous
materials; or grow and sustain anticipated revenue streams; and such other risks
and uncertainties beyond the control of the Company. We may not be granted
patents for our products and we may be unable to protect our intellectual
property; in addition, we may infringe on the intellectual property of other
parties. Except as required by law, the Company does not intend to update the
forward-looking information and forward-looking statements contained in this
news release. 


Neither the Toronto Stock Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the Toronto Stock Exchange) accepts
responsibility for the adequacy or accuracy of this release.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Kelso Technologies Inc.
James R. Bond
CEO and President
bond@kelsotech.com


Kelso Technologies Inc.
Richard Lee
Chief Financial Officer
lee@kelsotech.com
www.kelsotech.com

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