Hazardous Materials: Suspension of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail, 60356-60375 [2023-18569]
Download as PDF
<![CDATA[
lotter on DSK11XQN23PROD with RULES1
60356
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
high-cost areas for which it is requesting
to offer the high-cost area benefit. If the
Administrator finds the particularized
economic hardship showing is satisfied
in accordance with the Commission’s
rules and orders, and any guidance from
the Wireline Competition Bureau and
the Office of Economics and Analytics,
then the Administrator will approve the
request and notify the participating
provider. Otherwise, the Administrator
will deny the request and provide the
participating provider a written
explanation of the basis for the denial.
(1) The Administrator will review
applications within a timeline to be
determined by the Bureau.
(2) Providers may appeal the
Administrator’s determination as set
forth in subpart I in this part of the
Commission’s rules.
(3) Providers may only submit claims
for up to the $30.00 standard benefit
amount while an appeal of an
Administrator’s determination is
underway. Following a successful
appeal, providers approved to offer the
high-cost area benefit may submit
revised claims for eligible households in
the approved high-cost areas as set forth
in § 54.1808. The provider many submit
revised claims for up to $75.00 only
from the start of the approval period
indicated in the appeal determination
letter.
(d) Annual renewal process. A
participating provider that has been
approved to provide the high-cost area
benefit must request approval annually
thereafter to continue to provide the
enhanced benefit to eligible households
in a subsequent year. The participating
provider will need to demonstrate
particularized economic hardship in the
renewal submission, through the
documentation specified by the
Wireline Competition Bureau. The
deadline for submitting the renewal
request shall be determined by the
Wireline Competition Bureau.
(e) Notice to eligible households. (1)
Participating providers approved to
offer the high-cost area benefit shall
provide Affordable Connectivity
Program subscribers written notice
when the provider begins applying the
high-cost area benefit to the subscriber’s
bill. The written notice must state:
(i) That the subscriber is receiving a
high-cost area benefit and the difference
between the standard benefit amount
and the enhanced high-cost benefit
being applied to the subscriber’s
supported service;
(ii) That the receipt of the high-cost
area benefit is contingent on the
provider’s annual continued eligibility
to offer the enhanced high-cost area
benefit;
VerDate Sep<11>2014
17:22 Aug 31, 2023
Jkt 259001
(iii) That the provider is required to
provide the subscriber advance notice if
the provider is no longer deemed
eligible to offer the high-cost area
benefit; and
(iv) That the provider is required to
provide the subscriber advance notice of
any changes to the subscriber’s
supported service rate or service plan
stemming from any loss of the
provider’s eligibility to offer the highcost area benefit.
(2) If a participating provider fails to
timely submit the renewal submission
by the deadline or no longer qualifies to
offer the high-cost area benefit based on
its annual resubmission, then the
participating provider shall provide
written notice to its Affordable
Connectivity Program customers
receiving the high-cost area benefit at
least 30 days and at least 15 days before
the expiration of its approval to offer the
high-cost area benefit. Such subscriber
notices shall include:
(i) A statement that the provider will
no longer be offering the high-cost area
benefit in the relevant high-cost area;
(ii) The effective date of the end of the
high-cost area benefit;
(iii) A statement that upon the
effective date of the loss of the high-cost
area benefit, the Affordable Connectivity
Program supported service purchased
by the household will no longer be
discounted at the higher subsidy
amount; and
(iv) The amount the household will be
expected to pay if it continues
purchasing the service from the
provider after the high-cost area benefit
is no longer available.
(3) If a participating provider is no
longer authorized to offer the high-cost
area benefit, the provider may transition
an eligible household to a lower-priced
ACP service plan once the high-cost
area benefit is no longer available, upon
advance notice to the household and an
opportunity for the household to opt out
of the change and remain on its current
service plan or select another service
plan. Participating providers must
include the advance transition notice in
the required written notice about the
end of the provider’s approval to offer
the high-cost area benefit. The advanced
notice must:
(i) Provide details about the new plan
and monthly price;
(ii) State that the subscriber may
remain on its current plan or choose
another plan;
(iii) Provide instructions on how the
subscriber can opt out of the transition
or change its service plan;
(iv) Provide the deadline for the
subscriber to notify the provider that the
PO 00000
Frm 00040
Fmt 4700
Sfmt 4700
subscriber would like to remain on its
current plan or choose another plan.
[FR Doc. 2023–18621 Filed 8–31–23; 8:45 am]
BILLING CODE 6712–01–P
DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials
Safety Administration
49 CFR Part 172
[Docket No. PHMSA–2021–0058 (HM–264A)]
RIN 2137–AF55
Hazardous Materials: Suspension of
HMR Amendments Authorizing
Transportation of Liquefied Natural
Gas by Rail
Pipeline and Hazardous
Materials Safety Administration
(PHMSA), Department of Transportation
(DOT).
ACTION: Final rule.
AGENCY:
PHMSA, in coordination with
the Federal Railroad Administration
(FRA), is amending the Hazardous
Materials Regulations to suspend
authorization of liquefied natural gas
(LNG) transportation in rail tank cars
pursuant to a final rule published on
July 24, 2020, pending the earlier of
either completion of a companion
rulemaking evaluating potential
modifications to requirements governing
rail tank car transportation of LNG, or
June 30, 2025.
DATES: This final rule is effective on
October 31, 2023.
FOR FURTHER INFORMATION CONTACT:
Alexander Wolcott, Transportation
Specialist, Standards and Rulemaking
Division, Office of Hazardous Materials
Safety, (202) 366–8553, 1200 New Jersey
Avenue SE, Washington, DC 20590–
0001.
SUMMARY:
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Overview
II. Background
A. Historical Regulation of LNG by Rail
B. A New Regulatory Approach and
Enabling Research
C. Another Hard Look Incorporating
NASEM Recommendations and Ongoing
Research Efforts
D. East Palestine, OH Derailment
III. Discussion of Comments to the NPRM
and Adoption of a Temporary
Suspension of the July 2020 Final Rule
A. Comments Requesting an Immediate,
Permanent Ban of LNG by Rail
B. Comments Requesting the Removal of
the June 30, 2024, Sunset Date
E:\FR\FM\01SER1.SGM
01SER1
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
C. Comments of General Support for the
NPRM
D. Comments Alleging Chilling of NearTerm Demand for LNG Transportation by
Rail Tank Car Pursuant to the July 2020
Final Rule
E. Comments Contending That the LNG by
Rail Improves Safety
F. Comments Alleging Environmental
Benefits From LNG by Rail
G. Comments Alleging PHMSA Is
Overstepping its Authority by
Attempting To Regulate Oil and Gas
Production
H. Comments Alleging PHMSA Did Not
Meet its Evidentiary Burden Under the
APA for Temporary Suspension of the
July 2020 Final Rule
I. Comments Alleging That PHMSA’s
Proposal Will Have Miscellaneous
Adverse Consequences for Regulated
Entities, the U.S. Economy, and National
Security
J. Comments Beyond the Scope of This
Rulemaking
IV. Regulatory Analyses and Notices
A. Statutory/Legal Authority
B. Executive Orders 12866 and 14094, and
DOT Regulatory Policies and Procedures
C. Executive Order 13132
D. Executive Order 13175
E. Regulatory Flexibility Act and Executive
Order 13272
F. Paperwork Reduction Act
G. Unfunded Mandates Reform Act of 1995
H. Environmental Assessment
I. Privacy Act
J. Executive Order 13609 and International
Trade Analysis
K. Executive Order 13211
L. Cybersecurity and Executive Order
14028
lotter on DSK11XQN23PROD with RULES1
I. Overview
PHMSA, in coordination with FRA, is
suspending recent amendments to the
Hazardous Materials Regulations (HMR;
49 CFR parts 171–180) authorizing
transportation of ‘‘Methane, refrigerated
liquid,’’ commonly known as 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.
Transportation of LNG by rail tank car
has not occurred since the July 24, 2020,
publication of a final rule authorizing
transportation of LNG in rail tank cars 1
and there is considerable uncertainty
regarding whether any would occur in
the time it takes for PHMSA to consider
1 PHMSA final rule ‘‘Hazardous Materials:
Liquefied Natural Gas by Rail,’’ 85 FR 44994 (Jul.
24, 2020) (July 2020 Final Rule). References within
to ‘‘this Final Rule’’ or ‘‘the Final Rule’’ without
qualification by reference to ‘‘July 2020’’ are meant
to refer to this notice rather than its July 2020 Final
Rule.
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
potential modifications to existing,
pertinent HMR requirements. However,
this temporary suspension of the HMR
provisions authorizing transportation of
LNG in rail tank cars guarantees no such
transportation will occur before its
companion rulemaking has concluded
or June 30, 2025, whichever is earlier,
thereby: (1) avoiding potential risks to
public health and safety or
environmental consequences (to include
direct and indirect greenhouse gas
(GHG) emissions) 2 that are being
evaluated in the companion rulemaking
under RIN 2137–AF54; (2) allowing 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); (3) assuring an
opportunity for the potential
development of any mitigation measures
and operational controls for rail tank car
transportation of LNG; (4) reducing 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; and (5) enabling potential
opportunities for stakeholders and the
public to be apprised of, and comment
on, the results of ongoing testing and
evaluation efforts.
Towards that end, PHMSA is adding
a new special provision 439 that
prohibits LNG transportation in rail tank
cars until issuance of a final rule
concluding the rulemaking proceeding
under a companion rulemaking under
RIN 2137–AF54, or June 30, 2025,
whichever is earlier. 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. PHMSA is also adopting a
modest extension (until June 30, 2025,
at the latest) of the sunset for the
temporary suspension period identified
in its November 2021 notice of proposed
2 PHMSA distinguishes between ‘‘direct’’ and
‘‘indirect’’ GHG emissions herein consistent with
Council on Environmental Quality (CEQ) guidance.
See CEQ, ‘‘National Environmental Policy Act
Guidance on Consideration of Greenhouse Gas
Emissions and Climate Change,’’ 88 FR 1196 (Jan.
9, 2023), which builds upon and updates CEQ’s
2016 ‘‘Final Guidance for Federal Departments and
Agencies on Consideration of Greenhouse Gas
Emissions and the Effects of Climate Change in
National Environmental Policy Act Reviews,’’ 81 FR
51866 (Aug. 8, 2016).
PO 00000
Frm 00041
Fmt 4700
Sfmt 4700
60357
rulemaking in this proceeding,3
consistent with comments received on
the NPRM and information obtained
after its publication evincing greater
uncertainty regarding the near-term
commercial viability and potential
environmental and safety risks
associated with rail tank car
transportation of LNG as authorized by
the July 2020 Final Rule.
II. Background
A. Historical Regulation of LNG by Rail
LNG is a natural gas that has been
cooled and converted to a liquid form
for easier and more efficient
transportation. In the United States,
pipelines have historically delivered
most natural gas, although other modes
of transportation—such as rail and
highway—have accounted for a
relatively minor portion of natural gas
transportation, typically in the form of
LNG. Before PHMSA published the July
2020 Final Rule, rail transportation of
LNG would have been limited to UN
portable tank shipments (commonly
referred to as ISO tank shipments) under
an FRA approval and shipments made
under SPs issued by PHMSA. This
approach reflected the unique safety
risks presented by rail transportation of
large volumes of LNG and the
historically low demand to transport
LNG by rail.
B. A New Regulatory Approach and
Enabling Research
Executive Order 13868 (‘‘Promoting
Energy Infrastructure and Economic
Growth’’) 4 was signed in April 2019
and required PHMSA to treat LNG the
same as other cryogenic liquids,
authorize LNG to be transported in
approved rail tank cars, and to finalize
that rulemaking within 13 months.5 In
response, PHMSA published a notice of
proposed rulemaking titled ‘‘Hazardous
Materials: Liquefied Natural Gas by
Rail’’ 6 in which it proposed to authorize
the transportation of LNG in existing
DOT–113C120W specification tank cars.
The initial comment period for the
NPRM closed on December 23, 2019,
and was subsequently extended until
January 13, 2020, following PHMSA’s
issuance to Energy Transport Solutions,
LLC (ETS) in early December 2019 of
3 PHMSA, ‘‘Notice of Proposed Rulemaking—
Hazardous Materials: Suspension of HMR
Amendments Authorizing Transportation of
Liquefied Natural Gas by Rail’’ 86 FR 61731 (Nov.
8, 2021) (NPRM).
4 84 FR 15495 (Apr. 15, 2019).
5 The Secretary has delegated such rulemaking
duties to the PHMSA Administrator. See 49 CFR
1.97.
6 84 FR 56977 (Oct. 24, 2019).
E:\FR\FM\01SER1.SGM
01SER1
60358
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
DOT–SP 20534 for the transportation of
LNG by rail tank car.7
DOT–SP 20534 allowed the
transportation of LNG in existing DOT–
113 tank cars from Wyalusing, PA, to
Gibbstown, NJ, with no intermediate
stops. This SP contained safety controls
including a requirement to conduct
remote sensing for detecting and
reporting internal pressure, location,
leakage, and (prior to the initial
shipment of a tank car under the SP) a
requirement to provide training to
emergency response agencies that could
be affected on the route. DOT–SP 20534
expired by its terms on November 30,
2021, after ETS had not filed an
application for renewal until November
29, 2021. After careful consideration,
PHMSA denied ETS’ application for
renewal on March 31, 2023.8
In January 2020, PHMSA established
a joint LNG Task Force with FRA to
undertake testing and evaluation
activity on the transportation of LNG
that could inform potential future
regulatory actions, as appropriate. In
order to identify tasks within that effort,
the LNG Task Force utilized a risk-based
framework focused on knowing the risk,
predicting the risk, reducing the risk,
and preparing for the risk. Using that
framework, the LNG Task Force
identified and undertook 15 tasks to
synthesize ongoing research and
outreach activities. Those tasks
included empirical review of
international LNG transportation, safety
and security route risk assessments, a
re-evaluation of the costs and benefits of
electronically controlled pneumatic
(ECP) brakes, and the validation of
emergency responders’ opinions and
needs. Although the LNG Task Force
initially projected completion of its
tasks by late 2021, much of its work was
interrupted or delayed because of the
coronavirus disease 2019 (COVID–19)
public health emergency and because of
subsequent modification of the scope of
its activities. The ongoing efforts of the
LNG Task Force are discussed further
below.
In parallel with its work under the
LNG Task Force, and pursuant to a
7 84
FR 70492 (Dec. 23, 2019) (DOT–SP 20534).
FR 24844, 2846 (Apr. 24, 2023). PHMSA
formally informed ETS of the denial of its renewal
application by email on March 31, 2023, noting that
(1) ETS’s renewal application had made no attempt
to address the concerns raised in the NPRM in this
proceeding, (2) nearly three and a half years after
issuance of DOT–SP 20534, ETS had yet to provide
evidence that it had procured either new DOT–
113C120W9 tank cars or existing DOT–113C120W
tank cars, and (3) the origin and destination
facilities specified in DOT–SP 20534 had not been
built and would need additional authorizations
before construction could begin. ETS did not seek
judicial review of the denial.
lotter on DSK11XQN23PROD with RULES1
8 88
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
mandate in the ‘‘Further Consolidated
Appropriations Act, 2020’’ (Pub. L. 116–
94), PHMSA and FRA partnered with
NASEM to conduct a study on the
transportation of LNG in rail tank cars
through a committee of the
Transportation Research Board (TRB).9
The TRB commenced work in mid-July
2020. Roughly contemporaneous with
the TRB beginning its work, PHMSA
published the July 2020 Final Rule
authorizing the shipment of LNG in new
DOT–113C120W9 specification rail tank
cars with enhanced outer tank
requirements, subject to all applicable
requirements and certain new
operational controls. The July 2020
Final Rule became effective on August
24, 2020 and was swiftly followed by
several petitions for judicial review.
Specifically, six environmental groups,
a coalition of attorneys general for 14
States and the District of Columbia, and
the Puyallup Tribe of Indians filed
separate petitions for review challenging
the July 2020 Final Rule. All the
petitioners asked the court to vacate the
July 2020 Final Rule, alleging violations
of the Hazardous Materials
Transportation Act (HMTA; 49 U.S.C.
510 2012;5127), the Administrative
Procedure Act (APA; 5 U.S.C. 553 et
seq.), and the National Environmental
Policy Act (NEPA; 42 U.S.C. 4321 et
seq.). The Puyallup Tribe also alleged
violations of the Tribal consultation
protocols under the National Historic
Preservation Act (54 U.S.C. 300101 et
seq.) and Executive Order 13175
(‘‘Consultation and Coordination with
Indian Tribal Governments’’),10 as well
as disparate impacts on the Tribe in
violation of Executive Order 12898
(‘‘Federal Actions to Address
Environmental Justice in Minority
Populations and Low-Income
Populations’’) 11 and Title VI of the Civil
Rights Act of 1964 (42 U.S.C. 2000d et
seq.). The petitions were subsequently
consolidated within a single proceeding
in the U.S. Court of Appeals for the
District of Columbia Circuit 12 with the
court granting PHMSA’s motion to place
the petitions in abeyance while PHMSA
reviewed the July 2020 Final Rule.
9 In that legislation, Congress earmarked funds for
the NASEM study for the express purpose of
‘‘inform[ing] rulemaking.’’ NASEM maintains a
website dedicated to the TRB committee’s work that
contains the TRB committee’s charter, work
product, meeting agendas, and other supporting
material. See NASEM, ‘‘Safe Transportation of
Liquefied Natural Gas by Railroad Tank Car,’’
https://www.nationalacademies.org/our-work/safetransportation-of-liquefied-natural-gas-by-railroadtank-car (last visited May 15, 2023).
10 65 FR 67249 (Nov. 9, 2000).
11 59 FR 7629 (Feb. 16, 1994).
12 Under docket no. 20–1317 (consolidated with
docket nos. 20–1318, 20–1431, & 21–1009).
PO 00000
Frm 00042
Fmt 4700
Sfmt 4700
PHMSA submitted the latest status
report in that proceeding in early June
2023. The Court lifted the abeyance on
July 18, 2023.13
C. Another Hard Look Incorporating
NASEM Recommendations and Ongoing
Research Efforts
Immediately after taking office, the
Biden-Harris Administration issued
Executive Order 13990 (‘‘Protecting
Public Health and the Environment and
Restoring Science To Tackle the Climate
Crisis’’) 14 on January 20, 2021.
Executive Order 13990 required the
review of agency regulations and other
actions promulgated or adopted
between January 20, 2017, and January
20, 2021, that are candidates for
suspension, modification, or rescission
because of inconsistency with BidenHarris Administration policies to
improve public health, protect the
environment, prioritize environmental
justice, and reduce GHG emissions. The
Biden-Harris Administration identified
the July 2020 Final Rule in a nonexclusive list 15 of agency actions that
would be reviewed in accordance with
Executive Order 13990. Additionally,
section 7 of Executive Order 13990
revoked Executive Order 13868, along
with several other executive orders and
executive actions, and directed agencies
to promptly take steps, consistent with
applicable law, to rescind any rules or
regulations that had been issued
‘‘implementing or enforcing’’ those
executive orders and executive actions.
In response to Executive Order 13990,
DOT published a notice on May 5, 2021,
soliciting comment on potential
candidates for review under Executive
Order 13990 from among existing rules
and other DOT actions.16 DOT received
one comment pertaining to the July
2020 Final Rule from the Transportation
Trades Department of the American
Federation of Labor and Congress of
Industrial Organizations (AFL–CIO).
The commenter requested a
reexamination of the July 2020 Final
Rule as it believed that rulemaking
‘‘neglected to include meaningful safety
measures to adequately address the
13 On May 17, 2023, Petitioners filed a Joint
Motion to Lift Abeyance and requested the D.C.
Circuit Court to direct the parties to submit a
proposed briefing schedule. PHMSA, through the
Department of Justice, filed a response opposing the
motion to lift the abeyance on June 6, 2023. The
Petitioners filed a reply on June 13, 2023.
14 86 FR 7037 (Jan. 25, 2021).
15 U.S. White House, ‘‘Fact Sheet: List of Agency
Actions for Review,’’ https://www.whitehouse.gov/
briefing-room/statements-releases/2021/01/20/factsheet-list-of-agency-actions-for-review/ (last visited
May 16, 2023).
16 85 FR 23876 (May 5, 2021).
E:\FR\FM\01SER1.SGM
01SER1
lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
inherent risks to this type of
operation.’’ 17
The TRB issued its Phase I Report on
June 15, 2021,18 which reviewed the
plans and progress of the LNG Task
Force and evaluated the relevance,
completeness, and quality of those
efforts. The Phase I Report generally
praised the LNG Task Force’s
‘‘comprehensive as planned’’ program
for making effective use of a ‘‘number of
long standing and high-quality research
and testing programs.’’ However, the
TRB noted that the COVID–19 public
health emergency resulted in delays in
initiation and completion of several
tasks. The TRB also noted that the
interdependency of many of those
outstanding tasks complicated its and
the LNG Task Force’s work in
developing a complete understanding of
the risks associated with the
transportation of LNG in rail tank cars.
Specifically, it expressed concern on the
incomplete status of tasks pertaining to
full-scale impact testing, portable tank
pool fire testing, worst-case scenario
analysis, and quantitative risk
assessment. The Phase I Report made
several recommendations including
proposing that PHMSA and FRA make
changes to the planned portable fire
tank testing, assess the potential for
cryogenic damage cascading to adjacent
tanks, enhance the modeling for worstcase scenarios, evaluate explosion
hazards from a spill of LNG resulting in
vapor dispersion in an environment
with confined or congested spaces, and
add loading and unloading operations to
the risk assessment. PHMSA
subsequently modified its LNG Task
Force testing activity in response to the
Phase I Report recommendations by,
among other things, undertaking each of
the following: enhanced impact testing
directed toward evaluating post-weld,
heat-treated seams from a DOT–
113C120W9–specification tank car;
enhanced worst-case scenario modeling;
performing an enhanced quantitative
risk assessment; modification of ISO
tank pool fire testing protocols to better
simulate release conditions; and
enhanced train dynamic simulations to
better capture effects from use of
distributed power and buffer car
placement within a train consist
transporting LNG.
On November 8, 2021, PHMSA
published the NPRM in this rulemaking
proceeding. In that NPRM, PHMSA
reviewed pertinent economic data,
17 Docket
No. DOT–OST–2021–0036–0025.
‘‘Preparing for LNG by Rail Tank Car:
A Review of a U.S. DOT Safety Research, Testing,
and Analysis Initiative’’ (Jun. 2021) (Phase I
Report), https://www.nap.edu/read/26221/chapter/
1.
18 NASEM,
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
TRB’s Phase I Report recommendations,
and the status of ongoing work of the
LNG Task Force en route to proposing
a temporary suspension of the
transportation of LNG by rail tank car
until the earlier of either June 30, 2024,
or the publication of a companion
rulemaking under RIN 2137–AF54.
PHMSA’s proposal reflected its
understanding that uncertainties
acknowledged in the July 2020 Final
Rule—e.g., regarding the near-term
commercial viability of rail tank car
transportation of LNG, as well as
potential safety and environmental
benefits and risks of rail tank car
transportation—had only increased
since issuance, thereby ‘‘casti[ng] doubt
on the continued validity of the balance
between potential benefits and public
safety and environmental risks
underpinning the [July 2020 Final
Rule].’’ 19 PHMSA therefore proposed a
temporary suspension of the July 2020
Final Rule to allow time for PHMSA to
review the results of the (thenforthcoming) TRB Phase II Report,
complete ongoing LNG Task Force
testing and evaluation activities, and
(based on the results of those efforts)
modify HMR requirements as
appropriate within the companion
rulemaking under RIN2137–AF54. The
comment period closed on December
23, 2021. PHMSA received over 10,500
comments from private individuals,
environmental groups, government
officials, the rail industry, and other
stakeholders. See Section III for further
details.
The TRB issued its Phase II Report on
September 9, 2022.20 The Phase II
Report involved a more comprehensive
assessment than that undertaken in
connection with the Phase I Report
regarding topics relevant to the safe
movement of LNG by rail tank car
pursuant to both SPs and the HMR
following issuance of the July 2020
Final Rule. Specifically, it examined
bulk shipments of LNG by other modes
of transportation (including vessel and
highway) to identify the basic principles
used in those modes for safety
assurance. It also examined the
effectiveness of regulatory requirements
and industry practices (e.g., pertaining
to speed and routing, as well as other
operational controls applicable to highhazard flammable trains) intended to
assure the safe transportation of bulk
rail shipments of other hazardous
materials.
19 86
FR at 61735–36.
‘‘Preparing for LNG by Rail Tank Car:
A Readiness Review’’ (Sep. 2022) (Phase II Report),
https://www.nap.edu/read/26719/chapter/1.
20 NASEM,
PO 00000
Frm 00043
Fmt 4700
Sfmt 4700
60359
The Phase II Report also made
recommendations on necessary nearand long-term actions to improve the
understanding of the risks associated
with transporting LNG by rail tank car,
mitigate those risks, and prevent and
prepare for potential incidents. The first
recommendation suggested launching
an LNG safety assurance initiative
before LNG tank cars are put in service.
The safety assurance initiative would
actively monitor initial plans for and
early patterns of LNG traffic activity,
including the locations and routes of
shipments, the number and
configuration of tank cars in trains, and
reports of incidents involving a tank car
or train carrying LNG. The second and
final recommendation suggested that
PHMSA and FRA should review the
DOT–113C120W9 tank car specification
to ensure that it adequately accounts for
the cryogenic and thermal properties of
LNG that could contribute to a tank
release in the event of a rail incident
and potential cascading impacts
therefrom. The TRB’s elaboration on its
second recommendation emphasized
the value in assessing each of the
following: the capacity of the pressure
relief devices on the new DOT–
113C120W9-specification tank cars to
vent a sufficient amount of LNG when
the tank car is engulfed in an LNG fire
in derailment conditions, including a
rollover event; the effects of adding
more and different types of insulation in
the annular space to ensure sufficient
performance of the multilayer insulation
system when the tank car is exposed to
heat flux and direct flame impingement
from an LNG fire; and the potential for
the outer tank of the DOT–113C120W9
tank car to experience cryogenic brittle
failure and loss of vacuum insulation
when exposed to an LNG pool fire.
PHMSA subsequently adjusted its LNG
Task Force testing activity in response
to the Phase II Report recommendations
by modifying its ongoing worst-case
analysis modeling and quantitative risk
assessment efforts to address the DOT–
113C120W9-specification design
element concerns raised by the TRB. In
light of the new information received
from the TRB reports and PHMSA’s
completed research and ongoing tests,
PHMSA suspends the regulations
adopted in the July 2020 Final Rule to
allow PHMSA sufficient time to
complete its analysis to reconsider the
determinations made in the July 2020
Final Rule.
The LNG Task Force has completed
most of its testing and evaluation
activities (as modified in response to the
TRB Phases I and II Reports). Of those
remaining activities, PHMSA expects to
E:\FR\FM\01SER1.SGM
01SER1
60360
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
complete its enhanced quantitative risk
analysis and worse case analysis
modeling no later than Q3–2023. This
analysis has taken longer than expected
because it was modified first to address
concerns in the TRB Phase I Report in
June 2021 and then again in response to
the TRB Phase II Report issued in
September 2022. PHMSA is in the
process of contracting for performance
of each of the following remaining tasks:
(1) enhanced impact testing directed
toward evaluating post-weld, heattreated seams from a DOT–113C120W9specification tank car in response to the
TRB Phase I Report; and (2) enhanced
train dynamic simulations to better
capture effects from use of distributed
power and buffer car placement within
a train consist transporting LNG in
response to the TRB Phase I Report.
D. East Palestine, OH Derailment
On February 3, 2023, a mixed-consist
freight train operated by Norfolk
Southern Railway—comprised of two
head-end locomotives, 149 railcars, and
1 distributed power locomotive—
derailed in East Palestine, Ohio. Thirtyeight railcars derailed, including 11 tank
cars carrying combustible liquid and
flammable gas hazardous materials,
though none of the railcars were
carrying LNG. The derailment resulted
in a fire impacting the derailed tank cars
and damaging 12 additional railcars that
had not derailed. Included in the
derailment and fire were five DOT–105
specification tank cars containing vinyl
chloride—a hazardous material
classified as a Division 2.1 flammable
gas. These DOT–105 specification tank
cars were not punctured in the
derailment. PHMSA is working with the
National Transportation Safety Board to
learn all it can from this incident and
Commenter
Count
Non-Government Organizations .......................................................
18
Government Officials ........................................................................
Private Individuals .............................................................................
Industry Stakeholders .......................................................................
8
10,126
3
determine whether the lessons learned
should inform rail transportation of
other hazardous commodities such as
LNG.
III. Discussion of Comments to the
NPRM and Adoption of a Temporary
Suspension of the July 2020 Final Rule
The comment period for the NPRM in
this proceeding closed on December 23,
2021. PHMSA received over 10,500 sets
of comments to the rulemaking docket
through and after the formal comment
period; consistent with § 106.70,
PHMSA considers late-filed comments
to the extent possible. PHMSA
considered all comments received in the
development of this Final Rule. The
comments submitted to this docket may
be accessed via https://
www.regulations.gov. The following
table categorizes the commenters. Please
note that some commentors submitted
multiple comments.
Description and examples of category
Environmental Groups; Emergency Response Organizations;
Other.
Local; State; Federal; Tribal.
