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

- **operation:** document
- **citation:** 86 FR 61731
- **title:** Hazardous Materials: Suspension of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail
- **source type:** rulemaking
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** proposed
- **official:** true
- **published on:** 2021-11-08
- **effective on:** Not available
- **summary:** PHMSA, in coordination with the Federal Railroad Administration (FRA), proposes to amend the Hazardous Materials Regulations to suspend authorization of liquefied natural gas (LNG) transportation in rail tank cars pursuant to a final rule published in July 2020, pending the earlier of either completion of a separate rulemaking under RIN 2137-AF54 evaluating potential modifications to requirements governing rail tank car transportation of LNG, or June 30, 2024.
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Federal Register, Volume 86 Issue 213 (Monday, November 8, 2021) [Federal Register Volume 86, Number 213 (Monday, November 8, 2021)] [Proposed Rules] [Pages 61731-61745] From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ] [FR Doc No: 2021-23132] ======================================================================= ----------------------------------------------------------------------- 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: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: PHMSA, in coordination with the Federal Railroad Administration (FRA), proposes to amend the Hazardous Materials Regulations to suspend authorization of liquefied natural gas (LNG) transportation in rail tank cars pursuant to a final rule published in July 2020, pending the earlier of either completion of a separate rulemaking under RIN 2137-AF54 evaluating potential modifications to requirements governing rail tank car transportation of LNG, or June 30, 2024. DATES: Comments must be received by December 23, 2021. To the extent possible, PHMSA will consider late-filed comments as a final rule is developed. ADDRESSES: You may submit comments by any of the following methods: Federal Rulemaking Portal: http://www.regulations.gov . Follow the online instructions for submitting comments. Fax: 1-202-493-2251. Mail: Docket Management System; U.S. Department of Transportation, Docket Operations, M-30, Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590-0001. Hand Delivery: U.S. Department of Transportation, Docket Operations, M-30, Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590-0001 between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. Instructions: Include the agency name and docket number PHMSA-2021- 0058 (HM-264A) or RIN 2137-AF55 for this rulemaking at the beginning of your comment. Note that all comments received will be posted without change to http://www.regulations.gov including any personal information provided. If sent by mail, comments must be submitted in duplicate. Persons wishing to receive confirmation of receipt of their comments must include a self-addressed stamped postcard. Docket: For access to the dockets to read background documents or comments received, go to http://www.regulations.gov or the DOT Docket Operations Office (see ADDRESSES). Confidential Business Information: Confidential Business Information (CBI) is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA; 5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this NPRM contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this NPRM, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as ``PROPIN.'' Submissions containing CBI should be sent to Lily Ballengee, U.S. Department of Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590-0001. Any commentary that PHMSA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking. FOR FURTHER INFORMATION CONTACT: Lily Ballengee, Transportation Specialist, Standards and Rulemaking Division, Office of Hazardous Materials Safety, (202) 366-8553, 1200 New Jersey Avenue SE, Washington, DC 20590-0001. [[Page 61732]] SUPPLEMENTARY INFORMATION: Table of Contents I. Overview II. Background A. LNG by Rail Final Rule B. Pending Petitions for Review of the LNG by Rail Final Rule C. PHMSA/FRA LNG Task Force D. Transportation Research Board Study E. Executive Order 13990 III. Basis for Suspension A. Development of a More Complete Understanding of the Risks and Benefits Associated With Rail Tank Car Transportation of LNG B. No Material Adverse Impact on Reliance Interests IV. Regulatory Analyses and Notices A. Statutory/Legal Authority B. Executive Order 12866 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. Executive Order 12898 J. Privacy Act K. Executive Order 13609 and International