May 15, 2018

Transporting LNG by Rail is One Step Closer

Holland & Knight Energy and Natural Resources Blog
Dianne R. Phillips

On May 7, 2018, the U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (PHMSA) finally responded to the Petition for Rulemaking filed by the Association of American Railroads (AAR). As described in a prior blog post, regulatory changes are needed before liquefied natural gas (LNG) can be transported by rail tanker cars under applicable Hazardous Materials and Carriage by Rail regulations, 49 C.F.R Parts 172, 173 and 174, absent a special permit. AAR filed a petition for rulemaking with PHMSA over a year ago in January 2017. The petition sought revisions of Sections 172.101 and 173.319 of Title 49 to allow LNG to be treated the same as other cryogenic liquids transported in tank cars under the Hazardous Materials regulations. AAR has also weighed in on Special Permit Applications which sought permission to transport LNG in commerce via rail tank cars.

In formally accepting the petition, PHMSA concluded that it had assessed the petition and determined the request merits consideration in a future rulemaking, although no timeframe was given for such a rulemaking proceeding. The Federal Railroad Administration (FRA) authorized the Alaska Railroad Corp., pursuant to its authority under 49 C.F.R. § 174.63, to transport LNG in bulk packaging (ISO-certified tankers atop flatcars) back in 2015.

AAR's Tank Car Committee has been working on this subject for a number of years. This is the first significant movement towards achieving their goal.

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