PHMSA Publishes Crude Oil Volatility ANPRM

Today the DOT’s Pipeline and Hazardous Material Safety Administration (PHMSA) published an advance notice of proposed rulemaking (ANPRM) in the Federal Register (82 FR 5499-5508) concerning a possible rulemaking addressing volatility of unrefined petroleum products

and Class 3 materials.

As mentioned in an earlier post, this ANPRM is based upon a rulemaking petition filed by the Attorney General for the State of New York. According to the summary of the ANPRM that petition asks PHMSA to revise the hazardous materials regulations (HMR) to “implement a Reid Vapor Pressure (RVP) limit less than 9.0 pounds per square inch (psi) for crude oil transported by rail”. In that same summary PHMSA notes that it will use public comments on this ANPRM to “help assess and respond to the petition and to evaluate any other potential regulatory actions related to sampling and testing of crude oil and other Class 3 hazardous materials. PHMSA will also evaluate the potential safety benefits and costs of utilizing vapor pressure thresholds within the hazardous materials classification process for unrefined petroleum-based products and Class 3 hazardous materials”.

Review of Existing Data

The body of the ANPRM provides a discussion of how PHMSA currently regulates how the transportation hazards of crude oil and other flammable (Class 3) liquids are categorized. It then goes on to provide a brief discussion of how PHMSA dealt with the possible issue of adding vapor pressure to the regulatory scheme in the recent highly-hazardous flammable train rulemaking. PHMSA requested input on the potential use vapor pressure, but did not end up including it in that rulemaking.

In 2014 DOE and DOT commissioned the Sandia National Laboratory to conduct a review “of available crude oil chemical and physical property data literature to characterize and define tight crude oils based on their chemical and physical properties, and identify properties that could contribute to increased potential for accidental combustion”. The initial stages of that study concluded that “the wide-ranging variability in crude oil sample type, sampling method, and analytical method, as well as the acknowledgement that this variability limits the adequacy of the available crude oil property data set as the basis for establishing effective and affordable safe transport guidelines.”

The next phase of that Sandia study is specifically designed to determine what methods of sampling and analysis are suitable for characterizing the physical and chemical properties of different crude oils.

Questions to be Answered

While the Sandia study is on-going, PHMSA is looking for input on a wide variety of issues that would have to be considered in any proposed rulemaking on crude oil and flammable liquid vapor pressure regulation in the transportation realm. In asking for that input PHMSA is asking for answers to a specific set of questions that it breaks down into four broad categories; 24 general questions, six safety questions, eight vapor pressure questions; and a single packaging question.

The general questions covers many of the issues that any new regulatory scheme has to address to justify the cost of the regulation. It includes questions about

• How a 9.0 psi Reid Vapor Pressure limit on crude oil would affect the outcome of accidents involving crude oil transportation;

• How to measure the health and environmental effects of the proposed regulations;

• What methods could be used to reduce the vapor pressure of crude oils above the proposed limit;

• Whether the vapor pressure standard should be applied to all modes of transportation;

• Whether other risk factors that should also be addressed;

• The fixed and variable costs of establishing the vapor pressure limit; and

• The transportation of the flammable gasses removed from the crude oil;

The safety questions address the potential implications that the adoption of the vapor pressure limit have on other portions of the HMR. It includes questions about:

• The definition of flammable gasses;

• The possible adoption of a new crude oil listing in the hazardous materials table (HMT) for high vapor pressure crudes; and

• The effect of flammable liquids with high concentrations of dissolved flammable gasses on the response community.

Public Responses

PHMSA is soliciting public comments on this ANPRM. Comments may be submitted via the Federal eRulemaking Portal (www.Regulations.gov; Docket # PHMSA-2016-0077. Comments should be submitted by March 20^th, 2017.

There will almost certainly be a large letter writing campaign (or even possibly multiple campaigns) orchestrated by environmental activist organizations. Federal agencies do not take any special cognizance of the number of comments submitted for or against a rulemaking. They are required, however, to address specific issues raised in comments. When cut-and-paste comments are received, the agency only has to deal with a single response to each of the issues raised in the response. All of the activist organizations clearly understand this, thus it would seem that these campaigns are designed more for internal reasons (most likely fund raising) than to affect the outcome of the regulatory process.