Trade Analysis L. Executive Order 13211 List of Subjects I. Overview PHMSA, in coordination with FRA, proposes to suspend recent amendments to the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180) authorizing transportation of ``Methane, refrigerated liquid,'' commonly known as 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 RIN 2137-AF54, and determines if any modifications are necessary. Transportation of LNG by rail tank car has not occurred and there is considerable uncertainty regarding whether any would occur in the time it takes for PHMSA to consider potential modifications to the existing, pertinent HMR requirements. However, PHMSA's proposed 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, 2024, whichever is earlier, thereby: (1) Avoiding any risks to public health and safety or environmental consequences (to include direct and indirect greenhouse gas (GHG) emissions \1\) that are being evaluated in the companion rulemaking and in ongoing research efforts undertaken in collaboration with FRA and external technical experts; (2) assuring timely implementation of any mitigation measures and operational controls for rail tank car transportation of LNG identified in the companion rulemaking or those ongoing research efforts; (3) reducing the potential for economic burdens by ensuring that entities avoid ordering rail tank cars compliant with the current requirements when the companion rulemaking may adopt alternative requirements; and (4) enabling meaningful opportunity for consideration of the perspectives of diverse stakeholders. --------------------------------------------------------------------------- \1\ PHMSA distinguishes between ``direct'' and ``indirect'' GHG emissions herein consistent with the meaning of those terms in pertinent Obama-Administration Council on Environmental Quality (CEQ) guidance. See CEQ, ``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'' at 16 & n. 42 (Aug. 1, 2016); CEQ, ``National Environmental Policy Act Guidance on Consideration of Greenhouse Gas Emissions'' 86 FR 10252 (Feb. 19, 2021) (encouraging agencies to use CEQ's 2016 guidance until CEQ issues an updated version of that guidance). --------------------------------------------------------------------------- PHMSA proposes to add a new special provision 439 that prohibits LNG transportation in rail tank cars until issuance of a final rule concluding the rulemaking proceeding under RIN 2137-AF54, or June 30, 2024, whichever is earlier. Therefore, if the temporary suspension is adopted in a final rule, the HMR will not authorize the transportation of LNG in rail tank cars until completion of the companion rulemaking or June 30, 2024, whichever is earlier. Rail transport of LNG may still be permitted on an ad hoc basis as authorized by the conditions of a PHMSA special permit (Sec. 107.105), or in a portable tank secured to a rail car pursuant to the conditions of an FRA approval (Sec. 174.63). II. Background A. LNG by Rail Final Rule On May 7, 2018, PHMSA accepted a petition for rulemaking \2\ from the Association of American Railroads (AAR) to allow the transportation of LNG by rail in DOT-113 tank cars and began drafting a notice of proposed rulemaking (NPRM) in consultation with FRA. On April 10, 2019, Executive Order 13868 (``Promoting Energy Infrastructure and Economic Growth'') \3\ was published, which directed the Secretary of Transportation to propose regulations that ``treat LNG the same as other cryogenic liquids and permit LNG to be transported in approved rail tank cars'' and finalize that rulemaking within 13 months.\4\ In October 2019, PHMSA issued the LNG by Rail NPRM, which proposed to amend the HMR to allow LNG to be transported in existing DOT-113 tank cars and sought comments (due within 60 days) on the potential need for additional operational controls.\5\ --------------------------------------------------------------------------- \2\ Docket No. PHMSA-2017-0020-0002. \3\ 84 FR 15495 (Apr. 15, 2019). \4\ The Secretary has delegated such rulemaking duties to the PHMSA Administrator. See 49 CFR 1.97. \5\ 84 FR 56964 (Oct. 24, 2019). --------------------------------------------------------------------------- On December 5, 2019, PHMSA issued a DOT special permit (SP) 20534 to Energy Transport Solutions, LLC (ETS) to allow the transportation of LNG in existing DOT-113 tank cars from Wyalusing, PA, to Gibbstown, NJ, with no intermediate stops.\6\ DOT-SP 20534 includes several safety control measures, including a requirement to conduct remote sensing for detecting and reporting internal pressure, location, and leakage, and a requirement to provide training to emergency response agencies that could be affected prior to the initial shipment of a tank car under the SP. ETS applied for the SP before the LNG by Rail NPRM was initiated. After issuing the SP, PHMSA re-opened the comment period on the proposed rule until January 13, 2020.