OMB Approves PHMSA HM Security Plan ICR Revision

Yesterday, the OMB’s Office of Information and Regulatory Affairs (OIRA) announced that it had approved a revision of an existing information collection request from DOD’s Pipeline and Hazardous Material Safety Administration (PHMSA) on “Hazardous Materials Security Plans”. During an otherwise routine renewal request for the ICR, PHMSA reduced the burden estimate to reflect changes in the number of expected security plans caused by the cancellation of approval to ship liquified natural gas by rail. This resulted in a reduction in the number of expected responses by 8 and the number of hours burden estimate by 680.

Review - PHMSA Publishes LNG by Rail Suspension Final Rule

Today, DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) a final rule in the Federal Register (88 FR 60356-60375) for “Hazardous Materials: Suspension of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail”. The notice of proposed rulemaking for this final rule was published on November 7^th, 2021. The final rule will suspend the current authorization to transport liquified natural gas by rail until a second rulemaking (RIN 2137–AF54) on the matter is completed or June 30^th, 2025, whichever comes first.

This rule is effective on October 31^st, 2023.

For more information on this final rule, including information on PHMSA’s review of public comments on the notice of proposed rulemaking that preceded this final rulemaking, see my article at CFSN Detailed Analysis - https://patrickcoyle.substack.com/p/phmsa-publishes-lng-by-rail-suspension-276 - subscription required.

OMB Approves PHMSA Suspension of LNG by Rail Final Rule

Yesterday, OMB’s Office of Information and Regulatory Affairs announced that it had approved a final rule from DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) on “Hazardous Materials: Suspension of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail”. This final rule was sent to OIRA for review on July 14^th, 2023; a fairly rapid turnaround for OIRA.

According to the entry in the Spring 2023 Unified Agenda for this rulemaking:

“This rulemaking action would amend the Hazardous Materials Regulations to suspend authorization of liquefied natural gas (LNG) transportation by rail tank car pending completion of the companion rulemaking under RIN 2137-AF54 [link added], or June 30, 2024.”

We will probably see this final rule published in the Federal Register next week. That publication will not be the final word on LNG by rail. The notice of proposed rulemaking for the ‘other’ rulemaking has yet to be published, and the Republican energy advocates in the House will almost certainly introduce legislation to counter this rulemaking. This continuing controversy will ensure that few people will be interested in ordering the DOT-113C120W9 railcars necessary to transport LNG by rail under the existing rules that are being suspended by this rulemaking.

NOTE: This web site reports that Chart has constructed a single DOT-113C120W9 for testing purposes at the Transportation Technology Center, Inc.

PHMSA Sends LNG by Rail Suspension Final Rule to OMB

Yesterday, the OMB’s Office of Information and Regulatory Affairs (OIRA) announced that it had received a final rule from DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) for “Hazardous Materials: Suspension of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail”.

According to the Spring 2023 Unified Agenda entry for this rulemaking:

“This rulemaking action would amend the Hazardous Materials Regulations to suspend authorization of liquefied natural gas (LNG) transportation by rail tank car pending completion of the companion rulemaking under RIN 2137-AF54 [link added], or June 30, 2024.”

As a practical matter, this rulemaking is of little consequence. According to the latest information that I can find (a 2021 article) there are few if any of the special DOT-113C120W9 railcars needed to transport LNG. Of course, part of the reason that no one is ordering these railcars is the uncertainty of whether LNG transportation by rail is going to be continued to be allowed or, if still allowed, whether there will be changes to the requirements for the railcars under the other rulemaking. The railcars cost too much for this lack of certainty.

PHMSA Considers Special Permit for Rail Shipment of Cryogenic Ethane

The DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) published a notice in today’s Federal Register (87 FR 74468-74469) for “Hazardous Materials: Notice of Application for Special Permit”. The Special Permit has been requested by Gas Innovations LNG Refrigerants Inc to authorize the transportation in commerce of cryogenic ethane in DOT-113C120W9 and DOT-113C120W tank cars via rail freight. These are the same railcars currently authorized for use with cryogenic ethylene.

The special permit application (21283-N) was first announced by PHMSA on September 9^th, 2021 with a comment closing date of October 12^th, 2021. PHMSA is now asking for public comments on the application because it “raises issues similar to the transportation of Liquefied Natural Gas (LNG) by rail, a matter for which multiple rulemakings are currently pending at the agency.”