Trade Associations; Shippers.
lotter on DSK11XQN23PROD with RULES1
Table of Commenters to the NPRM
Comments received could generally
be summarized as advancing one or
more of the following positions:
• Comments requesting an
immediate, permanent ban of LNG by
rail;
• Comments requesting the removal
of the June 30, 2024, sunset date;
• Comments of general support for
the NPRM;
• Comments alleging chilling of nearterm demand for LNG transportation by
rail tank car pursuant to the July 2020
Final Rule;
• Comments alleging that LNG by rail
improves safety;
• Comments alleging environmental
benefits from LNG by rail;
• Comments alleging PHMSA is
overstepping its authority by attempting
to regulate oil and gas production;
• Comments alleging PHMSA did not
meet its evidentiary burden under the
APA for temporary suspension of the
July 2020 Final Rule;
• Comments alleging that PHMSA’s
proposal will have miscellaneous
adverse consequences for regulated
entities, the U.S. economy, and national
security; and
• Comments beyond the scope of this
rulemaking.
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
Based on the comments received in
response to the NPRM, the
recommendations in the TRB Phases I
and II Reports, the ongoing LNG Task
Force testing and evaluation activities,
and pertinent information regarding the
near-term commercial prospects for rail
tank car transportation of LNG, PHMSA
has concluded that a temporary
suspension of the July 2020 Final Rule’s
authorization for rail tank car
transportation of LNG in new DOT–
113C120W9-specification tank cars is
appropriate. PHMSA finds that,
consistent with the analysis in the
NPRM, these resources indicate that the
uncertainties described in the July 2020
Final Rule (e.g., regarding whether,
when and how LNG by rail tank car
transportation will occur, and the safety
and environmental risks and benefits of
such transportation) have only
increased since its issuance, calling into
question the balance between potential
benefits and public safety and
environmental risks PHMSA understood
itself to be striking in that rulemaking.
In contrast (and as explained at greater
length below in this Section III
responding to comments received on the
NPRM) a temporary suspension will
ensure each of the following: (1)
avoidance of potential safety risks to
PO 00000
Frm 00044
Fmt 4700
Sfmt 4700
public and worker safety and the
environment while PHMSA completes
its companion rulemaking under RIN
2137–AF54; (2) HMR authorization of
rail tank car transportation of LNG
pursuant to that companion rulemaking
reflects the best science by accounting
for ongoing LNG Task Force testing and
evaluation activities as informed by the
TRB Phases I and II Report
recommendations; (3) consideration of
additional public comment from diverse
stakeholders in that companion
proceeding; and (4) minimizing the
potential for economic burdens by
ensuring that entities avoid ordering rail
tank cars for LNG service compliant
with the requirements of the July 2020
Final Rule when the companion
rulemaking may alter those
requirements.21 See 86 FR at 61732,
67135–36. As noted in the NPRM,
stakeholders seeking to transport LNG
by rail during the suspension period
may seek (on an ad hoc basis) either SPs
from PHMSA or approvals from FRA.
Lastly, the Final Rule extends the
duration of the temporary suspension an
21 The temporary suspension provided for in this
Final Rule applies only to rail transportation of
LNG tank cars—it does not prohibit use of the new
DOT–113C120W9 tank car in connection with other
hazardous, cryogenic liquids.
E:\FR\FM\01SER1.SGM
01SER1
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
additional year (until June 30, 2025, at
the latest) beyond the sunset date (June
30, 2024) proposed in the NPRM. This
extension—which is consistent with
comments received from stakeholders 22
on the NPRM discussed in section III.B
below—is warranted due to delays in
completion of the LNG Task Force
activity (discussed in section III.C
below) that will inform the companion
rulemaking under RIN 2137–AF54.
Also, economic information discussed
in section III.D below shows that the
commercial prospects for rail tank car
transportation pursuant to the July 2020
Final Rule have become even more
uncertain than they were when the
NPRM issued in November 2021.
lotter on DSK11XQN23PROD with RULES1
A. Comments Requesting an Immediate,
Permanent Ban of LNG by Rail
PHMSA received numerous
comments requesting the immediate,
permanent ban of all LNG by rail in lieu
of the temporary suspension as
proposed in the NPRM. Many of these
comments were part of write-in
campaigns comprising approximately
6,650 comments in an initial campaign
during the formal comment period, and
an additional 3,500 comments in a
second campaign coordinated by the
National Resource Defense Council
(NRDC) after the East Palestine
derailment in early 2023 (NRDC
Coordinated Write-in Campaign
Comments). Other comments were
stand-alone comments submitted by
non-governmental organizations (e.g.,
environmental advocacy organizations);
Federal, State, and local government
officials; and private citizens.
Many of these comments attributed
the need for an immediate, permanent
ban on the risk to public safety and the
environment from LNG’s material
properties—specifically, pointing to its
flammability, explosive potential, and
GHG contributions—in the event of a
release. Of particular concern for many
commenters were the risks of a boiling
liquid expanding vapor explosions
(BLEVEs) or asphyxiation in the event of
a release of LNG during an accident or
incident. Some commenters elaborated
on their safety concerns by highlighting
the potential limitations (e.g., of
personnel and equipment resources and
training) of emergency response
personnel to respond to an incident
involving rail transportation of LNG in
their jurisdictions. Other commenters
alleged that the new DOT–113C120W9
tank car specification was inadequate or
22 PHMSA received no comments that specifically
requested the June 2024 sunset date for the
suspension; commenters either sought no
suspension or a permanent suspension.
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
untested for rail transportation of LNG
and that a more robust safety history—
coupled with more robust, mandatory
operational controls (such as limits on
train length, tank car weight, and
maximum allowable speed) than
required in the July 2020 Final Rule—
would be necessary to ensure safety.
Other commenters cited safety and
environmental justice concerns for those
who live along rail lines that would
carry LNG, stating that ‘‘bomb trains’’
would threaten the safety of those who
live in these communities—many of
which communities may be denselypopulated or historically disadvantaged.
Other commenters called for an
immediate ban of LNG transportation by
rail given methane’s status as a potent
GHG and the Biden-Harris
Administration’s commitments to
reducing GHG emissions. And
commenters from the NRDC campaign
called for a ban on LNG by rail in the
‘‘in the wake of the devastating train
derailment in East Palestine, Ohio.’’ 23
Lastly, some commenters contended
that if the ‘‘. . . rule was already bad
enough to reconsider, it should be
repealed outright.’’ 24
PHMSA Response
PHMSA acknowledges the concerns
raised by these stakeholders and agrees
that any risks related to the
transportation of LNG by rail should be
examined closely and properly
mitigated to ensure safety for the public
and the environment. Accordingly
PHMSA is suspending LNG
transportation by rail tank car pursuant
to the July 2020 Final Rule until the
conclusion of the companion
rulemaking under RIN 2137–AF54 or
June 30, 2025, whichever is earlier. This
will provide PHMSA an opportunity to
conduct a thorough evaluation of the
HMR’s regulatory framework for rail
transportation of LNG based on the
information received from the LNG Task
Force testing and evaluation efforts,
TRB Phases I and II Reports, and
stakeholders’ written comments.
PHMSA also encourages those
stakeholders to consider submitting
comments in response to any future
notice of proposed rulemaking issued by
PHMSA in the companion rulemaking
under RIN 2137–AF54.
B. Comments Requesting the Removal of
the June 30, 2024, Sunset Date
PHMSA received comments
requesting removal of the sunset date of
23 NRDC Coordinated Write-in Campaign
Comments.
24 Beyond Extreme Energy with 198 methods
Comment at 1.
PO 00000
Frm 00045
Fmt 4700
Sfmt 4700
60361
June 30, 2024, proposed in the NPRM so
that the proposed suspension would be
in effect until the companion
rulemaking under RIN 2137–AF54 has
concluded. Delaware Riverkeeper
Network (DRN) commented that in the
NPRM, PHMSA justified the sunset date
by indicating that the TRB Phase II
Report was expected in mid-2022 and
that PHMSA needed time to incorporate
those results and publish a rule. DRN
argued that ‘‘this rationale begs the
question—why not wait until PHMSA
actually incorporates the results of the
Phase II Report and concludes the
rulemaking process?’’ They further
stated that ‘‘the unpredictability of the
COVID–19 pandemic indicates that
timelines are not as predictable as they
were pre-2019.’’ 25
The International Association of Fire
Fighters (IAFF) suggested an objectivebased approach whereby the suspension
would only be lifted if certain criteria
have been met. IAFF further urged ‘‘. . .
the FRA to establish specific criteria to
be attained prior to the lifting of the
proposed suspension.’’ 26 Similarly,
comments from the AFL–CIO and others
supported suspending LNG by rail tank
car until LNG Task Force testing and
evaluation efforts are complete, stating
they ‘‘. . . support PHMSA’s
suspension of the implementation of the
rule until a time when the agencies have
completed a more thorough safety
review.’’ 27 Other commenters proposed
longer suspension periods than had
been proposed in the NPRM.
PHMSA Response
PHMSA in the NPRM specifically
sought comments on the proposed
suspension date, including the sunset
date, and whether PHMSA should
modify the proposed expiration of the
suspension period.28 PHMSA
appreciates and acknowledges the
points made by commenters and,
consistent with the discussion in the
introduction to section III above, is
extending the sunset date for the
suspension period an additional year
such that rail tank car transportation of
LNG pursuant to the July 2020 Final
Rule will be suspended until the earlier
of either (1) a final rule concluding the
companion rulemaking under RIN
2137–AF54, or (2) June 30, 2025. This
one-year extension beyond the sunset
date (June 30, 2024) proposed in the
NPRM will give PHMSA adequate time
to complete LNG Task Force testing and
evaluation activities (and delays in
25 DRN
Comment at 2.
Comment at 2.
27 TDD Comment at 1.
28 86 FR at 61737.
26 IAFF
E:\FR\FM\01SER1.SGM
01SER1
60362
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
receipt of the TRB Phases I and II
Reports) that had been delayed because
of the COVID–19 public health
emergency and additional scoping and
contracting issues, and thereafter
integrate those results into each of a
notice of proposed rulemaking and final
rulemaking in the companion
rulemaking under RIN 2137–AF54.
C. Comments of General Support for the
NPRM
PHMSA received numerous
comments in support of the NPRM’s
proposed suspension, including
comments from Governor Jay Inslee of
Washington State; the Attorneys General
of Maryland, New York, Connecticut,
Delaware, Illinois, Massachusetts,
Michigan, Minnesota, New Jersey,
Oregon, Pennsylvania, Rhode Island,
Vermont, Washington, and the District
of Columbia; and the Puyallup Tribe of
Indians. Many commenters who
supported the temporary suspension
proposed in the NPRM also urged
PHMSA to subsequently ban LNG in the
companion rulemaking under RIN
2137–AF54. Commenters supporting the
NPRM’s proposed suspension of the
July 2020 Final Rule generally
articulated the same safety and
environmental concerns as those calling
for an immediate, permanent bans of
rail tank car transportation of LNG
discussed in section III.A above.
lotter on DSK11XQN23PROD with RULES1
PHMSA Response
PHMSA acknowledges the thousands
of comments submitted in support of
the NPRM. Although some of those
commenters also urged PHMSA to
permanently ban rail tank car
transportation of LNG in the companion
rulemaking under RIN 2137–AF54,
PHMSA submits that it will need to
complete (and review the results of) the
LNG Task Force testing and evaluation
efforts before it will be in a position to
speak to the contents of a forthcoming
notice of proposed rulemaking in that
companion rulemaking. PHMSA
encourages stakeholders to consider
submitting comments in response to any
future notice of proposed rulemaking
issued by PHMSA in the companion
rulemaking under RIN 2137–AF54.
D. Comments Alleging Chilling of NearTerm Demand for LNG Transportation
by Rail Tank Car Pursuant to the July
2020 Final Rule
PHMSA received several comments 29
on the NPRM’s observations of
increased uncertainty regarding whether
29 CSX Comments at 1; PHMSA, Doc. No.
PHMSA–2021–0058–7064, ‘‘Summary of CSX
Listening Session’’ (Feb. 17, 2022); Landry, et al.
Comments at 1, 4.
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
there will be near-term demand for rail
tank car transportation of LNG pursuant
to the July 2020 Final Rule. Specifically,
CSX noted in its comments that it had
several projects in development to
transport LNG by rail in or before 2024,
and that ‘‘[t]he continued investment in
and pursuit of those projects, which
require design, permitting, and
construction with long lead times,
would be impaired if the July 2020 Final
Rule were suspended indefinitely,
delaying them potentially for years and
harming CSX’s reliance interests and
imposing costs and lost business
opportunities on CSX and its partners’’
(emphasis added). CSX subsequently
met with PHMSA on February 17, 2022,
and elaborated on their written
comments by noting that those projects
had been shelved and that the issuance
of the NPRM was the occasion for those
decisions. The Attorney General for the
State of Louisiana, Jeff Landry, joined by
State Attorneys General from Alabama,
Alaska, Arizona, Arkansas, Florida,
Georgia, Idaho, Indiana, Kentucky,
Mississippi, Missouri, Montana,
Nebraska, New Hampshire, Ohio, South
Carolina, South Dakota, Texas, Utah,
Virginia, West Virginia, and Wyoming
(Landry, et. al.) similarly contend that
‘‘the proposed rule itself is the cause of
the regulatory uncertainty of which it
complains’’ (emphasis in original) in
that it ‘‘discourages companies from
making any capital investment in LNG
by rail, specifically the DOT–
113C120W9 specification tank cars that
the 2020 Rule authorized.’’
PHMSA Response
PHMSA finds these comments
unconvincing statements of the nearterm commercial viability of rail tank
car transportation of LNG pursuant to
the July 2020 Final Rule. The
suspension proposed in the NPRM and
adopted in this Final Rule is not
‘‘indefinite’’ as characterized by CSX;
rather, it is time-limited to the earlier of
a date certain (June 2025) or to the
completion of the milestone of issuing
a final rule in the companion
rulemaking under RIN 2137–AF54. Even
if the NPRM affected one or more of
CSX’s nascent projects exploring rail
tank car transportation of LNG, CSX or
other entities could have applied for,
and may still apply for, an alternative
regulatory vehicle (e.g., an SP under
§ 107.105,30 or an FRA approval for rail
30 Applications for a Special Permit submitted
under § 107.105 must demonstrate that such Special
Permit will achieve at least an equivalent level of
safety as to what is provided under the HMR, and
in particular, should address any outstanding safety
questions or concerns including those raised in this
rulemaking.
PO 00000
Frm 00046
Fmt 4700
Sfmt 4700
transportation via portable tank) to
allow work to proceed on those projects
during the suspension period. PHMSA
is unaware of CSX, its collaborators in
those projects, or any other entities
having pursued alternatives. Indeed, in
its written comments and again during
its February 17, 2022, meeting with
PHMSA, CSX personnel acknowledged
that the choice of package (i.e., the
particular DOT-specification rail tank
car or ISO tank) employed in rail
transportation of LNG is merely one
decision within a multi-step, multi-year
project development and execution
chain involving, among other things, the
construction of origin facilities and offloading facilities, and the acquisition of
one or more enabling Federal and State
permits. The projects CSX and others
may have been pursuing were
prolonged, highly contingent processes
in which there are multiple potential
bases for material delay or cessation of
a project throughout the development
cycle. That said, PHMSA understands
the shelving of CSX’s or any other
entities’ projects following the proposal
of a time-limited, temporary suspension
for which there could be alternative rail
transportation methods evinces less an
alleged ‘‘chilling’’ of investment than
the significant uncertainty discussed in
the NPRM regarding whether there
would be any commercially viable
projects for rail transportation of LNG in
the near-term.
And PHMSA understands that a
variety of forces have created—and will
continue to create throughout the
suspension period—headwinds for the
near-term commercial viability of any
project for rail transportation of LNG.
The NPRM explained that the near-term
commercial prospects for LNG by rail
(which the July 2020 Final Rule had
acknowledged were uncertain at its
issuance) had grown even more
uncertain due to near-term structural
changes in international markets
including (1) massive investment in
greatly increased export capacity by
competing providers such as Qatar, and
(2) reduced demand for LNG customers
seeking to reduce their GHG
emissions.31 The comments submitted
by CSX, other industry stakeholders,
and Landry, et. al. did not attempt to
rebut this evidence, or PHMSA’s finding
that the near-term commercial
uncertainty for rail transportation of
LNG had increased. Further, the
structural headwinds for rail
transportation of LNG are likely to
accelerate in the near future, as the U.S.
Energy Information Administration
(EIA) predicts that the capacity of
31 86
E:\FR\FM\01SER1.SGM
FR at 61735–36.
01SER1
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
lotter on DSK11XQN23PROD with RULES1
pipeline-supplied U.S. LNG export
terminals are expected to increase
significantly beginning around 2025
which some analysts note could depress
the offtake prices for LNG in the
international export market—which
could divert demand for LNG exports
that could have been serviced by LNG
by rail.32 Further, the supply shocks of
the conflict in Ukraine have highlighted
both in the United States and abroad the
volatility of natural gas prices and
fragility of international LNG market
supply, accelerating movement among
historical consumers of natural gas
toward renewable energy and reduced
reliance on LNG exports.33 Meanwhile,
domestic consumption of natural gas in
the United States is expected to fall in
the next decade due to increasing
electrification driven by consumer
preferences and Federal and State
policy initiatives to reduce GHG
emissions.34 Durably high commodity
(e.g., steel) prices and interest rates 35
would also tend to discourage capital
investment in the manufacture of a new
fleet of DOT–113C120W9-specification
tank cars for dedicated commercial LNG
service.
PHMSA finds this recent evidence,
coupled with the evidence discussed in
the NPRM, augurs uncertainty regarding
the commercial prospects for rail
transportation of LNG that will continue
beyond the originally proposed
suspension period and into the longer
suspension period adopted in this final
rule.36 Following the conclusion of the
(temporary) suspension period,
stakeholders would be able to evaluate
32 EIA, ‘‘U.S. LNG Export Capacity to Grow as
Three Additional Projects Begin Construction,’’
(Sept. 6, 2022), https://www.eia.gov/todayinenergy/
detail.php?id=53719 (last visited May 12, 2023).
See also A. Shiryaevskaya et al., Bloomberg, ‘‘World
Gas Supply Shifts from Shortage to Glut with
Demand Muted’’ (Apr. 16, 2023); L. Hampton,
Reuters, ‘‘Wave of New LNG Export Plants
Threatens to Knock Gas Prices’’ (Mar. 14, 2023).
33 See Intl. Energy Agency (IEA), World Energy
Outlook: 2022 at 3, 25–26 (Oct. 2022); The
Economist ‘‘War and Subsidies Have Turbocharged
the Green Transition’’ (Feb. 13, 2023); Inst. for
Energy Economics and Financial Analysis, Global
LNG Outlook: 2023–2027 at 4–5 (Feb. 15, 2023).
34 See EIA, Annual Energy Outlook 2023 at 25
(Mar. 2023).
35 N. Ruggiero, S&P Global Commodity Insights,
U.S. Steel Sentiments Hit New High for 2023 As
Mills Increase Finished Prices’’ (Mar. 13, 2023); R.
Druzin, Argus Media, ‘‘U.S. Steel Price Driven Up
by Multiple Factors’’ (Mar. 14, 2023); M. Derby,
Reuters, ‘‘Premature for Fed to Call End to Rate
Hikes with Inflation Still High, Williams Says (May
9, 2023).
36 Amidst the limited domestic and international
commercial prospects discussed here, it is hardly
surprising that rail transportation of LNG has
occurred by neither (1) existing DOT–113C120W
tank cars pursuant to DOT–SP 20534 issued by
PHMSA to ETS in 2019, nor (2) ISO tanks pursuant
to an FRA approval issued to the Alaska Railroad
Company in 2015.
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
whether the commercial prospects for
rail tank car transportation of LNG
pursuant to the July 2020 Final Rule
merit pursuing.
E. Comments Contending That the LNG
by Rail Improves Safety
PHMSA received several comments
arguing temporary suspension of the
July 2020 Final Rule would forfeit safety
benefits.37 Some of those comments
pointed to the physical properties (e.g.,
auto-ignition temperatures) of LNG they
assert make its rail transportation
inherently safer than transportation of
natural gas in other physical states.
Others contended that, absent the July
2020 Final Rule, industry would be
forced to utilize other modes of
transportation of natural gas—in
particular, highway transportation via
MC–338 cargo tanks—which would
entail more frequent accidents and
incidents than rail transportation. Some
comments generally praised the DOT–
113C120W9-specification tank car
approved for use in transporting LNG in
the July 2020 Final Rule because it was
an improvement on the proven, existing
DOT–113C120W-specification tank cars
that PHMSA had approved for use in
rail tank car transportation of LNG via
SP. Lastly, RSI asserted that by
discouraging investment in DOT–
113C120W9 tank cars for LNG service,
PHMSA was discouraging construction
of those enhanced tank cars for use in
transporting other cryogenic liquid
hazardous materials.
PHMSA Response
PHMSA finds these contentions
unconvincing. As presented, each of
those arguments suggest that any
potential benefits of rail tank car
transportation of LNG will be lost if
PHMSA suspends the July 2020 Final
Rule as proposed in the NPRM. But that
binary understanding confuses the
temporary, time-limited suspension
proposed in the NPRM and adopted in
this final rule with a permanent or
indefinite ban on rail tank car
transportation of LNG. A temporary
suspension would mean that any safety
benefits would only be unavailable for
the suspension period—i.e., until the
end of June 2025 (at the latest). See 86
FR at 61737–38. Further, any such
potential, time-limited comparative
advantage turns on whether any rail
transportation of LNG pursuant to the
July 2020 Final Rule would in fact have
37 CSX Comments at 1; Landry, et al. Comments
at 1, 4, 5; RSI Comments at 2, 4; ‘‘Comments of U.S.
House of Representatives Committee on
Transportation and Infrastructure—Republican
Minority Members’’ at 2–3 (Dec. 22, 2021) (House
T&I Minority Comments).
PO 00000
Frm 00047
Fmt 4700
Sfmt 4700
60363
occurred during the suspension period,
but, as explained above, market
conditions now and in the near future
do not support demand to transport
LNG in rail tank cars. That demand,
which was uncertain at issuance of the
July 2020 Final Rule has become only
more uncertain since given the
commercial headwinds facing the
development of that market.38 Further,
any time-limited comparative advantage
from leaving the July 2020 Final Rule
undisturbed would also be mitigated by
the availability of other regulatory
vehicles (FRA approvals and PHMSA
SPs) that entities can pursue during the
suspension period.
Uncertainty regarding whether the
July 2020 Final Rule’s authorization of
rail transportation in DOT–113C120W9specification tank cars ensures adequate
protection of public safety has only
increased since the time of issuance of
each of the July 2020 Final Rule and the
NPRM proposing its suspension. The
July 2020 Final Rule itself
acknowledged that its authorization of
rail transportation of LNG in the new
DOT–113C120W9 tank car did not turn
only on the tank car itself; rather, a
number of other factors (including, but
not limited to, the material properties of
LNG and natural gas, the quantity of
LNG that will be moved by rail, the
routes involved, the availability of
emergency response planning resources,
etc.) affected the risks involved in rail
tank car transportation of LNG. See 86
FR at 61734.39 Subsequently, the TRB
Phase I Report highlighted gaps
(discussed in section II.C above) within
the LNG Task Force testing efforts
undertaken to improve confidence in
38 The NPRM also explains there is also
significant uncertainty regarding the commercial
prospects of mode-switching (from rail tank car to
MC–338 cargo tanks carried by truck) given that
such mode-switching would sacrifice (potentially
significant) economies of scale offered by rail tank
car transportation of LNG. See 86 FR at 61737. This
observation was not addressed by any of the
comments submitted by the House T&I Minority,
Landry, et al., RSI, or CSX.
39 PHMSA disagrees with Landry, et al. that
PHMSA’s authorization of rail transportation of
LNG in existing, less robust DOT–113C120W tank
cars pursuant to DOT–SP 20534 reveals PHMSA’s
concerns regarding safety of the DOT–113C120W9
tank car as pretextual. Landry, et al. Comments at
4. The conditions it imposed—a defined, limited
duration, a single route, and various operational
controls—facilitate understanding and bounding of
safety and environmental risks notwithstanding
transportation within a legacy DOT–113C120W
tank car. In contrast, the July 2020 Final Rule’s
nationwide, perpetual authorization of rail tank car
transportation of LNG in a new tank car
specification could entail a fundamentally different
risk profile than DOT–SP 20534 or any other special
permits that PHMSA may issue authorizing (on an
ad hoc basis) rail tank car transportation of LNG.
In addition, no LNG was ever shipped under DOT–
SP 20534, which has now expired and which
PHMSA has declined to renew.
E:\FR\FM\01SER1.SGM
01SER1
lotter on DSK11XQN23PROD with RULES1
60364
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
the safety benefits of rail transportation
of LNG. TRB’s subsequent Phase II
Report identified additional areas
warranting additional research and
evaluation to ensure the safety of rail
transportation of LNG in the DOT–
113C120W9-specification tank car.
Although PHMSA has revised the LNG
Task Force’s testing and evaluation
activities in response to the TRB Phases
I and II Report recommendations, that
work continues; and even after
completing the activities PHMSA must
evaluate the results and determine
whether and how to make permanent
modifications to the HMR governing rail
transportation of LNG. Further, the
comments submitted in response to the
NPRM proposing suspension of the July
2020 Final Rule show a lack of
consensus among stakeholders
regarding whether some of the critical
safety challenges known when PHMSA
issued the July 2020 Final Rule have
been addressed. For example, a
comment submitted by IAFF on the
NPRM noted that ‘‘the capabilities of
fire fighters and emergency medical
responders to safely and effectively
respond to hazmat incidents involving
LNG rail cars has not improved since
our 2019 comments’’ notwithstanding
any PHMSA and FRA outreach and
engagement efforts in the interim.40
Additionally, comments touting the
inherent safety advantages of rail tank
car transportation of liquefied natural
gas miss the larger safety issue toward
which much of the LNG Task Force
testing evaluation activity is directed.
Natural gas in liquid form, undisturbed
within a DOT–113C120W9 tank car is a
very stable material that will not
combust unless it vaporizes which only
happens if the material warms. Further,
any vapor present in the outage of the
tank car will be of a concentration that
is too high to combust. Rather, the
principal safety concern—highlighted
by PHMSA in the July 2020 Final Rule,
in the NPRM and comments thereon,
and in TRB’s evaluation of safety risks
associated with rail transportation of
LNG—pertains to consequences should
either there be a release of LNG to
atmosphere, or a tank car be exposed to
harsh conditions during an incident or
accident. LNG releases can expose
personnel and materials to extreme cold
(as low as ¥120 °C or ¥260 °F) and can
be an asphyxiant within a confined
space. When released to the atmosphere
(as a result of a puncture of the inner
40 IAFF, Doc. No. PHMSA–2021–0058–6442,
‘‘Comments Regarding Suspension of Hazardous
Materials Regulations Amendments Authorizing
Transportation of Liquefied Natural Gas (LNG) by
Rail’’ at 1–2 (Dec. 23, 2021).
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
and outer tanks during an accident or
incident), liquid methane will convert
to a gas that has a relatively low autoignition point (about 540 °C or 1000 °F)
in addition to being highly combustible
when exposed to an ignition source
such as fire or electrical sparking. When
methane ignites, it burns at very high
temperatures (about 1330 °C, or 2426
°F), potentially resulting in exposure of
personnel and materials—including
(potentially) undisturbed DOT–
113C120W9 tank cars adjacent to an
LNG pool fire to significant radiant heat
hazards. Although PHMSA had
undertaken (via the LNG Task Force) a
robust testing regime to develop a
fulsome understanding of those
potential, significant hazards of LNG
when transported by rail tank car in
parallel with the development and
issuance of the July 2020 Final Rule, the
subject matter expert recommendations
within each of the TRB’s Phases I and
II Reports underscore the value in
obtaining that understanding from
completing enhanced testing and
evaluation activities before LNG begins
moving in DOT–113C120W9 rail tank
cars pursuant to the July 2020 Final
Rule. A temporary suspension gives the
LNG Task Force and PHMSA an
opportunity to complete that critical
work.
PHMSA also disagrees that
suspension of the July 2020 Final Rule
would discourage investment in
enhanced, DOT–113C120W9specification tank cars for use in rail
transportation of any cryogenic liquid
hazardous materials—not just LNG.
PHMSA acknowledges that the HMR (at
49 CFR part 179 Subpart F)
contemplates use of DOT–113C120W9specification tank cars for transportation
of other materials authorized for
transportation in the DOT–113 series
tank cars in that DOT–113C120W9 tank
cars will also meet and exceed the
minimum DOT–113C120W standard.
However, factors influencing whether to
invest in new DOT–113C120W9specification tank cars for use in
transporting those other cryogenic
liquids are very different from the
factors driving decision making on
investing in those tank cars for LNG
service. For example, those other
cryogenic liquid hazardous materials
would likely be destined for more
mature domestic and international
markets than the (currently) speculative
domestic and international market for
LNG transported by rail tank car.
Perhaps for this reason, PHMSA is
aware of at least one entity having
submitted an order for construction of
new DOT–113C120W9-specification
PO 00000
Frm 00048
Fmt 4700
Sfmt 4700
tank cars for cryogenic ethylene
service—even as, over three years after
the July 2020 Final Rule issued, PHMSA
is unaware of a single order from a
commercial entity for a new DOT–
113C120W9 specification tank car for
LNG service.41
For the reasons discussed above and
in section III.D, PHMSA concludes that
uncertainty on critical issues regarding
the safety profile of rail tank car
transportation of LNG pursuant to the
July 2020 Final Rule has increased since
its issuance—and will persist through
the suspension period adopted in this
final rule until PHMSA and FRA have
had an opportunity to complete and
review the results of the LNG Task
Force’s testing and evaluation activities
and implement any necessary regulatory
amendments in the companion
rulemaking under RIN2137–AF54.