\7\ --------------------------------------------------------------------------- \6\ DOT-SP 20534 expires by its terms on November 30, 2021. However, ETS may request a renewal in accordance with Sec. 107.109. See https://cms7.phmsa.dot.gov/approvals-and-permits/hazmat/file-serve/offer/SP20534.pdf/2017088295/SP20534 . \7\ 84 FR 70491 (Dec. 23, 2019). \8\ 85 FR 44994 (Jul. 24, 2020) (LNG by Rail final rule). \9\ See, e.g., id. at 45024; FEA, Docket No. PHMSA-2018-0025- 0478; RIA, Docket No. PHMSA-2018-0025-0479. --------------------------------------------------------------------------- On July 24, 2020, PHMSA published a final rule in the Federal Register revising the HMR to allow for the bulk transport of LNG in rail tank cars.\8\ In the LNG by Rail final rule, the Final Environmental Assessment (FEA), and the Final Regulatory Impact Analysis (RIA), PHMSA evaluated the potential benefits of rail tank car transportation of LNG and weighed them against the potential public safety and environmental risks.\9\ PHMSA coordinated with FRA to determine that those potential risks from rail tank car transportation of LNG would be at safe levels if such transportation were: (1) In DOT- 113C120W specification rail tank cars--indicated by the new specification suffix ``9'' (DOT-113C120W9)--with [[Page 61733]] enhanced outer tank requirements; (2) subject to all applicable then- extant requirements of the HMR; and (3) subject to certain additional operational controls. The LNG by Rail final rule increased the thickness of DOT-113 outer tank shells from 7/16 to 9/16 inch (a 28.5 percent increase) and mandated use of stronger TC-128 Grade B normalized steel. With respect to this increase in tank shell thickness and strength, PHMSA noted that ``[w]hen divided by the large number of carloads that would be carried during a DOT-113's 50-year service life, the 9/16th inch TC-128B normalized steel outer tank is highly cost- effective in that it will mitigate the consequences of derailment involving LNG by reducing the number of tanks punctured in the unlikely event of an accident.'' \10\ The LNG by Rail final rule also required operational controls for transportation of LNG by rail tank car, including routing analysis, improved train braking, and remote monitoring. PHMSA noted that the operational controls added in the final rule were expected to reduce the likelihood of an incident and reduce potential damages if an incident were to occur.\11\ The LNG by Rail final rule went into effect on August 24, 2020. --------------------------------------------------------------------------- \10\ Id. at 45005. \11\ Id. at 45008. --------------------------------------------------------------------------- On August 20, 2020, the Puyallup Tribe of Indians filed an administrative appeal of the LNG by Rail final rule, alleging, inter alia, that the rulemaking disproportionately exposed its members to environmental hazards (including those associated with climate change) and that PHMSA's engagement with the Tribe on the rulemaking was inadequate. PHMSA denied the Tribe's administrative appeal on November 13, 2020.\12\ --------------------------------------------------------------------------- \12\ Docket No. PHMSA-2018-0025-0637. --------------------------------------------------------------------------- B. Pending Petitions for Review of the LNG by Rail Final Rule The LNG by Rail final rule is the subject of several petitions for judicial review. A group of 6 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 PHMSA's LNG by Rail final rule. All of the petitioners ask the court to vacate the rule, alleging violations of the Hazardous Materials Transportation Act (HMTA; 49 U.S.C. 5101-5127), 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 alleges 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''),\13\ 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'') \14\ and Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.). --------------------------------------------------------------------------- \13\ 65 FR 67249 (Nov. 9, 2000). \14\ 59 FR 7629 (Feb. 16, 1994). --------------------------------------------------------------------------- The petitions have been consolidated within a single proceeding in the U.S. Court of Appeals for the D.C. Circuit. On March 16, 2021, the court granted PHMSA's unopposed motion to place the petitions in abeyance while PHMSA reviewed the LNG by Rail final rule pursuant to Executive Order 13990 (``Protecting Public Health and the Environment and Restoring Science To Tackle the Climate Crisis'').