Comments may be submitted via the Federal eRulemaking Portal (www.Regulations.gov; Docket # PHMSA-2022-0081) comments should be submitted by January 4^th, 2022. I suspect that there may be requests to extend that deadline because of the holidays.

Review - PHMSA Publishes LNG by Rail Suspension NPRM

On Monday the DOT’s Pipeline and Hazardous Material Safety Administration (PHMSA) published (available on-line today) a notice of proposed rulemaking (NPRM) in the Federal Register (86 FR 61731-61745) on “Hazardous Materials: Suspension of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail”. The proposed rule would suspend the effect of the 2020 final rule authorizing the transportation of LNG by rail until the first of either:

• Completion of a separate rulemaking under RIN 2137-AF54 evaluating potential modifications to requirements governing rail tank car transportation of LNG, or

• June 30, 2024.

PHMSA is soliciting public comments on the proposed rulemaking. Comments may be submitted via the Federal eRulemaking Portal (www.regulations.gov; docket # PHMSA-2021-0058). Comments should be submitted by December 23^rd, 2021.

I suspect that the current due date for comments may raise some concern and may be extended. We are going into a holiday season and corporations and business groups really do prefer (and tend to use all of) a 60-day comment period at the best of times.

For more details about the background and justification for the NPRM, see my article at CFSN Detailed Analysis - https://patrickcoyle.substack.com/p/phmsa-publishes-lng-by-rail-suspension - subscription required.

OMB Approves Suspension of LNG by Rail Rule

Yesterday, the OMB’s Office of Information and Regulatory Affairs (OIRA) announced that it had approved a notice of proposed rulemaking (NPRM) from the DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) for “Suspension of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail”. This rulemaking was sent to the OIRA back in September. The NPRM could be published in the Federal Register as early as this week.

PHMSA Sends Natural Gas by Rail NPRM to OMB – 9-16-21

Yesterday the OMB’s Office of Information and Regulatory Affairs (OIRA) announced that it had received a notice of proposed rulemaking (NPRM) from DOT’s Pipeline and Hazardous Material Safety Administration (PHSMA) on “Hazardous Materials: Suspension of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail”. This rulemaking was included in the Spring 2021 Unified Agenda.

As I noted back in July this is part of an ongoing activity at PHMSA looking at the safety of the transportation by LNG by rail. According to the abstract in the Unified Agenda listing for the rulemaking:

“PHMSA proposes to amend the Hazardous Materials Regulations (HMR) to suspend authorization of liquefied natural gas (LNG) transportation by rail pending completion of the companion rulemaking under RIN 2137-AF54.”

That rulemaking would incorporate the results of ongoing research efforts. Those efforts include work by a committee of independent experts to study the safe transportation of LNG by rail tank car. A pre-publication version of the Phase I study report has been published. Phase II of the study began with a kick-off meeting in June.

In reality, this suspension would have little practical effect since I can find no information that anyone has produced any of the new railcars that the current LNG by rail regulations require railroads to use to transport LNG. Part of the reason for that is that I think everyone understood that the Biden Administration was going to re-look at regulation of LNG by rail, and no one was willing to invest the money in railcars that might not be able to be used for their intended purpose.

LNG by Rail and the Unified Agenda

While the Trump Administration published a final rule from the Pipeline and Hazardous Material Administration (PHMSA) authorizing the shipment of liquified natural gas (LNG) by rail last July, it was obvious that the incoming Biden Administration was opposed to such activity. In the first day of the Administration, President Biden published a list of agency actions requiring review by the incoming administration; one of three actions listed for DOT was the LNG by rail rulemaking.

With the publication of the Spring 2021 Unified Agenda, we have chance to see how the new Administration intends to deal with the LNG by rail situation.

There are two separate rulemakings listed in the Unified Agenda from PHMSA for LNG by rail:

Hazardous Materials: Improving the Safety of Transporting Liquefied Natural Gas

Hazardous Materials: Suspension of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail, and

Improving Safety

The abstract for the first rulemaking states:

This rulemaking would amend the Hazardous Materials Regulations governing transportation of liquefied natural gas (LNG) in rail tank cars. This rulemaking action would incorporate the results of ongoing research efforts and collaboration with other Department of Transportation Operating Administrations and external technical experts; respond to a mandate in Executive Order 13990 for PHMSA to review recent actions that could be obstacles to Administration policies promoting public health and safety, the environment, climate change mitigation; and provide an opportunity for stakeholders to contribute their perspectives on rail transportation of LNG.

