DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a Final Rule titled “Oil Spill Response Plans and Information Sharing for High Hazard Flammable Trains.” Among other requirements, certain rail trains carrying petroleum oil will be required to prepare comprehensive oil spill response plans to address a worst case discharge. Modifications to the existing rules become effective 180 days after publication in the Federal Register (including development of new spill response plans), but incorporation of certain publications by reference is approved within 30 days. The rule is promulgated in coordination with the Federal Railroad Administration (FRA) and is intended to implement directives in the Fixing America’s Surface Transportation Act of 2015 (FAST Act) and other mandates.

Under the rule, Comprehensive Oil Spill Response Plans (COSRPs) must address a ‘worst case discharge’ (WCD) and will be required for any train that has more than 20 continuous cars carrying petroleum oil, or 35 cars spread throughout any one train. A WCD is defined as an incident with potential to release 300,000 gallons or more of petroleum oil, or 15% of the amount of oil on the largest train consist carrying oil in a given response zone. The COSRP requirement expands upon oil spill response requirements already established in both the Clean Water Act of 1972 and the Oil Pollution Act of 1990. Since 1996, COSRPs have been applicable to railroads transporting oil greater than 1,000 barrels or 42,000 gallons per package, but because the typical rail tank car has a capacity around 30,000 gallons, no rail carriers currently transport petroleum oil subject to the 42,000 gallon packaging threshold. In addition to expanding the COSRP requirement, the final rule also “modernizes” the COSRP requirements by requiring that plans establish geographic response zones and ensure that personnel and equipment are prepared to respond to an accident. In addition, the Final Rule requires “high hazard flammable trains” (also called HHFTs and defined as more than 20 continuous cars carrying Class 3 Flammable liquids or 35 cars spread throughout any one train) to share COSRPs and related information with State Emergency Response Commissions, Tribal Emergency Response Commissions, or other appropriate State designated entities.

This rule was first proposed in a Notice of Proposed Rulemaking (NPRM) issued on July 29, 2016, proposing both additions and revisions to 49 CFR Part 130. The NPRM was prompted both by the 2015 FAST Act and National Transportation Safety Board (NTSB) Recommendation R-14-005 following the Lac Megantic train derailment in Quebec. Both the proposed and final rules cite to 13 derailment accidents involving trains carrying crude oil, between 2013 and 2016 (the most recent incident occurred on June 2016 in Mosier, Oregon). Following the July 2013 multiple fatality crude oil train derailment and explosion in Lac Megantic, the NTSB and DOT issued Advisories. The NTSB then issued its 2014 recommendation, with DOT issuing an Emergency Order on May 7, 2014, requiring trains carrying more than one million gallons of Bakken crude to notify local emergency planning entities along their route. Then on August 1, 2014, PHMSA issued a NPRM (HM-251) to explicate and define the Emergency Rule, which was finalized in 2015 and added new design, speed restrictions, braking systems and routing requirements to HHFTs. Congress followed in 2015 with oil train response plan mandates in the FAST Act. In addition, in March of 2018 (in the Consolidated Appropriations Act), Congress directed DOT to “issue a final rule to expand the applicability of comprehensive oil spill response plans.”

The final rule in large part tracks the NPRM, but adds some clarifications and increased flexibility to railroads that must submit COSRPs. PHMSA rejected comments suggesting that COSRPs should be required for lower quantities of oil or fewer numbers of cars in trains, citing to a prior conclusion in a related rulemaking that at lower thresholds “relatively few tank cars would be breached on average in the event of an incident.’ The definition of ‘petroleum oil’ does not change from its current definition at 49 CFR Part 130.5, and the burden remains on the offeror of oil for transport to make that determination. Under the current rule, ‘petroleum oil’ includes mixtures of at least 10% (so diluted wastewater would not meet the test, nor would E95 ethanol, although E85 ethanol would meet the test and require a COSRP if sufficient numbers of cars are in a train).

In terms of increased flexibility, the rule allows railroads to submit plans that meet State requirements under certain circumstances and implements a 12 hour response time in all areas (as opposed to a smaller timeframe). Further, CORSP plans will be approved by PHMSA (not the FRA) and response and mitigation requirements align with PHMSA’s pipeline Facility Response Plan requirements under 49 C.F.R. Part 194. A railroad must also certify in its plan that it has conducted training and that the plan includes requirements for equipment testing and exercises, with recordkeeping required for both (Parts 130.135 and 130.140). Railroads must update and resubmit their plans every 5 years (Part 130.145), or within 90 days of implementing any significant changes or new routes. Finally, the new Final Rule also provides for an alternative hazardous liquid classification testing method based on initial boiling point (per industry best practice ASTM D79000).

PHMSA estimates that the new rule will apply to 73 railroad operators at time of issuance, and that it should take roughly 180 hours to prepare an initial plan. Although not noted in the Final Rule, the number of crude by rail incidents has declined significantly since 2016 (the last incident cited in the Final Rule). The reason for that is that the amount of crude shipped by rail has also declined significantly since 2016. When new sources of shale oil were developed a decade ago, pipeline proximity and capacity was limited, thus increasing amounts of crude were shipped by rail. From 2012 to 2013, the amount of crude oil shipped by rail more than doubled, then continued to increase in 2014 and 2015. In 2016, however, the amount of crude shipped by rail began to drop, and it has now fallen below the levels shipped in 2012.

Although the market need for use of transporting oil by rail has declined overall, to the extent an increase arises as a result of the Permian Basin activity and/or additional high profile rail incidents occur in the future, there may be an increased focus on rail shipments.