\15\ --------------------------------------------------------------------------- \15\ 86 FR 7037 (Jan. 25, 2021). --------------------------------------------------------------------------- C. PHMSA/FRA LNG Task Force PHMSA established a joint LNG Task Force with FRA in January 2020 as part of its ongoing research efforts on the transportation of LNG. The LNG Task Force helped to identify areas of research that could inform potential future regulatory activity, as appropriate. To assist in identifying appropriate tasks within that effort, the LNG Task Force employed a risk-based framework directed toward: ``knowing the risk'' by improving DOT's knowledge of the types and extent of risk posed by LNG by rail transportation, with a focus on research and testing; ``predicting the risk'' by leveraging modeling and simulation software and tools to analyze LNG by rail operations and potential risk outcomes; ``reducing the risk'' by relating the possible strategies and technologies that decrease the risk of transporting LNG by rail tank cars, especially through track inspection and operational factors; and ``preparing for the risk'' by focusing on the emergency response community to ensure that--should an incident occur and the risks of LNG materialize--emergency responders have the awareness, training, and resources to keep themselves and the public safe. The LNG Task Force ultimately identified and undertook 15 tasks to synthesize ongoing research and outreach activities. Those tasks are listed in Table 1 below. Table 1--LNG Task Force Methodology for Addressing LNG by Rail Risk ---------------------------------------------------------------------------------------------------------------- Know the risk Predict the risk Reduce the risk Prepare for the risk ---------------------------------------------------------------------------------------------------------------- Empirical Review of Evaluate Re-Evaluate Validate International LNG Rail Likely Number of Costs and Benefits of Emergency Responder Transportation. Punctures and ECP Brakes. Opinions and Needs. LNG Loading/Unloading Safety Derailment Simulation Evaluation of Develop LNG Evaluation. Models. Train Operational Educational and Quantitative Risk Assessment Develop Worst- Controls. Outreach Plan. of LNG Transportation. Case Scenario Model. Automated Full-Scale Impact Testing on Safety/ Track Inspection. DOT-113. Security Route Risk LNG UN T75 Portable Tank Assessment. Fire-Testing. Train Energy and Dynamics Simulator (TEDS). Modal Conversion Between LNG by Truck and Rail. ---------------------------------------------------------------------------------------------------------------- The LNG Task Force initially projected completion of the above tasks by late 2021. However, much of the LNG Task Force's work was interrupted by the coronavirus disease 2019 (COVID-19) public health emergency. Consequently, several tasks--including full-scale impact testing, puncture and derailment simulation modeling, and LNG portable tank pool fire testing--are not expected to be completed until sometime in 2022. D. Transportation Research Board Study Pursuant to the ``Further Consolidated Appropriations Act, 2020'' (Pub. L. 116-94), PHMSA and FRA partnered with the National Academy of Sciences, Engineering, and Medicine (NASEM) to conduct a study on the transportation of LNG in rail tank cars through a committee of the Transportation [[Page 61734]] Research Board (TRB).\16\ The TRB committee commenced work in mid-July 2020. --------------------------------------------------------------------------- \16\ 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 Jun. 16, 2021). --------------------------------------------------------------------------- The TRB study consists of two phases, with each phase culminating in a report with findings and recommendations: Phase I reviews the plans and progress of the LNG Task Force to develop a report containing findings regarding the relevance, completeness, and quality of its efforts, and to offer recommendations for addressing any shortcomings. Phase II involves a more comprehensive assessment of topics relevant to the safe movement of LNG by rail tank car pursuant to both SP and the HMR. The Phase II Report will contain recommendations to Congress, PHMSA, FRA, industry, emergency responders, and other relevant stakeholders on necessary near- and long-term actions to improve understanding of the risks associated with transporting LNG by rail tank car, mitigate those risks, and prevent and prepare for potential incidents. The TRB committee issued its Phase I Report on June 15, 2021.