DOT took the first public step in the review process by including the LNG by rail final rule in the Regulatory Review published by DOT in May. In the preamble, DOT specifically mentions the Biden mandate to review the LNG by Rail rule. The public comment period for that regulatory review ended on June 4^th; there were no public comments offered on the LNG by rail question. A National Academy of Science study on the safety of LNG by rail is ongoing (see below).

According to the Agenda entry for this rulemaking, DOT expects to issue a notice of proposed rulemaking (NPRM) in April of next year.

Suspending the Rule

The abstract for the second rulemaking states:

“PHMSA proposes to amend the Hazardous Materials Regulations (HMR) to suspend authorization of liquefied natural gas (LNG) transportation by rail pending completion of the companion rulemaking under RIN 2137-AF54 [the rulemaking described above].”

According to the Agenda entry for this rulemaking, DOT expects to issue a notice of proposed rulemaking (NPRM) next month.

Ongoing Safety Study

Last year PHMSA reached an agreement with the National Academies of Sciences, Engineering, and Medicine (NASEM) to convene a committee of independent experts to study the safe transportation of LNG by rail tank car. A pre-publication version of the Phase I study report has been published.

Phase II of the study began with a kick-off meeting last month.

Public Comments on DOT Regulatory Review Notice

Yesterday the public comment period on the DOT Regulatory Review notice ended. Only 21 comments were submitted. It was a short comment period (30-days) because of requirements of one of the Executive Orders that the notice was supporting, that may explain the relatively low corporate turnout. What was amazing was that there were absolutely no letter writing campaigns associated with the Notice.

Comment Review

Of the 21 comments submitted there were only two addressing topics that I generally cover here in this blog. My comment on the FAA’s failure to write congressionally mandated regulations allowing critical infrastructure to request ‘no UAS fly zone’ designation and one cybersecurity comment from an anonymous commentor.

The cybersecurity related comment was part of a recommendation to do away with the Electronic Log Devices (ELDs) that FMCSA is requiring for truckers. Anonymous, quoting a number of cybersecurity publications, points out that the Omnitracs (a major ELD supplier) device has known cybersecurity vulnerabilities that might allow a sophisticated attacker to gain access to other systems on the trucks on which the ELD is installed. This, anonymous explains, makes the truck subject to cyber attack and potential hijacking. The commentor’s solution, get rid of the ELD’s.

Actually there are a couple of other commentors that also want to achieve the same end, but none of them mentioned cybersecurity as a reason.

What Is Missing

Given the level of opposition to the Trump Administration’s (PHMSA) rulemaking on LNG by rail, I expected to see a similar campaign supporting the Biden Administration’s consideration of revoking that rule. Biden specifically directed DOT to look at the LNG by rail rulemaking, it was mentioned in the Notice, and there were no comments submitted that addressed the issue.

One of the reasons may be that this is turning out to be a non-issue. Not because people are not concerned about the potential dangers, but because no one is taking advantage of the rule. The reason for that is the non-existence of the new DOT-113C120W9 required by the PHMSA rule. An article over at DelawareCurrents.org has an interesting discussion about why no one is making these new railcars.

I suspect that PHMSA will get around to removing the authorization for LNG shipment by rail. But it will be deliberatively done in such a way to make it more difficult to reinstitute such a rule in the future. There is no time pressure on DOT or PHMSA to get this accomplished, the lack of railcars has given them the time necessary to accomplish this.

HR 2100 Introduced – PALS Act

Back in March Rep Nehls (R,TX) introduced HR 2100, the Providing Americans with LNG Safely (PALS) Act. The bill would prohibit DOT from taking action to stop the shipment of liquified natural gas (LNG) by rail. This is very similar to S 1012 that was introduced earlier this year in the Senate, but Nehls added a cute name.

Prohibition on Action

The very short bill would specifically stop DOT from taking two different types of regulatory action concerning the shipment of LNG by rail. The first would be a prohibition against issuing any regulation or long-term order that prohibits the transportation of LNG by rail. The second would prevent similar DOT actions that would restrict or contract the scope of PHMSA’s final rule authorizing the shipment of LNG by rail that was issued last year.

