November 6, 2019

PHMSA Issues NPRM for LNG by Rail

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

On October 24, 2019, The U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (PHMSA) published a Notice of Proposed Rulemaking (NPRM) in the Federal Register following its earlier issuance of a Press Release. The NPRM follows the April 11, 2019 Executive Order issued by President Trump discussed here. In response to the Executive Order, members of Congress specifically sought additional information concerning PHMSA’s plans in a June 28, 2019 communication and a follow-up letter dated August 7, 2019. Both raise concerns including those related to the pending Special Permit process described here. In addition, House Transportation Committee Chair Peter DeFazio (D-Ore.) and U.S. Representative Tom Malinowski (D-NJ) introduced legislation, H.R. 4306, that would require a comprehensive review of the transportation of liquefied natural gas (LNG) by rail. Previously, we wrote about efforts to change the regulations which seemed stalled until the Executive Order was issued.  This history is described in the NPRM.

To support the regulatory changes, PHMSA analyzed data regarding DOT-113 safety incidents (damage) and found that the vast majority of incidents causing damage to the DOT-113s did not result in a loss of hazardous materials.  In addition, PHMSA conducted an analysis of potential failure scenarios, including a cascading failure of multiple DOT-113 tank cars and a potential boiling liquid expanding vapor explosion (BLEVE).  This analysis included evaluation of radiant heat exposure, cryogenic temperature exposure, and flammable vapor cloud scenarios.  PHMSA concluded that from an overall risk to the public perspective, rail transportation is still the safest and preferred option considering the quantity and distance transported.  These analyses are described in the NPRM and published in a Preliminary Regulatory Impact Analysis which was requested by members of Congress as noted above.

PHMSA is seeking comment on several specific areas described in the NPRM including “on whether there is a reasoned basis for limiting the length of train transporting LNG tank cars, and what that limitation would look like.”  In addition, “whether there is a reasoned basis for limiting the amount of LNG tank cars that can be in one consist, or where the LNG tank cars may be placed within the train.”  Comments are due by December 23, 2019 and may be filed electronically at in Docket No. PHMSA-2018-0025.

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