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USDOT "Fast Lane" blog, 7/23:

Proposed rulemaking promises increased rail safety for crude oil, other flammable materials

Posted by
Anthony Foxx

We are at the dawn of a promising time for energy production in this country. This is a positive development for our economy, and for energy independence.

But the responsibilities attached to this production are very serious. More crude oil is being shipped by rail than ever before, with much of it being transported out of North Dakota’s Bakken Shale Formation. In 2008, producers shipped 9,500 rail-carloads of oil in the U.S.; by just last year, that number skyrocketed to 415,000 rail-carloads --a jump of more than 4,300 percent.

The risks of transporting that crude, unfortunately, were made clear to me during my first week as Secretary last July, when a train carrying Bakken crude derailed in Lac-Megantic, Quebec, killing 47 people.

Immediately, we began taking a series of steps to improve the safe transportation of crude oil that has grown to include:
•Safety Advisories, including our latest that calls for companies to avoid the use of DOT 111 tank cars;
•Emergency Orders, for example, requiring companies to notify State Emergency Response Commissions that they're transporting crude oil through their towns and communities; and
•Agreements with the industry to undertake a number of voluntary measures that immediately improved safety.

And now, today, we're building on that progress by proposing a rulemaking to improve the safe transportation of large quantities of flammable materials by rail, particularly crude oil and ethanol. The new, comprehensive rulemaking will open for public comment once published in the Federal Register at www.regulations.gov, and I urge you to read it and provide your feedback.



First, our rulemaking proposes to enhance tank car standards.

Within two years, it phases out the use of older DOT 111 tank cars –unless they’ve been retrofitted for safety– for shipments of Packing Group I flammable liquids, including most crude oil.

It also lays out three options for improving the design of tank cars built after October 1 of next year, the most comprehensive of which requires thicker, more puncture-resistant shells, enhanced braking, and rollover protection.

Additionally, we're proposing new operational requirements for what we're now defining as High-Hazard Flammable Trains (HHFTs). These include enhanced braking, speed restrictions, route risk assessments incorporating 27 different factors, and advanced notification of State Emergency Response Commissions.

And our new rulemaking requires a higher standard for classifying and testing mined gases and liquids.

Our proposal is supported by sound data and analysis. Because today, we’re also releasing a report with testing results from our inspection program, Operation Classification. That effort is ongoing, but what we’ve confirmed so far is that, compared to other crude oils, Bakken crude is on the high end of volatility.

This rulemaking also benefits from the 152,000 commenters who responded to our Advanced Notice of Proposed Rulemaking last September.



The volume of crude oil being produced and shipped by rail in North America simply did not exist that long ago. As the facts have changed on the ground so rapidly in the past few years, we must also change how we move this energy.

That means acting aggressively --and responsibly-- to ensure that we transport these important, high-hazard flammables safely, which is exactly what we've done in the past year, exactly what we're doing today, and exactly what we'll continue to do.

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USDOT news release, 7/23:

U.S. DOT Announces Comprehensive Proposed Rulemaking for the Safe Transportation of Crude Oil, Flammable Materials
Releases new data on Bakken crude oil to support increased safety measures

WASHINGTON – The U.S. Department of Transportation today released the details of its comprehensive rulemaking proposal to improve the safe transportation of large quantities of flammable materials by rail - particularly crude oil and ethanol - in the form of a Notice of Proposed Rulemaking (NPRM) and a companion Advanced Notice of Proposed Rulemaking (ANPRM).

The NPRM proposes enhanced tank car standards, a classification and testing program for mined gases and liquids and new operational requirements for high-hazard flammable trains (HHFT) that include braking controls and speed restrictions. Specifically, within two years, it proposes the phase out of the use of older DOT 111 tank cars for the shipment of packing group I flammable liquids, including most Bakken crude oil, unless the tank cars are retrofitted to comply with new tank car design standards. The ANPRM seeks further information on expanding comprehensive oil spill response planning requirements for shipments of flammable materials. Both the NPRM and ANPRM are available for review here and will be open for 60 days of public comment. Given the urgency of the safety issues addressed in these proposals, PHMSA does not intend to extend the comment period.