The bill does specifically state that: “Nothing in this section shall be construed to limit the authority of the Secretary of Transportation from issuing short-term emergency orders related to the transportation of liquefied natural gas by rail.”

Moving Forward

While Nehls is a member of the Transportation and Infrastructure Committee to which this bill was assigned for consideration, and a cosponsor is Ranking Member Graves (R,MO), there is no way that this bill will be considered in Committee. This is almost a strictly party-divided issue. Even in a nearly evenly divided House, this bill could never make it to the floor for consideration.

DOT Publishes Regulatory Review Notice

Today DOT published a notice in the Federal Register (86 FR 23876-23877) that the Department was seeking public input on the regulatory review DOT is conducting in accordance with two Biden Administration executive orders; EO 13990 – “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis”, and EO 13992 – “Revocation of Certain Executive Orders Concerning Federal Regulation”. DOT is inviting the public to provide input on existing rules and other agency actions for the Department's consideration regarding consistency with the policies and objectives of these executive orders.

The notice discusses the presidential directives from EO 13990 and EO 13992. It also mentions the specific directive from the President for DOT to review the Liquified Natural Gas by Rail rulemaking finalized last summer.

In requesting these public comments, DOT is looking for specific information about each recommendation. The items of interest listed below are not intended to limit target of recommendations, but rather to ensure that the recommendations will provide actionable items for consideration.

• Specific reference to regulation or agency action,

• Description of the effects of the identified regulation or agency action,

• Description of potential alternative action, and

• Examples of the affected entities or projects.

Comments may be submitted via the Federal eRulemaking Portal (www.Regulations.gov; Docket number DOT-OST-2021-0036). Comments should be submitted by June 4^th, 2021.

S 1012 Introduced – Protecting LNG by Rail

Last month, Sen Cruz (R,TX) introduced S 1012, a bill to prohibit the Secretary of Transportation from prohibiting the transportation of liquefied natural gas by rail, and for other purposes. The bill would stop DOT from modifying last summer’s final rule allowing the shipment of LNG by rail. A similar bill, HR 2100 was introduced in the House.

The Language

The bill is a short piece of legislation, only one section and no fancy title. It would not only stop DOT from initiating rulemakings to prohibit the transportation of LNG by rail, it would also prevent any rulemakings that “restricts or contracts the scope of allowance provided by the final rule of the Pipeline and Hazardous Materials Safety Administration, titled “Hazardous Materials: Liquefied Natural Gas by Rail”, which was published in the Federal Register on July 24, 2020 (85 Fed. Reg. 44994)” {§1(a)(2)}. It would, however, allow DOT “to issue short-term emergency orders related to the transportation of liquefied natural gas by rail” {§1(b)}.

Moving Forward

Cruz is a member of the Senate Commerce, Science, and Transportation Committee to which this bill was assigned for consideration. This could mean that there would be enough influence to have this bill considered in Committee. In this case, however, I think that opposition for Democrats would be sufficient to stop the bill from being considered. If it were considered it would fail on a party line vote or maybe even have one or two Republicans vote against it. It could never make it to the floor of the Senate for consideration.

Commentary

Cruz and his two cosponsors {Sen Kennedy (R,LA) and Sen Cramer (R,ND)} are all from natural gas producing states. They are very aware of the general opposition in the Democratic Party to the shipment of natural gas by rail, and really, almost anything to do with natural gas in general. It is very likely that DOT will start some sort of rulemaking limiting LNG shipments or flatly overturning the Trump Administration’s rule allowing such shipments.

The three Senators know that there is no possible way for this bill to move forward in the Senate in this session. Even in a narrowly Republican Senate, this bill would face too much stiff opposition from Democrats to be able to get anywhere. The same will hold true on HR 2100 in the House. This bill and it’s House counterpart were introduced just to show the member’s constituents that they were trying to do something to protect the interests of natural gas shippers, the two bills are political gestures, nothing more.

Frankly, I am surprised that we have not seen a bill directing DOT to vacate the LNG by rail rule; something along the lines of §8202 of HR 2, the INVEST in America Act in the 116^th Congress. Such a bill would be very unlikely to be considered in a split Senate, but it would be an important notice to environmental activists and chemical safety supporters of the Democratic Party.

One thing is for sure, this is not the last we have heard about LNG by rail in the 117^th Congress.

