The U.S. Court of Appeals for the District of Columbia Circuit on Jan. 17 vacated the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) rule authorizing the transport of liquefied natural gas (LNG) in DOT-113C120W9-specification rail tank cars.
A coalition of environmental nonprofits, collection of 14 states, and the Puyallup Tribe of Indians challenged the LNG rule, “contending that PHMSA did not sufficiently consider the safety risks of transporting LNG by rail,” and arguing, in part, “that the National Environmental Policy Act (‘NEPA’) required PHMSA to prepare an EIS [Environmental Impact Statement], and that its decision not to do so was arbitrary and capricious,” according to Circuit Judge Florence Y. Pan, who was part of the case’s three-judge panel and wrote the opinion. “We agree. We thus grant the petitions, vacate the LNG Rule, and remand for further proceedings before the agency [PHMSA].”
Pipelines or trucks have typically transported LNG, while rail was authorized “only on an ad hoc basis by special permit or approval,” Judge Pan reported in the opinion. “But in 2020, the Pipeline and Hazardous Materials Safety Administration (‘PHMSA’) promulgated a rule authorizing the transportation of LNG by rail in newly designed tank cars, with no permit required. The new final rule (‘LNG Rule’) imposed no limit on the number of LNG tank cars that could be included in a single train and set no mandatory speed limit for trains that carry LNG. … During the rulemaking process, commenters expressed alarm about the potentially catastrophic consequences of a train derailment in which LNG tank cars were breached or punctured. For example, a group of environmental organizations asserted that the amount of energy contained in 22 tank cars of LNG would be equal to that of the atomic bomb that was dropped on Hiroshima, Japan, during World War II. PHMSA nevertheless opined that transporting LNG by rail under its LNG Rule would have no significant effect on the environment. It therefore declined to prepare an environmental impact statement (‘EIS’).”
According to a Jan. 17 Reuters report, “Without the court’s ruling, the incoming … administration could have allowed the rule to take effect later this year.”
PHMSA “did not respond to requests for comment,” the news outlet reported, but Cathy Collentine, a Director at Sierra Club, one of the case’s petitioners, said in a statement: “Communities near harm’s way along railroad tracks where trains could carry explosive LNG can breathe a sigh of relief now that this dangerous rule has been struck down.”
Railway Age on Jan. 21 asked the Railway Supply Institute (RSI) to weigh in on the decision. “RSI members, who collectively own more than 95% of the tank cars traveling on the North American rail system, prioritize safety above all else,” said the association in a statement. “Tank cars are among the safest and most efficient modes to move materials from their production source to the consumer. And, with that as a backdrop, RSI expressed disappointment in the recent federal appeals court decision delaying LNG transportation by rail. As demand for energy transportation increases, rail networks provide a safe, cost-effective, and scalable manner to move LNG. DOT-113 specification tank cars are uniquely designed for the safe transportation of cryogenic materials like LNG and have a strong record in their more than five decades of service. Moving LNG by rail is safer than moving it by truck, with the truck hazmat incident rate being than 13 times higher than the rail incident rates. Currently 99.9% of hazardous materials reach their intended destination without incident, and railcar manufacturers continue to work toward improved safety through new technologies and advances in material science and engineering.”
The American Short Line and Regional Railroad Association on Jan. 22 reported that it is “disappointed in the ruling,” noting that it “previously supported a letter sent by House representatives to the PHMSA administrator in 2021 asking the agency not to rescind the rule. The letter argued that shipment of LNG by rail is a safer, more efficient and more environmentally friendly way to transport LNG versus the alternatives including trucks.”
Background
The 2020 final rule (scroll down to download) authorized transporting LNG in DOT-113C120W specification tank cars “with enhanced outer tank requirements, subject to all applicable requirements and certain additional operational controls.” The enhancements would be indicated by the suffix “9” (DOT-113C120W9). The rule stemmed from a 2019 Executive Order, “Promoting Energy Infrastructure and Economic Growth,” which required PHMSA to treat LNG the same as other cryogenic liquids and allow it to be transported in approved rail tank cars. PHMSA reported in the final rule that a “recent expansion in U.S. natural gas production has increased interest in a programmatic approach to using appropriately the nation’s rail infrastructure to facilitate efficient transportation of LNG.”