“Safety is our top priority, which is why I’ve worked aggressively to improve the safe transport of crude oil and other hazardous materials since my first week in office,” said Secretary Foxx. “While we have made unprecedented progress through voluntary agreements and emergency orders, today’s proposal represents our most significant progress yet in developing and enforcing new rules to ensure that all flammable liquids, including Bakken crude and ethanol, are transported safely.”

Today’s NPRM is based on an ANPRM published by the Pipeline and Hazardous Materials Safety Administration (PHMSA) last September, and reflects feedback from more than 152,000 commenters. Specifically, PHMSA will seek comment on the following provisions:


Defining the term “high-hazard flammable train” (HHFT).
•Proposes a definition of HHFT as a train carrying 20 or more tank carloads of flammable liquids (including crude oil and ethanol).

Better classification and characterization of mined gases and liquids.
•Proposes development and implementation of a written sampling and testing program for all mined gases and liquids, such as crude oil, to address:
1.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 better analysis, classification, and characterization of material;
5.statistical justification for sample frequencies; and,
6.duplicate samples for quality assurance.

•Proposes that offerors be required to certify that sampling and testing program is in place, document the testing and sampling program, and makes program information available to DOT personnel, upon request.


Rail routing risk assessment.
•Proposes that carriers be required to perform a routing analysis for HHFT that would consider 27 safety and security factors and select a route based on findings of the route analysis.

Notification to State Emergency Response Commissions.
•Proposes to codify DOT’s May 2014 emergency order that require trains containing one million gallons of Bakken crude oil to notify State Emergency Response Commissions (SERCs) or other appropriate state delegated entities about the operation of these trains through their States.

Reduced operating speeds.
•Requests comment on three speed restriction options for HHFTs that contain any tank cars not meeting the enhanced tank car standards proposed by this rule:
1.a 40-mph maximum speed restriction in all areas;
2.a 40-mph speed restriction in high threat urban areas[1]; and,
3.a 40-mph speed restriction in areas with a 100K+ population.
•If tank cars in the HHFT meet specifications finalized in the enhanced tank car section of this rule, speed would be limited to 50-mph in all areas (rather than 40-mph).
•PHMSA also will evaluate a 30-mph speed restriction for HHFTs that do not comply with enhanced braking requirements.

Enhanced braking.
•Proposes to require all HHFTs to be equipped with alternative brake signal propagation systems. Depending on the outcome of the tank car standard proposal and implementation timing, all HHFTs would be operated with either electronic controlled pneumatic brakes (ECP), a two-way end of train device (EOT), or distributed power (DP).


Enhanced standards for both new and existing tank cars.
•Proposes new standards for tank cars constructed after October 1, 2015 (and that are used to transport flammable liquids as part of a HHFT) (e.g., thermal, top fittings, and bottom outlet protection; tank head and shell puncture resistance). PHMSA is requesting comment on three options for enhanced tank car standard requirements: 1.Tank car option 1 would have 9/16 inch steel, would be outfitted with electronically controlled pneumatic (ECP) brakes and would be equipped with rollover protection.
2.Tank car option 2 would also have 9/16 inch steel but would not require ECP brakes or rollover protection.
3.Tank car option 3 is based on a 2011 industry standard and has 7/16 inch steel, and does not require ECP brakes or rollover protection

•Proposes to require existing tank cars that are used to transport flammable liquids as part of a HHFT be retrofitted to meet the selected option for performance requirements. Those not retrofitted would be retired, repurposed, or operated under speed restrictions for up to five years, based on packing group assignment of the flammable liquids being shipped by rail.


PHMSA will concurrently publish an ANPRM on oil spill response plans, specifically current thresholds and their applicability to rail, in part in response to an NTSB recommendation issued in January 2014.

In addition to issuing the NPRM and ANPRM, PHMSA concurrently released a report summarizing the analysis of Bakken crude oil data gathered by PHMSA and FRA between August 2013 and May 2014. The data show that crude oil from the Bakken region in North Dakota tends to be more volatile and flammable than other crude oils. Collected as part of Operation Classification (OSD), a joint PHMSA and Federal Railroad Administration (FRA) effort, the data were initially gathered to verify that crude oil was being properly classified in accordance with federal regulations, and evolved to include more robust testing to better understand the characteristics of the product.