\17\ Although 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,'' the TRB committee noted that the COVID-19 public health emergency resulted in delays in initiation and completion of several tasks. The TRB committee 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 transportation of LNG in rail tank cars. It expressed particular concern regarding the incomplete status of tasks pertaining to full- scale impact testing, portable tank pool fire testing, worst-case scenario analysis, and quantitative risk assessment.\18\ The TRB committee also emphasized pending tasks necessary to understand the potential risks to public and worker safety arising from releases during loading, unloading, and transloading of LNG tank cars, as well as in overcoming limited emergency planning and response training and resources. --------------------------------------------------------------------------- \17\ 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 . \18\ Id. at 5-6. --------------------------------------------------------------------------- The Phase I Report provided recommendations \19\ for improving the assumptions, rationale, and methodology employed by the LNG Task Force in executing the outstanding tasks. The recommendations include that PHMSA and FRA should make several changes to the planned portable fire tank testing--including using LNG as the pool fire fuel and not liquefied petroleum gas--and assess the potential for cryogenic damage cascading to adjacent tanks. The report also recommends PHMSA and FRA enhance the modeling for worst-case scenarios--such as using a train speed of 50 miles-per-hour (mph) instead of 40 mph--and evaluate explosion hazards from a spill of LNG resulting in vapor dispersion in an environment with confined or congested spaces. Additionally, the report recommends PHMSA and FRA add loading and unloading operations and train assembly classification to the risk assessment for transport of LNG by rail as compared to highway. --------------------------------------------------------------------------- \19\ Id. --------------------------------------------------------------------------- The TRB committee plans to complete its work under Phase II in mid- 2022.\20\ --------------------------------------------------------------------------- \20\ Id. at 13. --------------------------------------------------------------------------- E. Executive Order 13990 Section 2(a) of Executive Order 13990 requires 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 Administration policies to improve public health, protect the environment, prioritize environmental justice, and reduce GHG emissions. The White House identified the LNG by Rail final rule in a non-exclusive list \21\ of agency actions that would be reviewed in accordance with Executive Order 13990. Additionally, section 7 of Executive Order 13990 revokes Executive Order 13868, along with several other executive orders and executive actions, and directs 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. --------------------------------------------------------------------------- \21\ 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 Jun. 16, 2021). --------------------------------------------------------------------------- On May 5, 2021, DOT issued a notice soliciting comment on potential candidates for review under Executive Order 13990 from among existing rules and other DOT actions.\22\ DOT received one comment pertaining to the LNG by Rail final rule. In that comment, the Transportation Trades Department of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) called for re-examination of the LNG by Rail final rule because it believes that rulemaking ``neglected to include meaningful safety measures to adequately address the inherent risks to this type of operation.'' \23\ --------------------------------------------------------------------------- \22\ 85 FR 23876. \23\ Docket No. DOT-OST-2021-0036-0025. --------------------------------------------------------------------------- III. Basis for Suspension A. Development of a More Complete Understanding of the Risks and Benefits Associated With Rail Tank Car Transportation of LNG The LNG by Rail rulemaking considered incorporating within the HMR regulatory requirements to protect the public, property, and the environment from unreasonable risks from transportation of LNG in rail tank cars. As such, PHMSA--in consultation with FRA--determined that existing HMR requirements including the modified DOT-113 tank car and new operational requirements prescribed in the LNG by Rail final rule, along with expected compliance with widely-accepted, voluntary industry standards such as AAR Circular OT-55 for shipments of LNG in rail tank cars, would reduce risk to safety, property, and the environment to acceptable levels in light of the potential benefits of that rulemaking.