Committee Passes HR 3763 – 2016 STA

Yesterday the House Transportation and Infrastructure Committee held a markup hearing for HR 3763, the Surface Transportation Reauthorization and Reform Act of 2015. [NOTE: Bill number corrected on 10-25-15 at 12:00 pm CDT] Ten amendments were considered and eight were adopted, apparently by voice votes, before the Committee unanimously approved the revised bill for consideration by the full House.

The Committee did not publish the language of the two bills that were defeated in bipartisan roll call votes, so we do not know what provisions they included. Of the other eight amendment, only one contained measures that would be of specific interest to readers of this blog. Chairman Shuster’s (R,PA) Managers Amendment included two provisions of interest; a cybersecurity addendum to the existing Intelligent Transportation Systems requirements in 23 USC 514, and a new section of the bill addressing the phase out of the current fleet of railcars for transporting flammable liquids.

Cybersecurity

Shuster’s amendment would modify §514(b) by adding a new subparagraph to the list of activities that the Secretary is required to “implement activities under the intelligent transportation system program”. That new subparagraph {§514(b)(10)} reads:

“(T)o assist in the development of cybersecurity standards in cooperation with relevant modal administrations of the Department of Transportation and other Federal agencies to help prevent hacking, spoofing, and disruption of connected and automated transportation vehicles.”

On a purely grammatical note it probably should have read “or disruption”.

Railcar Phase Out

The Shuster amendment added a new section dealing with the phase out of DOT-111 and CPC-1234 railcars in flammable liquid service. The new section would change the phase out of these railcars in favor of the DOT-117R and DOT-117 railcars. The amendment does not specifically mention the DOT-117P standard that was set in the recent HHFT final rule.

The HHFT final rule only prohibited the use of DOT 111 and CPC-1234 railcars in flammable liquid service in Highly-Hazardous Flammable Trains. The new section added in the Shuster amendment would remove that qualification by adding “regardless of train composition” {new Section (b)}. The HHFT also set different phase out dates based upon the packing group rating for the flammable liquid. The Shuster amendment does away with that distinction for “unrefined petroleum products in Class 3 flammable service, including crude oil” {new Section (b)(1)} and ethanol.

The table below shows a comparison of the phase out schedules for the Shuster amendment (Proposed) and the HHFT mandate. Note that the HHFT gave the Secretary the authority to slip the 1-1-2017 date to 1-1-2018 if there were not going to be enough DOT-117 and DOT-117R cars available due to lack of retrofit or manufacturing capacity.

Flammable Material	Proposed	PG-1 in HHFT	PG-2 in HHFT	PG-3 in HHFT
Crude Oil
Non-Jacketed DOT-111	1-1-2018	1-1-2017	5-1-2023	5-1-2025
Jacketed DOT-111	3-1-2018	3-1-2018	5-1-2023	5-1-2025
Non-Jacketed CPC-1232	4-1-2020	4-1-2020	7-1-2023	5-1-2025
Jacketed CPC-1232	5-1-2025	5-1-2025	5-1-2025	5-1-2025
Ethanol
DOT-111	5-1-2023
CPC-1232	5-1-2025
Other PG-1 Flammable Liquids	5-1-2025
PG-2 and -3 Flammable Liquids	5-1-2029

Paragraph (d) of the new section states that: “Nothing in this section shall be construed to require the Secretary to issue regulations to implement this section” and then paragraph (e) allows the implementation of the HHFT final rule “other than the provisions of the final rule that are inconsistent with this section”; which would be the phase out standards described above.

Moving Forward

This bill is a high priority for Chairman Shuster. The current surface transportation authorization runs out at midnight next Thursday and there is a major push to get this bill to the President by that time. I expect that we will see a Rules Committee hearing on this bill Monday evening with a House vote under a modified rule (limited debate and pre-approved amendments) on Tuesday with the Senate voting on Thursday. Because of the negotiations between the House and Senate Transportation Committees, there might not be any amendments allowed to be offered on the floor in the House or Senate.

Commentary

The minor cybersecurity change added to this bill is just another instance of the change in the way that Congress is beginning to approach cybersecurity issues. As I have pointed out a couple of times in this blog, they are starting to move away from relying on large cybersecurity bills and starting to add small bits of cybersecurity language in other bills where appropriate.

This will have the effect of pushing more of the responsibility for cybersecurity out to the regulatory agencies. The argument could certainly be made that those agencies have more expertise to set cybersecurity standards than does Congress. In most cases I’m not sure that they have enough expertise, but that is going to be a perennial problem for any technical issue in government. I expect, however, that this will allow quicker movement to consideration of cybersecurity issues in these regulatory agencies than would waiting for comprehensive legislation.

I can understand why the Shuster amendment made changes to the railcar phase out standards set in the HHFT. There is a lot of political push to get the older cars off the tracks. Unfortunately this was a political risk management decision rather than a transportation risk management decision. There is no risk basis for having a 2029 phase out date for ‘other’ PG II chemicals and a 2018 phase out date for PG II crude oil. If the HHFT element had been left in the calculation you could make the argument that the higher number of cars in the train would increase the chance that a flammable liquid railcar would be involved in the derailment (which is why DOT only made the phase out required in HHFT situations), but without that distinction the risk of a PG II fire should be the same regardless of what the chemical is.

The concern about the higher flammability of Bakken Crude has only ever been claimed (but not substantiated) for PG I material. There has not been a claim that I know of that PG II and PG III Bakken Crude has a higher tendency to ignite.

If this change stands (and I see no political will to change it) then we are going to run into a situation on January 2^nd, 2018 when there are not going to be enough railcars to transport crude oil from the Bakken basin. There were concerns enough that the DOT’s phase out program was too aggressive to provide enough railcars. Even with the decline in the crude oil production due to the lower crude prices there will be no way that there are going to be enough DOT-117 and DOT-117R (or DOT-117P) railcars available to move all of the Bakken Crude to refineries.

The resulting rise in crude oil prices and resulting rise in gasoline prices is going to create its own political backlash. But that will be two election cycles away so not a worry of the current Congress.