F. Comments Alleging Environmental
Benefits From LNG by Rail
PHMSA received several comments
arguing temporary suspension of the
July 2020 Final Rule would forfeit
important environmental benefits.
Comments describe several mechanisms
for such environmental benefits
including potential reduction in flaring
from oil and gas production activities
and reduced GHG emissions compared
to highway transportation of the same
volume of LNG in MC–338 cargo
tanks.42
PHMSA Response
For largely the same reasons
discussed in section III.E above, PHMSA
finds these arguments unconvincing.
The statements in those comments
regarding the environmental benefits of
the July 2020 Final Rule were offered
without any evidentiary support and
little analysis, frustrating evaluation
against the comments submitted in
response to the NPRM attributing
potential environmental harms
(including those pertaining to
commodity releases and lifecycle and
indirect GHG emissions) to rail tank car
41 In addition, DOT–113C120W9-specification
tank cars constructed for cryogenic ethylene (or
other cryogenic liquid) service could not be
converted for LNG service easily or immediately:
each tank car would have to be cleaned and purged;
the physical configuration of critical, installed
components of each tank car (e.g., pressure relief
valve piping, valves, and other service equipment)
would have to be changed; and the re-configured
tank car would have to obtain a design certification
from the American Association of Railroads Tank
Car Committee. Mechanically converting one car—
separate from the approval process for the Tank Car
Committee—could take several months to over a
year.
42 House T&I Minority Comments at 2–3; Landry,
et al. Comments at 5–7; CSX Comments at 1–2; RSI
Comments at 2, 5.
E:\FR\FM\01SER1.SGM
01SER1
lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
transportation of LNG. As explained in
the NPRM, both environmental benefits
and risks of rail tank car transportation
of LNG are a function of whether, when,
and where viable market opportunities
for such transportation develops. The
July 2020 Final Rule acknowledged
considerable uncertainty regarding
those questions—and as explained in
the section III.D above, the commercial
prospects for rail tank car transportation
of LNG are more speculative now than
in July 2020 or even when the NPRM in
this proceeding issued in November
2021.
These considerations are particularly
relevant to the mechanisms for
environmental benefits identified in
those comments charactering the
environmental benefits of the July 2020
Final Rule. Whether a market will
emerge during the suspension period (or
for that matter, may ever emerge) for
capture of methane that would be
otherwise be flared from oil and gas
production operations and transported
by rail tank car is not a straightforward
proposition. In addition to the nontrivial capital investment for rail tank
cars, such an approach would require,
among other things, liquefaction
equipment at the production site and
gasification equipment at the
destination and enabling Federal or
state regulatory authorizations—and
each of those elements may need to be
procured sooner at break-even or lower
cost than alternatives such as capture
and transportation via pipeline or MC–
338 cargo tank carried by truck (or, by
extension, by rail tank car via FRA
approval or PHMSA SP). And even if
such a market opportunity would have
arisen, meaningful evaluation of the
GHG emissions benefits would
inevitably involve myriad assumptions
(e.g., accident/incident rates for rail and
highway transportation; lifecycle
emissions from construction and
operation of the tank cars and related
equipment; potential indirect effects
such as emissions associated with
upstream production induced by newlyavailable takeaway capacity) that
increase uncertainty regarding GHG
impacts. Similarly, modal shifting
between highway transportation of LNG
via MC–338 cargo tank and rail tank car
may not be as easy or as desirable as
those comments assume. As discussed
above in section III.D, highway
transportation sacrifices economies of
scale that is among the principal
advantages of rail tank car
transportation of LNG.
For the reasons discussed above,
PHMSA concludes that uncertainty
regarding the potential environmental
benefits and harms from rail tank car
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
transportation of LNG pursuant to the
July 2020 Final Rule will continue
throughout the suspension period
adopted in this Final Rule. This
persistent uncertainty on a critical
potential benefit identified for the July
2020 Final Rule militates in favor of its
temporary suspension as the LNG Task
Force completes its testing and
evaluation activity and PHMSA
implements any necessary regulatory
amendments in the companion
rulemaking under RIN 2137–AF54.
G. Comments Alleging PHMSA Is
Overstepping Its Authority by
Attempting To Regulate Oil and Gas
Production
PHMSA received comments alleging
that PHMSA’s proposed suspension of
the July 2020 Final Rule overstepped its
statutory authority under the HMTA by
attempting to discourage oil and gas
production activity.43
PHMSA Response
Those arguments mischaracterize
PHMSA’s intentions and misapprehend
pertinent law.44 Indeed, PHMSA
nowhere in either the NPRM or in this
Final Rule identifies decreasing oil and
gas production activity as an explicit
goal of its suspension of the July 2020
Final Rule. Instead, Landry, et al.
divines that intention from a reference
to ‘‘[induced] natural gas extraction’’
within a list of several considerations in
the NPRM that are probative to the
safety and environmental risks
attendant to rail tank car transportation
of LNG.45 But PHMSA’s
acknowledgement in the NPRM of the
common-sense proposition that new oil
and gas production activity—and any
attendant environmental benefits as
well as risks (including release to
atmosphere of methane lost during
extraction and transportation)
associated with those activities—could
be a reasonably foreseeable consequence
of authorizing new takeaway capacity is
consistent with its obligations under
NEPA. See 86 FR 61735–36 & n. 35. It
is also consistent with the reasoning
supporting the July 2020 Final Rule,
43 Landry,
et al. Comments at 1, 4.
argument is also in tension with
exhortations elsewhere in the Landry, et al.
comments for PHMSA to consider policy issues
(pertaining to U.S national security and consumers’
home heating bills) that are arguably more
‘‘attenuated’’ and less ‘‘tethered’’ to PHMSA’s
authority under the HMTA. See Landry, et al.
Comments at 1, 7–10. Indeed, Landry, et al. also
urges PHMSA to consider the indirect relationship
between the rulemaking and production activity by
claiming that rail tank car transportation could
yield reductions in flaring from oil and gas
production activities. Id. at 7.
45 Landry, et al. Comments at 4 (citing 86 FR at
61736).
44 This
PO 00000
Frm 00049
Fmt 4700
Sfmt 4700
60365
which (along with its supporting
documentation) explicitly identified
potential indirect effects on each of
upstream production activity and
downstream fuel switching from coal as
justifications for that rulemaking.46
Nor, moreover, would any indirect
effect on production activity from
PHMSA’s exercise of its authority under
the HMTA to regulate interstate rail
transportation of hazardous material
implicate, as suggested by Landry, et al.,
the ‘‘major questions’’ concerns
articulated in Utility Air Regulatory
Group v. EPA (573 U.S. 302 (2014)), and
in West Virginia v. EPA (597 U.S.
(2022)). Neither case disturbed the
longstanding tolerance of minor,
incidental, or accidental effects when an
agency takes actions within the core of
its statutory responsibilities. And here,
PHMSA is doing just that: imposing a
temporary suspension of a recent (July
2020) exercise of its authority under the
HMTA to prescribe regulations
governing interstate transportation by
rail of hazardous materials to
temporarily restore the status quo ex
ante preceding the July 2020 Final Rule.
Lastly, given that (as explained in
section III.D above) there is considerable
uncertainty regarding the commercial
viability of rail tank car transportation
of LNG, the limited-duration suspension
adopted in this Final Rule hardly
resembles the fact sets before the
Supreme Court in either of the above
decisions in which EPA was said to
have ‘‘discover[ed] . . . an unheralded
power to regulate ‘a significant portion
of the American economy.’ ’’
H. Comments Alleging PHMSA Did Not
Meet Its Evidentiary Burden Under the
APA for Temporary Suspension of the
July 2020 Final Rule
PHMSA also received comments
claiming that the NPRM did not make
the required showing under the APA for
suspension of currently-effective
regulations.47 Landry, et al. in particular
characterizes controlling precedent as
establishing a uniquely high burden for
temporary suspension of existing
regulations. PHMSA must, in their view,
provide ‘‘a detailed justification of new
facts that contradict facts underlying
. . . prior policy’’, as well as ‘‘a more
‘reasoned explanation’ to justify
suspension of a regulation’’ than merely
the ‘‘inauguration of a new President.’’
PHMSA must also demonstrate an
46 See 85 FR at 44995. See also Final Regulatory
Impact Assessment, Doc. No. PHMSA–2018–0025–
0479, at 4, 32–33 & n. 48; Final Environmental
Assessment, Doc. No. PHMSA–2018–0025–0478 at
35–36, 52.
47 House T&I Minority Comments at 2 & n.8;
Landry, et al. Comments at 3–4.
E:\FR\FM\01SER1.SGM
01SER1
60366
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
lotter on DSK11XQN23PROD with RULES1
‘‘awareness that it is changing position.’’
Landry, et al. ultimately concluded that
PHMSA ‘‘had not provided any . . .
explanations’’ demonstrating
compliance with those purported
requirements.
PHMSA Response
These criticisms misapprehend
controlling precedent. Indeed, PHMSA
does not understand the cited decisions
to stand for the proposition suggested in
those comments that ‘‘reasoned
decision-making’’ in the context of
suspension of currently effective
regulations necessarily entails a
heightened evidentiary burden. Rather,
the Supreme Court explicitly stated that
the evidentiary burden for agency action
is not heightened when that action is a
change. F.C.C. v. Fox Studios, 556 U.S.
at 502, 514–15 (2009). And although
agencies suspending currently effective
regulations must acknowledge a change
in their position, address any tensions
between conflicting factual findings,
and confront any serious reliance
interests on the old policy, those
common-sense expectations do not
constitute a different, uniquely higher
evidentiary standard for suspending a
currently-effective regulation; rather,
those are the sort of issues an agency
may need to address (as applicable)
when adopting any change in its
regulations. See Motor Veh. Mfrs. Ass’n
v. State Farm Ins., 463 U.S. 29, 51–52
(1983).
Nor did Landry, et al.’s comments
provide any analysis explaining how
PHMSA had run afoul of judicial
guardrails for suspending currentlyeffective regulations. They simply
asserted that PHMSA had failed to
‘‘explain[ ]’’ its compliance with
pertinent APA requirements. But the
NPRM acknowledged that it proposed a
change in position from the July 2020
Final Rule: it stated in multiple places
that rail tank car transportation of LNG
authorized by the July 2020 Final Rule
would be temporarily suspended. See,
e.g., 86 FR at 61731–32. Further,
PHMSA described at length its rationale
and the evidence relied on in making
that change. Specifically, information
(including the TRB Phase 1 Report,
COVID-related delays in the execution
of LNG Task Force testing and
evaluation efforts that had been
expected to corroborate the conclusions
in the July 2020 Final Rule, and
potential fundamental shifts in the
domestic and international market
dynamics) that had emerged following
issuance of the July 2020 LNG Final
Rule cast doubt on the validity of
PHMSA’s understanding of the potential
benefits and risks on which that
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
rulemaking’s policy decisions rested.
See 86 FR at 61735–36. And (as
explained in section III.D above)
because uncertainty on these
considerations has only increased since
the NPRM’s issuance in November 2021,
PHMSA has now decided to impose that
suspension with a marginally longer
(but still time-limited) duration. Lastly,
this decision does not rest, as Landry, et
al. suggests, on specious reasoning that
‘‘no policy is better than the old policy
solely because a new policy might be
put in place . . .’’; rather, temporary
suspension ensures that no rail car
transportation of LNG pursuant to the
July 2020 Final Rule will occur during
the time needed for PHMSA to develop
confidence regarding its potential risks
and benefits within the companion
rulemaking under RIN 2137–AF54.
I. Comments Alleging That PHMSA’s
Proposal Will Have Miscellaneous
Adverse Consequences for Regulated
Entities, the U.S. Economy, and
National Security
PHMSA also received a handful of
comments warning of miscellaneous
adverse effects from the NPRM’s
proposed suspension of the July 2020
Final Rule.48 Certain members of the
U.S. House Transportation and
Infrastructure Committee and Landry, et
al. caution suspension of the July 2020
Final Rule could increase household
energy expenses and compromise U.S.
energy independence and geopolitical
influence. Meanwhile RSI warns that
the NPRM’s invocation of economic
uncertainty and ‘‘hypothetical
concerns’’ as considerations when
tailoring HMR requirements could
portend shifting regulatory requirements
for the transportation of other hazardous
materials. RSI also contends that a more
appropriate tool for addressing
PHMSA’s concerns with the July 2020
Final Rule would be to exercise its
authority under § 107.339 to obtain
emergency orders from a U.S. District
Court to address ‘‘imminent hazards.’’
PHMSA Response
PHMSA finds these comments
unconvincing. The claim that temporary
suspension of the July 2020 Final Rule
could affect U.S. household energy
prices or the geopolitical balance of
power strains credulity given that no
DOT–113C120W9 tank cars intended for
commercial LNG service have been sold
and the commercial viability of such rail
tank car transportation is increasingly
uncertain. Additionally, RSI’s concern
that PHMSA could invoke changing
48 House T&I Minority Comments at 1, 3; Landry,
et al. Comments at 7–8; RSI Comments at 3.
PO 00000
Frm 00050
Fmt 4700
Sfmt 4700
market dynamics to modify
longstanding HMR requirements for
other hazardous materials is misplaced.
Unlike other hazardous materials, the
rail tank car transportation of LNG is not
a mature market—in fact, as discussed
elsewhere in this Final Rule, no such
market has emerged in over three years
since the July 2020 Final Rule issued
and a market may not emerge at all. Nor
does PHMSA’s decision to temporarily
suspend the July 2020 Final Rule hardly
address merely ‘‘hypothetical
concerns’’; rather, (as discussed in
sections III.E and F above) the potential
safety and environmental hazards
associated with LNG could be
significant, and it is PHMSA’s
responsibility under the HMTA to
evaluate and adjust the HMR to ensure
its transportation by rail tank car is
conducted in a manner that protects
public safety and the environment.
Additionally, PHMSA’s decision in this
Final Rule to adjust pertinent HMR
requirements on a time-limited basis
and before any rail tank car
transportation of LNG commences (or is
likely to commence), minimizes the risk
of stranded investments or lost business
opportunities for regulated entities
should PHMSA’s ongoing evaluation of
the safety and environmental risks and
benefits merit imposing additional or
conflicting safety requirements in the
companion rulemaking under RIN
2137–AF54.
In addition, the final rule addresses
any potential public safety and
environmental risks from rail tank car
transportation of LNG via a generic,
nationwide, time-limited suspension
following notice-and-comment
rulemaking is a more appropriate
approach than utilizing the emergency
order authority recommended by RSI.
The July 2020 Final Rule was a
legislative rule that itself was the
product of notice-and-comment
rulemaking, and the APA establishes a
presumption that a subsequent
legislative rule providing for its
modification (to include its temporary
suspension) should similarly involve
notice-and comment rulemaking. See 5
U.S.C. 553. In addition, PHMSA’s
emergency order authority may be
difficult to assert on a time-limited,
precautionary, nationwide basis like the
temporary suspension adopted in this
Final Rule. Each of PHMSA’s § 107.339
emergency order authority and the
Secretary‘s authority to address
imminent hazards under 49 U.S.C.
5122(b) are seldom exercised. A finding
of ‘‘imminent harm’’ may make it more
difficult for any controls addressing that
harm to be removed later based on
E:\FR\FM\01SER1.SGM
01SER1
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
B. Executive Orders 12866 and 14094,
and DOT Regulatory Policies and
Procedures
PHMSA’s evaluation of whether and
how to amend pertinent HMR
requirements in a companion
rulemaking under RIN 2137–AF54.
J. Comments Beyond the Scope of This
Rulemaking
PHMSA received miscellaneous
comments beyond the scope of this
rulemaking. These comments pertained
to concerns regarding PHMSA’s process
in developing, and reasoning in
adopting, the July 2020 Final Rule;
concerns with the adequacy of
conditions imposed by PHMSA within
DOT–SP 20534 issued to ETS in 2019;
a requested ban on fracking (the process
of hydraulic fracturing to extract oil or
gas) and all fossil fuels; and additional
miscellaneous comments unrelated to
this rulemaking or rail tank car
transportation of LNG. A number of
commentors requested repeal of any
existing regulatory approvals or
regulatory provisions—whether by FRA
or PHMSA—authorizing rail
transportation of LNG.
PHMSA Response
Although PHMSA appreciates the
concerns raised by the commenters that
the NPRM’s proposal to suspend the
transportation of LNG by rail tank car
authorized by the July 2020 Final Rule
did not go far enough to protect public
safety and the environment, PHMSA
declines to adopt their far-reaching
recommendations in this proceeding.
However, PHMSA encourages those
stakeholders to consider submitting
comments in response to any future
notice of proposed rulemaking in
PHMSA’s companion rulemaking under
RIN 2137–AF54, as well as to engage
other Federal and State regulatory
authorities with jurisdictional
responsibilities for the issues they asked
PHMSA to address.
IV. Regulatory Analyses and Notices
lotter on DSK11XQN23PROD with RULES1
A. Statutory/Legal Authority
Statutory authority for this final rule
is provided by the HMTA. Section
5103(b) of the HMTA authorizes the
Secretary of Transportation to
‘‘prescribe regulations for the safe
transportation, including security, of
hazardous materials in intrastate,
interstate, and foreign commerce.’’ The
Secretary has delegated the authority
granted in the HMTA to the PHMSA
Administrator at § 1.97(b).
Executive Order 12866 (‘‘Regulatory
Planning and Review’’),49 as amended
by Executive Order 14094
(‘‘Modernizing Regulatory Review’’),50
requires that agencies ‘‘should assess all
costs and benefits of available regulatory
alternatives, including the alternative of
not regulating.’’ Agencies should
consider quantifiable measures and
qualitative measures of costs and
benefits that are difficult to quantify.
Further, Executive Order 12866 requires
that ‘‘agencies should select those
[regulatory] approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety, and other advantages;
distributive impacts; and equity), unless
a statute requires another regulatory
approach.’’ Similarly, DOT Order
2100.6A (‘‘Rulemaking and Guidance
Procedures’’) requires that regulations
issued by PHMSA and other DOT
Operating Administrations should
consider an assessment of the potential
benefits, costs, and other important
impacts of the proposed action and
should quantify (to the extent
practicable) the benefits, costs, and any
significant distributional impacts,
including any environmental impacts.
Executive Order 12866 and DOT
Order 2100.6A require that PHMSA
submit ‘‘significant regulatory actions’’
to the Office of Management and Budget
(OMB) for review. Executive Order
14094 amended Executive Order 12866,
which defines significant regulatory
actions. This rulemaking is considered a
significant regulatory action under
section 3(f) of Executive Order 12866 as
amended by Executive Order 14094.
This final rule has, therefore, been
reviewed by OMB.
PHMSA concludes that the temporary
suspension of transporting LNG by rail
tank car is not expected to have an
economic impact because LNG transport
by rail tank car is not expected to occur
during the suspension period. As
explained in section III.D above, since
issuance of the July 2020 Final Rule, the
commercial prospects for rail tank car
transportation of LNG have become
increasingly unlikely. LNG has not been
transported in any rail tank cars
(whether pursuant to the July 2020 Final
Rule, SP issued by PHMSA, or FRA
approval), and PHMSA is unaware of
any planned movements in the near
future. Indeed, the development of the
necessary infrastructure—including
49 58
50 88
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
PO 00000
FR 51735 (Oct. 4, 1993).
FR 21879 (April 11, 2023).
Frm 00051
Fmt 4700
Sfmt 4700
60367
construction of DOT–113C120W9 tank
cars, loading and unloading facilities,
vessel handling facilities if sea transport
is required, liquification facilities, and
regasification facilities—to transport
LNG by rail as authorized by the July
2020 Final Rule demands significant
financial investment, long-term
commitment, and considerable planning
associated with constructing a new LNG
tank car fleet (which construction may
itself be subject to delays because of
limited capacity in the rail car
manufacturing industry). PHMSA is
unaware of any orders having been
placed for the manufacture of new
DOT–113C120W9 tank cars for
commercial LNG service. This absence
of commercial demand occurred despite
the highest prices for domestic U.S.
natural gas markets and LNG export
markets in nearly a decade.51
Additionally, it appears LNG export
prices have risen faster than the
domestic price which has resulted in a
substantial increase in US LNG exports
over the last decade. However, the
increase in export capacity does not
appear to have translated into increased
demand for tank cars, possibly due to
the majority of the increase in
liquefication capacity occurring at
waterfront LNG facilities.52
PHMSA expects no economic impact
due to the temporary suspension.
Indeed, PHMSA’s temporary suspension
may in fact reduce economic burden by
discouraging a shipper from ordering
rail tank cars compliant with the July
2020 Final Rule when the companion
rulemaking (under RIN 2137–AF54)
may adopt different requirements.
Additionally, should any potential
shippers need to transport LNG by rail
tank car during the suspension period,
they could avail themselves of the
PHMSA SP or FRA approval processes
for such transport.53 Further, temporary
51 See EIA, ‘‘Price of U.S. Liquefied Natural Gas
Exports’’, https://www.eia.gov/dnav/ng/hist/
n9133us3m.htm (last accessed May 24, 2023); EIA,
‘‘Average Cost of Wholesale U.S. Natural Gas in
2022 Highest Since 2008’’, https://www.eia.gov/
todayinenergy/detail.php?id=55119#:∼:text=
In%202022%2C%20the%20wholesale
%20U.S.,on%20data%20from
%20Refinitiv%20Eikon (last accessed May 24,
2023).
52 For approved and under construction U.S. LNG
projects see EIA, ‘‘U.S. LNG export capacity to grow
as three additional projects begin construction’’,
https://www.eia.gov/todayinenergy/
detail.php?id=53719 (last accessed June 28, 2023).
53 As noted earlier in this final rule, PHMSA
previously denied an application for renewal of a
special permit, in part, on the basis that the
application for renewal did not discuss any of the
concerns raised in the NPRM in this proceeding.
PHMSA will consider all applications for a special
permit that meet the requirements set forth in 49
Continued
E:\FR\FM\01SER1.SGM
01SER1
60368
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
suspension guarantees avoidance of
potential adverse public safety and
environmental impacts (including, but
not limited to, contribution of direct and
indirect GHG emissions) that could have
arisen from rail tank car transportation
of LNG under the HMR. Lastly, the
limited duration of the suspension will
also mitigate any potential adverse
economic, public safety, or
environmental impacts that could arise
in the unlikely event that demand for
rail tank car transportation under the
July 2020 Final Rule would have
materialized during the suspension
period in the absence of this final rule.
In addition to the PHMSA SP and
FRA approval alternatives, shippers
could transport LNG by highway via
MC–338 insulated cargo tanks. All of
these alternatives for LNG shippers
would involve higher costs than rail
transportation, but they are available in
the unlikely case that market conditions
evolve to warrant LNG transportation
prior to June 30, 2025, or the completion
of the companion rulemaking.54
C. Executive Order 13132
lotter on DSK11XQN23PROD with RULES1
PHMSA analyzed this rulemaking in
accordance with the principles and
criteria contained in Executive Order
13132 (‘‘Federalism’’) 55 and its
implementing Presidential
Memorandum (’’Preemption’’).56
Executive Order 13132 requires agencies
to assure meaningful and timely input
by State and local officials in the
development of regulatory policies that
may have ‘‘substantial direct effects on
the states, on the relationship between
the national government and the states,
or on the distribution of power and
responsibilities among the various
levels of government.’’
This rulemaking may preempt State,
local, and Native American Tribe
requirements, but does not contain any
regulation that has substantial direct
effects on the States, the relationship
between the national government and
the States, or the distribution of power
and responsibilities among the various
levels of government.
The HMTA contains an express
preemption provision at 49
U.S.C.5125(b) that preempts State, local,
and Tribal requirements on certain
covered subjects, unless the non-Federal
requirements are ‘‘substantively the
CFR 107, Subpart B and notes that each special
permit application is considered on its own merits.
54 Id. at 33–34, 56 (discussing higher direct GHG
emissions from highway transportation) and 37–38
(discussing higher risk of crashes from highway
transportation).
55 64 FR 43255 (Aug. 10, 1999).
56 74 FR 24693 (May 22, 2009).
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
same’’ as the Federal requirements,
including the following:
(1) the designation, description, and
classification of hazardous material;
(2) the packing, repacking, handling,
labeling, marking, and placarding of
hazardous material;
(3) the preparation, execution, and
use of shipping documents related to
hazardous material and requirements
related to the number, contents, and
placement of those documents;
(4) the written notification, recording,
and reporting of the unintentional
release in transportation of hazardous
material; and
(5) the design, manufacture,
fabrication, inspection, marking,
maintenance, recondition, repair, or
testing of a packaging or container
represented, marked, certified, or sold
as qualified for use in transporting
hazardous material in commerce.
This final rule addresses subject items
(2) and (5) above, which are covered
subjects, and therefore, non-Federal
requirements that fail to meet the
‘‘substantively the same’’ standard are
vulnerable to preemption under the
Federal hazmat law. Moreover, PHMSA
will continue to make preemption
determinations applicable to specific
non-Federal requirements on a case-bycase basis, using the obstacle, dual
compliance, and covered subjects tests
provided in Federal hazmat law.
D. Executive Order 13175
PHMSA analyzed this rulemaking in
accordance with the principles and
criteria contained in Executive Order
13175 and DOT Order 5301.1
(‘‘Department of Transportation
Policies, Programs, and Procedures
Affecting American Indians, Alaska
Natives, and Tribes’’). Executive Order
13175 and DOT Order 5301.1 require
DOT Operating Administrations to
assure meaningful and timely input
from Native American Tribal
government representatives in the
development of rules that significantly
or uniquely affect Tribal communities
by imposing ‘‘substantial direct
compliance costs’’ or ‘‘substantial direct
effects’’ on such communities or the
relationship and distribution of power
between the Federal government and
Tribes.
In addition to the petitions filed by
the environmental groups and State
attorneys general mentioned above, the
Puyallup Tribe also challenged the July
2020 Final Rule and alleged violations
of the Tribal consultation protocols
under the National Historic Preservation
Act and Executive Order 13175 and
disparate impacts on the Tribe in
PO 00000
Frm 00052
Fmt 4700
Sfmt 4700
violation of Executive Order 12898 and
Title VI of the Civil Rights Act of 1964.
PHMSA assessed the impact of this
final rule and concluded that it will not
significantly or uniquely affect Tribal
communities or Tribal governments.
This rulemaking does not impose
substantial compliance costs on Tribal
governments or communities, nor does
it mandate Tribal action. Insofar as
PHMSA expects the final rule will not
adversely affect the safe transportation
of hazardous materials generally,
PHMSA does not expect it will entail
disproportionately high adverse risks for
Tribal communities. This final rule
could in fact reduce risks to Tribal
communities, as it could avoid the
release of hazardous materials (in
particular, LNG) by railroad in the
vicinity of Tribal communities. For
these reasons, PHMSA has concluded
that the funding and consultation
requirements of Executive Order 13175
and DOT Order 5301.1 do not apply.
E. Regulatory Flexibility Act and
Executive Order 13272
The Regulatory Flexibility Act (5
U.S.C. 601 et seq.) requires agencies to
consider whether a rulemaking would
have a ‘‘significant economic impact on
a substantial number of small entities’’
to include small businesses, not-forprofit organizations that are
independently owned and operated and
are not dominant in their fields, and
governmental jurisdictions with
populations under 50,000. The
Regulatory Flexibility Act directs
agencies to establish exceptions and
differing compliance standards for small
businesses, where possible to do so and
still meet the objectives of applicable
regulatory statutes. Executive Order
13272 (‘‘Proper Consideration of Small
Entities in Agency Rulemaking’’) 57
requires agencies to establish
procedures and policies to promote
compliance with the Regulatory
Flexibility Act and to ‘‘thoroughly
review draft rules to assess and take
appropriate account of the potential
impact’’ of the rules on small
businesses, governmental jurisdictions,
and small organizations. The DOT posts
its implementing guidance on a
dedicated web page.58
This rulemaking has been developed
in accordance with Executive Order
13272 and DOT’s procedures and
policies to promote compliance with the
Regulatory Flexibility Act and ensure
that potential impacts of draft rules on
57 67
FR 53461 (Aug. 16, 2002).
‘‘Rulemaking Requirements Related to
Small Entities,’’ https://www.transportation.gov/
regulations/rulemaking-requirements-concerningsmall-entities (last visited Jun. 17, 2021).
58 DOT,
E:\FR\FM\01SER1.SGM
01SER1
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
small entities are properly considered.
Consistent with the analysis above,
PHMSA certifies that the temporary
suspension of the July 2020 Final Rule
will not have a significant economic
impact on a substantial number of small
entities.
F. Paperwork Reduction Act
Under the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), no
person is required to respond to any
information collection unless it has
been approved by OMB and displays a
valid OMB control number. Pursuant to
44 U.S.C. 3506(c)(2)(B) and 5 CFR
1320.8(d), PHMSA must provide
interested members of the public and
affected agencies an opportunity to
comment on information collection and
recordkeeping requests.
PHMSA has analyzed this rulemaking
in accordance with the Paperwork
Reduction Act. PHMSA currently
accounts for security plan burdens
under OMB Control Number 2137–0612,
‘‘Hazardous Materials Security Plans.’’
In the July 2020 Final Rule, PHMSA
required any rail carrier transporting a
tank car quantity of UN1972 (Methane,
refrigerated liquid (cryogenic liquid) or
Natural gas, refrigerated liquid
(cryogenic liquid)) to comply with the
additional rail transportation safety and
security planning requirements.
