The U.S. Department of Transportation (“USDOT”) recently took two steps to address the safe transport of crude oil and ethanol by rail. First, it proposed new rules regarding the transportation of crude oil and ethanol by rail, and the rail cars in which those commodities are shipped. Second, USDOT seeks comments on a proposal to expand application of comprehensive Oil Spill Response Plans (“ORSPs”) to trains carrying large quantities of these commodities. On July 23, 2014, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), in coordination with the Federal Railroad Administration (“FRA”), issued a Notice of Proposed Rulemaking regarding Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains (“NPRM”). The NPRM contains three significant proposals: (1) new operational requirements for certain trains transporting a large volume of Class 3 flammable liquids (which the rule refers to as “high-hazard flammable trains”); (2) changes in tank car standards for “high-hazard flammable trains;” and (3) revision of the general requirements for offerors to ensure proper classification and characterization of mined gases and liquids. See PHMSA Docket No. 2012-0082 (HM-251). PHMSA indicated that a primary impetus for the NPRM was the significant growth in rail transport of large quantities of flammable liquids such as crude oil and ethanol, as well as recent incidents involving trains transporting large volumes of flammable liquids. PHMSA cited recent derailments of unit trains carrying crude oil in Casselton, N.D., Aliceville, AL, and in particular, the deadly derailment in Lac Mégantic, Quebec, in July 2013. PHMSA’s proposed rules establish requirements for “high-hazard flammable trains” (“HHFTs”), which the rule defines as trains comprised of 20 or more carloads of a Class 3 flammable liquid. In practice, this rule is expected primarily to affect unit train shipments of ethanol and crude oil and the rail carriers, tank car manufacturers and owners and shippers involved in such shipments. The primary intent of the rulemaking “is to propose revisions to the [Hazardous Materials Regulations (“HMR”)] that update and clarify the regulations to prevent and mitigate the consequences of a train accident involving flammable liquids.” The primary regulatory changes include:
Each of the proposed options would be a 286,000 pound car constructed with normalized steel and equipped with full-height, ½ inch thick head shields; reclosing pressure relief devices; minimum 11-gauge, weather tight jackets; bottom outlet handles that can be removed or are designed to prevent unintended actuation during a train accident; thermal protection capable of withstanding a 100-minute pool fire; top fitting protection; and enhanced braking. The only differences among the three PHMSA options are the type of enhanced braking (ECP, DP, or EOT devices) and the shell thickness. The CPC-1232 enhanced tank car would require a shell thickness of 7/16 inch, while the PHMSA/FRA and AAR 2014 tank car designs provide for a 9/16 inch minimum shell thickness. PHMSA proposes that existing tank cars be retrofitted to meet the new tank car standards (except for top fittings protection). Those cars not retrofitted would be retired, repurposed or operated under speed restrictions of 40 mph (30 mph absent enhanced braking capabilities) for up to five years. PHSMA proposes to phase out the DOT-111 tank car as follows:
New operational requirements for HHFTs: PHMSA proposes to enact rules requiring rail carriers to make four changes to the operation of trains falling under the definition of an HHFT. First, rail carriers will be required to perform a routing analysis that considers 27 safety and security factors for all HHFTs. The proposed analysis for HHFTs is the same as the analysis currently required for trains carrying certain volumes of Toxic-by-Inhalation Chemicals (e.g., chlorine), and other highly hazardous materials, known as “Key Trains.” Second, PHMSA proposes to codify the recent emergency order that required carriers to notify State Emergency Response Commissions (“SERCs”) of the operation of trains containing one million gallons or more of Bakken crude oil through their states.Third, PHMSA proposes that all HHFTs be restricted to a speed of 50 mph. PHMSA requests comments on a proposal to further restrict HHFTs to 40 mph along the entire route of movement, or in limited areas such as High-Threat Urban Areas, or areas with a population over 100,000 (defined using municipal borders). Finally, rail carriers would be required to equip all HHFTs with enhanced braking systems. PHMSA proposes that these trains be operated with electronically controlled pneumatic brakes (“ECP”), a two-way end of train device (“EOT”), or distributed power (“DP”). Changes to Tank Car Standards: PHMSA requests comments on three options for a new tank car design for use in connection with crude oil and ethanol service. The proposed tank car design would replace the DOT-111 Specification tank car commonly used for crude and ethanol transport. The new tank car, DOT Specification 117, would be mandatory for tank cars constructed after October 1, 2015. The three options PHMSA is considering are:
FRA and PHMSA Designed Car, or equivalent AAR 2014 Tank Car, or equivalent Jacketed CPC-1232, or equivalent
Timeline for Continued Use of DOT Specification III Tank Cars in HHFT Service
DOT 111 Not Authorized After
October 1, 2017
October 1, 2018
October 1, 2020
Classification and Characterization of Mined Gases and Liquids: PHMSA would require all offerors and shippers of mined gases and liquids to comply with a written sampling and testing program that would address (1) the frequency of sampling and testing; (2) sampling at various points along the supply chain; (3) sampling methods that ensure a representative sample of the entire mixture; (4) testing methods to enable complete analysis, classification, and characterization of material; (5) statistical justification for sample frequencies; and (6) duplicate samples for quality assurance. Offerors would be required to certify that such a program is in place, document the testing and provide information to DOT upon request.
In addition to the NPRM, PHMSA also issued an Advance Notice of Proposed Rulemaking (“ANPRM”) seeking comment on potential revisions to its regulations that would expand the applicability of comprehensive ORSPs to include HHFTs. PHMSA specifically seeks comment on the appropriate threshold volume of crude oil in a train that would be required in order to trigger a comprehensive OSRP. Finally, USDOT issued an update regarding “Operation Safe Delivery,” which included “Operation Classification,” an investigation into the proper classification of crude oil produced from the Bakken Shale Formation. The investigation found that “crude oil analyzed from the Bakken region displayed characteristics consistent with those of a Class 3 flammable liquid, PG I or II, with a predominance to PG 1, the most dangerous class of Class 3 flammable liquids.” The report concludes that Bakken crude oil has a higher degree of volatility and therefore presents “an increased risk of a significant incident.” USDOT intends to continue its sampling and analysis of Bakken crude oil through the summer and fall of 2014. PHMSA will accept public comments on both the NPRM and the ANPRM for 60 days from the date of publication in the Federal Register. (The NPRM and ANPRM have not yet been published as of the date of this update, but they will likely be published very soon.).