OMB Approves PHMSA Oil Volatility ANPRM

On Monday, the OMB’s Office of Information and Regulatory Affairs (OIRA) announced that it had approved for publication an advanced notice of proposed rulemaking (ANPRM) submitted by DOT’s Pipeline and Hazardous Material Safety Administration. PHMSA is considering this rulemaking in response to a petition for rulemaking from the Attorney General of the State of New York.

The ANPRM that will probably be published in the Federal Register in the coming weeks will see information from the public and the regulated community on a variety of questions related to the appropriateness and use of Reid Vapor Pressure (RVP) testing and establishing a maximum RVP standard for shipping crude oil by rail.

The timing of this rulemaking may make for an interesting look at how the Trump Administration will look at the regulatory process for chemical transportation safety. It is generally assumed that the new administration will be very limited in its use of the regulatory process, rather letting ‘market forces’ control how businesses conduct their operations.

This ANPRM is likely to be published before the upcoming inauguration of Donald Trump as President. The public comment period will thus be started under the Obama Administration, but it will be Trump’s DOT Secretary (probably Elaine Cho) who makes the determination of whether to proceed with this rulemaking process or deny the petition for rulemaking.

Those political questions aside, there is still the technical question of the appropriateness of RVP sampling and testing. As I pointed out in an earlier blog post the results of RVP testing can  be extremely variable based upon differences in the sampling regime. If a vapor pressure standard is needed for crude oil shipments (and that is a political question), it would seem to be important that the method used to obtain that information should be the most reliable and replicable method. Hopefully, PHMSA will address this in their request for information in the ANPRM.

New FRA-PHMSA Order and Advisory for Bakken Crude

A DOT press release today reports that the Federal Railroad Administration has published a new Emergency Order (Docket Number DOT-OST-2014-0067) setting emergency response notification requirements for railroads hauling crude oil trains consisting of 35 or more railcars (or 1,000,000 gal) of Bakken crude oil. Additionally FRA and the Pipeline and Hazardous Material Safety Administration issued a joint safety advisory (SA #: 2014-01) for railroads transporting Bakken crude oil.

Emergency Order

While the PR reports that the FRA “has issued” the Emergency Order it is not found on the DOT or FRA web site. The docket number listed in the PR looks like one of the docket numbers used on the Federal eRulemaking Portal (www.Regulations.gov), as of 20:30 CDT there is nothing listed for the docket number. Nor is there a listing that the Emergency Order is scheduled to be printed in tomorrow’s Federal Register, a pre-requisite for effective Emergency Order.

According to the PR the Emergency Order will require railroads operating crude oil trains carrying Bakken crude oil to provide each “SERC [State Emergency Response Commissions] notification regarding the expected movement of such trains through the counties in that state”. The Emergency Order lists the following information as being required in those notifications:

• Estimated volumes of Bakken crude oil being transported;

• Frequencies of anticipated train traffic:

• Route through which Bakken crude oil will be transported; and

• Contact information for at least one responsible party at the host railroads.

Since I haven’t seen the actual Emergency Order yet, I can’t tell for sure, but it looks like the Emergency Order does not require providing schedules for the movement of such unit trains. Many local government officials and emergency planners have been asking for this type of information for years on hazardous material shipments.

It is also not clear if the Emergency Order provides any information sharing protections to providers of this information. The standard Federal Rules do not apparently apply as the information disclosure is being made to a State not Federal agency. This information protection issue has always been the railroad’s strongest argument against the mandate of information disclosure.

Safety Advisory

While the Emergency Order is not currently available, the Joint Safety Advisory has been published on the FRA web site. The SA ‘advises’ and ‘encourages’ railroads and crude offerors to “select and use the railroad tank car designs with the highest level of integrity reasonably available [emphasis added] within their fleet” for shipment of Bakken Crude. It also recommends against the use of “older, legacy DOT Specificaiton 111 or CTC 111 tank cars” for that material.

FRA and PHMSA are paying the price for their inaction on the long known DOT 111 tank car problem. These cars are a major portion of the current rail tank car fleet and would normally be expected to remain in full service for a number of years. If FRA and/or PHMSA were to try to immediately eliminate the use of these cars for crude oil shipments a major reduction in the number of cars available for crude oil shipments; a reduction that would severely curtail those shipments. Economically this would be a non-starter.

Moving Forward

Given the publication schedule for the Federal Register, it is possible that the Emergency Order may be published Friday, but it is more likely to appear in the Monday FR.