\24\ That decision reflected consideration of LNG's hazardous properties and the safety record of the DOT-113 tank car.\25\ --------------------------------------------------------------------------- \24\ See, e.g., 85 FR 45003 (discussing reduction in risks from tank car enhancements, mandatory operational controls, and voluntary industry practices) and 45024 (discussing potential economic and other benefits from the LNG by Rail final rule). \25\ 85 FR 44998. --------------------------------------------------------------------------- However, PHMSA acknowledged in the LNG by Rail final rule that additional further data and knowledge (for example regarding potential benefits as well as safety and environmental risks) could make appropriate further mitigations for shipping LNG by rail tank car.\26\ The LNG by Rail final rule, RIA, and FEA were candid about uncertainty in the future market demand for transportation of LNG by rail tank car, potential direct and [[Page 61735]] indirect GHG emissions associated with authorizing LNG by rail tank car, and the adequacy of emergency planning and response resources.\27\ PHMSA sought to mitigate potential risks that were affected by those uncertainties by adopting certain requirements in the LNG by Rail final rule suggested by comments in the rulemaking docket.\28\ PHMSA also stated that it may adjust the HMR's regulatory framework governing rail tank car transportation of LNG as more information became available from its oversight activities.\29\ In fact, PHMSA had already begun work within the LNG Task Force on a comprehensive set of tasks directed toward refining PHMSA's knowledge of the risks of rail tank car transportation of LNG when it issued the LNG by Rail final rule. PHMSA also expected that it would have the benefit of the TRB committee's study on LNG by rail that Congress had directed for the express purpose of informing pertinent PHMSA rulemakings. Lastly, PHMSA understood it would have time to amend the HMR to integrate insights from those research activities, as it could take time to build a fleet of dedicated DOT-113C120W9 tank cars, as stated in the RIA.\30\ --------------------------------------------------------------------------- \26\ See, e.g., 85 FR 44995 (``PHMSA recognizes that there is ongoing and potential future research related to the transportation of LNG by all modes. The Agency will continue to use this research to inform potential future regulatory activity, as appropriate.''). \27\ 85 FR 45016 (describing market demand uncertainties) and 45019-21 (describing ongoing efforts to improve emergency planning and emergency response training and resources); Docket No. PHMSA- 2018-0025-0478 at 35 (discussing uncertainties regarding GHG emissions impacts of that rulemaking). \28\ 85 FR 44996. \29\ 85 FR 44995. \30\ Docket No. PHMSA-2018-0025-0479 at 19. --------------------------------------------------------------------------- Uncertainty regarding the potential benefits and safety and environmental risks of rail transportation of LNG under the HMR has persisted longer than PHMSA anticipated when it issued the LNG by Rail final rule, and has in fact increased as a result of the release of the TRB Phase I Report on June 15, 2021. Uncertainty has persisted longer than expected because the COVID-19 public health emergency has delayed the completion of research efforts to confirm and enhance PHMSA and FRA's knowledge of public safety and environmental risks attendant in rail tank car transportation of LNG. As explained in the TRB Phase I Report, several of the tasks that had been scheduled for completion by early 2021 will not be completed before late 2021 or 2022. Delivery of the TRB Phase I Report was expected March 31, 2021, but the report was issued June 15, 2021. Uncertainty also has increased because, while the TRB committee generally commended PHMSA and FRA's efforts under the LNG Task Force, the TRB committee identified a number of information gaps in its and the LNG Task Force's work that PHMSA was not aware of when it issued the LNG by Rail final rule. The gaps concern testing and the evaluation of public safety and environmental risks (e.g., relating to full-scale impact testing, pool fire testing, worst-case analysis, and quantitative risk assessment)--including testing on which PHMSA had relied in the LNG by Rail final rule.