Environmental advocates question PHMSA’s inaction on LNG by rail

Environmental advocates are hoping the Pipeline and Hazardous Materials Safety Association (PHMSA) will soon release a proposed rulemaking that will become the new regulation governing the movement of liquefied natural gas by rail in the United States.

But advocates also say PHMSA has continuously missed its deadlines for both releasing the new proposed rule and suspending the current regulation set up by the Trump administration. That current rule, which allows companies to transport LNG without a special permit, is still technically in effect, although no companies have gone forward with transporting LNG via rail under that rule, according to Sahana Rao, an attorney with the Natural Resources Defense Council.

“As long as the Trump-era rule is not suspended, theoretically, LNG transport by rail can move forward. And that’s why it’s important from our perspective that this rule be suspended as soon as possible,” Rao recently told FreightWaves.

Transporting LNG by rail had been prohibited nationally unless a company obtained a special permit through PHMSA. But then-President Donald Trump issued a rule in 2020 that enabled the transport of LNG by rail without the need for a special permit.

While this was happening, energy producer New Fortress Energy applied for and was granted a permit for transporting LNG by rail from facilities in Pennsylvania to the Gibbstown export terminal in New Jersey. That permit expired in November 2021, although New Fortress Energy has applied to renew the permit.

When President Joe Biden took office, environmental advocates had hoped that Transportation Secretary Pete Buttigieg would suspend the Trump rule while also proposing a new regulation that would grant the movement of LNG by rail only if companies received a special permit. Environmental advocates also prefer that PHMSA would only grant permits on a case-by-case basis.

PHMSA, in conjunction with the Federal Railroad Administration, did issue a notice of proposed rulemaking to suspend the LNG-by-rail rule issued by the agencies in 2020.

But the agency has kept pushing back the deadline for suspending the current rule and taking action on the new one, Rao said. PHMSA had indicated that it would take action by June 2022, but that got pushed back to December 2022. Then there was a deadline of March 20 of this year, but PHMSA said in a court filing that it didn’t anticipate meeting that deadline either, according to Rao.

According to PHMSA, the agency has received more than 10,000 comments about the proposed suspension, including comments from 24 state attorneys general opposing the proposed rule.

Fourteen state attorneys general plus the District of Columbia have lobbied PHMSA to suspend Trump’s rule.

As PHMSA has been receiving comments on the issue, the agency has also been studying how to deliver LNG by rail safely, and that research has included looking at how other countries have managed LNG transport by rail.

“In our view, there’s no real downside to suspending the rules because it provides regulatory certainty to all stakeholders, on the developer side and for the community and on the environmental side. And PHMSA has already said that they’re working on revising the rule, with the indication that they’re not satisfied with the current Trump rules [and its] safety precautions. … [So] why do we still have that in place as the reigning regulation?” Rao said.

Meanwhile, New Fortress Energy’s permit renewal is before PHMSA, but the agency hasn’t yet ruled on it because there is an ongoing docket on the issue, according to Rao.

“LNG was not allowed in the past to be transported by rail because it is way too dangerous. Not only is it possibly deadly to communities along the route, it will fuel increased drilling, pipeline construction, methane leaks, water contamination, air emissions and severe damage to our atmosphere and the communities over the Marcellus Shale,” said Wes Gillingham, associate director of Catskill Mountainkeeper, in a March 13 news release issued by several environmental organizations in response to PHMSA’s court filing indicating it would miss its March deadline.

PHMSA’s missed March deadline comes as the agency has been busy examining rail safety initiatives in light of the Feb. 3 derailment of a Norfolk Southern train in East Palestine, Ohio.

East Palestine “showed us that we don’t have time to waste. … There are actually quite a few similarities to LNG by rail transport and the transport of some of the volatile chemicals that were involved in East Palestine,” Rao said. “LNG is pure methane so it’s extremely flammable. It also burns hotter and faster than gasoline or crude oil or other petroleum-based substances, and those fires just keep burning until they consume all the available gas. … One train car holds about 30,000 gallons of gas. So that’s a huge amount just for one train car.”

PHMSA told FreightWaves that it is continuing to review the issue.

One question is what type of rail car can be used to transport LNG by rail. New Fortress Energy had indicated that it would like to use cryogenic tank cars, which are not available in the U.S. There has also been some discussion within the industry about using DOT-113 tank cars.

Current federal regulations do authorize LNG by rail using UN portable tanks with prior approval from FRA. Both Florida East Coast Railway (FECR) and Alaska Railroad have approvals to do this, but only FECR is actively transporting LNG in UN portable tanks. UN tanks are smaller intermodal packages that hold approximately 10,000 gallons of product, while tank cars hold about 30,000 gallons.

“Due to [Department of Transportation] ex parte restrictions governing rulemakings by PHMSA, and other DOT operating administrations, we are unable to share the details of any changes to the rule at this time. Additionally, we are unaware of any concrete commercial interest in building the type of DOT-113C120W9 tank cars that are permitted to transport LNG by rail under the 2020 rule — and currently no LNG by rail cars are being transported subject to the 2020 rule,” PHMSA told FreightWaves.

The proposed rule on LNG transport by rail “was one of the first rulemakings that PHMSA published during this administration. During the past few years, we’ve had one of the most successful periods in our agency’s history in advancing safety rules — despite legal challenges in nearly every instance. Safety rules remain our top priority — especially in light of the East Palestine derailment,” the agency continued.

Said Rao: “Our view is that they’ve been looking at this for years at this point, and we’ve been waiting and waiting for some assurance that our communities are going to be kept safe. So it’s high time for them to act.”

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