Following publication of the July 2020
Final Rule, PHMSA published both a
60-day 59 and 30-day 60 notice and
comment period to provide an
opportunity for public comment on the
estimated increase in burden. PHMSA
did not receive comments to either
notice. Subsequently, PHMSA
submitted the revision to OMB and
received approval for the increased
Change in
number of
railroads
Decrease in primary route analysis
Class I Railroads .......................................................................
Class II Railroads ......................................................................
Class III Railroads .....................................................................
0
0
0
Total ...................................................................................
Burden
hours per
route
(2)
(1)
(1)
80
80
40
(4)
....................
Decrease in
number of
routes
Burden
hours per
route
burden. As PHMSA implements a
temporary suspension of the
authorization to ship LNG by rail tank
car pursuant to July 2020 Final Rule,
PHMSA estimates this rulemaking
would result in a decrease in the burden
associated with additional rail
transportation safety and security
planning requirements imposed by the
July 2020 Final Rule. Because this final
rule contains revisions to an
information collection approved under
OMB control number 2137–0612 that
are subject to review by OMB under the
PRA Act, PHMSA has submitted the
revised information collection to OMB
and will publish a subsequent Federal
Register notice to advise the public
when OMB has approved the revisions.
The following reflects this estimated
decrease in burden:
Decrease in
total burden
hours
Salary
cost per
hour 61
(160)
(80)
(40)
$75.88
75.88
75.88
(280)
....................
Decrease in
total burden
hours
Salary
cost per
hour 62
Decrease in
total salary
cost
Decrease in
total burden
cost
($12,141)
(6,071)
(3,035)
$0
0
0
(21,248)
0
Decrease in
total salary
cost
Decrease in
total burden
cost
Class I Railroads .......................................................................
Class II Railroads ......................................................................
Class III Railroads .....................................................................
0
0
0
(2)
(1)
(1)
120
120
40
(240)
(120)
(40)
$75.88
75.88
75.88
($18,212)
(9,106)
(3,035)
$0
0
0
Total ...................................................................................
0
(4)
....................
(400)
....................
(30,354)
0
Total Annual Decrease in Number of
Respondents: 0.
Total Annual Decrease in Number of
Response: 8.
Total Annual Decrease in Burden
Hours: 680.
Total Annual Decrease in Salary
Costs: $51,598.
Total Annual Decrease in Burden
Costs: $0.
G. Unfunded Mandates Reform Act of
1995
lotter on DSK11XQN23PROD with RULES1
0
Change in
number of
railroads
Decrease in alternate route analysis
Decrease in
number of
routes
60369
The Unfunded Mandates Reform Act
of 1995 (UMRA; 2 U.S.C. 1501 et seq.)
requires agencies to assess the effects of
Federal regulatory actions on State,
local, and Tribal governments, and the
private sector. For any notice of
proposed rulemaking or final rule that
includes a Federal mandate that may
result in the expenditure by State, local,
59 85
FR 46220 (Jul. 31, 2020).
FR 73128 (Nov. 16, 2020).
61 Occupation labor rates based on 2022
Occupational and Employment Statistics Survey
(OES) for ‘‘Transportation, Storage, and Distribution
Managers (11–3071)’’ in the Transportation and
60 85
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
and Tribal governments, or by the
private sector of $100 million or more
in 1996 dollars in any given year, the
agency must prepare, amongst other
things, a written statement that
qualitatively and quantitatively assesses
the costs and benefits of the Federal
mandate.
This rulemaking does not impose
unfunded mandates under the UMRA.
As explained above, it is not expected
to result in costs of $100 million or
more in 1996 dollars on either State,
local, or Tribal governments, in the
aggregate, or to the private sector in any
one year, and is the least burdensome
alternative that achieves the objective of
the rule.
H. Environmental Assessment
The National Environmental Policy
Act of 1969 (NEPA), as amended (42
Warehousing industry. See https://www.bls.gov/
oes/current/oes113071.htm. The hourly mean wage
for this occupation ($52.36) is adjusted to reflect the
total costs of employee compensation based on the
BLS Employer Costs for Employee Compensation
Summary, which indicates that wages for civilian
PO 00000
Frm 00053
Fmt 4700
Sfmt 4700
U.S.C. 4321 et seq.),63 requires federal
agencies to consider the environmental
impacts of their actions in the decisionmaking process. NEPA requires Federal
agencies to assess the environmental
effects of proposed Federal actions prior
to making decisions and involve the
public in the decision-making process.
Agencies must prepare an
environmental assessment (EA) for an
action for which a categorical exclusion
is not applicable and is either unlikely
to have significant effects or when
significance of the action is unknown.
In accordance with these requirements,
an EA must briefly discuss: (1) the need
for the action; (2) the alternatives
considered; (3) the environmental
impacts of the action and alternatives;
and (4) a listing of the agencies and
persons consulted. If, after reviewing
the EA and public comments if
workers are 69.0 percent of total compensation
(total wage = wage rate/wage % of total
compensation).
62 Ibid.
63 See also 40 CFR parts 1501 to 1508.
E:\FR\FM\01SER1.SGM
01SER1
60370
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
applicable, in response to a draft EA
(DEA), an agency determines that a
proposed action will not have a
significant impact on the human or
natural environment, it can conclude
the NEPA analysis with a finding of no
significant impact (FONSI).
(1) The Need for the Action
PHMSA has determined that the
recommendations from the TRB, its
ongoing research, and recent events
stemming from the COVID–19 public
health emergency predicate the need to
re-evaluate the amendments authorized
in the July 2020 Final Rule. Research
activity that PHMSA had expected
would enhance its understanding of the
risks attendant in rail transportation of
LNG has been delayed, and
uncertainties have increased in whether
there will be any potential benefits, and
in the underlying economic dynamics
bounding those risks (e.g., the quantity
of LNG that will move by rail, and the
routes involved). Therefore, PHMSA is
amending the HMR to suspend
authorization of LNG transportation in a
rail tank car pending further analysis
and completion of a companion
rulemaking that will consider changes
to the conditions under which LNG
could be moved by rail, to potentially
include additional safety,
environmental, and environmental
justice protections. This action will
provide PHMSA an opportunity to
review recent actions that could be
obstacles to Administration policies
promoting public health and safety, the
environment, and climate change
mitigation; and to evaluate the results of
ongoing and delayed research efforts to
ensure the safe transportation of LNG by
rail tank car.
lotter on DSK11XQN23PROD with RULES1
(2) Alternatives to the Action
In this rulemaking, PHMSA
considered the following alternatives:
No Action Alternative
If PHMSA were to select the No
Action Alternative, current regulations
authorizing the transport of LNG in rail
tank cars would remain in effect and no
provisions would be amended or added.
Therefore, the HMR would continue to
authorize the transportation of LNG in
DOT–113C120W9 tank cars with a 9/16inch outer tank composed of TC–128B
normalized steel. The following
operational controls and safety
measures would also remain in effect:
• Each tank car must be operated in
accordance with § 173.319, which
includes:
Æ testing of relief valves every 5 years
Æ annual replacement of rupture
discs
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
Æ thermal integrity tests following an
average daily pressure rise during any
shipment exceeding 3 psig per day
Æ other requirements specific to
liquids in cryogenic tank cars.
• 49 CFR part 179, subpart F contains
detailed design, construction, and
operational requirements for DOT–
113C120W tank cars with the
specification suffix ‘‘9’’ to be used in
rail transportation of LNG.
• Trains transporting 20 or more tank
cars of LNG in a block, or 35 such tank
cars throughout the train, must be
equipped and operated with a two-way
EOT device, pursuant to the
requirements in 49 CFR part 232,
subpart E, or a distributed-power (DP)
locomotive as defined in 49 CFR 229.5.
• The offeror must remotely monitor
each tank car while in transportation for
pressure and location.
• The offeror must notify the carrier
if the tank pressure rise exceeds 3 psig
over any 24-hour period.
• Trains transporting any quantity of
LNG must comply with the route
planning requirements in § 172.820,
which requires rail carriers transporting
LNG by rail tank car to conduct an
annual route analysis considering, at a
minimum, 27 risk factors listed in
appendix D to part 172.
• Each LNG tank car must have:
Æ a reclosing pressure relief device
with a start-to-discharge pressure of 75
psig;
Æ a non-reclosing pressure relief
device set to discharge at the tank test
pressure;
Æ a maximum permitted filling
density (percent by weight) of 37.3
percent;
Æ a design service temperature of
¥162 °C (¥260 °F);
Æ a maximum pressure when offered
for transportation not to exceed 15 psig;
Æ a minimum steel thickness, after
forming, on the outer tank shell and
tank heads of 9/16 inch, which is
thicker than the requirement for other
DOT–113C120W tank cars; and
Æ an outer tank shell constructed of
AAR TC–128, Grade B normalized steel
plate as specified in § 179.100–7(a),
which has a higher tensile strength of
81,000 psi which makes it stronger than
that used for the existing DOT–113
outer shell.
The final environmental analysis
(FEA), which—except for the finding of
no significant impact therein—is
incorporated by reference into this final
rule, examined how the above
requirements were imposed to reduce
risks to human safety and the
environment from the transportation of
LNG in rail tank cars and incidents
occurring as a result of this
PO 00000
Frm 00054
Fmt 4700
Sfmt 4700
transportation.64 The No Action
Alternative would allow the shipment
of LNG in rail tank cars, and PHMSA
could continue to consider whether
additional mitigations are necessary
based on the expert recommendations
from the TRB Phase I and Phase II
Reports and results from ongoing,
delayed testing and evaluation activity
by the LNG Task Force.
Selected Action Alternative
This Selected Action Alternative as it
appears in this final rule, adding a new
special provision to the HMR that
would suspend the transportation of
LNG in rail tank cars while PHMSA
undergoes a comprehensive review to
ensure the safe transportation of LNG by
rail in accordance with ongoing research
and incorporation of recommendations
from the TRB, as well as the best
available economic analysis and
science. Rail transport of LNG would be
permitted only as authorized by the
conditions of a PHMSA special permit
(49 CFR 107.105) that would apply only
to the railroad(s) operating under such
a permit or in a portable tank secured
to a rail car pursuant to the conditions
of an FRA approval (49 CFR 174.63).
The amendments included in this
alternative are more fully discussed in
the preamble and regulatory text
sections of this final rule.
(3) Probable Environmental Impacts of
the Action and Alternatives
No Action Alternative
If PHMSA selected the No Action
Alternative, current regulations would
remain in place without suspension. As
described in the FEA, the No Action
Alternative could pose risks to public
safety and the environment because the
authorization under the HMR to offer
shipments of LNG by rail tank car
would remain in place. LNG poses
potential hazards as a cryogenic
liquefied flammable gas, including
cryogenic temperature exposure, fire,
and asphyxiation hazards.
Transportation of any hazardous
material introduces risk to safety and
the environment, and each additional
tank car increases the overall risk of an
incident occurring and the quantity that
could be released in the event of a
derailment. While this is true for all
hazardous materials transportation,
PHMSA seeks to better understand the
risks inherent to LNG transportation in
the DOT–113C120W9, especially given
that the July 2020 Final Rule authorized
large quantities to be transported in rail
cars. The July 2020 Final Rule FEA
64 See
E:\FR\FM\01SER1.SGM
Docket No. PHMSA–2018–0025–0478.
01SER1
lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
explained that transporting LNG in rail
tank cars is expected to be safer than
transporting LNG by truck on
highways—however, it is possible that
allowing LNG to be transported in rail
tank cars would increase the amount of
LNG transported, and therefore a direct
comparison of the risks by rail and
highway may be misleading. PHMSA
will also consider, based on existing rail
infrastructure locations and anticipated
routes, whether transportation of LNG
in rail tank cars could pose
disproportionate harm or risk to
communities of color or low-income
communities. As described in the
preamble to this final rule, various
market and other uncertainties exist
regarding specific routes that may be
used for the transport of LNG by rail
tank car.
No release of LNG vapor to the
environment is allowed during the
normal transportation of LNG in tank
cars whether by roadway or railway.
However, methane is odorless, and LNG
contains no odorant, making detection
of a release resulting from an incident
difficult without a detection device.
Releases of LNG due to venting or to
accidents/incidents, without immediate
ignition, involving either an MC–338
cargo tank, a portable tank, or a DOT–
113C120W9 rail tank car have the
potential to create flammable vapor
clouds of natural gas because recently
gasified LNG does not dissipate in the
atmosphere as quickly as ambienttemperature natural gas. Large releases
of LNG due to the breach of the inner
tank of these transport vessels could
result in a pool fire, vapor fire, and
explosion hazards if methane vapors
become confined. These flammability
hazards pose a risk of higher potential
impacts than localized cryogenic
hazards.
Some commenters on the July 2020
Final Rule argued that the authorization
of LNG by rail would further incentivize
the production of natural gas, which is
a fossil fuel. Methane has much greater
heat trapping potential in the
atmosphere than carbon dioxide in the
short term. Thus, methane is considered
a potent GHG, and comprises a
significant portion of the United States’
GHG emissions. While methane leaks
are highly unlikely during
transportation in the DOT–113C120W9
due to tank car design, increased natural
gas production could lead to indirect
environmental impacts of increased
methane emissions released during
production, loading and unloading, or at
other times during its life cycle. In
considering whether the authorization
could further incentivize the production
of natural gas, PHMSA will consider the
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
scope of existing natural gas production
and transportation via natural gas
pipeline and other modes of
transportation.
The FEA for the July 2020 Final Rule
discussed potential environmental
benefits that could be associated with
the authorization to transport LNG by
rail tank car. First, PHMSA discussed
that the authorization could allow for
the delivery of natural gas to locations
dependent on more polluting energy
forms, such as coal, diesel, heating oil,
or firewood.65 Use of natural gas in such
areas, whether foreign or domestic,
could allow for a reduction in polluting
and climate-warming emissions.
Additionally, the authorization to
transport LNG by rail tank car could
potentially replace some shipments of
LNG by highway. As discussed in the
FEA for the July 2020 Final Rule,
highway transportation is less efficient
in comparison to rail transportation
when considering fuel use, combustion
emissions, and climate change impacts.
However, in order to supplement,
reduce, or replace highway
transportation, rail infrastructure would
need to exist between the origin and
destination locations or be developed.
Finally, the FEA explored industry
claims that the authorization could
incentivize the capture, storage, and
liquefaction of natural gas over venting
and flaring of natural gas during oil
production and other industrial
activities, in areas where natural gas
pipeline capacity is unavailable.
Facilitating the productive end use of
by-product methane could reduce the
venting and flaring of natural gas, which
causes methane and carbon dioxide
emissions. Similar to other abovedescribed benefits, it is difficult to
predict the extent to which industries
would invest in the equipment,
technology, and expertise necessary to
pursue natural gas capture, storage, and
liquefaction necessary to pursue LNG
transportation by rail. A suspension of
the authorization to transport LNG by
rail could curtail these potential benefits
in the near term.
65 See, e.g., EPA, Press Release, ‘‘State of Alaska
and Fairbanks North Star Borough receive $14.7
Million EPA grant to improve air quality,’’ (Nov.
2020), https://www.epa.gov/newsreleases/statealaska-and-fairbanks-north-star-borough-receive147-million-epa-grant-improve-air (‘‘The Borough
will use the grant funds to continue a woodstove
changeout and conversion program focused on
converting more wood burning appliances to
cleaner burning liquid or gas-fueled heating
appliances, which have a very low output of
particulate pollution and higher fuel efficiency.
Wood smoke contributes up to 60 to 80 percent of
fine particle pollution levels measured in the
Fairbanks North Star Borough.’’).
PO 00000
Frm 00055
Fmt 4700
Sfmt 4700
60371
Selected Action Alternative
Under this Selected Action
Alternative, PHMSA will amend the
HMR to suspend authorization of LNG
transportation in rail tank cars pending
further analysis and completion of a
companion rulemaking or June 30, 2025,
whichever is earlier. Therefore, the
HMR will not authorize shippers to
transport bulk quantities of LNG by rail
tank car. Instead, LNG by rail will only
be permitted pursuant to a DOT SP or
in portable tanks subject to FRA
approval. The Selected Action
Alternative will avoid the risks that
transportation of LNG in rail tank cars,
and particularly potential derailments of
rail cars transporting LNG, could pose to
public safety and the environment.
PHMSA will be able to further consider
whether the transportation of LNG
could pose disproportionately high or
adverse effects on minority and low
income communities, which have
historically borne the brunt of
deleterious Federal policy decisions.
PHMSA will also be able to further
consider whether shipping LNG in rail
tank cars is consistent with public
health and safety, environmental
protection, including climate change
mitigation; and to evaluate the results of
ongoing and delayed research efforts
and collaboration as part of an
accompanying rulemaking under RIN
2137–AF54.
However, as noted above and in the
FEA for the July 2020 Final Rule, the
authorization to transport LNG in DOT–
113C120W9 specification tank cars
could have yielded some environmental
benefits or improvements, which will
not be realized during the suspension
period. The scope of potential
environmental effects of suspending the
July 2020 Final Rule depend on whether
use of MC–338 for transportation of
LNG increases as a result of the
suspension of the DOT–113C120W9 or
whether environmental benefits of the
authorization have been realized that
would not occur during the suspension.
PHMSA is unaware of any order from a
commercial entity for a new DOT–
113C120W9-specification tank car for
LNG service. Thus, no increased use of
MC–338 tank cars for LNG service is
expected as a result of this suspension.
In the unlikely event that the use of
MC–338 cargo tank cars for LNG
transportation increases due to the
inability to transport LNG in rail tank
cars, a few environmental effects could
result. First, highway transportation of
LNG requires more diesel engine
vehicles and would result in more
emissions, including volatile organic
compounds, carbon dioxide, nitrogen
E:\FR\FM\01SER1.SGM
01SER1
60372
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
oxides, sulfur oxides, and particulate
matter of 10 microns or less. Next,
increased highway congestion also
increases the potential for a highway
incident involving LNG, depending on
the extent of the increase. In the event
highway transportation increases as a
result of this rule, these environmental
effects would be speculative and minor,
and PHMSA finds that they are
warranted during the suspension period
while PHMSA undertakes a full analysis
of risks inherent in transporting LNG in
rail tank cars.
The July 2020 Final Rule FEA noted
that the transportation of LNG could
allow natural gas to reach markets that
lack this access and could potentially
reduce and replace the burning of more
polluting and carbon-intensive sources
of energy such as coal, wood, and
diesel. As noted above, the July 2020
Final Rule has not resulted in these
replacements or emissions reductions,
such that the suspension would not
reverse any such benefits. The July 2020
Final Rule FEA also explained that
authorization to transport LNG in rail
tank cars had the potential to reduce the
wasteful and carbon-intensive practice
of natural gas flaring because it could
provide a market for by-product natural
gas in areas where natural gas pipeline
transportation is not available. The July
2020 Final Rule has not resulted in this
benefit, and there is no indication that
this benefit would have occurred
anytime in the foreseeable future in the
event that it remained available. Thus,
PHMSA does not anticipate negative
environmental effects from the
suspension of the July 2020 Final Rule.
lotter on DSK11XQN23PROD with RULES1
(4) Agencies and Persons Consulted
During the Consideration Process
PHMSA has coordinated with FRA,
the Federal Aviation Administration,
the Federal Motor Carrier Safety
Administration, and the U.S. Coast
Guard in the development of this rule.
The final rule has also been made
available to other Federal agencies
within the interagency review process
contemplated under Executive Order
12866.
(5) Environmental Justice
Executive Order 12898 (‘‘Federal
Actions to Address Environmental
Justice in Minority Populations and
Low-Income Populations’’),66 directs
Federal agencies to take appropriate and
necessary steps to identify and address
disproportionately high and adverse
effects of Federal actions on the health
or environment of minority and lowincome populations to the greatest
66 59
FR 7629 (Feb. 11, 1994).
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
extent practicable and permitted by law.
DOT Order 5610.2C (‘‘U.S. Department
of Transportation Actions to Address
Environmental Justice in Minority
Populations and Low-Income
Populations’’) establishes departmental
procedures for effectuating Executive
Order 12898 promoting the principles of
environmental justice through full
consideration of environmental justice
principles throughout planning and
decision-making processes in the
development of programs, policies, and
activities—including PHMSA
rulemaking.
PHMSA has evaluated this final rule
under DOT Order 5610.2C and
Executive Order 12898 and has
determined it will not cause
disproportionately high and adverse
human health and environmental effects
on minority and low-income
populations. The final rule is national in
scope; it is neither directed toward a
particular population, region, or
community, nor is it expected to result
in any adverse environmental or health
impact to any particular population,
region, or community.
This final rule could reduce risks to
minority populations, low-income
populations, or other underserved and
disadvantaged communities. Insofar as
these HMR amendments could avoid the
release of hazardous materials, the final
rule could reduce risks to populations
and communities—including any
minority, low-income, underserved, and
disadvantaged populations and
communities—in the vicinity of railroad
lines. However, as noted in the FEA for
the July 2020 Final Rule, access to LNG
may result in potential economic
benefits for underserved communities
because of the efficiencies of
transporting LNG by rail, and thereby
domestic production, distribution, and
consumption of natural gas could
increase. These potential economic
benefits that could result from the
transportation of bulk quantities of LNG
by rail car would not be realized by
underserved communities in the short
term. In addition, to the extent that
suspending shipment of LNG by rail
tank car could increase demand for
shipping LNG by truck on highways,
these HMR amendments could increase
risks to environmental justice
communities in the vicinity of those
highways.
Further, this rule advances the policy
goals of the most recent environmental
justice Executive Order 14096—
Revitalizing Our Nation’s Commitment
PO 00000
Frm 00056
Fmt 4700
Sfmt 4700
to Environmental Justice for All,67
which deepens the Administration’s
whole-of-government approach to
environmental justice to better protect
communities from pollution and other
environmental justice concerns.
(6) Finding of No Significant Impact
The adoption of the Selected Action
Alternative’s suspension will prohibit
the transportation of LNG in rail tank
cars while PHMSA and FRA undertake
a comprehensive analysis of safety and
environmental issues associated with
the transportation of LNG by rail. As
such, the HMR amendments in this final
rule will have no significant impact on
the human environment. The Selected
Action Alternative will allow PHMSA to
review new information to evaluate the
potential impact on safety,
environmental justice, and GHG
emissions. Further, based on PHMSA’s
analysis of these provisions described
above and insofar as there has been no
significant progress toward the
movement of LNG by rail tank car,
PHMSA finds that codification and
implementation of this rule will not
result in a significant impact to the
human environment.
I. Privacy Act
In accordance with 5 U.S.C. 553(c),
DOT solicits comments from the public
to better inform its rulemaking process.
DOT posts these comments, without
edit, including any personal information
the commenter provides, to https://
www.regulations.gov, as described in
the system of records notice (DOT/ALL–
14 FDMS), which can be reviewed on
DOT’s website at https://www.dot.gov/
privacy or DOT’s complete Privacy Act
Statement in the Federal Register
published on April 11, 2000.68
J. Executive Order 13609 and
International Trade Analysis
Executive Order 13609 (‘‘Promoting
International Regulatory
Cooperation’’) 69 requires that agencies
must consider whether the impacts
associated with significant variations
between domestic and international
regulatory approaches are unnecessary
or may impair the ability of American
business to export and compete
internationally. In meeting shared
challenges involving health, safety,
labor, security, environmental, and
other issues, international regulatory
cooperation can identify approaches
that are at least as protective as those
67 88 FR 25251 (Apr. 21, 2023). Executive Order
14096 supplemented the efforts of Executive Order
12898.
68 65 FR 19475 (Apr. 11, 2000).
69 77 FR 26413 (May 4, 2012).
E:\FR\FM\01SER1.SGM
01SER1
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
lotter on DSK11XQN23PROD with RULES1
that are or would be adopted in the
absence of such cooperation.
International regulatory cooperation can
also reduce, eliminate, or prevent
unnecessary differences in regulatory
requirements.
Similarly, the Trade Agreements Act
of 1979 (Pub. L. 96–39), as amended by
the Uruguay Round Agreements Act
(Pub. L. 103–465), prohibits Federal
agencies from establishing any
standards or engaging in related
activities that create unnecessary
obstacles to the foreign commerce of the
United States. Pursuant to the Trade
Agreements Act, the establishment of
standards is not considered an
unnecessary obstacle to the foreign
commerce of the United States, so long
as the standards have a legitimate
domestic objective, such as providing
for safety, and do not operate to exclude
imports that meet this objective. The
statute also requires consideration of
international standards and, where
appropriate, that they be the basis for
U.S. standards.
PHMSA participates in the
establishment of international standards
in order to protect the safety of the
American public. PHMSA has assessed
the effects of this rulemaking to ensure
that it does not cause unnecessary
obstacles to foreign trade. While the
suspension the transport of LNG by rail
tank car has potential to impact the
United States’ export of bulk LNG
internationally, there has been no
significant reliance interest or progress
toward the near-term movement of LNG
by rail tank cars. As such, PHMSA
expects the amendments herein to pose
a minimal impact to international trade
if adopted. Therefore, PHMSA is
amending the HMR to suspend
authorization of LNG transportation in a
rail tank car pending further analysis to
ensure potential future regulatory
actions to allow bulk transport of LNG
by rail promote public health and safety,
the environment, and climate change
mitigation. Accordingly, this
rulemaking is consistent with Executive
Order 13609 and PHMSA’s obligations
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
under the Trade Agreement Act, as
amended.
K. Executive Order 13211
Executive Order 13211 (‘‘Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use’’) 70 requires
Federal agencies to prepare a Statement
of Energy Effects for any ‘‘significant
energy action.’’ Executive Order 13211
defines a ‘‘significant energy action’’ as
any action by an agency (normally
published in the Federal Register) that
promulgates, or is expected to lead to
the promulgation of, a final rule or
regulation that (1)(i) is a significant
regulatory action under Executive Order
12866 or any successor order and (ii) is
likely to have a significant adverse effect
on the supply, distribution, or use of
energy (including a shortfall in supply,
price increases, and increased use of
foreign supplies); or (2) is designated by
the Administrator of the Office of
Information and Regulatory Affairs
(OIRA) as a significant action.
Although this rule is a significant
action under Executive Order 12866,
PHMSA expects it to have an annual
effect on the economy of less than $200
million. Further, this action is not likely
to have a significant adverse effect on
the supply, distribution, or use of
energy in the United States. While the
amendment to suspend the transport of
LNG by rail tank car has potential to
impact the supply, distribution, or use
of energy in the United States, PHMSA
does not anticipate any near-term
movement of LNG by rail tank cars. For
additional discussion of the anticipated
economic impact of this rulemaking,
please see section IV.B above.
L. Cybersecurity and Executive Order
14028
Executive Order 14028 (‘‘Improving
the Nation’s Cybersecurity’’) 71 directed
the Federal government to improve its
efforts to identify, deter, and respond to
‘‘persistent and increasingly
70 66
FR 28355 (May 22, 2001).
71 86 FR 26633 (May 17, 2021).
PO 00000
Frm 00057
Fmt 4700
Sfmt 4700
60373
sophisticated malicious cyber
campaigns.’’ Consistent with Executive
Order 14028, the Transportation
Security Administration (TSA) in
October 2022 issued a Security Directive
to reduce the risk that cybersecurity
threats pose to critical railroad
operations and facilities through
implementation of layered cybersecurity
measures that provide defense-indepth.72 PHMSA has considered the
effects of the final rule and determined
that its regulatory amendments will not
materially affect the cybersecurity risk
profile for rail transportation of
hazardous materials.
List of Subjects in 49 CFR Part 172
Education, Hazardous materials
transportation, Hazardous waste,
Labeling, Markings, Packaging and
containers, Reporting and recordkeeping
requirements.
In consideration of the foregoing,
PHMSA is amending 49 CFR chapter I
as follows:
PART 172—HAZARDOUS MATERIALS
TABLE, SPECIAL PROVISIONS,
HAZARDOUS MATERIALS
COMMUNICATIONS, EMERGENCY
RESPONSE INFORMATION, TRAINING
REQUIREMENTS, AND SECURITY
PLANS
1. The authority citation for part 172
continues to read as follows:
■
Authority: 49 U.S.C. 5101–5128, 44701; 49
CFR 1.81, 1.96 and 1.97.
2. In § 172.101, amend the § 172.101
Hazardous Materials Table, by revising
the entry for ‘‘Methane, refrigerated
liquid (cryogenic liquid) or Natural gas,
refrigerated liquid (cryogenic liquid),
with high methane content)’’ to read as
follows:
■
§ 172.101 Purpose and use of the
hazardous materials table.
*
*
*
*
*
72 TSA, Security Directive No. 1580/82–2022–01,
‘‘Rail Cybersecurity Mitigation Actions and
Testing’’ (Oct. 24, 2022).
E:\FR\FM\01SER1.SGM
01SER1
VerDate Sep<11>2014
(2)
(1)
16:44 Aug 31, 2023
Jkt 259001
*
*
Methane, refrigerated liquid (cryogenic liquid) or Natural gas, refrigerated liquid (cryogenic liquid,
with high methane content).
Hazardous materials descriptions
and proper shipping names
Symbols
lotter on DSK11XQN23PROD with RULES1
2.1
(3)
Hazard
class or
division
*
*
UN1972
(4)
Identification
Nos.
........
(5)
PG
*
*
2.1 ....
(6)
Label
codes
§ 172.101
*
*
T75, TP5, 439, 440
(7)
Special provisions
(§ 172.102)
(8B)
Non-bulk
*
*
None .......... None ..........
