Review - DOT Spring 2022 Unified Agenda – LNG by Rail

Last week the Biden Administration published their Spring 2022 Unified Agenda, outlining the regulatory actions that the various agencies of the Federal Government were considering. Under the DOT section of the Agenda there are two rulemakings from their Pipeline and Hazardous Material Safety Administration (PHMSA) that deal with the shipments of liquified natural gas by rail:

Final Rule Stage	Hazardous Materials: Suspension of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail	2137-AF55
Proposed Rule Stage	Hazardous Materials: Improving the Safety of Transporting Liquefied Natural Gas	2137-AF54

Both of these rulemakings first showed up in the Spring 2021 Unified Agenda, the first Agenda published by the Biden Administration.

PHMSA projects the publication of a final rule for the first rulemaking in December of this year. A notice of proposed rulemaking is planned for January of next year, but PHMSA has yet to receive the second part of a report by the National Academy of Sciences that is supposed to inform that rulemaking. Depending on the conclusions and recommendations made by the final report, PHMSA could have a very rough time meeting that projected date.

Commentary

The war in Ukraine and the resulting sanctions against Russia have increased the political pressure for the United States to begin large scale exporting of LNG to Europe, preferably before this winter’s heating season begins. That combined with the recent explosion at the Freeport, TX LNG shipping facility which has shutdown the largest domestic LNG shipping port, further complicates the issue. Establishing rail shipping networks for shipping LNG by rail, while much quicker than installing new pipelines, will take time. These two ongoing rulemakings are making it difficult for LNG producers and shippers to commit to the construction of new railcars and handling facilities.

 

For more details on these two rulemakings, see my article at CFSN Detailed Analysis - https://patrickcoyle.substack.com/p/dot-spring-2022-unified-agenda-lng - subscription required.