The safety risk presented by transporting Bakken crude oil by rail is magnified both by an increasing volume of Bakken being shipped by throughout the U.S. and the large distances over which the product is shipped. In 2008, 9,500 rail-carloads of crude moved through our country compared to last year, when there were 415,000 rail-carloads. Moreover, on average Bakken crude oil shipments travel over 1,000 miles from point of origin to refineries on the coasts.

PHMSA and FRA plan to continue the sampling and analysis activities of Operation Safe Delivery through the summer and fall of 2014working with the regulated community to ensure the safe transportation of crude oil across the nation.

The new, comprehensive rulemaking will open for public comment once published in the Federal Register at www.regulations.gov, and I urge you to read it and provide your feedback.

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Chicago Tribune Breaking News, 7/23:

New rules proposed for railroad oil shipments

U.S. Transportation Secretary Anthony Foxx today proposed new rules on "high-hazard" shipments of crude oil by trains, including a phase-out of older model tank cars that critics contend are unsafe.

The department proposed that the older model tank cars, known as DOT-111s, should be phased out starting in two years unless they are retrofitted with stronger shells and other safety features.

Foxx is also proposing new speed restrictions on so-called "unit trains" that carry more than 20 tank cars of crude oil, a risk assessment of railroad routes along which the trains travel, and higher standards for the classification and testing of Bakken crude oil.

The new rules would come after a 60-day comment period during which the public and the oil, tank car and railroad industries would be allowed to provide input, Foxx said.

Read more.

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Politico, 7/23:

New oil train rules in brief

The Department of Transportation’s 200-page proposed rule is intended to strengthen standards for transporting crude oil by rail, particularly the more volatile crude extracted from North Dakota’s Bakken region. The highlights:

Read the highlights here.

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The News Journal, Wilmington, DE, 7/26:

US may again boost rail tank car safety standards
Rail safety officials weigh designs even tougher than the current top-of-the line models

Federal rail safety officials are considering crude oil tank car designs even tougher than the current top-of-the line models adopted by PBF Energy for its fast-moving crude-by-rail expansion at Delaware City, under an accelerating, nationwide safety overhaul.

All tank cars owned or leased by PBF meet the industry's current best design, PBF officials said last week. The company's commitment for 100 percent use of the top-standard tankers by June 30 now covers about 3,400 cars, and could cover nearly 6,000 cars by the fall of next year if oil deliveries to Delaware rise to a projected 210,000 barrels daily by that time

Continue.

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UP Customer News, 9/9:

Potential Customer Impact of PHMSA’s Proposed Flammable Liquids Rulemaking

To Our Customers,

As your business partner, Union Pacific is writing to highlight how pending regulatory changes could adversely affect the company’s ability to provide the service you have come to expect. On August 1, 2014, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a notice that it was considering new rules governing the transportation of all flammable liquids in what it calls high-hazard flammable trains (HHFT). The proposed rule would impose a variety of restrictions on any train with 20 or more tank cars of flammable liquids. These new rules contain provisions covering everything from tank car design and braking systems to train speed restrictions and commodity testing.

There are three specific areas of the proposed rule that you should understand: 1) the scope of the commodities covered by the proposed rule; 2) proposed braking system requirements; and 3) train speed restrictions.

1) Scope: The scope of the proposed rule is broad. As presently written, it covers all tank cars containing flammable liquids in an HHFT, not just crude oil. The rule then defines all trains with 20 or more cars of flammable liquids as HHFTs, without consideration of whether the cars are in a manifest or unit train. It also assumes cars spread throughout a manifest train are just as hazardous as cars in a single block. Together, the rule on commodities covered and definition of HHFT applies to 2.5 times the number of Union Pacific trains than if the rule applied to crude oil only. This means the number of customers affected significantly increases—including many who do not ship flammable liquids.