(8A)
Exceptions
Bulk
*
*
318, 319 .....
(8C)
*
*
Forbidden ...
(9A)
Passenger
aircraft/rail
Forbidden ...
(9B)
Cargo
aircraft
only
(9)
Quantity limitations
(see §§ 173.27 and 175.75)
(8)
Packaging
(§ 173.***)
HAZARDOUS MATERIALS TABLE
(10)
(10A)
D
Location
(10B)
Other
Vessel stowage
40
60374
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
PO 00000
Frm 00058
Fmt 4700
Sfmt 4700
E:\FR\FM\01SER1.SGM
01SER1
Federal Register / Vol. 88, No. 169 / Friday, September 1, 2023 / Rules and Regulations
*
*
*
*
*
3. In § 172.102, amend paragraph
(c)(1) by adding special provision 439 in
numerical order to read as follows:
■
§ 172.102
Special provisions.
*
*
*
*
*
(c) * * *
(1) * * *
439 UN1972 is not authorized for
transportation by rail tank car until
either issuance of a final rule
concluding the rulemaking action
proceeding under RIN 2137–AF54, or
June 30, 2025, whichever occurs first.
For information and the status of RIN
2137–AF54, please refer to the Office of
Management and Budget’s Office of
Information and Regulatory Affairs at
www.reginfo.gov.
*
*
*
*
*
Issued in Washington, DC, on August 23,
2023, under authority delegated in 49 CFR
1.97.
Tristan H. Brown,
Deputy Administrator, Pipeline and
Hazardous Materials Safety Administration.
[FR Doc. 2023–18569 Filed 8–31–23; 8:45 am]
BILLING CODE 4910–60–P
DEPARTMENT OF THE INTERIOR
Fish and Wildlife Service
50 CFR Part 20
[Docket No. FWS–HQ–MB–2022–0090;
FF09M32000–234–FXMB1231099BPP0]
RIN 1018–BF64
Migratory Bird Hunting; Migratory
Game Bird Hunting Regulations on
Certain Federal Indian Reservations
and Ceded Lands
Fish and Wildlife Service,
Interior.
ACTION: Final rule.
AGENCY:
As part of the rulemaking
process for the 2023–2024 season for
migratory game bird hunting, the U.S.
Fish and Wildlife Service (hereinafter,
Service or we) has revised the process
for establishing regulations for certain
Tribes on Federal Indian reservations,
off-reservation trust lands, and ceded
lands. The Service recognizes Tribal
treaty rights and the reserved hunting
rights and management authority of
Indian Tribes and seeks to strengthen
Tribal sovereignty. We will no longer
require that Tribes annually submit a
proposal to the Service for our review
and approval and no longer publish in
the Federal Register the annual Tribal
migratory bird hunting regulations.
Instead, the regulations now include
lotter on DSK11XQN23PROD with RULES1
SUMMARY:
VerDate Sep<11>2014
16:44 Aug 31, 2023
Jkt 259001
elements of our current guidelines for
establishing migratory game bird
hunting regulations on Federal Indian
reservations (including off-reservation
trust lands) and ceded lands. Since
1985, Tribal migratory bird harvest has
been small with negligible impact to
bird population status, and we
anticipate that Tribal hunting of
migratory birds will continue to have
similar negligible impacts to bird
populations in the future. This rule will
reduce administrative burdens on both
the Tribes and the Service while
continuing to sustain healthy migratory
game bird populations for future
generations.
DATES: This rule takes effect September
1, 2023.
ADDRESSES: You may inspect comments
received on the migratory bird hunting
regulations at https://
www.regulations.gov at Docket No.
FWS–HQ–MB–2022–0090. You may
obtain copies of referenced reports from
the Division of Migratory Bird
Management’s website at https://
www.fws.gov/program/migratory-birds
or at https://www.regulations.gov at
Docket No. FWS–HQ–MB–2022–0090.
FOR FURTHER INFORMATION CONTACT:
Jerome Ford, U.S. Fish and Wildlife
Service, Department of the Interior,
(703) 358–2606. Individuals in the
United States who are deaf, deafblind,
hard of hearing, or have a speech
disability may dial 711 (TTY, TDD, or
TeleBraille) to access
telecommunications relay services.
Individuals outside the United States
should use the relay services offered
within their country to make
international calls to the point of
contact in the United States.
SUPPLEMENTARY INFORMATION:
Background
Migratory game birds are those bird
species so designated in conventions
between the United States and several
foreign nations for the protection and
management of these birds. Under the
Migratory Bird Treaty Act (16 U.S.C.
703–712), the Secretary of the Interior is
authorized to determine when ‘‘hunting,
taking, capture, killing, possession, sale,
purchase, shipment, transportation,
carriage, or export of any such bird, or
any part, nest, or egg’’ of migratory game
birds can take place and to adopt
regulations for this purpose. These
regulations must give due regard to the
zones of temperature and to the
distribution, abundance, economic
value, breeding habits, and times and
lines of migratory flight of such birds
(16 U.S.C. 704(a)). The Secretary of the
Interior has delegated to the Service the
PO 00000
Frm 00059
Fmt 4700
Sfmt 4700
60375
lead Federal responsibility for managing
and conserving migratory birds in the
United States; however, migratory bird
management is a cooperative effort of
Federal, Tribal, and State governments.
Federal regulations pertaining to
migratory bird hunting are located in
title 50 of the Code of Federal
Regulations in part 20.
Acknowledging regional differences
in hunting conditions, the Service has
administratively divided the United
States into four Flyways for the primary
purpose of managing migratory game
birds. Each Flyway (Atlantic,
Mississippi, Central, and Pacific) has a
Flyway Council, a formal organization
generally composed of one member
from each State within the Flyway, as
well as Provinces in Canada that share
migratory bird populations with the
Flyway. The Flyway Councils,
established through the Association of
Fish and Wildlife Agencies, assist in
researching and providing migratory
game bird management information for
Federal, Tribal, State, and Provincial
governments, as well as private
conservation entities and the general
public.
The Service annually develops
migratory game bird hunting outside
limits (hereinafter, Federal outside
limits or Federal limits) for season
dates, season lengths, shooting hours,
bag and possession limits, and areas
where migratory game bird hunting may
occur. Hunting seasons selected by the
States and Tribes within these Federal
limits are set forth in regulations at 50
CFR part 20, subpart K. Because the
Service is required to take abundance of
migratory game birds and other factors
into consideration, the Service
undertakes several surveys throughout
the year in conjunction with Service
Regional Offices, the Canadian Wildlife
Service, Tribes, and State and Provincial
wildlife management agencies. For each
annual regulatory cycle, Service
biologists gather, analyze, and interpret
biological survey data and provide this
information through a series of
published status reports and
presentations to the Flyway Councils
and other interested parties. The August
6, 2015, Federal Register at 80 FR 47388
provides a detailed overview of this
process.
The Federal outside limits are
necessary to allow harvest at levels
compatible with migratory game bird
population status and habitat
conditions. To determine the
appropriate outside limits for each
species, we consider factors such as
population size and trend, geographical
distribution, annual breeding effort,
condition of breeding and wintering
E:\FR\FM\01SER1.SGM
01SER1
]]>Agencies
[Federal Register Volume 88, Number 169 (Friday, September 1, 2023)]
[Rules and Regulations]
[Pages 60356-60375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-18569]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration
49 CFR Part 172
[Docket No. PHMSA-2021-0058 (HM-264A)]
RIN 2137-AF55
Hazardous Materials: Suspension of HMR Amendments Authorizing
Transportation of Liquefied Natural Gas by Rail
AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
Department of Transportation (DOT).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: PHMSA, in coordination with the Federal Railroad
Administration (FRA), is amending the Hazardous Materials Regulations
to suspend authorization of liquefied natural gas (LNG) transportation
in rail tank cars pursuant to a final rule published on July 24, 2020,
pending the earlier of either completion of a companion rulemaking
evaluating potential modifications to requirements governing rail tank
car transportation of LNG, or June 30, 2025.
DATES: This final rule is effective on October 31, 2023.
FOR FURTHER INFORMATION CONTACT: Alexander Wolcott, Transportation
Specialist, Standards and Rulemaking Division, Office of Hazardous
Materials Safety, (202) 366-8553, 1200 New Jersey Avenue SE,
Washington, DC 20590-0001.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Overview
II. Background
A. Historical Regulation of LNG by Rail
B. A New Regulatory Approach and Enabling Research
C. Another Hard Look Incorporating NASEM Recommendations and
Ongoing Research Efforts
D. East Palestine, OH Derailment
III. Discussion of Comments to the NPRM and Adoption of a Temporary
Suspension of the July 2020 Final Rule
A. Comments Requesting an Immediate, Permanent Ban of LNG by
Rail
B. Comments Requesting the Removal of the June 30, 2024, Sunset
Date
[[Page 60357]]
C. Comments of General Support for the NPRM
D. Comments Alleging Chilling of Near-Term Demand for LNG
Transportation by Rail Tank Car Pursuant to the July 2020 Final Rule
E. Comments Contending That the LNG by Rail Improves Safety
F. Comments Alleging Environmental Benefits From LNG by Rail
G. Comments Alleging PHMSA Is Overstepping its Authority by
Attempting To Regulate Oil and Gas Production
H. Comments Alleging PHMSA Did Not Meet its Evidentiary Burden
Under the APA for Temporary Suspension of the July 2020 Final Rule
I. Comments Alleging That PHMSA's Proposal Will Have
Miscellaneous Adverse Consequences for Regulated Entities, the U.S.
Economy, and National Security
J. Comments Beyond the Scope of This Rulemaking
IV. Regulatory Analyses and Notices
A. Statutory/Legal Authority
B. Executive Orders 12866 and 14094, and DOT Regulatory Policies
and Procedures
C. Executive Order 13132
D. Executive Order 13175
E. Regulatory Flexibility Act and Executive Order 13272
F. Paperwork Reduction Act
G. Unfunded Mandates Reform Act of 1995
H. Environmental Assessment
I. Privacy Act
J. Executive Order 13609 and International Trade Analysis
K. Executive Order 13211
L. Cybersecurity and Executive Order 14028
I. Overview
PHMSA, in coordination with FRA, is suspending recent amendments to
the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180)
authorizing transportation of ``Methane, refrigerated liquid,''
commonly known as 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.
Transportation of LNG by rail tank car has not occurred since the July
24, 2020, publication of a final rule authorizing transportation of LNG
in rail tank cars \1\ 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.
However, this temporary suspension of the HMR provisions authorizing
transportation of LNG in rail tank cars guarantees no such
transportation will occur before its companion rulemaking has concluded
or June 30, 2025, whichever is earlier, thereby: (1) avoiding potential
risks to public health and safety or environmental consequences (to
include direct and indirect greenhouse gas (GHG) emissions) \2\ that
are being evaluated in the companion rulemaking under RIN 2137-AF54;
(2) allowing 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);
(3) assuring an opportunity for the potential development of any
mitigation measures and operational controls for rail tank car
transportation of LNG; (4) reducing 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; and (5)
enabling potential opportunities for stakeholders and the public to be
apprised of, and comment on, the results of ongoing testing and
evaluation efforts.
---------------------------------------------------------------------------
\1\ PHMSA final rule ``Hazardous Materials: Liquefied Natural
Gas by Rail,'' 85 FR 44994 (Jul. 24, 2020) (July 2020 Final Rule).
References within to ``this Final Rule'' or ``the Final Rule''
without qualification by reference to ``July 2020'' are meant to
refer to this notice rather than its July 2020 Final Rule.
\2\ PHMSA distinguishes between ``direct'' and ``indirect'' GHG
emissions herein consistent with Council on Environmental Quality
(CEQ) guidance. See CEQ, ``National Environmental Policy Act
Guidance on Consideration of Greenhouse Gas Emissions and Climate
Change,'' 88 FR 1196 (Jan. 9, 2023), which builds upon and updates
CEQ's 2016 ``Final Guidance for Federal Departments and Agencies on
Consideration of Greenhouse Gas Emissions and the Effects of Climate
Change in National Environmental Policy Act Reviews,'' 81 FR 51866
(Aug. 8, 2016).
---------------------------------------------------------------------------
Towards that end, PHMSA is adding a new special provision 439 that
prohibits LNG transportation in rail tank cars until issuance of a
final rule concluding the rulemaking proceeding under a companion
rulemaking under RIN 2137-AF54, or June 30, 2025, whichever is earlier.
Rail transport of LNG may still be permitted as authorized by the
conditions of a PHMSA special permit (SP) under Sec. 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 Sec. 174.63. PHMSA is also adopting a modest extension (until
June 30, 2025, at the latest) of the sunset for the temporary
suspension period identified in its November 2021 notice of proposed
rulemaking in this proceeding,\3\ consistent with comments received on
the NPRM and information obtained after its publication evincing
greater uncertainty regarding the near-term commercial viability and
potential environmental and safety risks associated with rail tank car
transportation of LNG as authorized by the July 2020 Final Rule.
---------------------------------------------------------------------------
\3\ PHMSA, ``Notice of Proposed Rulemaking--Hazardous Materials:
Suspension of HMR Amendments Authorizing Transportation of Liquefied
Natural Gas by Rail'' 86 FR 61731 (Nov. 8, 2021) (NPRM).
---------------------------------------------------------------------------
II. Background
A. Historical Regulation of LNG by Rail
LNG is a natural gas that has been cooled and converted to a liquid
form for easier and more efficient transportation. In the United
States, pipelines have historically delivered most natural gas,
although other modes of transportation--such as rail and highway--have
accounted for a relatively minor portion of natural gas transportation,
typically in the form of LNG. Before PHMSA published the July 2020
Final Rule, rail transportation of LNG would have been limited to UN
portable tank shipments (commonly referred to as ISO tank shipments)
under an FRA approval and shipments made under SPs issued by PHMSA.
This approach reflected the unique safety risks presented by rail
transportation of large volumes of LNG and the historically low demand
to transport LNG by rail.
B. A New Regulatory Approach and Enabling Research
Executive Order 13868 (``Promoting Energy Infrastructure and
Economic Growth'') \4\ was signed in April 2019 and required PHMSA to
treat LNG the same as other cryogenic liquids, authorize LNG to be
transported in approved rail tank cars, and to finalize that rulemaking
within 13 months.\5\ In response, PHMSA published a notice of proposed
rulemaking titled ``Hazardous Materials: Liquefied Natural Gas by
Rail'' \6\ in which it proposed to authorize the transportation of LNG
in existing DOT-113C120W specification tank cars. The initial comment
period for the NPRM closed on December 23, 2019, and was subsequently
extended until January 13, 2020, following PHMSA's issuance to Energy
Transport Solutions, LLC (ETS) in early December 2019 of
[[Page 60358]]
DOT-SP 20534 for the transportation of LNG by rail tank car.\7\
---------------------------------------------------------------------------
\4\ 84 FR 15495 (Apr. 15, 2019).
\5\ The Secretary has delegated such rulemaking duties to the
PHMSA Administrator. See 49 CFR 1.97.
\6\ 84 FR 56977 (Oct. 24, 2019).
\7\ 84 FR 70492 (Dec. 23, 2019) (DOT-SP 20534).
---------------------------------------------------------------------------
DOT-SP 20534 allowed the transportation of LNG in existing DOT-113
tank cars from Wyalusing, PA, to Gibbstown, NJ, with no intermediate
stops. This SP contained safety controls including a requirement to
conduct remote sensing for detecting and reporting internal pressure,
location, leakage, and (prior to the initial shipment of a tank car
under the SP) a requirement to provide training to emergency response
agencies that could be affected on the route. DOT-SP 20534 expired by
its terms on November 30, 2021, after ETS had not filed an application
for renewal until November 29, 2021. After careful consideration, PHMSA
denied ETS' application for renewal on March 31, 2023.\8\
---------------------------------------------------------------------------
\8\ 88 FR 24844, 2846 (Apr. 24, 2023). PHMSA formally informed
ETS of the denial of its renewal application by email on March 31,
2023, noting that (1) ETS's renewal application had made no attempt
to address the concerns raised in the NPRM in this proceeding, (2)
nearly three and a half years after issuance of DOT-SP 20534, ETS
had yet to provide evidence that it had procured either new DOT-
113C120W9 tank cars or existing DOT-113C120W tank cars, and (3) the
origin and destination facilities specified in DOT-SP 20534 had not
been built and would need additional authorizations before
construction could begin. ETS did not seek judicial review of the
denial.
---------------------------------------------------------------------------
In January 2020, PHMSA established a joint LNG Task Force with FRA
to undertake testing and evaluation activity on the transportation of
LNG that could inform potential future regulatory actions, as
appropriate. In order to identify tasks within that effort, the LNG
Task Force utilized a risk-based framework focused on knowing the risk,
predicting the risk, reducing the risk, and preparing for the risk.
Using that framework, the LNG Task Force identified and undertook 15
tasks to synthesize ongoing research and outreach activities. Those
tasks included empirical review of international LNG transportation,
safety and security route risk assessments, a re-evaluation of the
costs and benefits of electronically controlled pneumatic (ECP) brakes,
and the validation of emergency responders' opinions and needs.
Although the LNG Task Force initially projected completion of its tasks
by late 2021, much of its work was interrupted or delayed because of
the coronavirus disease 2019 (COVID-19) public health emergency and
because of subsequent modification of the scope of its activities. The
ongoing efforts of the LNG Task Force are discussed further below.
In parallel with its work under the LNG Task Force, and pursuant to
a mandate in the ``Further Consolidated Appropriations Act, 2020''
(Pub. L. 116-94), PHMSA and FRA partnered with NASEM to conduct a study
on the transportation of LNG in rail tank cars through a committee of
the Transportation Research Board (TRB).\9\ The TRB commenced work in
mid-July 2020. Roughly contemporaneous with the TRB beginning its work,
PHMSA published the July 2020 Final Rule authorizing the shipment of
LNG in new DOT-113C120W9 specification rail tank cars with enhanced
outer tank requirements, subject to all applicable requirements and
certain new operational controls. The July 2020 Final Rule became
effective on August 24, 2020 and was swiftly followed by several
petitions for judicial review. Specifically, six environmental groups,
a coalition of attorneys general for 14 States and the District of
Columbia, and the Puyallup Tribe of Indians filed separate petitions
for review challenging the July 2020 Final Rule. All the petitioners
asked the court to vacate the July 2020 Final Rule, alleging violations
of the Hazardous Materials Transportation Act (HMTA; 49 U.S.C. 510
2012;5127), the Administrative Procedure Act (APA; 5 U.S.C. 553 et
seq.), and the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
et seq.). The Puyallup Tribe also alleged violations of the Tribal
consultation protocols under the National Historic Preservation Act (54
U.S.C. 300101 et seq.) and Executive Order 13175 (``Consultation and
Coordination with Indian Tribal Governments''),\10\ as well as
disparate impacts on the Tribe in violation of Executive Order 12898
(``Federal Actions to Address Environmental Justice in Minority
Populations and Low-Income Populations'') \11\ and Title VI of the
Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.). The petitions were
subsequently consolidated within a single proceeding in the U.S. Court
of Appeals for the District of Columbia Circuit \12\ with the court
granting PHMSA's motion to place the petitions in abeyance while PHMSA
reviewed the July 2020 Final Rule. PHMSA submitted the latest status
report in that proceeding in early June 2023. The Court lifted the
abeyance on July 18, 2023.\13\
---------------------------------------------------------------------------
\9\ In that legislation, Congress earmarked funds for the NASEM
study for the express purpose of ``inform[ing] rulemaking.'' NASEM
maintains a website dedicated to the TRB committee's work that
contains the TRB committee's charter, work product, meeting agendas,
and other supporting material. See NASEM, ``Safe Transportation of
Liquefied Natural Gas by Railroad Tank Car,'' https://www.nationalacademies.org/our-work/safe-transportation-of-liquefied-natural-gas-by-railroad-tank-car (last visited May 15, 2023).
\10\ 65 FR 67249 (Nov. 9, 2000).
\11\ 59 FR 7629 (Feb. 16, 1994).
\12\ Under docket no. 20-1317 (consolidated with docket nos. 20-
1318, 20-1431, & 21-1009).
\13\ On May 17, 2023, Petitioners filed a Joint Motion to Lift
Abeyance and requested the D.C. Circuit Court to direct the parties
to submit a proposed briefing schedule. PHMSA, through the
Department of Justice, filed a response opposing the motion to lift
the abeyance on June 6, 2023. The Petitioners filed a reply on June
13, 2023.
---------------------------------------------------------------------------
C. Another Hard Look Incorporating NASEM Recommendations and Ongoing
Research Efforts
Immediately after taking office, the Biden-Harris Administration
issued Executive Order 13990 (``Protecting Public Health and the
Environment and Restoring Science To Tackle the Climate Crisis'') \14\
on January 20, 2021. Executive Order 13990 required the review of
agency regulations and other actions promulgated or adopted between
January 20, 2017, and January 20, 2021, that are candidates for
suspension, modification, or rescission because of inconsistency with
Biden-Harris Administration policies to improve public health, protect
the environment, prioritize environmental justice, and reduce GHG
emissions. The Biden-Harris Administration identified the July 2020
Final Rule in a non-exclusive list \15\ of agency actions that would be
reviewed in accordance with Executive Order 13990. Additionally,
section 7 of Executive Order 13990 revoked Executive Order 13868, along
with several other executive orders and executive actions, and directed
agencies to promptly take steps, consistent with applicable law, to
rescind any rules or regulations that had been issued ``implementing or
enforcing'' those executive orders and executive actions.
---------------------------------------------------------------------------
\14\ 86 FR 7037 (Jan. 25, 2021).
\15\ U.S. White House, ``Fact Sheet: List of Agency Actions for
Review,'' https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/fact-sheet-list-of-agency-actions-for-review/
(last visited May 16, 2023).
---------------------------------------------------------------------------
In response to Executive Order 13990, DOT published a notice on May
5, 2021, soliciting comment on potential candidates for review under
Executive Order 13990 from among existing rules and other DOT
actions.\16\ DOT received one comment pertaining to the July 2020 Final
Rule from the Transportation Trades Department of the American
Federation of Labor and Congress of Industrial Organizations (AFL-CIO).
The commenter requested a reexamination of the July 2020 Final Rule as
it believed that rulemaking ``neglected to include meaningful safety
measures to adequately address the
[[Page 60359]]
inherent risks to this type of operation.'' \17\
---------------------------------------------------------------------------
\16\ 85 FR 23876 (May 5, 2021).
\17\ Docket No. DOT-OST-2021-0036-0025.
---------------------------------------------------------------------------
The TRB issued its Phase I Report on June 15, 2021,\18\ which
reviewed the plans and progress of the LNG Task Force and evaluated the
relevance, completeness, and quality of those efforts. The Phase I
Report generally praised the LNG Task Force's ``comprehensive as
planned'' program for making effective use of a ``number of long
standing and high-quality research and testing programs.'' However, the
TRB noted that the COVID-19 public health emergency resulted in delays
in initiation and completion of several tasks. The TRB also noted that
the interdependency of many of those outstanding tasks complicated its
and the LNG Task Force's work in developing a complete understanding of
the risks associated with the transportation of LNG in rail tank cars.
Specifically, it expressed concern on the incomplete status of tasks
pertaining to full-scale impact testing, portable tank pool fire
testing, worst-case scenario analysis, and quantitative risk
assessment. The Phase I Report made several recommendations including
proposing that PHMSA and FRA make changes to the planned portable fire
tank testing, assess the potential for cryogenic damage cascading to
adjacent tanks, enhance the modeling for worst-case scenarios, evaluate
explosion hazards from a spill of LNG resulting in vapor dispersion in
an environment with confined or congested spaces, and add loading and
unloading operations to the risk assessment. PHMSA subsequently
modified its LNG Task Force testing activity in response to the Phase I
Report recommendations by, among other things, undertaking each of the
following: enhanced impact testing directed toward evaluating post-
weld, heat-treated seams from a DOT-113C120W9-specification tank car;
enhanced worst-case scenario modeling; performing an enhanced
quantitative risk assessment; modification of ISO tank pool fire
testing protocols to better simulate release conditions; and enhanced
train dynamic simulations to better capture effects from use of
distributed power and buffer car placement within a train consist
transporting LNG.
---------------------------------------------------------------------------
\18\ NASEM, ``Preparing for LNG by Rail Tank Car: A Review of a
U.S. DOT Safety Research, Testing, and Analysis Initiative'' (Jun.
2021) (Phase I Report), https://www.nap.edu/read/26221/chapter/1.
---------------------------------------------------------------------------
On November 8, 2021, PHMSA published the NPRM in this rulemaking
proceeding. In that NPRM, PHMSA reviewed pertinent economic data, TRB's
Phase I Report recommendations, and the status of ongoing work of the
LNG Task Force en route to proposing a temporary suspension of the
transportation of LNG by rail tank car until the earlier of either June
30, 2024, or the publication of a companion rulemaking under RIN 2137-
AF54. PHMSA's proposal reflected its understanding that uncertainties
acknowledged in the July 2020 Final Rule--e.g., regarding the near-term
commercial viability of rail tank car transportation of LNG, as well as
potential safety and environmental benefits and risks of rail tank car
transportation--had only increased since issuance, thereby ``casti[ng]
doubt on the continued validity of the balance between potential
benefits and public safety and environmental risks underpinning the
[July 2020 Final Rule].'' \19\ PHMSA therefore proposed a temporary
suspension of the July 2020 Final Rule to allow time for PHMSA to
review the results of the (then-forthcoming) TRB Phase II Report,
complete ongoing LNG Task Force testing and evaluation activities, and
(based on the results of those efforts) modify HMR requirements as
appropriate within the companion rulemaking under RIN2137-AF54. The
comment period closed on December 23, 2021. PHMSA received over 10,500
comments from private individuals, environmental groups, government
officials, the rail industry, and other stakeholders. See Section III
for further details.
---------------------------------------------------------------------------
\19\ 86 FR at 61735-36.
---------------------------------------------------------------------------
The TRB issued its Phase II Report on September 9, 2022.\20\ The
Phase II Report involved a more comprehensive assessment than that
undertaken in connection with the Phase I Report regarding topics
relevant to the safe movement of LNG by rail tank car pursuant to both
SPs and the HMR following issuance of the July 2020 Final Rule.
Specifically, it examined bulk shipments of LNG by other modes of
transportation (including vessel and highway) to identify the basic
principles used in those modes for safety assurance. It also examined
the effectiveness of regulatory requirements and industry practices
(e.g., pertaining to speed and routing, as well as other operational
controls applicable to high-hazard flammable trains) intended to assure
the safe transportation of bulk rail shipments of other hazardous
materials.
---------------------------------------------------------------------------
\20\ NASEM, ``Preparing for LNG by Rail Tank Car: A Readiness
Review'' (Sep. 2022) (Phase II Report), https://www.nap.edu/read/26719/chapter/1.
---------------------------------------------------------------------------
The Phase II Report also made recommendations on necessary near-
and long-term actions to improve the understanding of the risks
associated with transporting LNG by rail tank car, mitigate those
risks, and prevent and prepare for potential incidents. The first
recommendation suggested launching an LNG safety assurance initiative
before LNG tank cars are put in service. The safety assurance
initiative would actively monitor initial plans for and early patterns
of LNG traffic activity, including the locations and routes of
shipments, the number and configuration of tank cars in trains, and
reports of incidents involving a tank car or train carrying LNG. The
second and final recommendation suggested that PHMSA and FRA should
review the DOT-113C120W9 tank car specification to ensure that it
adequately accounts for the cryogenic and thermal properties of LNG
that could contribute to a tank release in the event of a rail incident
and potential cascading impacts therefrom. The TRB's elaboration on its
second recommendation emphasized the value in assessing each of the
following: the capacity of the pressure relief devices on the new DOT-
113C120W9-specification tank cars to vent a sufficient amount of LNG
when the tank car is engulfed in an LNG fire in derailment conditions,
including a rollover event; the effects of adding more and different
types of insulation in the annular space to ensure sufficient
performance of the multilayer insulation system when the tank car is
exposed to heat flux and direct flame impingement from an LNG fire; and
the potential for the outer tank of the DOT-113C120W9 tank car to
experience cryogenic brittle failure and loss of vacuum insulation when
exposed to an LNG pool fire. PHMSA subsequently adjusted its LNG Task
Force testing activity in response to the Phase II Report
recommendations by modifying its ongoing worst-case analysis modeling
and quantitative risk assessment efforts to address the DOT-113C120W9-
specification design element concerns raised by the TRB. In light of
the new information received from the TRB reports and PHMSA's completed
research and ongoing tests, PHMSA suspends the regulations adopted in
the July 2020 Final Rule to allow PHMSA sufficient time to complete its
analysis to reconsider the determinations made in the July 2020 Final
Rule.
The LNG Task Force has completed most of its testing and evaluation
activities (as modified in response to the TRB Phases I and II
Reports). Of those remaining activities, PHMSA expects to
[[Page 60360]]
complete its enhanced quantitative risk analysis and worse case
analysis modeling no later than Q3-2023. This analysis has taken longer
than expected because it was modified first to address concerns in the
TRB Phase I Report in June 2021 and then again in response to the TRB
Phase II Report issued in September 2022. PHMSA is in the process of
contracting for performance of each of the following remaining tasks:
(1) enhanced impact testing directed toward evaluating post-weld, heat-
treated seams from a DOT-113C120W9-specification tank car in response
to the TRB Phase I Report; and (2) enhanced train dynamic simulations
to better capture effects from use of distributed power and buffer car
placement within a train consist transporting LNG in response to the
TRB Phase I Report.