\31\ The data gaps identified by the TRB committee might have been resolved by this point in time, but they currently remain unresolved because of the disruptions caused by the COVID-19 public health emergency. Further, the committee identified opportunities to improve the work of the LNG Task Force in understanding the risks to the public, workers, and the environment from rail tank car transportation of LNG, which potentially could further reduce uncertainties in the future and put PHMSA in a better position to evaluate risks as it moves forward with its companion rulemaking. The TRB committee also emphasized the need for a robust understanding of the potential risks to public and worker safety arising from releases during loading, unloading, and transloading of LNG tank cars, and improved emergency planning and response training and resources, further underscoring the importance of PHMSA taking additional time to ensure it fully understands and considers uncertainties. --------------------------------------------------------------------------- \31\ See 85 FR 45006 (full-scale impact testing), 45012 (pool fire testing), and 45013 (quantitative risk assessment). --------------------------------------------------------------------------- The COVID-19 public health emergency and other developments have also exacerbated uncertainties in near- and long-term market demand for rail transportation of LNG bounding the potential benefits and risks to public safety and the environment from the LNG by Rail final rule. The FEA supporting the LNG by Rail final rule acknowledged the complexity of the economics driving whether demand for natural gas transport outside the pipeline network as LNG would be met through the transportation in tank cars under the LNG by Rail final rule or by alternatives (one or more of highway transportation of LNG via MC-338 insulated cargo tanks, rail transportation of LNG pursuant to SP, or rail transportation of LNG via portable tank pursuant to FRA approval).\32\ The COVID-19 public health emergency has complicated that calculus further by causing economic disruption throughout the natural gas industry, impacting LNG infrastructure investment directly.\33\ Additionally, since the LNG by Rail final rule became effective, LNG markets have seen a number of announcements portending potentially fundamental supply and demand changes in international LNG markets.\34\ Consequently, PHMSA believes there is more uncertainty now than when the LNG by Rail final rule was issued regarding whether, when, and where rail tank car transport of LNG--and by extension, any potential benefits and public safety/environmental risks--will materialize. --------------------------------------------------------------------------- \32\ Docket No. PHMSA-2018-0025-0478 at 11, 26-29. \33\ See, e.g., Kravtosova & DiSavinio, Reuters, ``LNG Investments Vanish in 2020 as Coronavirus Slashes Oil and Gas Prices,'' (Sep. 9, 2020), https://www.reuters.com/article/us-lng-exports-investment-analysis/lng-investments-vanish-in-2020-as-coronavirus-slashes-oil-and-gas-prices-idUSKBN2602PY . \34\ See, e.g., DiSavinio, Reuters, ``For LNG Developers, Another Year of Cancelled Projects'' (May 18, 2021), https://www.reuters.com/business/energy/lng-developers-another-year-canceled-projects-2021-05-18/ ; Shiryaevskaya, Stapczynski & Ratcliffe, Bloomberg, ``King of LNG Undercuts Rivals to Keep Dominating World Market'' (May 19, 2021), https://www.bloomberg.com/news/articles/2021-05-19/king-of-lng-undercuts-rivals-in-bid-to-dominate-global-market ; Stapczynski. Bloomberg, ``Global LNG Market Faces Shakeup from Japan's Green Shift'' (Jul. 26, 2021), https://www.bloomberg.com/news/articles/2021-07-26/japan-s-green-ambitions-threaten-the-lng-market-it-helped-create . --------------------------------------------------------------------------- PHMSA believes the increased uncertainty regarding the potential benefits and safety and environmental consequences of rail transportation of LNG pursuant to the LNG by Rail final rule warrants temporary suspension while PHMSA evaluates (under RIN 2137-AF54) whether and under what circumstances the HMR should allow rail transportation of LNG. As explained above, research activity that PHMSA had expected would corroborate its understanding of the safety and environmental risks attendant in rail transportation of LNG has been delayed, while TRB's peer review of testing cited in the LNG by Rail final rule has raised additional questions.