OMB Approves Revision to Transportation Security ICR – 1-27-21

Yesterday the OMB’s Office of Information and Regulatory Affairs approved a revision to the information collection request (ICR) from the DOT’s Pipeline and Hazardous Material Safety Administration (PHMSA) for “Hazardous Materials Security Plans”. The changes were necessitated by the approval of PHMSA’s final rule on “: Liquefied Natural Gas (LNG) by Rail”. That rule added natural gas as a commodity is subject to routing requirements.

The supporting document [.docx download link] PHMSA provided to OIRA supporting the request to revise the ICR does a good of describing the need for the revision (para 1) and showing the calculations (para 12) for the revised burden estimates, but it does not specifically quantify the change in the burden. That is found in OIRA’s announcement; eight new annual reports are expected with a total additional burden of 680 hours. This will be borne by the railroads hauling the LNG performing their route security analysis and alternative route analysis reporting.

Interestingly, the LNG by rail final rule only estimated a 677 hour burden increase for this ICR. A minor difference to be sure, but not one explained in the data submitted to OIRA.

LNG-by-Rail Lawsuits

Earlier this week I was asked on TWITTER® to comment on an article published at Marcellus Drilling News about lawsuits that had been filed to stop the implementation of the LNG by rail final rule that was published by the DOT’s Pipeline and Hazardous Material Administration (PHMSA) last month. I am taking this time to expand on by TWEETS.

Lawsuits

The article mentioned above briefly describes the lawsuit filed by fourteen State Attorneys General and Washington, DC to block the rule. A less polarized article on the same subject can be found on TheHill.com.

According to the brief filed Tuesday, “State Petitioners seek a determination by this Court pursuant to the Administrative Procedure Act, 5 U.S.C. § 706, the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq., and the National Environmental Policy Act, 42 U.S.C. § 4321 et seq., that the rule is unlawful and therefore must be vacated.” The actual reasoning and facts supporting that claim of the ‘unlawful’ nature of the rulemaking will be submitted to the Court is subsequent documents and proceedings.

The article on TheHill.com, in reference to an unlinked statement by the AG’s noted that they “plan to argue that the PHMSA failed to evaluate the rule’s environmental impacts and that the rule does not contain enough safety requirements.”

Environmental Impact

The environmental impact complaints center around the fact that PHMSA, in the preamble to the final rule stated that:

“PHMSA has completed its NEPA [National Environmental Policy Act of 1969] analysis. Based on the environmental assessment, PHMSA determined that an environmental impact statement is not required for this rulemaking because it does not constitute an action meeting the criteria that normally requires the preparation of an environmental impact statement. As explained in the final EA [environmental assessment; .PDF download link added], PHMSA has found that the selected action will not have a significant impact on the human environment in accordance with Section 102(2) of NEPA.”

While the EA goes into lengthy details about the safety related issues for a release of methane during an LNG railcar incident, it only briefly discusses (pg 35) the long-term environmental hazards associated with the release of methane, a potent greenhouse gas. PHMSA concludes by stating: “PHMSA contends that these economic and practical unknowns create compounded uncertainties that would not be clarified through the preparation of an environmental impact statement.” This failure to prepare an EIS will certainly be addressed in the lawsuit.

Safety Issues

As noted above, PHMSA includes a lengthy discussion of LNG related safety issues in the EA. And the preamble to the final rule provides discussions about comments received about the notice of proposed rulemaking with regards to emergency planning. PHMSA concluded that they have adequately addressed safety issues related to the rail transportation of liquified natural gas.

The AG’s will certainly argue that adequacy determination, particularly where it concerns ongoing safety testing be conducted by PHMS and the Federal Railroad Administration (FRA). I noted in one of my posts on the NPRM comments that there were four studies underway when the NPRM was issued:

• Puncture resistance testing for DOT 113C120W railcars;

• Pool fire testing for DOT 113C120W railcars;

• FRA testing of an alternative ‘LNG tender’ design; and

• FRA testing of an alternative ISO tank design;

The first test in the list was discussed in the safety assessment I described in the EA. The others have not been mentioned and may not yet be completed. PHMSA would probably maintain that with the improvements that the final rule mandated for the DOD 113C120W9 rail cars would obviate the need for waiting for the completion of the other testing.