D. East Palestine, OH Derailment
On February 3, 2023, a mixed-consist freight train operated by
Norfolk Southern Railway--comprised of two head-end locomotives, 149
railcars, and 1 distributed power locomotive--derailed in East
Palestine, Ohio. Thirty-eight railcars derailed, including 11 tank cars
carrying combustible liquid and flammable gas hazardous materials,
though none of the railcars were carrying LNG. The derailment resulted
in a fire impacting the derailed tank cars and damaging 12 additional
railcars that had not derailed. Included in the derailment and fire
were five DOT-105 specification tank cars containing vinyl chloride--a
hazardous material classified as a Division 2.1 flammable gas. These
DOT-105 specification tank cars were not punctured in the derailment.
PHMSA is working with the National Transportation Safety Board to learn
all it can from this incident and determine whether the lessons learned
should inform rail transportation of other hazardous commodities such
as LNG.
III. Discussion of Comments to the NPRM and Adoption of a Temporary
Suspension of the July 2020 Final Rule
The comment period for the NPRM in this proceeding closed on
December 23, 2021. PHMSA received over 10,500 sets of comments to the
rulemaking docket through and after the formal comment period;
consistent with Sec. 106.70, PHMSA considers late-filed comments to
the extent possible. PHMSA considered all comments received in the
development of this Final Rule. The comments submitted to this docket
may be accessed via https://www.regulations.gov. The following table
categorizes the commenters. Please note that some commentors submitted
multiple comments.
------------------------------------------------------------------------
Description and examples
Commenter Count of category
------------------------------------------------------------------------
Non-Government Organizations....... 18 Environmental Groups;
Emergency Response
Organizations; Other.
Government Officials............... 8 Local; State; Federal;
Tribal.
Private Individuals................ 10,126 ..........................
Industry Stakeholders.............. 3 Trade Associations;
Shippers.
------------------------------------------------------------------------
Table of Commenters to the NPRM
------------------------------------------------------------------------
Comments received could generally be summarized as advancing one or
more of the following positions:
Comments requesting an immediate, permanent ban of LNG by
rail;
Comments requesting the removal of the June 30, 2024,
sunset date;
Comments of general support for the NPRM;
Comments alleging chilling of near-term demand for LNG
transportation by rail tank car pursuant to the July 2020 Final Rule;
Comments alleging that LNG by rail improves safety;
Comments alleging environmental benefits from LNG by rail;
Comments alleging PHMSA is overstepping its authority by
attempting to regulate oil and gas production;
Comments alleging PHMSA did not meet its evidentiary
burden under the APA for temporary suspension of the July 2020 Final
Rule;
Comments alleging that PHMSA's proposal will have
miscellaneous adverse consequences for regulated entities, the U.S.
economy, and national security; and
Comments beyond the scope of this rulemaking.
Based on the comments received in response to the NPRM, the
recommendations in the TRB Phases I and II Reports, the ongoing LNG
Task Force testing and evaluation activities, and pertinent information
regarding the near-term commercial prospects for rail tank car
transportation of LNG, PHMSA has concluded that a temporary suspension
of the July 2020 Final Rule's authorization for rail tank car
transportation of LNG in new DOT-113C120W9-specification tank cars is
appropriate. PHMSA finds that, consistent with the analysis in the
NPRM, these resources indicate that the uncertainties described in the
July 2020 Final Rule (e.g., regarding whether, when and how LNG by rail
tank car transportation will occur, and the safety and environmental
risks and benefits of such transportation) have only increased since
its issuance, calling into question the balance between potential
benefits and public safety and environmental risks PHMSA understood
itself to be striking in that rulemaking. In contrast (and as explained
at greater length below in this Section III responding to comments
received on the NPRM) a temporary suspension will ensure each of the
following: (1) avoidance of potential safety risks to public and worker
safety and the environment while PHMSA completes its companion
rulemaking under RIN 2137-AF54; (2) HMR authorization of rail tank car
transportation of LNG pursuant to that companion rulemaking reflects
the best science by accounting for ongoing LNG Task Force testing and
evaluation activities as informed by the TRB Phases I and II Report
recommendations; (3) consideration of additional public comment from
diverse stakeholders in that companion proceeding; and (4) minimizing
the potential for economic burdens by ensuring that entities avoid
ordering rail tank cars for LNG service compliant with the requirements
of the July 2020 Final Rule when the companion rulemaking may alter
those requirements.\21\ See 86 FR at 61732, 67135-36. As noted in the
NPRM, stakeholders seeking to transport LNG by rail during the
suspension period may seek (on an ad hoc basis) either SPs from PHMSA
or approvals from FRA.
---------------------------------------------------------------------------
\21\ The temporary suspension provided for in this Final Rule
applies only to rail transportation of LNG tank cars--it does not
prohibit use of the new DOT-113C120W9 tank car in connection with
other hazardous, cryogenic liquids.
---------------------------------------------------------------------------
Lastly, the Final Rule extends the duration of the temporary
suspension an
[[Page 60361]]
additional year (until June 30, 2025, at the latest) beyond the sunset
date (June 30, 2024) proposed in the NPRM. This extension--which is
consistent with comments received from stakeholders \22\ on the NPRM
discussed in section III.B below--is warranted due to delays in
completion of the LNG Task Force activity (discussed in section III.C
below) that will inform the companion rulemaking under RIN 2137-AF54.
Also, economic information discussed in section III.D below shows that
the commercial prospects for rail tank car transportation pursuant to
the July 2020 Final Rule have become even more uncertain than they were
when the NPRM issued in November 2021.
---------------------------------------------------------------------------
\22\ PHMSA received no comments that specifically requested the
June 2024 sunset date for the suspension; commenters either sought
no suspension or a permanent suspension.
---------------------------------------------------------------------------
A. Comments Requesting an Immediate, Permanent Ban of LNG by Rail
PHMSA received numerous comments requesting the immediate,
permanent ban of all LNG by rail in lieu of the temporary suspension as
proposed in the NPRM. Many of these comments were part of write-in
campaigns comprising approximately 6,650 comments in an initial
campaign during the formal comment period, and an additional 3,500
comments in a second campaign coordinated by the National Resource
Defense Council (NRDC) after the East Palestine derailment in early
2023 (NRDC Coordinated Write-in Campaign Comments). Other comments were
stand-alone comments submitted by non-governmental organizations (e.g.,
environmental advocacy organizations); Federal, State, and local
government officials; and private citizens.
Many of these comments attributed the need for an immediate,
permanent ban on the risk to public safety and the environment from
LNG's material properties--specifically, pointing to its flammability,
explosive potential, and GHG contributions--in the event of a release.
Of particular concern for many commenters were the risks of a boiling
liquid expanding vapor explosions (BLEVEs) or asphyxiation in the event
of a release of LNG during an accident or incident. Some commenters
elaborated on their safety concerns by highlighting the potential
limitations (e.g., of personnel and equipment resources and training)
of emergency response personnel to respond to an incident involving
rail transportation of LNG in their jurisdictions. Other commenters
alleged that the new DOT-113C120W9 tank car specification was
inadequate or untested for rail transportation of LNG and that a more
robust safety history--coupled with more robust, mandatory operational
controls (such as limits on train length, tank car weight, and maximum
allowable speed) than required in the July 2020 Final Rule--would be
necessary to ensure safety. Other commenters cited safety and
environmental justice concerns for those who live along rail lines that
would carry LNG, stating that ``bomb trains'' would threaten the safety
of those who live in these communities--many of which communities may
be densely-populated or historically disadvantaged. Other commenters
called for an immediate ban of LNG transportation by rail given
methane's status as a potent GHG and the Biden-Harris Administration's
commitments to reducing GHG emissions. And commenters from the NRDC
campaign called for a ban on LNG by rail in the ``in the wake of the
devastating train derailment in East Palestine, Ohio.'' \23\ Lastly,
some commenters contended that if the ``. . . rule was already bad
enough to reconsider, it should be repealed outright.'' \24\
---------------------------------------------------------------------------
\23\ NRDC Coordinated Write-in Campaign Comments.
\24\ Beyond Extreme Energy with 198 methods Comment at 1.
---------------------------------------------------------------------------
PHMSA Response
PHMSA acknowledges the concerns raised by these stakeholders and
agrees that any risks related to the transportation of LNG by rail
should be examined closely and properly mitigated to ensure safety for
the public and the environment. Accordingly PHMSA is suspending LNG
transportation by rail tank car pursuant to the July 2020 Final Rule
until the conclusion of the companion rulemaking under RIN 2137-AF54 or
June 30, 2025, whichever is earlier. This will provide PHMSA an
opportunity to conduct a thorough evaluation of the HMR's regulatory
framework for rail transportation of LNG based on the information
received from the LNG Task Force testing and evaluation efforts, TRB
Phases I and II Reports, and stakeholders' written comments. PHMSA also
encourages those stakeholders to consider submitting comments in
response to any future notice of proposed rulemaking issued by PHMSA in
the companion rulemaking under RIN 2137-AF54.
B. Comments Requesting the Removal of the June 30, 2024, Sunset Date
PHMSA received comments requesting removal of the sunset date of
June 30, 2024, proposed in the NPRM so that the proposed suspension
would be in effect until the companion rulemaking under RIN 2137-AF54
has concluded. Delaware Riverkeeper Network (DRN) commented that in the
NPRM, PHMSA justified the sunset date by indicating that the TRB Phase
II Report was expected in mid-2022 and that PHMSA needed time to
incorporate those results and publish a rule. DRN argued that ``this
rationale begs the question--why not wait until PHMSA actually
incorporates the results of the Phase II Report and concludes the
rulemaking process?'' They further stated that ``the unpredictability
of the COVID-19 pandemic indicates that timelines are not as
predictable as they were pre-2019.'' \25\
---------------------------------------------------------------------------
\25\ DRN Comment at 2.
---------------------------------------------------------------------------
The International Association of Fire Fighters (IAFF) suggested an
objective-based approach whereby the suspension would only be lifted if
certain criteria have been met. IAFF further urged ``. . . the FRA to
establish specific criteria to be attained prior to the lifting of the
proposed suspension.'' \26\ Similarly, comments from the AFL-CIO and
others supported suspending LNG by rail tank car until LNG Task Force
testing and evaluation efforts are complete, stating they ``. . .
support PHMSA's suspension of the implementation of the rule until a
time when the agencies have completed a more thorough safety review.''
\27\ Other commenters proposed longer suspension periods than had been
proposed in the NPRM.
---------------------------------------------------------------------------
\26\ IAFF Comment at 2.
\27\ TDD Comment at 1.
---------------------------------------------------------------------------
PHMSA Response
PHMSA in the NPRM specifically sought comments on the proposed
suspension date, including the sunset date, and whether PHMSA should
modify the proposed expiration of the suspension period.\28\ PHMSA
appreciates and acknowledges the points made by commenters and,
consistent with the discussion in the introduction to section III
above, is extending the sunset date for the suspension period an
additional year such that rail tank car transportation of LNG pursuant
to the July 2020 Final Rule will be suspended until the earlier of
either (1) a final rule concluding the companion rulemaking under RIN
2137-AF54, or (2) June 30, 2025. This one-year extension beyond the
sunset date (June 30, 2024) proposed in the NPRM will give PHMSA
adequate time to complete LNG Task Force testing and evaluation
activities (and delays in
[[Page 60362]]
receipt of the TRB Phases I and II Reports) that had been delayed
because of the COVID-19 public health emergency and additional scoping
and contracting issues, and thereafter integrate those results into
each of a notice of proposed rulemaking and final rulemaking in the
companion rulemaking under RIN 2137-AF54.
---------------------------------------------------------------------------
\28\ 86 FR at 61737.
---------------------------------------------------------------------------
C. Comments of General Support for the NPRM
PHMSA received numerous comments in support of the NPRM's proposed
suspension, including comments from Governor Jay Inslee of Washington
State; the Attorneys General of Maryland, New York, Connecticut,
Delaware, Illinois, Massachusetts, Michigan, Minnesota, New Jersey,
Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the
District of Columbia; and the Puyallup Tribe of Indians. Many
commenters who supported the temporary suspension proposed in the NPRM
also urged PHMSA to subsequently ban LNG in the companion rulemaking
under RIN 2137-AF54. Commenters supporting the NPRM's proposed
suspension of the July 2020 Final Rule generally articulated the same
safety and environmental concerns as those calling for an immediate,
permanent bans of rail tank car transportation of LNG discussed in
section III.A above.
PHMSA Response
PHMSA acknowledges the thousands of comments submitted in support
of the NPRM. Although some of those commenters also urged PHMSA to
permanently ban rail tank car transportation of LNG in the companion
rulemaking under RIN 2137-AF54, PHMSA submits that it will need to
complete (and review the results of) the LNG Task Force testing and
evaluation efforts before it will be in a position to speak to the
contents of a forthcoming notice of proposed rulemaking in that
companion rulemaking. PHMSA encourages stakeholders to consider
submitting comments in response to any future notice of proposed
rulemaking issued by PHMSA in the companion rulemaking under RIN 2137-
AF54.
D. Comments Alleging Chilling of Near-Term Demand for LNG
Transportation by Rail Tank Car Pursuant to the July 2020 Final Rule
PHMSA received several comments \29\ on the NPRM's observations of
increased uncertainty regarding whether there will be near-term demand
for rail tank car transportation of LNG pursuant to the July 2020 Final
Rule. Specifically, CSX noted in its comments that it had several
projects in development to transport LNG by rail in or before 2024, and
that ``[t]he continued investment in and pursuit of those projects,
which require design, permitting, and construction with long lead
times, would be impaired if the July 2020 Final Rule were suspended
indefinitely, delaying them potentially for years and harming CSX's
reliance interests and imposing costs and lost business opportunities
on CSX and its partners'' (emphasis added). CSX subsequently met with
PHMSA on February 17, 2022, and elaborated on their written comments by
noting that those projects had been shelved and that the issuance of
the NPRM was the occasion for those decisions. The Attorney General for
the State of Louisiana, Jeff Landry, joined by State Attorneys General
from Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho,
Indiana, Kentucky, Mississippi, Missouri, Montana, Nebraska, New
Hampshire, Ohio, South Carolina, South Dakota, Texas, Utah, Virginia,
West Virginia, and Wyoming (Landry, et. al.) similarly contend that
``the proposed rule itself is the cause of the regulatory uncertainty
of which it complains'' (emphasis in original) in that it ``discourages
companies from making any capital investment in LNG by rail,
specifically the DOT-113C120W9 specification tank cars that the 2020
Rule authorized.''
---------------------------------------------------------------------------
\29\ CSX Comments at 1; PHMSA, Doc. No. PHMSA-2021-0058-7064,
``Summary of CSX Listening Session'' (Feb. 17, 2022); Landry, et al.
Comments at 1, 4.
---------------------------------------------------------------------------
PHMSA Response
PHMSA finds these comments unconvincing statements of the near-term
commercial viability of rail tank car transportation of LNG pursuant to
the July 2020 Final Rule. The suspension proposed in the NPRM and
adopted in this Final Rule is not ``indefinite'' as characterized by
CSX; rather, it is time-limited to the earlier of a date certain (June
2025) or to the completion of the milestone of issuing a final rule in
the companion rulemaking under RIN 2137-AF54. Even if the NPRM affected
one or more of CSX's nascent projects exploring rail tank car
transportation of LNG, CSX or other entities could have applied for,
and may still apply for, an alternative regulatory vehicle (e.g., an SP
under Sec. 107.105,\30\ or an FRA approval for rail transportation via
portable tank) to allow work to proceed on those projects during the
suspension period. PHMSA is unaware of CSX, its collaborators in those
projects, or any other entities having pursued alternatives. Indeed, in
its written comments and again during its February 17, 2022, meeting
with PHMSA, CSX personnel acknowledged that the choice of package
(i.e., the particular DOT-specification rail tank car or ISO tank)
employed in rail transportation of LNG is merely one decision within a
multi-step, multi-year project development and execution chain
involving, among other things, the construction of origin facilities
and off-loading facilities, and the acquisition of one or more enabling
Federal and State permits. The projects CSX and others may have been
pursuing were prolonged, highly contingent processes in which there are
multiple potential bases for material delay or cessation of a project
throughout the development cycle. That said, PHMSA understands the
shelving of CSX's or any other entities' projects following the
proposal of a time-limited, temporary suspension for which there could
be alternative rail transportation methods evinces less an alleged
``chilling'' of investment than the significant uncertainty discussed
in the NPRM regarding whether there would be any commercially viable
projects for rail transportation of LNG in the near-term.
---------------------------------------------------------------------------
\30\ Applications for a Special Permit submitted under Sec.
107.105 must demonstrate that such Special Permit will achieve at
least an equivalent level of safety as to what is provided under the
HMR, and in particular, should address any outstanding safety
questions or concerns including those raised in this rulemaking.
---------------------------------------------------------------------------
And PHMSA understands that a variety of forces have created--and
will continue to create throughout the suspension period--headwinds for
the near-term commercial viability of any project for rail
transportation of LNG. The NPRM explained that the near-term commercial
prospects for LNG by rail (which the July 2020 Final Rule had
acknowledged were uncertain at its issuance) had grown even more
uncertain due to near-term structural changes in international markets
including (1) massive investment in greatly increased export capacity
by competing providers such as Qatar, and (2) reduced demand for LNG
customers seeking to reduce their GHG emissions.\31\ The comments
submitted by CSX, other industry stakeholders, and Landry, et. al. did
not attempt to rebut this evidence, or PHMSA's finding that the near-
term commercial uncertainty for rail transportation of LNG had
increased. Further, the structural headwinds for rail transportation of
LNG are likely to accelerate in the near future, as the U.S. Energy
Information Administration (EIA) predicts that the capacity of
[[Page 60363]]
pipeline-supplied U.S. LNG export terminals are expected to increase
significantly beginning around 2025 which some analysts note could
depress the offtake prices for LNG in the international export market--
which could divert demand for LNG exports that could have been serviced
by LNG by rail.\32\ Further, the supply shocks of the conflict in
Ukraine have highlighted both in the United States and abroad the
volatility of natural gas prices and fragility of international LNG
market supply, accelerating movement among historical consumers of
natural gas toward renewable energy and reduced reliance on LNG
exports.\33\ Meanwhile, domestic consumption of natural gas in the
United States is expected to fall in the next decade due to increasing
electrification driven by consumer preferences and Federal and State
policy initiatives to reduce GHG emissions.\34\ Durably high commodity
(e.g., steel) prices and interest rates \35\ would also tend to
discourage capital investment in the manufacture of a new fleet of DOT-
113C120W9-specification tank cars for dedicated commercial LNG service.
---------------------------------------------------------------------------
\31\ 86 FR at 61735-36.
\32\ EIA, ``U.S. LNG Export Capacity to Grow as Three Additional
Projects Begin Construction,'' (Sept. 6, 2022), https://www.eia.gov/todayinenergy/detail.php?id=53719 (last visited May 12, 2023). See
also A. Shiryaevskaya et al., Bloomberg, ``World Gas Supply Shifts
from Shortage to Glut with Demand Muted'' (Apr. 16, 2023); L.
Hampton, Reuters, ``Wave of New LNG Export Plants Threatens to Knock
Gas Prices'' (Mar. 14, 2023).
\33\ See Intl. Energy Agency (IEA), World Energy Outlook: 2022
at 3, 25-26 (Oct. 2022); The Economist ``War and Subsidies Have
Turbocharged the Green Transition'' (Feb. 13, 2023); Inst. for
Energy Economics and Financial Analysis, Global LNG Outlook: 2023-
2027 at 4-5 (Feb. 15, 2023).
\34\ See EIA, Annual Energy Outlook 2023 at 25 (Mar. 2023).
\35\ N. Ruggiero, S&P Global Commodity Insights, U.S. Steel
Sentiments Hit New High for 2023 As Mills Increase Finished Prices''
(Mar. 13, 2023); R. Druzin, Argus Media, ``U.S. Steel Price Driven
Up by Multiple Factors'' (Mar. 14, 2023); M. Derby, Reuters,
``Premature for Fed to Call End to Rate Hikes with Inflation Still
High, Williams Says (May 9, 2023).
---------------------------------------------------------------------------
PHMSA finds this recent evidence, coupled with the evidence
discussed in the NPRM, augurs uncertainty regarding the commercial
prospects for rail transportation of LNG that will continue beyond the
originally proposed suspension period and into the longer suspension
period adopted in this final rule.\36\ Following the conclusion of the
(temporary) suspension period, stakeholders would be able to evaluate
whether the commercial prospects for rail tank car transportation of
LNG pursuant to the July 2020 Final Rule merit pursuing.
---------------------------------------------------------------------------
\36\ Amidst the limited domestic and international commercial
prospects discussed here, it is hardly surprising that rail
transportation of LNG has occurred by neither (1) existing DOT-
113C120W tank cars pursuant to DOT-SP 20534 issued by PHMSA to ETS
in 2019, nor (2) ISO tanks pursuant to an FRA approval issued to the
Alaska Railroad Company in 2015.
---------------------------------------------------------------------------
E. Comments Contending That the LNG by Rail Improves Safety
PHMSA received several comments arguing temporary suspension of the
July 2020 Final Rule would forfeit safety benefits.\37\ Some of those
comments pointed to the physical properties (e.g., auto-ignition
temperatures) of LNG they assert make its rail transportation
inherently safer than transportation of natural gas in other physical
states. Others contended that, absent the July 2020 Final Rule,
industry would be forced to utilize other modes of transportation of
natural gas--in particular, highway transportation via MC-338 cargo
tanks--which would entail more frequent accidents and incidents than
rail transportation. Some comments generally praised the DOT-113C120W9-
specification tank car approved for use in transporting LNG in the July
2020 Final Rule because it was an improvement on the proven, existing
DOT-113C120W-specification tank cars that PHMSA had approved for use in
rail tank car transportation of LNG via SP. Lastly, RSI asserted that
by discouraging investment in DOT-113C120W9 tank cars for LNG service,
PHMSA was discouraging construction of those enhanced tank cars for use
in transporting other cryogenic liquid hazardous materials.
---------------------------------------------------------------------------
\37\ CSX Comments at 1; Landry, et al. Comments at 1, 4, 5; RSI
Comments at 2, 4; ``Comments of U.S. House of Representatives
Committee on Transportation and Infrastructure--Republican Minority
Members'' at 2-3 (Dec. 22, 2021) (House T&I Minority Comments).
---------------------------------------------------------------------------
PHMSA Response
PHMSA finds these contentions unconvincing. As presented, each of
those arguments suggest that any potential benefits of rail tank car
transportation of LNG will be lost if PHMSA suspends the July 2020
Final Rule as proposed in the NPRM. But that binary understanding
confuses the temporary, time-limited suspension proposed in the NPRM
and adopted in this final rule with a permanent or indefinite ban on
rail tank car transportation of LNG. A temporary suspension would mean
that any safety benefits would only be unavailable for the suspension
period--i.e., until the end of June 2025 (at the latest). See 86 FR at
61737-38. Further, any such potential, time-limited comparative
advantage turns on whether any rail transportation of LNG pursuant to
the July 2020 Final Rule would in fact have occurred during the
suspension period, but, as explained above, market conditions now and
in the near future do not support demand to transport LNG in rail tank
cars. That demand, which was uncertain at issuance of the July 2020
Final Rule has become only more uncertain since given the commercial
headwinds facing the development of that market.\38\ Further, any time-
limited comparative advantage from leaving the July 2020 Final Rule
undisturbed would also be mitigated by the availability of other
regulatory vehicles (FRA approvals and PHMSA SPs) that entities can
pursue during the suspension period.
---------------------------------------------------------------------------
\38\ The NPRM also explains there is also significant
uncertainty regarding the commercial prospects of mode-switching
(from rail tank car to MC-338 cargo tanks carried by truck) given
that such mode-switching would sacrifice (potentially significant)
economies of scale offered by rail tank car transportation of LNG.
See 86 FR at 61737. This observation was not addressed by any of the
comments submitted by the House T&I Minority, Landry, et al., RSI,
or CSX.
---------------------------------------------------------------------------
Uncertainty regarding whether the July 2020 Final Rule's
authorization of rail transportation in DOT-113C120W9-specification
tank cars ensures adequate protection of public safety has only
increased since the time of issuance of each of the July 2020 Final
Rule and the NPRM proposing its suspension. The July 2020 Final Rule
itself acknowledged that its authorization of rail transportation of
LNG in the new DOT-113C120W9 tank car did not turn only on the tank car
itself; rather, a number of other factors (including, but not limited
to, the material properties of LNG and natural gas, the quantity of LNG
that will be moved by rail, the routes involved, the availability of
emergency response planning resources, etc.) affected the risks
involved in rail tank car transportation of LNG. See 86 FR at
61734.\39\ Subsequently, the TRB Phase I Report highlighted gaps
(discussed in section II.C above) within the LNG Task Force testing
efforts undertaken to improve confidence in
[[Page 60364]]
the safety benefits of rail transportation of LNG. TRB's subsequent
Phase II Report identified additional areas warranting additional
research and evaluation to ensure the safety of rail transportation of
LNG in the DOT-113C120W9-specification tank car. Although PHMSA has
revised the LNG Task Force's testing and evaluation activities in
response to the TRB Phases I and II Report recommendations, that work
continues; and even after completing the activities PHMSA must evaluate
the results and determine whether and how to make permanent
modifications to the HMR governing rail transportation of LNG. Further,
the comments submitted in response to the NPRM proposing suspension of
the July 2020 Final Rule show a lack of consensus among stakeholders
regarding whether some of the critical safety challenges known when
PHMSA issued the July 2020 Final Rule have been addressed. For example,
a comment submitted by IAFF on the NPRM noted that ``the capabilities
of fire fighters and emergency medical responders to safely and
effectively respond to hazmat incidents involving LNG rail cars has not
improved since our 2019 comments'' notwithstanding any PHMSA and FRA
outreach and engagement efforts in the interim.\40\
---------------------------------------------------------------------------
\39\ PHMSA disagrees with Landry, et al. that PHMSA's
authorization of rail transportation of LNG in existing, less robust
DOT-113C120W tank cars pursuant to DOT-SP 20534 reveals PHMSA's
concerns regarding safety of the DOT-113C120W9 tank car as
pretextual. Landry, et al. Comments at 4. The conditions it
imposed--a defined, limited duration, a single route, and various
operational controls--facilitate understanding and bounding of
safety and environmental risks notwithstanding transportation within
a legacy DOT-113C120W tank car. In contrast, the July 2020 Final
Rule's nationwide, perpetual authorization of rail tank car
transportation of LNG in a new tank car specification could entail a
fundamentally different risk profile than DOT-SP 20534 or any other
special permits that PHMSA may issue authorizing (on an ad hoc
basis) rail tank car transportation of LNG. In addition, no LNG was
ever shipped under DOT-SP 20534, which has now expired and which
PHMSA has declined to renew.
\40\ IAFF, Doc. No. PHMSA-2021-0058-6442, ``Comments Regarding
Suspension of Hazardous Materials Regulations Amendments Authorizing
Transportation of Liquefied Natural Gas (LNG) by Rail'' at 1-2 (Dec.
23, 2021).
---------------------------------------------------------------------------
Additionally, comments touting the inherent safety advantages of
rail tank car transportation of liquefied natural gas miss the larger
safety issue toward which much of the LNG Task Force testing evaluation
activity is directed. Natural gas in liquid form, undisturbed within a
DOT-113C120W9 tank car is a very stable material that will not combust
unless it vaporizes which only happens if the material warms. Further,
any vapor present in the outage of the tank car will be of a
concentration that is too high to combust. Rather, the principal safety
concern--highlighted by PHMSA in the July 2020 Final Rule, in the NPRM
and comments thereon, and in TRB's evaluation of safety risks
associated with rail transportation of LNG--pertains to consequences
should either there be a release of LNG to atmosphere, or a tank car be
exposed to harsh conditions during an incident or accident. LNG
releases can expose personnel and materials to extreme cold (as low as
-120 [deg]C or -260 [deg]F) and can be an asphyxiant within a confined
space. When released to the atmosphere (as a result of a puncture of
the inner and outer tanks during an accident or incident), liquid
methane will convert to a gas that has a relatively low auto-ignition
point (about 540 [deg]C or 1000 [deg]F) in addition to being highly
combustible when exposed to an ignition source such as fire or
electrical sparking. When methane ignites, it burns at very high
temperatures (about 1330 [deg]C, or 2426 [deg]F), potentially resulting
in exposure of personnel and materials--including (potentially)
undisturbed DOT-113C120W9 tank cars adjacent to an LNG pool fire to
significant radiant heat hazards. Although PHMSA had undertaken (via
the LNG Task Force) a robust testing regime to develop a fulsome
understanding of those potential, significant hazards of LNG when
transported by rail tank car in parallel with the development and
issuance of the July 2020 Final Rule, the subject matter expert
recommendations within each of the TRB's Phases I and II Reports
underscore the value in obtaining that understanding from completing
enhanced testing and evaluation activities before LNG begins moving in
DOT-113C120W9 rail tank cars pursuant to the July 2020 Final Rule. A
temporary suspension gives the LNG Task Force and PHMSA an opportunity
to complete that critical work.