\35\ Uncertainties in [[Page 61736]] the underlying economic dynamics driving the potential benefits and public safety and environmental risks considered in the LNG by Rail final rule have increased (e.g., the quantity of LNG that will move by rail, the routes involved, and whether new transportation capacity would induce more natural gas extraction). PHMSA believes these increased uncertainties cast doubt on the continued validity of the balance between potential benefits and public safety and environmental risks underpinning the LNG by Rail final rule. --------------------------------------------------------------------------- \35\ PHMSA also notes that, even as there is less certainty regarding the potential benefits associated with the LNG by Rail final rule, there is greater scientific certainty that one of those potential benefits would entail significant environmental consequences. Specifically, the LNG by Rail final rule touted the potential for increased natural gas (methane) production as a potential benefit of that rulemaking. See, e.g., 85 FR 44995. However, more recent science has underscored the urgency of limiting such additional production for avoiding the worst consequences from anthropogenic climate change from indirect emissions associated with production and transportation activity. See, e.g., ``Sixth Assessment Report--Working Group I: Physical Science Basis'' at TS- 68, 6-11, 6-73 (Aug. 2021), https://www.ipcc.ch/report/ar6/wg1/#FullReport (last visited Aug. 19, 2021) (explaining the urgency of reducing GHG emissions--in particular, short-term contributors such as methane); Intl. Energy Agency, ``Net Zero by 2050: A Roadmap for the Global Energy Sector'' at 99 (May 2021) (noting the urgency of avoiding new natural gas production fields in order to meet net-zero policy goals). --------------------------------------------------------------------------- A temporary suspension, however, will give PHMSA and FRA the opportunity to complete a comprehensive evaluation of the benefits and risks of rail tank car transportation of LNG in the companion rulemaking before any LNG moves by rail under the HMR. Although--as explained below--PHMSA and FRA understand that rail tank car transportation of LNG is neither occurring nor expected to occur in the near future, temporary suspension of the LNG by Rail final rule ensures avoidance of potential risks to public and worker safety and the environment from such transportation while that parallel rulemaking proceeds. Suspension would also ensure HMR authorization of rail transportation of LNG reflects the ``best science'' available,\36\ including additional information obtained from the ongoing and delayed research efforts of the LNG Task Force, the forthcoming TRB Phase II Report expected in mid-2022, and continuing developments in scientific understanding of the near-term risks of climate change from enhanced natural gas transportation investments. Suspension would allow consideration of additional public comment, particularly on issues such as public and worker safety, environmental risks, and environmental justice, as well as on any additional testing or other information generated by PHMSA, FRA, and the TRB. --------------------------------------------------------------------------- \36\ See ``Presidential Memorandum on Restoring Trust in Government Through Scientific Integrity and Evidence-Based Policymaking'' (Jan. 27, 2021), https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/27/memorandum-on-restoring-trust-in-government-through-scientific-integrity-and-evidence-based-policymaking/ (requiring Federal agencies to make ``evidence-based decisions'' informed by the ``best available science and data'' in their regulatory activity). --------------------------------------------------------------------------- Therefore, PHMSA proposes to add a new special provision 439 prohibiting LNG transportation in rail tank cars until issuance of a final rule concluding the rulemaking proceeding under RIN 2137-AF54, or June 30, 2024, whichever is earlier. B. No Material Adverse Impact on Reliance Interests PHMSA does not expect temporary suspension of transporting LNG by rail tank car will have a material adverse impact on serious reliance interests. Despite issuance of the LNG by Rail final rule in July 2020, LNG has not been transported in rail tank cars, and PHMSA is unaware of any planned movements in the near future. The development of the necessary infrastructure--in particular, construction of DOT-113C120W9 tank cars--to transport LNG by rail under the HMR demands significant financial investment, long-term commitment, and considerable planning. The DOT-113C120W9 tank car was introduced for LNG transport and would be impractical for use with other hazardous materials because another, more feasible specification (i.e., DOT-113C120W) is already available for other Class 2 cryogenic flammable liquids that are authorized t
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