Before the 2020 rule was enacted, the HMR permitted rail transport of LNG only on an ad hoc basis, “as authorized by the conditions of a PHMSA special permit (49 CFR 107.105) or in a portable tank secured to a rail car pursuant to the conditions of an FRA approval,” according to PHMSA.
In November 2021, PHMSA reversed course, issuing a Notice of Proposed Rulemaking (NPRM) suggesting the temporary suspension of the 2020 final rule (scroll down to download). The proposed pause prompted not only the Railway Supply Institute (RSI) to weigh in (against), but also the Republican members of the House Transportation and Infrastructure Committee (against) and a coalition of attorneys general from 14 states and Washington, D.C. (for). Those groups, plus more than 10,500 private individuals, environmental groups, government officials, the rail industry and other stakeholders, submitted comments.
Why did PHMSA finalize the temporary suspension, which took effect Oct. 31, 2023?
“PHMSA, in coordination with the Federal Railroad Administration [FRA], is amending the Hazardous Materials Regulations [HMR] to suspend authorization of liquefied natural gas (LNG) transportation in rail tank cars,” PHMSA said in a statement to Railway Age in September 2023. “There has been no transportation of LNG by tank car since the previous administration finalized the 2020 Rule that allowed it, and PHMSA is not aware of any orders to build the required rail cars to transport it. The suspension will ensure no rail tank car transports LNG before updated research on safety is completed or a revised rulemaking is completed by June 30, 2025, whichever is earlier. This suspension will minimize potential risks to public health, safety and the environment.”
The agency explained in the Federal Register that it was “suspending recent amendments to the Hazardous Materials Regulations (HMR; 49 CFR parts 171–180) authorizing transportation of … liquefied natural gas (LNG) in DOT-113C120W9 specification rail tank cars while it conducts a thorough evaluation of the HMR’s regulatory framework for rail transportation of LNG in a companion rulemaking under Regulatory Identification Number (RIN) 2137–AF54, and determines whether any modifications are necessary.” PHMSA noted that rail tank cars have not been used to transport LNG since the 2020 rule authorizing it, and “there is considerable uncertainty regarding whether any would occur in the time it takes for PHMSA to consider potential modifications to existing, pertinent HMR requirements.” PHMSA said this temporary suspension “guarantees no such transportation will occur before its companion rulemaking has concluded or June 30, 2025, whichever is earlier.”
PHMSA explained its decision would:
- Avoid “potential risks to public health and safety or environmental consequences (to include direct and indirect greenhouse gas (GHG) emissions) that are being evaluated in the companion rulemaking under RIN 2137–AF54.”
- Allow “for the completion of ongoing testing and evaluation efforts undertaken in collaboration with FRA, as well as further consideration of the recommendations from external technical experts of the National Academy of Sciences, Engineering, and Medicine (NASEM).”
- Assure “an opportunity for the potential development of any mitigation measures and operational controls for rail tank car transportation of LNG.”
- Reduce “the potential for economic burdens by ensuring that entities avoid ordering rail tank cars for transporting LNG compliant with current HMR requirements when the companion rulemaking may adopt alternative requirements.”
- Enable “potential opportunities for stakeholders and the public to be apprised of, and comment on, the results of ongoing testing and evaluation efforts.”
PHMSA noted, however, that rail transport of LNG “may still be permitted as authorized by the conditions of a PHMSA special permit (SP) under § 107.105, or in a portable International Organization for Standardization (ISO) tank secured to a rail car pursuant to the conditions of an FRA approval under § 174.63.
When the temporary suspension was finalized, RSI President Patty Long told Railway Age that “[t]he extended hold of the rule for transporting LNG by rail is disappointing. Transporting LNG has a proven safety record, and with our country continuing to face rising energy prices, we should be incentivizing critical infrastructure that can provide additional capacity to the U.S. We should not have to rely on foreign sources of LNG to meet demand in certain parts of the country. LNG has been safely shipped by other modes of transportation for decades, including ships and trucks. More than 435 million shipments of hazardous materials are transported every year under HMR, and the safety record of transporting hazardous materials by rail is factually outstanding. Shipping LNG in a robust and especially built cryogenic tank car makes sense and will provide a safer, more efficient, and more environmentally friendly method of transportation for LNG.”