PHMSA also disagrees that suspension of the July 2020 Final Rule
would discourage investment in enhanced, DOT-113C120W9-specification
tank cars for use in rail transportation of any cryogenic liquid
hazardous materials--not just LNG. PHMSA acknowledges that the HMR (at
49 CFR part 179 Subpart F) contemplates use of DOT-113C120W9-
specification tank cars for transportation of other materials
authorized for transportation in the DOT-113 series tank cars in that
DOT-113C120W9 tank cars will also meet and exceed the minimum DOT-
113C120W standard. However, factors influencing whether to invest in
new DOT-113C120W9-specification tank cars for use in transporting those
other cryogenic liquids are very different from the factors driving
decision making on investing in those tank cars for LNG service. For
example, those other cryogenic liquid hazardous materials would likely
be destined for more mature domestic and international markets than the
(currently) speculative domestic and international market for LNG
transported by rail tank car. Perhaps for this reason, PHMSA is aware
of at least one entity having submitted an order for construction of
new DOT-113C120W9-specification tank cars for cryogenic ethylene
service--even as, over three years after the July 2020 Final Rule
issued, PHMSA is unaware of a single order from a commercial entity for
a new DOT-113C120W9 specification tank car for LNG service.\41\
---------------------------------------------------------------------------
\41\ In addition, DOT-113C120W9-specification tank cars
constructed for cryogenic ethylene (or other cryogenic liquid)
service could not be converted for LNG service easily or
immediately: each tank car would have to be cleaned and purged; the
physical configuration of critical, installed components of each
tank car (e.g., pressure relief valve piping, valves, and other
service equipment) would have to be changed; and the re-configured
tank car would have to obtain a design certification from the
American Association of Railroads Tank Car Committee. Mechanically
converting one car--separate from the approval process for the Tank
Car Committee--could take several months to over a year.
---------------------------------------------------------------------------
For the reasons discussed above and in section III.D, PHMSA
concludes that uncertainty on critical issues regarding the safety
profile of rail tank car transportation of LNG pursuant to the July
2020 Final Rule has increased since its issuance--and will persist
through the suspension period adopted in this final rule until PHMSA
and FRA have had an opportunity to complete and review the results of
the LNG Task Force's testing and evaluation activities and implement
any necessary regulatory amendments in the companion rulemaking under
RIN2137-AF54.
F. Comments Alleging Environmental Benefits From LNG by Rail
PHMSA received several comments arguing temporary suspension of the
July 2020 Final Rule would forfeit important environmental benefits.
Comments describe several mechanisms for such environmental benefits
including potential reduction in flaring from oil and gas production
activities and reduced GHG emissions compared to highway transportation
of the same volume of LNG in MC-338 cargo tanks.\42\
---------------------------------------------------------------------------
\42\ House T&I Minority Comments at 2-3; Landry, et al. Comments
at 5-7; CSX Comments at 1-2; RSI Comments at 2, 5.
---------------------------------------------------------------------------
PHMSA Response
For largely the same reasons discussed in section III.E above,
PHMSA finds these arguments unconvincing. The statements in those
comments regarding the environmental benefits of the July 2020 Final
Rule were offered without any evidentiary support and little analysis,
frustrating evaluation against the comments submitted in response to
the NPRM attributing potential environmental harms (including those
pertaining to commodity releases and lifecycle and indirect GHG
emissions) to rail tank car
[[Page 60365]]
transportation of LNG. As explained in the NPRM, both environmental
benefits and risks of rail tank car transportation of LNG are a
function of whether, when, and where viable market opportunities for
such transportation develops. The July 2020 Final Rule acknowledged
considerable uncertainty regarding those questions--and as explained in
the section III.D above, the commercial prospects for rail tank car
transportation of LNG are more speculative now than in July 2020 or
even when the NPRM in this proceeding issued in November 2021.
These considerations are particularly relevant to the mechanisms
for environmental benefits identified in those comments charactering
the environmental benefits of the July 2020 Final Rule. Whether a
market will emerge during the suspension period (or for that matter,
may ever emerge) for capture of methane that would be otherwise be
flared from oil and gas production operations and transported by rail
tank car is not a straightforward proposition. In addition to the non-
trivial capital investment for rail tank cars, such an approach would
require, among other things, liquefaction equipment at the production
site and gasification equipment at the destination and enabling Federal
or state regulatory authorizations--and each of those elements may need
to be procured sooner at break-even or lower cost than alternatives
such as capture and transportation via pipeline or MC-338 cargo tank
carried by truck (or, by extension, by rail tank car via FRA approval
or PHMSA SP). And even if such a market opportunity would have arisen,
meaningful evaluation of the GHG emissions benefits would inevitably
involve myriad assumptions (e.g., accident/incident rates for rail and
highway transportation; lifecycle emissions from construction and
operation of the tank cars and related equipment; potential indirect
effects such as emissions associated with upstream production induced
by newly-available takeaway capacity) that increase uncertainty
regarding GHG impacts. Similarly, modal shifting between highway
transportation of LNG via MC-338 cargo tank and rail tank car may not
be as easy or as desirable as those comments assume. As discussed above
in section III.D, highway transportation sacrifices economies of scale
that is among the principal advantages of rail tank car transportation
of LNG.
For the reasons discussed above, PHMSA concludes that uncertainty
regarding the potential environmental benefits and harms from rail tank
car transportation of LNG pursuant to the July 2020 Final Rule will
continue throughout the suspension period adopted in this Final Rule.
This persistent uncertainty on a critical potential benefit identified
for the July 2020 Final Rule militates in favor of its temporary
suspension as the LNG Task Force completes its testing and evaluation
activity and PHMSA implements any necessary regulatory amendments in
the companion rulemaking under RIN 2137-AF54.
G. Comments Alleging PHMSA Is Overstepping Its Authority by Attempting
To Regulate Oil and Gas Production
PHMSA received comments alleging that PHMSA's proposed suspension
of the July 2020 Final Rule overstepped its statutory authority under
the HMTA by attempting to discourage oil and gas production
activity.\43\
---------------------------------------------------------------------------
\43\ Landry, et al. Comments at 1, 4.
---------------------------------------------------------------------------
PHMSA Response
Those arguments mischaracterize PHMSA's intentions and misapprehend
pertinent law.\44\ Indeed, PHMSA nowhere in either the NPRM or in this
Final Rule identifies decreasing oil and gas production activity as an
explicit goal of its suspension of the July 2020 Final Rule. Instead,
Landry, et al. divines that intention from a reference to ``[induced]
natural gas extraction'' within a list of several considerations in the
NPRM that are probative to the safety and environmental risks attendant
to rail tank car transportation of LNG.\45\ But PHMSA's acknowledgement
in the NPRM of the common-sense proposition that new oil and gas
production activity--and any attendant environmental benefits as well
as risks (including release to atmosphere of methane lost during
extraction and transportation) associated with those activities--could
be a reasonably foreseeable consequence of authorizing new takeaway
capacity is consistent with its obligations under NEPA. See 86 FR
61735-36 & n. 35. It is also consistent with the reasoning supporting
the July 2020 Final Rule, which (along with its supporting
documentation) explicitly identified potential indirect effects on each
of upstream production activity and downstream fuel switching from coal
as justifications for that rulemaking.\46\
---------------------------------------------------------------------------
\44\ This argument is also in tension with exhortations
elsewhere in the Landry, et al. comments for PHMSA to consider
policy issues (pertaining to U.S national security and consumers'
home heating bills) that are arguably more ``attenuated'' and less
``tethered'' to PHMSA's authority under the HMTA. See Landry, et al.
Comments at 1, 7-10. Indeed, Landry, et al. also urges PHMSA to
consider the indirect relationship between the rulemaking and
production activity by claiming that rail tank car transportation
could yield reductions in flaring from oil and gas production
activities. Id. at 7.
\45\ Landry, et al. Comments at 4 (citing 86 FR at 61736).
\46\ See 85 FR at 44995. See also Final Regulatory Impact
Assessment, Doc. No. PHMSA-2018-0025-0479, at 4, 32-33 & n. 48;
Final Environmental Assessment, Doc. No. PHMSA-2018-0025-0478 at 35-
36, 52.
---------------------------------------------------------------------------
Nor, moreover, would any indirect effect on production activity
from PHMSA's exercise of its authority under the HMTA to regulate
interstate rail transportation of hazardous material implicate, as
suggested by Landry, et al., the ``major questions'' concerns
articulated in Utility Air Regulatory Group v. EPA (573 U.S. 302
(2014)), and in West Virginia v. EPA (597 U.S. (2022)). Neither case
disturbed the longstanding tolerance of minor, incidental, or
accidental effects when an agency takes actions within the core of its
statutory responsibilities. And here, PHMSA is doing just that:
imposing a temporary suspension of a recent (July 2020) exercise of its
authority under the HMTA to prescribe regulations governing interstate
transportation by rail of hazardous materials to temporarily restore
the status quo ex ante preceding the July 2020 Final Rule. Lastly,
given that (as explained in section III.D above) there is considerable
uncertainty regarding the commercial viability of rail tank car
transportation of LNG, the limited-duration suspension adopted in this
Final Rule hardly resembles the fact sets before the Supreme Court in
either of the above decisions in which EPA was said to have
``discover[ed] . . . an unheralded power to regulate `a significant
portion of the American economy.' ''
H. Comments Alleging PHMSA Did Not Meet Its Evidentiary Burden Under
the APA for Temporary Suspension of the July 2020 Final Rule
PHMSA also received comments claiming that the NPRM did not make
the required showing under the APA for suspension of currently-
effective regulations.\47\ Landry, et al. in particular characterizes
controlling precedent as establishing a uniquely high burden for
temporary suspension of existing regulations. PHMSA must, in their
view, provide ``a detailed justification of new facts that contradict
facts underlying . . . prior policy'', as well as ``a more `reasoned
explanation' to justify suspension of a regulation'' than merely the
``inauguration of a new President.'' PHMSA must also demonstrate an
[[Page 60366]]
``awareness that it is changing position.'' Landry, et al. ultimately
concluded that PHMSA ``had not provided any . . . explanations''
demonstrating compliance with those purported requirements.
---------------------------------------------------------------------------
\47\ House T&I Minority Comments at 2 & n.8; Landry, et al.
Comments at 3-4.
---------------------------------------------------------------------------
PHMSA Response
These criticisms misapprehend controlling precedent. Indeed, PHMSA
does not understand the cited decisions to stand for the proposition
suggested in those comments that ``reasoned decision-making'' in the
context of suspension of currently effective regulations necessarily
entails a heightened evidentiary burden. Rather, the Supreme Court
explicitly stated that the evidentiary burden for agency action is not
heightened when that action is a change. F.C.C. v. Fox Studios, 556
U.S. at 502, 514-15 (2009). And although agencies suspending currently
effective regulations must acknowledge a change in their position,
address any tensions between conflicting factual findings, and confront
any serious reliance interests on the old policy, those common-sense
expectations do not constitute a different, uniquely higher evidentiary
standard for suspending a currently-effective regulation; rather, those
are the sort of issues an agency may need to address (as applicable)
when adopting any change in its regulations. See Motor Veh. Mfrs. Ass'n
v. State Farm Ins., 463 U.S. 29, 51-52 (1983).
Nor did Landry, et al.'s comments provide any analysis explaining
how PHMSA had run afoul of judicial guardrails for suspending
currently-effective regulations. They simply asserted that PHMSA had
failed to ``explain[ ]'' its compliance with pertinent APA
requirements. But the NPRM acknowledged that it proposed a change in
position from the July 2020 Final Rule: it stated in multiple places
that rail tank car transportation of LNG authorized by the July 2020
Final Rule would be temporarily suspended. See, e.g., 86 FR at 61731-
32. Further, PHMSA described at length its rationale and the evidence
relied on in making that change. Specifically, information (including
the TRB Phase 1 Report, COVID-related delays in the execution of LNG
Task Force testing and evaluation efforts that had been expected to
corroborate the conclusions in the July 2020 Final Rule, and potential
fundamental shifts in the domestic and international market dynamics)
that had emerged following issuance of the July 2020 LNG Final Rule
cast doubt on the validity of PHMSA's understanding of the potential
benefits and risks on which that rulemaking's policy decisions rested.
See 86 FR at 61735-36. And (as explained in section III.D above)
because uncertainty on these considerations has only increased since
the NPRM's issuance in November 2021, PHMSA has now decided to impose
that suspension with a marginally longer (but still time-limited)
duration. Lastly, this decision does not rest, as Landry, et al.
suggests, on specious reasoning that ``no policy is better than the old
policy solely because a new policy might be put in place . . .'';
rather, temporary suspension ensures that no rail car transportation of
LNG pursuant to the July 2020 Final Rule will occur during the time
needed for PHMSA to develop confidence regarding its potential risks
and benefits within the companion rulemaking under RIN 2137-AF54.
I. Comments Alleging That PHMSA's Proposal Will Have Miscellaneous
Adverse Consequences for Regulated Entities, the U.S. Economy, and
National Security
PHMSA also received a handful of comments warning of miscellaneous
adverse effects from the NPRM's proposed suspension of the July 2020
Final Rule.\48\ Certain members of the U.S. House Transportation and
Infrastructure Committee and Landry, et al. caution suspension of the
July 2020 Final Rule could increase household energy expenses and
compromise U.S. energy independence and geopolitical influence.
Meanwhile RSI warns that the NPRM's invocation of economic uncertainty
and ``hypothetical concerns'' as considerations when tailoring HMR
requirements could portend shifting regulatory requirements for the
transportation of other hazardous materials. RSI also contends that a
more appropriate tool for addressing PHMSA's concerns with the July
2020 Final Rule would be to exercise its authority under Sec. 107.339
to obtain emergency orders from a U.S. District Court to address
``imminent hazards.''
---------------------------------------------------------------------------
\48\ House T&I Minority Comments at 1, 3; Landry, et al.
Comments at 7-8; RSI Comments at 3.
---------------------------------------------------------------------------
PHMSA Response
PHMSA finds these comments unconvincing. The claim that temporary
suspension of the July 2020 Final Rule could affect U.S. household
energy prices or the geopolitical balance of power strains credulity
given that no DOT-113C120W9 tank cars intended for commercial LNG
service have been sold and the commercial viability of such rail tank
car transportation is increasingly uncertain. Additionally, RSI's
concern that PHMSA could invoke changing market dynamics to modify
longstanding HMR requirements for other hazardous materials is
misplaced. Unlike other hazardous materials, the rail tank car
transportation of LNG is not a mature market--in fact, as discussed
elsewhere in this Final Rule, no such market has emerged in over three
years since the July 2020 Final Rule issued and a market may not emerge
at all. Nor does PHMSA's decision to temporarily suspend the July 2020
Final Rule hardly address merely ``hypothetical concerns''; rather, (as
discussed in sections III.E and F above) the potential safety and
environmental hazards associated with LNG could be significant, and it
is PHMSA's responsibility under the HMTA to evaluate and adjust the HMR
to ensure its transportation by rail tank car is conducted in a manner
that protects public safety and the environment. Additionally, PHMSA's
decision in this Final Rule to adjust pertinent HMR requirements on a
time-limited basis and before any rail tank car transportation of LNG
commences (or is likely to commence), minimizes the risk of stranded
investments or lost business opportunities for regulated entities
should PHMSA's ongoing evaluation of the safety and environmental risks
and benefits merit imposing additional or conflicting safety
requirements in the companion rulemaking under RIN 2137-AF54.
In addition, the final rule addresses any potential public safety
and environmental risks from rail tank car transportation of LNG via a
generic, nationwide, time-limited suspension following notice-and-
comment rulemaking is a more appropriate approach than utilizing the
emergency order authority recommended by RSI. The July 2020 Final Rule
was a legislative rule that itself was the product of notice-and-
comment rulemaking, and the APA establishes a presumption that a
subsequent legislative rule providing for its modification (to include
its temporary suspension) should similarly involve notice-and comment
rulemaking. See 5 U.S.C. 553. In addition, PHMSA's emergency order
authority may be difficult to assert on a time-limited, precautionary,
nationwide basis like the temporary suspension adopted in this Final
Rule. Each of PHMSA's Sec. 107.339 emergency order authority and the
Secretary`s authority to address imminent hazards under 49 U.S.C.
5122(b) are seldom exercised. A finding of ``imminent harm'' may make
it more difficult for any controls addressing that harm to be removed
later based on
[[Page 60367]]
PHMSA's evaluation of whether and how to amend pertinent HMR
requirements in a companion rulemaking under RIN 2137-AF54.
J. Comments Beyond the Scope of This Rulemaking
PHMSA received miscellaneous comments beyond the scope of this
rulemaking. These comments pertained to concerns regarding PHMSA's
process in developing, and reasoning in adopting, the July 2020 Final
Rule; concerns with the adequacy of conditions imposed by PHMSA within
DOT-SP 20534 issued to ETS in 2019; a requested ban on fracking (the
process of hydraulic fracturing to extract oil or gas) and all fossil
fuels; and additional miscellaneous comments unrelated to this
rulemaking or rail tank car transportation of LNG. A number of
commentors requested repeal of any existing regulatory approvals or
regulatory provisions--whether by FRA or PHMSA--authorizing rail
transportation of LNG.
PHMSA Response
Although PHMSA appreciates the concerns raised by the commenters
that the NPRM's proposal to suspend the transportation of LNG by rail
tank car authorized by the July 2020 Final Rule did not go far enough
to protect public safety and the environment, PHMSA declines to adopt
their far-reaching recommendations in this proceeding. However, PHMSA
encourages those stakeholders to consider submitting comments in
response to any future notice of proposed rulemaking in PHMSA's
companion rulemaking under RIN 2137-AF54, as well as to engage other
Federal and State regulatory authorities with jurisdictional
responsibilities for the issues they asked PHMSA to address.
IV. Regulatory Analyses and Notices
A. Statutory/Legal Authority
Statutory authority for this final rule is provided by the HMTA.
Section 5103(b) of the HMTA authorizes the Secretary of Transportation
to ``prescribe regulations for the safe transportation, including
security, of hazardous materials in intrastate, interstate, and foreign
commerce.'' The Secretary has delegated the authority granted in the
HMTA to the PHMSA Administrator at Sec. 1.97(b).
B. Executive Orders 12866 and 14094, and DOT Regulatory Policies and
Procedures
Executive Order 12866 (``Regulatory Planning and Review''),\49\ as
amended by Executive Order 14094 (``Modernizing Regulatory
Review''),\50\ requires that agencies ``should assess all costs and
benefits of available regulatory alternatives, including the
alternative of not regulating.'' Agencies should consider quantifiable
measures and qualitative measures of costs and benefits that are
difficult to quantify. Further, Executive Order 12866 requires that
``agencies should select those [regulatory] approaches that maximize
net benefits (including potential economic, environmental, public
health and safety, and other advantages; distributive impacts; and
equity), unless a statute requires another regulatory approach.''
Similarly, DOT Order 2100.6A (``Rulemaking and Guidance Procedures'')
requires that regulations issued by PHMSA and other DOT Operating
Administrations should consider an assessment of the potential
benefits, costs, and other important impacts of the proposed action and
should quantify (to the extent practicable) the benefits, costs, and
any significant distributional impacts, including any environmental
impacts.
---------------------------------------------------------------------------
\49\ 58 FR 51735 (Oct. 4, 1993).
\50\ 88 FR 21879 (April 11, 2023).
---------------------------------------------------------------------------
Executive Order 12866 and DOT Order 2100.6A require that PHMSA
submit ``significant regulatory actions'' to the Office of Management
and Budget (OMB) for review. Executive Order 14094 amended Executive
Order 12866, which defines significant regulatory actions. This
rulemaking is considered a significant regulatory action under section
3(f) of Executive Order 12866 as amended by Executive Order 14094. This
final rule has, therefore, been reviewed by OMB.
PHMSA concludes that the temporary suspension of transporting LNG
by rail tank car is not expected to have an economic impact because LNG
transport by rail tank car is not expected to occur during the
suspension period. As explained in section III.D above, since issuance
of the July 2020 Final Rule, the commercial prospects for rail tank car
transportation of LNG have become increasingly unlikely. LNG has not
been transported in any rail tank cars (whether pursuant to the July
2020 Final Rule, SP issued by PHMSA, or FRA approval), and PHMSA is
unaware of any planned movements in the near future. Indeed, the
development of the necessary infrastructure--including construction of
DOT-113C120W9 tank cars, loading and unloading facilities, vessel
handling facilities if sea transport is required, liquification
facilities, and regasification facilities--to transport LNG by rail as
authorized by the July 2020 Final Rule demands significant financial
investment, long-term commitment, and considerable planning associated
with constructing a new LNG tank car fleet (which construction may
itself be subject to delays because of limited capacity in the rail car
manufacturing industry). PHMSA is unaware of any orders having been
placed for the manufacture of new DOT-113C120W9 tank cars for
commercial LNG service. This absence of commercial demand occurred
despite the highest prices for domestic U.S. natural gas markets and
LNG export markets in nearly a decade.\51\ Additionally, it appears LNG
export prices have risen faster than the domestic price which has
resulted in a substantial increase in US LNG exports over the last
decade. However, the increase in export capacity does not appear to
have translated into increased demand for tank cars, possibly due to
the majority of the increase in liquefication capacity occurring at
waterfront LNG facilities.\52\
---------------------------------------------------------------------------
\51\ See EIA, ``Price of U.S. Liquefied Natural Gas Exports'',
https://www.eia.gov/dnav/ng/hist/n9133us3m.htm (last accessed May
24, 2023); EIA, ``Average Cost of Wholesale U.S. Natural Gas in 2022
Highest Since 2008'', https://www.eia.gov/todayinenergy/
detail.php?id=55119#:~:text=In%202022%2C%20the%20wholesale%20U.S.,on%
20data%20from%20Refinitiv%20Eikon (last accessed May 24, 2023).
\52\ For approved and under construction U.S. LNG projects see
EIA, ``U.S. LNG export capacity to grow as three additional projects
begin construction'', https://www.eia.gov/todayinenergy/detail.php?id=53719 (last accessed June 28, 2023).
---------------------------------------------------------------------------
PHMSA expects no economic impact due to the temporary suspension.
Indeed, PHMSA's temporary suspension may in fact reduce economic burden
by discouraging a shipper from ordering rail tank cars compliant with
the July 2020 Final Rule when the companion rulemaking (under RIN 2137-
AF54) may adopt different requirements. Additionally, should any
potential shippers need to transport LNG by rail tank car during the
suspension period, they could avail themselves of the PHMSA SP or FRA
approval processes for such transport.\53\ Further, temporary
[[Page 60368]]
suspension guarantees avoidance of potential adverse public safety and
environmental impacts (including, but not limited to, contribution of
direct and indirect GHG emissions) that could have arisen from rail
tank car transportation of LNG under the HMR. Lastly, the limited
duration of the suspension will also mitigate any potential adverse
economic, public safety, or environmental impacts that could arise in
the unlikely event that demand for rail tank car transportation under
the July 2020 Final Rule would have materialized during the suspension
period in the absence of this final rule.
---------------------------------------------------------------------------
\53\ As noted earlier in this final rule, PHMSA previously
denied an application for renewal of a special permit, in part, on
the basis that the application for renewal did not discuss any of
the concerns raised in the NPRM in this proceeding. PHMSA will
consider all applications for a special permit that meet the
requirements set forth in 49 CFR 107, Subpart B and notes that each
special permit application is considered on its own merits.
---------------------------------------------------------------------------
In addition to the PHMSA SP and FRA approval alternatives, shippers
could transport LNG by highway via MC-338 insulated cargo tanks. All of
these alternatives for LNG shippers would involve higher costs than
rail transportation, but they are available in the unlikely case that
market conditions evolve to warrant LNG transportation prior to June
30, 2025, or the completion of the companion rulemaking.\54\
---------------------------------------------------------------------------
\54\ Id. at 33-34, 56 (discussing higher direct GHG emissions
from highway transportation) and 37-38 (discussing higher risk of
crashes from highway transportation).
---------------------------------------------------------------------------
C. Executive Order 13132
PHMSA analyzed this rulemaking in accordance with the principles
and criteria contained in Executive Order 13132 (``Federalism'') \55\
and its implementing Presidential Memorandum (''Preemption'').\56\
Executive Order 13132 requires agencies to assure meaningful and timely
input by State and local officials in the development of regulatory
policies that may have ``substantial direct effects on the states, on
the relationship between the national government and the states, or on
the distribution of power and responsibilities among the various levels
of government.''
---------------------------------------------------------------------------
\55\ 64 FR 43255 (Aug. 10, 1999).
\56\ 74 FR 24693 (May 22, 2009).
---------------------------------------------------------------------------
This rulemaking may preempt State, local, and Native American Tribe
requirements, but does not contain any regulation that has substantial
direct effects on the States, the relationship between the national
government and the States, or the distribution of power and
responsibilities among the various levels of government.
The HMTA contains an express preemption provision at 49
U.S.C.5125(b) that preempts State, local, and Tribal requirements on
certain covered subjects, unless the non-Federal requirements are
``substantively the same'' as the Federal requirements, including the
following:
(1) the designation, description, and classification of hazardous
material;
(2) the packing, repacking, handling, labeling, marking, and
placarding of hazardous material;
(3) the preparation, execution, and use of shipping documents
related to hazardous material and requirements related to the number,
contents, and placement of those documents;
(4) the written notification, recording, and reporting of the
unintentional release in transportation of hazardous material; and
(5) the design, manufacture, fabrication, inspection, marking,
maintenance, recondition, repair, or testing of a packaging or
container represented, marked, certified, or sold as qualified for use
in transporting hazardous material in commerce.
This final rule addresses subject items (2) and (5) above, which
are covered subjects, and therefore, non-Federal requirements that fail
to meet the ``substantively the same'' standard are vulnerable to
preemption under the Federal hazmat law. Moreover, PHMSA will continue
to make preemption determinations applicable to specific non-Federal
requirements on a case-by-case basis, using the obstacle, dual
compliance, and covered subjects tests provided in Federal hazmat law.
D. Executive Order 13175
PHMSA analyzed this rulemaking in accordance with the principles
and criteria contained in Executive Order 13175 and DOT Order 5301.1
(``Department of Transportation Policies, Programs, and Procedures
Affecting American Indians, Alaska Natives, and Tribes''). Executive
Order 13175 and DOT Order 5301.1 require DOT Operating Administrations
to assure meaningful and timely input from Native American Tribal
government representatives in the development of rules that
significantly or uniquely affect Tribal communities by imposing
``substantial direct compliance costs'' or ``substantial direct
effects'' on such communities or the relationship and distribution of
power between the Federal government and Tribes.
In addition to the petitions filed by the environmental groups and
State attorneys general mentioned above, the Puyallup Tribe also
challenged the July 2020 Final Rule and alleged violations of the
Tribal consultation protocols under the National Historic Preservation
Act and Executive Order 13175 and disparate impacts on the Tribe in
violation of Executive Order 12898 and Title VI of the Civil Rights Act
of 1964.
PHMSA assessed the impact of this final rule and concluded that it
will not significantly or uniquely affect Tribal communities or Tribal
governments. This rulemaking does not impose substantial compliance
costs on Tribal governments or communities, nor does it mandate Tribal
action. Insofar as PHMSA expects the final rule will not adversely
affect the safe transportation of hazardous materials generally, PHMSA
does not expect it will entail disproportionately high adverse risks
for Tribal communities. This final rule could in fact reduce risks to
Tribal communities, as it could avoid the release of hazardous
materials (in particular, LNG) by railroad in the vicinity of Tribal
communities. For these reasons, PHMSA has concluded that the funding
and consultation requirements of Executive Order 13175 and DOT Order
5301.1 do not apply.
E. Regulatory Flexibility Act and Executive Order 13272
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
agencies to consider whether a rulemaking would have a ``significant
economic impact on a substantial number of small entities'' to include
small businesses, not-for-profit organizations that are independently
owned and operated and are not dominant in their fields, and
governmental jurisdictions with populations under 50,000. The
Regulatory Flexibility Act directs agencies to establish exceptions and
differing compliance standards for small businesses, where possible to
do so and still meet the objectives of applicable regulatory statutes.
Executive Order 13272 (``Proper Consideration of Small Entities in
Agency Rulemaking'') \57\ requires agencies to establish procedures and
policies to promote compliance with the Regulatory Flexibility Act and
to ``thoroughly review draft rules to assess and take appropriate
account of the potential impact'' of the rules on small businesses,
governmental jurisdictions, and small organizations. The DOT posts its
implementing guidance on a dedicated web page.\58\
---------------------------------------------------------------------------
\57\ 67 FR 53461 (Aug. 16, 2002).
\58\ DOT, ``Rulemaking Requirements Related to Small Entities,''
https://www.transportation.gov/regulations/rulemaking-requirements-concerning-small-entities (last visited Jun. 17, 2021).
---------------------------------------------------------------------------
This rulemaking has been developed in accordance with Executive
Order 13272 and DOT's procedures and policies to promote compliance
with the Regulatory Flexibility Act and ensure that potential impacts
of draft rules on
[[Page 60369]]
small entities are properly considered. Consistent with the analysis
above, PHMSA certifies that the temporary suspension of the July 2020
Final Rule will not have a significant economic impact on a substantial
number of small entities.
F. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.),
no person is required to respond to any information collection unless
it has been approved by OMB and displays a valid OMB control number.
Pursuant to 44 U.S.C. 3506(c)(2)(B) and 5 CFR 1320.8(d), PHMSA must
provide interested members of the public and affected agencies an
opportunity to comment on information collection and recordkeeping
requests.
PHMSA has analyzed this rulemaking in accordance with the Paperwork
Reduction Act. PHMSA currently accounts for security plan burdens under
OMB Control Number 2137-0612, ``Hazardous Materials Security Plans.''