Political Influence

Neither of the articles mentioned earlier call attention to the possible political influence exerted by President Trump on PHMSA to adopt regulations authorizing the rail transportation of LNG. Paragraph 4(b) of EO 13868, Promoting Energy Infrastructure and Economic Growth, dated April 10^th, 2019, required DOT to “finalize such [LNG by Rail] rulemaking no later than 13 months after the date of this order.” PHMSA acknowledged this requirement in the preamble to the final rule. PHMSA missed the deadline by slightly more than 2 months.

As the Chief Executive of the United States, it is clearly within the President’s authority to set priorities for regulatory development actions of agencies like DOT. This could only be a legal problem if the President used undue influence to have PHMSA ignore safety information or other regulatory requirements in adopting this rulemaking. It would be very unlikely that any court would find that the existence of EO 13868, in and of itself, constituted undue political influence. This is especially true since DOT went through a complete publish, comment and review cycle in the development of this final rule.

Did the EO influence the processing of this rulemaking? Almost certainly; the turnaround time between the end of the comment period and the submission of the final rule to OMB’s Office of Information and Regulatory Review (OIRA) for approval was extremely short for a rulemaking of this impact (and that submission was well within the time limit set by the EO). Additionally, the time for approval at OIRA was shorter than normal at less than 60-days. At the very least, DOT put additional administrative efforts into getting the final rule written, reviewed and published.

If called upon to defend against a charge of undue political influence, the Administration can, however, point to the unusual delay between the OIRA approval of the final rule (June 18^th, 2020) and the actual publication of the final rule (July 24^th, 2020) in the Federal Register over a month later. It would be argued that the Administration conducted additional reviews of the rulemaking process to ensure that all of the ‘i's’ were doted and the ‘t’s’ crossed during the shorter than normal time between the NPRM and the final rule.

Moving Forward

It is not clear at this point what effect this lawsuit will have on the start of transportation of liquified natural gas by rail. I think that the best that the plaintiff’s attorneys really hope for is a stay of the effective date of the regulation pending review in the courts. If that stay can be put into place through the first quarter of 2021, the whole lawsuit will probably be moot. I suspect that a Democratic Congress and a President Biden will overturn the rulemaking by legislative action, much as we saw the Republicans do in so many instances in the first two years of the Trump Administration.

I suspect that the simple act of initiating the lawsuit has achieved the objective of the plaintiffs, stopping the large-scale shipment of LNG by rail. Since there are no DOT 113C120W9 railcars in existence, and no other railcar is authorized by this rulemaking, LNG shippers will have to place orders for a large number of railcars and begin construction of LNG liquefaction facilities. These are both long-lead time, high-expense activities. Few shippers can be expected to put this much money on the line with the very real possibility that their shipping authorization will disappear before the facilities and railcars can be delivered.

PHMSA Publishes LNG by Rail Final Rule

On Friday the DOT’s Pipeline and Hazardous Material Safety Administration (PHMSA) published a final rule in the Federal Register (85 FR 44994-45030) for “Hazardous Materials: Liquefied Natural Gas by Rail”. The rule was sent to OMB’s Office of Information and Regulatory Affairs (OIRA) for approval on May 1^st and was approved by OIRA on June 19^th, 2020. The notice of proposed rulemaking (NPRM) for this action was published in October 2019.

According to the summary provided in the rulemaking:

“PHMSA, in coordination with the Federal Railroad Administration (FRA), is amending the Hazardous Materials Regulations (HMR) to allow for the bulk transport of “Methane, refrigerated liquid,” commonly known as liquefied natural gas (LNG), in rail tank cars. This rulemaking authorizes the transportation of LNG by rail in DOT-113C120W specification rail tank cars with enhanced outer tank requirements, subject to all applicable requirements and certain additional operational controls. The enhancements to the outer tank are indicated by the new specification suffix “9” (DOT-113C120W9).”

Changes in Final Rule

PHMSA received 445 comments on the NPRM for this rulemaking (see my series of blog posts about those comments here). In the preamble to this final rule PHMSA addresses those comments and notes the changes that were made as a result of those comments. Those revisions include:

• Changes to DOT-113 outer shell specification,

• Changes to maximum filling density,

• Removes inappropriate reference to ‘Mylar’ in insulation description,

• Adding additional breaking requirement for unit trains (similar to HHFT requirements), and

• Adding route planning requirements,

The Final Rule

PHMSA provides a summary of the changes being made to the HMR:

• §172.101,

• §172.102,

• §172.280,

• §173.319,

• §174.200,

• §179.400-5,

• §179.400-8,

• §179.400-26,

• §180.515

Effective Date

The effective date for this final rule is August 24^th, 2020.