In the July 2020 Final Rule, PHMSA required any rail carrier
transporting a tank car quantity of UN1972 (Methane, refrigerated
liquid (cryogenic liquid) or Natural gas, refrigerated liquid
(cryogenic liquid)) to comply with the additional rail transportation
safety and security planning requirements. Following publication of the
July 2020 Final Rule, PHMSA published both a 60-day \59\ and 30-day
\60\ notice and comment period to provide an opportunity for public
comment on the estimated increase in burden. PHMSA did not receive
comments to either notice. Subsequently, PHMSA submitted the revision
to OMB and received approval for the increased burden. As PHMSA
implements a temporary suspension of the authorization to ship LNG by
rail tank car pursuant to July 2020 Final Rule, PHMSA estimates this
rulemaking would result in a decrease in the burden associated with
additional rail transportation safety and security planning
requirements imposed by the July 2020 Final Rule. Because this final
rule contains revisions to an information collection approved under OMB
control number 2137-0612 that are subject to review by OMB under the
PRA Act, PHMSA has submitted the revised information collection to OMB
and will publish a subsequent Federal Register notice to advise the
public when OMB has approved the revisions. The following reflects this
estimated decrease in burden:
---------------------------------------------------------------------------
\59\ 85 FR 46220 (Jul. 31, 2020).
\60\ 85 FR 73128 (Nov. 16, 2020).
\61\ Occupation labor rates based on 2022 Occupational and
Employment Statistics Survey (OES) for ``Transportation, Storage,
and Distribution Managers (11-3071)'' in the Transportation and
Warehousing industry. See https://www.bls.gov/oes/current/oes113071.htm. The hourly mean wage for this occupation ($52.36) is
adjusted to reflect the total costs of employee compensation based
on the BLS Employer Costs for Employee Compensation Summary, which
indicates that wages for civilian workers are 69.0 percent of total
compensation (total wage = wage rate/wage % of total compensation).
\62\ Ibid.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Decrease in Decrease in Decrease in
Change in Decrease in Burden total Salary total total
Decrease in primary route analysis number of number of hours per burden cost per salary burden
railroads routes route hours hour \61\ cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class I Railroads............................................ 0 (2) 80 (160) $75.88 ($12,141) $0
Class II Railroads........................................... 0 (1) 80 (80) 75.88 (6,071) 0
Class III Railroads.......................................... 0 (1) 40 (40) 75.88 (3,035) 0
------------------------------------------------------------------------------------------
Total.................................................... 0 (4) ........... (280) ........... (21,248) 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Decrease in Decrease in Decrease in
Change in Decrease in Burden total Salary total total
Decrease in alternate route analysis number of number of hours per burden cost per salary burden
railroads routes route hours hour \62\ cost cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class I Railroads............................................ 0 (2) 120 (240) $75.88 ($18,212) $0
Class II Railroads........................................... 0 (1) 120 (120) 75.88 (9,106) 0
Class III Railroads.......................................... 0 (1) 40 (40) 75.88 (3,035) 0
------------------------------------------------------------------------------------------
Total.................................................... 0 (4) ........... (400) ........... (30,354) 0
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Annual Decrease in Number of Respondents: 0.
Total Annual Decrease in Number of Response: 8.
Total Annual Decrease in Burden Hours: 680.
Total Annual Decrease in Salary Costs: $51,598.
Total Annual Decrease in Burden Costs: $0.
G. Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (UMRA; 2 U.S.C. 1501 et
seq.) requires agencies to assess the effects of Federal regulatory
actions on State, local, and Tribal governments, and the private
sector. For any notice of proposed rulemaking or final rule that
includes a Federal mandate that may result in the expenditure by State,
local, and Tribal governments, or by the private sector of $100 million
or more in 1996 dollars in any given year, the agency must prepare,
amongst other things, a written statement that qualitatively and
quantitatively assesses the costs and benefits of the Federal mandate.
This rulemaking does not impose unfunded mandates under the UMRA.
As explained above, it is not expected to result in costs of $100
million or more in 1996 dollars on either State, local, or Tribal
governments, in the aggregate, or to the private sector in any one
year, and is the least burdensome alternative that achieves the
objective of the rule.
H. Environmental Assessment
The National Environmental Policy Act of 1969 (NEPA), as amended
(42 U.S.C. 4321 et seq.),\63\ requires federal agencies to consider the
environmental impacts of their actions in the decision-making process.
NEPA requires Federal agencies to assess the environmental effects of
proposed Federal actions prior to making decisions and involve the
public in the decision-making process. Agencies must prepare an
environmental assessment (EA) for an action for which a categorical
exclusion is not applicable and is either unlikely to have significant
effects or when significance of the action is unknown. In accordance
with these requirements, an EA must briefly discuss: (1) the need for
the action; (2) the alternatives considered; (3) the environmental
impacts of the action and alternatives; and (4) a listing of the
agencies and persons consulted. If, after reviewing the EA and public
comments if
[[Page 60370]]
applicable, in response to a draft EA (DEA), an agency determines that
a proposed action will not have a significant impact on the human or
natural environment, it can conclude the NEPA analysis with a finding
of no significant impact (FONSI).
---------------------------------------------------------------------------
\63\ See also 40 CFR parts 1501 to 1508.
---------------------------------------------------------------------------
(1) The Need for the Action
PHMSA has determined that the recommendations from the TRB, its
ongoing research, and recent events stemming from the COVID-19 public
health emergency predicate the need to re-evaluate the amendments
authorized in the July 2020 Final Rule. Research activity that PHMSA
had expected would enhance its understanding of the risks attendant in
rail transportation of LNG has been delayed, and uncertainties have
increased in whether there will be any potential benefits, and in the
underlying economic dynamics bounding those risks (e.g., the quantity
of LNG that will move by rail, and the routes involved). Therefore,
PHMSA is amending the HMR to suspend authorization of LNG
transportation in a rail tank car pending further analysis and
completion of a companion rulemaking that will consider changes to the
conditions under which LNG could be moved by rail, to potentially
include additional safety, environmental, and environmental justice
protections. This action will provide PHMSA an opportunity to review
recent actions that could be obstacles to Administration policies
promoting public health and safety, the environment, and climate change
mitigation; and to evaluate the results of ongoing and delayed research
efforts to ensure the safe transportation of LNG by rail tank car.
(2) Alternatives to the Action
In this rulemaking, PHMSA considered the following alternatives:
No Action Alternative
If PHMSA were to select the No Action Alternative, current
regulations authorizing the transport of LNG in rail tank cars would
remain in effect and no provisions would be amended or added.
Therefore, the HMR would continue to authorize the transportation of
LNG in DOT-113C120W9 tank cars with a 9/16-inch outer tank composed of
TC-128B normalized steel. The following operational controls and safety
measures would also remain in effect:
Each tank car must be operated in accordance with Sec.
173.319, which includes:
[cir] testing of relief valves every 5 years
[cir] annual replacement of rupture discs
[cir] thermal integrity tests following an average daily pressure
rise during any shipment exceeding 3 psig per day
[cir] other requirements specific to liquids in cryogenic tank
cars.
49 CFR part 179, subpart F contains detailed design,
construction, and operational requirements for DOT-113C120W tank cars
with the specification suffix ``9'' to be used in rail transportation
of LNG.
Trains transporting 20 or more tank cars of LNG in a
block, or 35 such tank cars throughout the train, must be equipped and
operated with a two-way EOT device, pursuant to the requirements in 49
CFR part 232, subpart E, or a distributed-power (DP) locomotive as
defined in 49 CFR 229.5.
The offeror must remotely monitor each tank car while in
transportation for pressure and location.
The offeror must notify the carrier if the tank pressure
rise exceeds 3 psig over any 24-hour period.
Trains transporting any quantity of LNG must comply with
the route planning requirements in Sec. 172.820, which requires rail
carriers transporting LNG by rail tank car to conduct an annual route
analysis considering, at a minimum, 27 risk factors listed in appendix
D to part 172.
Each LNG tank car must have:
[cir] a reclosing pressure relief device with a start-to-discharge
pressure of 75 psig;
[cir] a non-reclosing pressure relief device set to discharge at
the tank test pressure;
[cir] a maximum permitted filling density (percent by weight) of
37.3 percent;
[cir] a design service temperature of -162 [deg]C (-260 [deg]F);
[cir] a maximum pressure when offered for transportation not to
exceed 15 psig;
[cir] a minimum steel thickness, after forming, on the outer tank
shell and tank heads of 9/16 inch, which is thicker than the
requirement for other DOT-113C120W tank cars; and
[cir] an outer tank shell constructed of AAR TC-128, Grade B
normalized steel plate as specified in Sec. 179.100-7(a), which has a
higher tensile strength of 81,000 psi which makes it stronger than that
used for the existing DOT-113 outer shell.
The final environmental analysis (FEA), which--except for the
finding of no significant impact therein--is incorporated by reference
into this final rule, examined how the above requirements were imposed
to reduce risks to human safety and the environment from the
transportation of LNG in rail tank cars and incidents occurring as a
result of this transportation.\64\ The No Action Alternative would
allow the shipment of LNG in rail tank cars, and PHMSA could continue
to consider whether additional mitigations are necessary based on the
expert recommendations from the TRB Phase I and Phase II Reports and
results from ongoing, delayed testing and evaluation activity by the
LNG Task Force.
---------------------------------------------------------------------------
\64\ See Docket No. PHMSA-2018-0025-0478.
---------------------------------------------------------------------------
Selected Action Alternative
This Selected Action Alternative as it appears in this final rule,
adding a new special provision to the HMR that would suspend the
transportation of LNG in rail tank cars while PHMSA undergoes a
comprehensive review to ensure the safe transportation of LNG by rail
in accordance with ongoing research and incorporation of
recommendations from the TRB, as well as the best available economic
analysis and science. Rail transport of LNG would be permitted only as
authorized by the conditions of a PHMSA special permit (49 CFR 107.105)
that would apply only to the railroad(s) operating under such a permit
or in a portable tank secured to a rail car pursuant to the conditions
of an FRA approval (49 CFR 174.63). The amendments included in this
alternative are more fully discussed in the preamble and regulatory
text sections of this final rule.
(3) Probable Environmental Impacts of the Action and Alternatives
No Action Alternative
If PHMSA selected the No Action Alternative, current regulations
would remain in place without suspension. As described in the FEA, the
No Action Alternative could pose risks to public safety and the
environment because the authorization under the HMR to offer shipments
of LNG by rail tank car would remain in place. LNG poses potential
hazards as a cryogenic liquefied flammable gas, including cryogenic
temperature exposure, fire, and asphyxiation hazards. Transportation of
any hazardous material introduces risk to safety and the environment,
and each additional tank car increases the overall risk of an incident
occurring and the quantity that could be released in the event of a
derailment. While this is true for all hazardous materials
transportation, PHMSA seeks to better understand the risks inherent to
LNG transportation in the DOT-113C120W9, especially given that the July
2020 Final Rule authorized large quantities to be transported in rail
cars. The July 2020 Final Rule FEA
[[Page 60371]]
explained that transporting LNG in rail tank cars is expected to be
safer than transporting LNG by truck on highways--however, it is
possible that allowing LNG to be transported in rail tank cars would
increase the amount of LNG transported, and therefore a direct
comparison of the risks by rail and highway may be misleading. PHMSA
will also consider, based on existing rail infrastructure locations and
anticipated routes, whether transportation of LNG in rail tank cars
could pose disproportionate harm or risk to communities of color or
low-income communities. As described in the preamble to this final
rule, various market and other uncertainties exist regarding specific
routes that may be used for the transport of LNG by rail tank car.
No release of LNG vapor to the environment is allowed during the
normal transportation of LNG in tank cars whether by roadway or
railway. However, methane is odorless, and LNG contains no odorant,
making detection of a release resulting from an incident difficult
without a detection device. Releases of LNG due to venting or to
accidents/incidents, without immediate ignition, involving either an
MC-338 cargo tank, a portable tank, or a DOT-113C120W9 rail tank car
have the potential to create flammable vapor clouds of natural gas
because recently gasified LNG does not dissipate in the atmosphere as
quickly as ambient-temperature natural gas. Large releases of LNG due
to the breach of the inner tank of these transport vessels could result
in a pool fire, vapor fire, and explosion hazards if methane vapors
become confined. These flammability hazards pose a risk of higher
potential impacts than localized cryogenic hazards.
Some commenters on the July 2020 Final Rule argued that the
authorization of LNG by rail would further incentivize the production
of natural gas, which is a fossil fuel. Methane has much greater heat
trapping potential in the atmosphere than carbon dioxide in the short
term. Thus, methane is considered a potent GHG, and comprises a
significant portion of the United States' GHG emissions. While methane
leaks are highly unlikely during transportation in the DOT-113C120W9
due to tank car design, increased natural gas production could lead to
indirect environmental impacts of increased methane emissions released
during production, loading and unloading, or at other times during its
life cycle. In considering whether the authorization could further
incentivize the production of natural gas, PHMSA will consider the
scope of existing natural gas production and transportation via natural
gas pipeline and other modes of transportation.
The FEA for the July 2020 Final Rule discussed potential
environmental benefits that could be associated with the authorization
to transport LNG by rail tank car. First, PHMSA discussed that the
authorization could allow for the delivery of natural gas to locations
dependent on more polluting energy forms, such as coal, diesel, heating
oil, or firewood.\65\ Use of natural gas in such areas, whether foreign
or domestic, could allow for a reduction in polluting and climate-
warming emissions. Additionally, the authorization to transport LNG by
rail tank car could potentially replace some shipments of LNG by
highway. As discussed in the FEA for the July 2020 Final Rule, highway
transportation is less efficient in comparison to rail transportation
when considering fuel use, combustion emissions, and climate change
impacts. However, in order to supplement, reduce, or replace highway
transportation, rail infrastructure would need to exist between the
origin and destination locations or be developed. Finally, the FEA
explored industry claims that the authorization could incentivize the
capture, storage, and liquefaction of natural gas over venting and
flaring of natural gas during oil production and other industrial
activities, in areas where natural gas pipeline capacity is
unavailable. Facilitating the productive end use of by-product methane
could reduce the venting and flaring of natural gas, which causes
methane and carbon dioxide emissions. Similar to other above-described
benefits, it is difficult to predict the extent to which industries
would invest in the equipment, technology, and expertise necessary to
pursue natural gas capture, storage, and liquefaction necessary to
pursue LNG transportation by rail. A suspension of the authorization to
transport LNG by rail could curtail these potential benefits in the
near term.
---------------------------------------------------------------------------
\65\ See, e.g., EPA, Press Release, ``State of Alaska and
Fairbanks North Star Borough receive $14.7 Million EPA grant to
improve air quality,'' (Nov. 2020), https://www.epa.gov/newsreleases/state-alaska-and-fairbanks-north-star-borough-receive-147-million-epa-grant-improve-air (``The Borough will use the grant
funds to continue a woodstove changeout and conversion program
focused on converting more wood burning appliances to cleaner
burning liquid or gas-fueled heating appliances, which have a very
low output of particulate pollution and higher fuel efficiency. Wood
smoke contributes up to 60 to 80 percent of fine particle pollution
levels measured in the Fairbanks North Star Borough.'').
---------------------------------------------------------------------------
Selected Action Alternative
Under this Selected Action Alternative, PHMSA will amend the HMR to
suspend authorization of LNG transportation in rail tank cars pending
further analysis and completion of a companion rulemaking or June 30,
2025, whichever is earlier. Therefore, the HMR will not authorize
shippers to transport bulk quantities of LNG by rail tank car. Instead,
LNG by rail will only be permitted pursuant to a DOT SP or in portable
tanks subject to FRA approval. The Selected Action Alternative will
avoid the risks that transportation of LNG in rail tank cars, and
particularly potential derailments of rail cars transporting LNG, could
pose to public safety and the environment. PHMSA will be able to
further consider whether the transportation of LNG could pose
disproportionately high or adverse effects on minority and low income
communities, which have historically borne the brunt of deleterious
Federal policy decisions. PHMSA will also be able to further consider
whether shipping LNG in rail tank cars is consistent with public health
and safety, environmental protection, including climate change
mitigation; and to evaluate the results of ongoing and delayed research
efforts and collaboration as part of an accompanying rulemaking under
RIN 2137-AF54.
However, as noted above and in the FEA for the July 2020 Final
Rule, the authorization to transport LNG in DOT-113C120W9 specification
tank cars could have yielded some environmental benefits or
improvements, which will not be realized during the suspension period.
The scope of potential environmental effects of suspending the July
2020 Final Rule depend on whether use of MC-338 for transportation of
LNG increases as a result of the suspension of the DOT-113C120W9 or
whether environmental benefits of the authorization have been realized
that would not occur during the suspension. PHMSA is unaware of any
order from a commercial entity for a new DOT-113C120W9-specification
tank car for LNG service. Thus, no increased use of MC-338 tank cars
for LNG service is expected as a result of this suspension.
In the unlikely event that the use of MC-338 cargo tank cars for
LNG transportation increases due to the inability to transport LNG in
rail tank cars, a few environmental effects could result. First,
highway transportation of LNG requires more diesel engine vehicles and
would result in more emissions, including volatile organic compounds,
carbon dioxide, nitrogen
[[Page 60372]]
oxides, sulfur oxides, and particulate matter of 10 microns or less.
Next, increased highway congestion also increases the potential for a
highway incident involving LNG, depending on the extent of the
increase. In the event highway transportation increases as a result of
this rule, these environmental effects would be speculative and minor,
and PHMSA finds that they are warranted during the suspension period
while PHMSA undertakes a full analysis of risks inherent in
transporting LNG in rail tank cars.
The July 2020 Final Rule FEA noted that the transportation of LNG
could allow natural gas to reach markets that lack this access and
could potentially reduce and replace the burning of more polluting and
carbon-intensive sources of energy such as coal, wood, and diesel. As
noted above, the July 2020 Final Rule has not resulted in these
replacements or emissions reductions, such that the suspension would
not reverse any such benefits. The July 2020 Final Rule FEA also
explained that authorization to transport LNG in rail tank cars had the
potential to reduce the wasteful and carbon-intensive practice of
natural gas flaring because it could provide a market for by-product
natural gas in areas where natural gas pipeline transportation is not
available. The July 2020 Final Rule has not resulted in this benefit,
and there is no indication that this benefit would have occurred
anytime in the foreseeable future in the event that it remained
available. Thus, PHMSA does not anticipate negative environmental
effects from the suspension of the July 2020 Final Rule.
(4) Agencies and Persons Consulted During the Consideration Process
PHMSA has coordinated with FRA, the Federal Aviation
Administration, the Federal Motor Carrier Safety Administration, and
the U.S. Coast Guard in the development of this rule. The final rule
has also been made available to other Federal agencies within the
interagency review process contemplated under Executive Order 12866.
(5) Environmental Justice
Executive Order 12898 (``Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations''),\66\
directs Federal agencies to take appropriate and necessary steps to
identify and address disproportionately high and adverse effects of
Federal actions on the health or environment of minority and low-income
populations to the greatest extent practicable and permitted by law.
DOT Order 5610.2C (``U.S. Department of Transportation Actions to
Address Environmental Justice in Minority Populations and Low-Income
Populations'') establishes departmental procedures for effectuating
Executive Order 12898 promoting the principles of environmental justice
through full consideration of environmental justice principles
throughout planning and decision-making processes in the development of
programs, policies, and activities--including PHMSA rulemaking.
---------------------------------------------------------------------------
\66\ 59 FR 7629 (Feb. 11, 1994).
---------------------------------------------------------------------------
PHMSA has evaluated this final rule under DOT Order 5610.2C and
Executive Order 12898 and has determined it will not cause
disproportionately high and adverse human health and environmental
effects on minority and low-income populations. The final rule is
national in scope; it is neither directed toward a particular
population, region, or community, nor is it expected to result in any
adverse environmental or health impact to any particular population,
region, or community.
This final rule could reduce risks to minority populations, low-
income populations, or other underserved and disadvantaged communities.
Insofar as these HMR amendments could avoid the release of hazardous
materials, the final rule could reduce risks to populations and
communities--including any minority, low-income, underserved, and
disadvantaged populations and communities--in the vicinity of railroad
lines. However, as noted in the FEA for the July 2020 Final Rule,
access to LNG may result in potential economic benefits for underserved
communities because of the efficiencies of transporting LNG by rail,
and thereby domestic production, distribution, and consumption of
natural gas could increase. These potential economic benefits that
could result from the transportation of bulk quantities of LNG by rail
car would not be realized by underserved communities in the short term.
In addition, to the extent that suspending shipment of LNG by rail tank
car could increase demand for shipping LNG by truck on highways, these
HMR amendments could increase risks to environmental justice
communities in the vicinity of those highways.
Further, this rule advances the policy goals of the most recent
environmental justice Executive Order 14096--Revitalizing Our Nation's
Commitment to Environmental Justice for All,\67\ which deepens the
Administration's whole-of-government approach to environmental justice
to better protect communities from pollution and other environmental
justice concerns.
---------------------------------------------------------------------------
\67\ 88 FR 25251 (Apr. 21, 2023). Executive Order 14096
supplemented the efforts of Executive Order 12898.
---------------------------------------------------------------------------
(6) Finding of No Significant Impact
The adoption of the Selected Action Alternative's suspension will
prohibit the transportation of LNG in rail tank cars while PHMSA and
FRA undertake a comprehensive analysis of safety and environmental
issues associated with the transportation of LNG by rail. As such, the
HMR amendments in this final rule will have no significant impact on
the human environment. The Selected Action Alternative will allow PHMSA
to review new information to evaluate the potential impact on safety,
environmental justice, and GHG emissions. Further, based on PHMSA's
analysis of these provisions described above and insofar as there has
been no significant progress toward the movement of LNG by rail tank
car, PHMSA finds that codification and implementation of this rule will
not result in a significant impact to the human environment.
I. Privacy Act
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the
public to better inform its rulemaking process. DOT posts these
comments, without edit, including any personal information the
commenter provides, to https://www.regulations.gov, as described in the
system of records notice (DOT/ALL-14 FDMS), which can be reviewed on
DOT's website at https://www.dot.gov/privacy or DOT's complete Privacy
Act Statement in the Federal Register published on April 11, 2000.\68\
---------------------------------------------------------------------------
\68\ 65 FR 19475 (Apr. 11, 2000).
---------------------------------------------------------------------------
J. Executive Order 13609 and International Trade Analysis
Executive Order 13609 (``Promoting International Regulatory
Cooperation'') \69\ requires that agencies must consider whether the
impacts associated with significant variations between domestic and
international regulatory approaches are unnecessary or may impair the
ability of American business to export and compete internationally. In
meeting shared challenges involving health, safety, labor, security,
environmental, and other issues, international regulatory cooperation
can identify approaches that are at least as protective as those
[[Page 60373]]
that are or would be adopted in the absence of such cooperation.
International regulatory cooperation can also reduce, eliminate, or
prevent unnecessary differences in regulatory requirements.
---------------------------------------------------------------------------
\69\ 77 FR 26413 (May 4, 2012).
---------------------------------------------------------------------------
Similarly, the Trade Agreements Act of 1979 (Pub. L. 96-39), as
amended by the Uruguay Round Agreements Act (Pub. L. 103-465),
prohibits Federal agencies from establishing any standards or engaging
in related activities that create unnecessary obstacles to the foreign
commerce of the United States. Pursuant to the Trade Agreements Act,
the establishment of standards is not considered an unnecessary
obstacle to the foreign commerce of the United States, so long as the
standards have a legitimate domestic objective, such as providing for
safety, and do not operate to exclude imports that meet this objective.
The statute also requires consideration of international standards and,
where appropriate, that they be the basis for U.S. standards.
PHMSA participates in the establishment of international standards
in order to protect the safety of the American public. PHMSA has
assessed the effects of this rulemaking to ensure that it does not
cause unnecessary obstacles to foreign trade. While the suspension the
transport of LNG by rail tank car has potential to impact the United
States' export of bulk LNG internationally, there has been no
significant reliance interest or progress toward the near-term movement
of LNG by rail tank cars. As such, PHMSA expects the amendments herein
to pose a minimal impact to international trade if adopted. Therefore,
PHMSA is amending the HMR to suspend authorization of LNG
transportation in a rail tank car pending further analysis to ensure
potential future regulatory actions to allow bulk transport of LNG by
rail promote public health and safety, the environment, and climate
change mitigation. Accordingly, this rulemaking is consistent with
Executive Order 13609 and PHMSA's obligations under the Trade Agreement
Act, as amended.
K. Executive Order 13211
Executive Order 13211 (``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'') \70\
requires Federal agencies to prepare a Statement of Energy Effects for
any ``significant energy action.'' Executive Order 13211 defines a
``significant energy action'' as any action by an agency (normally
published in the Federal Register) that promulgates, or is expected to
lead to the promulgation of, a final rule or regulation that (1)(i) is
a significant regulatory action under Executive Order 12866 or any
successor order and (ii) is likely to have a significant adverse effect
on the supply, distribution, or use of energy (including a shortfall in
supply, price increases, and increased use of foreign supplies); or (2)
is designated by the Administrator of the Office of Information and
Regulatory Affairs (OIRA) as a significant action.
---------------------------------------------------------------------------
\70\ 66 FR 28355 (May 22, 2001).
---------------------------------------------------------------------------
Although this rule is a significant action under Executive Order
12866, PHMSA expects it to have an annual effect on the economy of less
than $200 million. Further, this action is not likely to have a
significant adverse effect on the supply, distribution, or use of
energy in the United States. While the amendment to suspend the
transport of LNG by rail tank car has potential to impact the supply,
distribution, or use of energy in the United States, PHMSA does not
anticipate any near-term movement of LNG by rail tank cars. For
additional discussion of the anticipated economic impact of this
rulemaking, please see section IV.B above.
L. Cybersecurity and Executive Order 14028
Executive Order 14028 (``Improving the Nation's Cybersecurity'')
\71\ directed the Federal government to improve its efforts to
identify, deter, and respond to ``persistent and increasingly
sophisticated malicious cyber campaigns.'' Consistent with Executive
Order 14028, the Transportation Security Administration (TSA) in
October 2022 issued a Security Directive to reduce the risk that
cybersecurity threats pose to critical railroad operations and
facilities through implementation of layered cybersecurity measures
that provide defense-in-depth.\72\ PHMSA has considered the effects of
the final rule and determined that its regulatory amendments will not
materially affect the cybersecurity risk profile for rail
transportation of hazardous materials.
---------------------------------------------------------------------------
\71\ 86 FR 26633 (May 17, 2021).
\72\ TSA, Security Directive No. 1580/82-2022-01, ``Rail
Cybersecurity Mitigation Actions and Testing'' (Oct. 24, 2022).
---------------------------------------------------------------------------
List of Subjects in 49 CFR Part 172
Education, Hazardous materials transportation, Hazardous waste,
Labeling, Markings, Packaging and containers, Reporting and
recordkeeping requirements.
In consideration of the foregoing, PHMSA is amending 49 CFR chapter
I as follows:
PART 172--HAZARDOUS MATERIALS TABLE, SPECIAL PROVISIONS, HAZARDOUS
MATERIALS COMMUNICATIONS, EMERGENCY RESPONSE INFORMATION, TRAINING
REQUIREMENTS, AND SECURITY PLANS
0
1. The authority citation for part 172 continues to read as follows:
Authority: 49 U.S.C. 5101-5128, 44701; 49 CFR 1.81, 1.96 and
1.97.
0
2. In Sec. 172.101, amend the Sec. 172.101 Hazardous Materials Table,
by revising the entry for ``Methane, refrigerated liquid (cryogenic
liquid) or Natural gas, refrigerated liquid (cryogenic liquid), with
high methane content)'' to read as follows:
Sec. 172.101 Purpose and use of the hazardous materials table.
* * * * *
[[Page 60374]]
Sec. 172.101 Hazardous Materials Table
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(8) (9) (10)
-----------------------------------------------------------------------------------------------------------------
Hazardous materials Hazard Packaging (Sec. 173.***) Quantity limitations (see Sec. Vessel stowage
Symbols descriptions and class or Identification PG Label Special provisions ------------------------------------------------------ Sec. 173.27 and 175.75) -----------------------
proper shipping division Nos. codes (Sec. 172.102) ------------------------------------
names Exceptions Non-bulk Bulk Passenger Cargo aircraft Location Other
aircraft/rail only
(1) (2)................ (3) (4) (5) (6)....... (7)............... (8A)............ (8B)............ (8C)............ (9A)............ (9B)............ (10A) (10B)
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
Methane, 2.1 UN1972 ..... 2.1....... T75, TP5, 439, 440 None............ None............ 318, 319........ Forbidden....... Forbidden....... D 40
refrigerated
liquid (cryogenic
liquid) or Natural
gas, refrigerated
liquid (cryogenic
liquid, with high
methane content).
* * * * * * *
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 60375]]
* * * * *
0
3. In Sec. 172.102, amend paragraph (c)(1) by adding special provision
439 in numerical order to read as follows:
Sec. 172.102 Special provisions.
* * * * *
(c) * * *
(1) * * *
439 UN1972 is not authorized for transportation by rail tank car
until either issuance of a final rule concluding the rulemaking action
proceeding under RIN 2137-AF54, or June 30, 2025, whichever occurs
first. For information and the status of RIN 2137-AF54, please refer to
the Office of Management and Budget's Office of Information and
Regulatory Affairs at www.reginfo.gov.
* * * * *
Issued in Washington, DC, on August 23, 2023, under authority
delegated in 49 CFR 1.97.
Tristan H. Brown,
Deputy Administrator, Pipeline and Hazardous Materials Safety
Administration.
[FR Doc. 2023-18569 Filed 8-31-23; 8:45 am]
BILLING CODE 4910-60-P