Commentary

As I noted in an earlier post, the House is attempting to require PHMSA to cancel this rule via §8202 of HR 2, the INVEST in America Act that passed in the House on June 26th. While it is unlikely that the Senate will take up this bill it does provide some insight into how a Democratic controlled Congress would view this rulemaking. It is very likely that a Democratic 117^th Congress would introduce legislation to negate this rulemaking. As President, Biden would likely sign such legislation.

This is an important consideration. While it will be legal to ship LNG by rail as of August 24^th, none of the approved DOT-113C120W9 railcars yet exist. It will take time to scale-up production of these railcars to begin significant transportation of LNG by rail. With the uncertainty about the continued existence of this shipping approval because of the uncertain outcome of the November election, I would suspect that large orders for these new railcars will not be placed until after the election.

The big question will be how much control (if any) the Democrats have in the Senate. Under current rules (subject to change) a simple majority only provides a limited measure of control of that body. A 60-vote majority would be necessary (again under changeable current rules) to be able to ensure that debate could be closed on bills with substantial opposition. A Democratic majority in the 117^th Congress is certainly a possibility, but supermajority control is almost impossible.

OMB Approves LNG by Rail Final Rule

Yesterday the OMB’s Office of Information and Regulatory Affairs (OIRA) announced that it had approved a final rule from the DOT’s Pipeline and Hazardous Material Safety Administration (PHMSA) on “Hazardous Materials: Liquefied Natural Gas by Rail”. The rule was sent to OIRA for approval on May 1^st. The notice of proposed rulemaking (NPRM) for this action was published in October 2019.

With the possibility becoming more pronounced that Trump may be a single-term President, we are starting to approach the time when an outgoing administration begins to worry about its legacy. Trump came into office as an anti-regulatory campaigner. While that has not generally changed, the Administration is becoming more prolific in writing permissive regulations that allow industry to take actions that were not previously allowed.

This rulemaking certainly fits that description and that is almost certainly the reason that we have seen such a quick turnaround of the final bill (less than six months since the end of the comment period) even with the large number of comments that were submitted in opposition to the proposed rule. The downside of this is that if Trump is not re-elected and the Republicans to not retain control of the Senate, this rulemaking would be a prime target for reversal under the Congressional Review Act of 1996.

LNG by Rail Final Rule Sent to OMB

Yesterday the OMB’s Office of Information and Regulatory Affairs (OIRA) announced that it had received for review a final rule from the DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) concerning “Liquefied Natural Gas by Rail”. The notice of proposed rulemaking (NPRM) for this action was published in October 2019.

With the large number of comments received on the NPRM (see my series of blog posts here) this is a remarkably quick turnaround of this rulemaking, especially considering the COVID-19 operational restrictions under which PHMSA has been working. It will be interesting to see how fast OIRA responds considering the Administration’s obvious desire to move this quickly.

PHMSA Extends Comment Period on LNG by Rail NPRM

The DOT’s Pipeline and Hazardous Material Safety Administration (PHMSA) published a notice in Monday’s (available online today) Federal Register (84 FR 70491-70492) announcing that they were extending the deadline for comments on their Liquified Natural Gas by Rail NPRM. The additional time was added because PHMSA published their LNG by Rail Special Permit and included the operational controls specified in that document as potential controls in the NPRM. The new closing date for comments is January 13^th, 2020.

LNG by Rail NPRM Comments – 12-14-19

With just a little over two weeks left before the end of the comment period on the DOT’s Pipeline and Hazardous Material Administration (PHMSA) notice of proposed rulemaking (NPRM) that would allow the rail transportation of liquified natural gas (LNG), there have only been 76 comments posted to the Docket. The vast majority of those comments have been from individual who are generally opposed to the NPRM, but the opposition does not seem to be an organized letter writing campaign.

Five of the comments submitted to date do not fall into the private citizen comment category (note: all links are .PDF download links):

Village of Barrington, IL;

Port of Brownsville, Texas (in opposition to a local LNG facility, not about LNG by rail);

National Transportation Safety Board; and

Theresa Pugh Consulting, LLC;

The fifth comment was my comment that I posted here back in October.

Not Enough Safety Data

Three of the commenters (ignoring the Brownsville comments) above made frequent mention that PHMSA and the Federal Railroad Administration (FRA) have not completed a variety of safety tests currently planned and/or underway related to the shipment of LNG by rail. These tests include:

• Puncture resistance testing for DOT 113C120W railcars;

• Pool fire testing for DOT 113C120W railcars;

• FRA testing of an alternative ‘LNG tender’ design; and

• FRA testing of an alternative ISO tank design;

Additionally, the NTSB notes that the limited data on crashes involving DOT 113 railcars in other cryogenic service does not provide a large enough statistical universe to offer an reliable predictive data about the potential safety of LNG shipments, especially if the size of the fleet increases as projected.

The VOB comment expresses concerns about the adequacy of emergency response information that is available for a large-scale release from a multi-unit LNG train.

NOTE: The PHMSA LNG by rail special permit did include a training special condition for the shipper to provide emergency response training to all emergency response agencies that could be affected between the authorized origin and destination.

Operational Controls

The NTSB comments include a lengthy discussion about the operational controls that should be part of the LNG by rail rulemaking. They recommend:

• Rail route security assessments in accordance with 49 CFR 172.820;

• Speed restrictions – 40 mph in high-threat urban areas, 50 mph elsewhere;

• Enhanced breaking requirements – ECP, 2-way end-of-train devices, or distributed power systems;

• LNG railcar placement – more than 5 cars away from locomotive or occupied equipment to protect train personnel in event of derailment.

NOTE: The special permit did include an enhanced breaking equipment special condition.

Commentary

It is interesting that there have been no comments submitted to date from any of the environmental or transportation safety advocacy groups that we have seen with earlier NPRMs for crude oil shipments for instance. I am particularly surprised that there have not been any letter writing campaigns organized by these organizations. Such campaigns have little effect on regulatory agencies (particularly in a Republican Administration), but they do have a positive effect on monetary contributions to those organizations.

One issue that none of the commenters to date (myself included) have raised is the peculiar vulnerability associated with double-shell railcars used in the shipment of cryogenic liquids. The annular space between the two shells has the air evacuated to very-low pressure (vacuum) levels. This is used to help prevent environmental heat from raising the temperature (and the resulting pressure) in the internal tank in much the same way that a vacuum thermos bottle keeps one’s coffee hot.

PHMSA has touted this double shell design as an additional way of preventing leaks of the LNG during an accident; a puncturing object would have to pass through the outer shell, the annular space and the inner shell for a leak to occur. Except….. During an accident where the outer shell is punctured, environmental air enters the annular space and heat-transfer immediately begins. In the event of a pool fire in the vicinity (not even necessarily with ‘flame impingement’ on the car), the heat transfer is much higher than normal.

In a relatively short amount of time (depending on environmental conditions) the interior tank pressure is going to raise above the pressure set for the pressure relief valve and the tank car will begin to vent. If the PRV were equipped with an ignition device, an impressive flame would accompany the screaming sound of quickly escaping natural gas. Without a flaring device on the PRV, a gas cloud would form that would continue to expand until it reached some other ignition source. In a best-case scenario the cloud would burn back to the PRV which would then become an unintended flare device. Oh yes, and the local air temperature would increase significantly and the heat transfer rate would increase.

If the heat transfer rate were high-enough the pressure would continue to rise even with the PRV venting. At some point the pressure in the tank could rise to the point where the rupture disk would release large volumes of natural gas into the environment. Because of the larger opening of the rupture disk, the burn-back of the vapor cloud could potentially result in the flame burning back into the confined space of the rail car where detonation would likely result.

This is one of the reasons that PHMSA’s special condition of requiring remote pressure monitoring of each railcar is so important; important, however, only if the information on rising pressure levels can be provided to emergency responders in a timely manner. Fires in and around LNG railcars should aggressively fought to help keep the LNG cars in a safe temperature/pressure situation, but only until pressures start to approach the PRV release pressure. Then fast evacuations of firefighting personnel are the main priority.

Determining how high the pressure can reach before safe evacuations should be ordered is one of the reasons that DOT needs to test these railcars to failure in fire situations in both puncture-free and loss-of-vacuum situations. And why the pressure monitoring needs to be conducted on both the annular space and the inner tank.