2) Braking Systems: One proposal included in the rule is the requirement of Electronically Controlled Pneumatic (ECP) brakes in new and retrofitted tank cars being used in HHFTs. ECP brakes are a costly addition to rail cars and locomotives that have yet to be proven effective for large-scale use. As recently as 2008, the FRA conducted a rulemaking proceeding on ECP brakes. After an extensive cost benefit analysis, the FRA concluded that it could not justify a requirement for use of ECP. In a recent filing in response to a similar proposal in Canada, the Railway Association of Canada concluded that a requirement for ECP brakes would pose significant compatibility and reliability issues. These conclusions are consistent with Union Pacific’s own tests of ECP.

3) Speed Restrictions: The proposed rule would also impose a speed limit on HHFTs until all cars in that train meet the new tank car standards. Currently, Union Pacific restricts the speed on trains moving 20 or more cars of crude oil to 40 mph in high-threat urban areas. The proposed rule could, at a minimum, extend the existing 40 mph speed limit to all HHFTs in high-threat urban areas. At maximum, the proposed rule would impose a nationwide 40 mph speed limit on all HHFTs regardless of location.

An arbitrary national speed limit on all flammable liquids, which make up less than 3 percent of Union Pacific’s total shipments, would have wide-felt reverberations throughout both our network and the entire national rail system. Here are some of the ways it would affect Union Pacific’s customers:

-Speed restrictions applicable to HHFTs would directly impact the speed of all traffic on a line.
-Velocity as measured by the Association of American Railroads (AAR) would be reduced across the entire network, with some areas seeing up to a two- to four-mph decrease. This would increase transit times and create congestion.
-The growth capacity on major segments of our network would be severely reduced or eliminated, restricting our ability to grow with our customers in the coming years.
-Disruptions, like severe weather, would have a larger impact on our service levels and the recovery would take longer.
-Two of the most impacted corridors include:
-Southern California – Chicago via the Sunset corridor, which is a particularly important route for our intermodal customers; and
-Chicago and Upper Midwest – Texas/Mexico, which handles large volumes of intermodal, automotive, grain, coal, sand and manifest traffic.

It could require years and hundreds of millions, if not billions, of dollars in additional capital expenditures to restore the capabilities of today's system and the service you have come to expect.

Union Pacific supports the goal of increasing rail safety. Over the last three years, the rail industry has undertaken a variety of actions to improve crude oil transportation safety. We continue working with our customers, the U.S. Department of Transportation (DOT) and other railroads to maximize rail safety without forfeiting the customer benefits provided by a fluid rail network. However, we are concerned that the proposed measures in this rule could substantially reduce our ability to support your growth, and therefore your ability to meet your customers’ needs.

Union Pacific will be participating in the comment process for the proposed rule through AAR and as an individual corporation. Union Pacific will seek to narrow the applicability of the rule by excluding some categories of flammable liquids and certain train configurations and by limiting any speed restrictions to high-threat urban areas. Also, the rail industry reached an agreement with the American Petroleum Institute on standards for new and retrofitted tank cars. The PHMSA rule as drafted is not consistent with those standards, and our comments will support our agreed-upon standards. Finally, we will argue against the requirement of ECP and will demonstrate that similar benefits can be achieved using existing technologies.

You will be receiving additional information from our team in the coming days, including instructions on how you can participate in the comment process to ensure your views are heard.

We welcome your thoughts on this important topic. Thank you for your business.

Sincerely,

Lance Fritz
President and COO

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UP Customer news, 9/12:

Letter from Eric Butler Regarding Proposed Flammable Liquids Rule

To Our Customers,

Earlier this week, you received a letter from our President and COO, Lance Fritz, regarding the implications of new rules governing the transportation of flammable liquids proposed by the Pipeline and Hazardous Materials Safety Administration (PHMSA). These rules would negatively impact service to all Union Pacific customers and curtail our ability to grow together in the future.

As you know, safety is our top priority. Union Pacific and the rest of the rail industry have undertaken a variety of voluntary steps to improve the safety of crude oil shipments. We are concerned that the proposed rule is too broad and would have a detrimental impact on our network without improving safety. Network velocity would deteriorate, capacity we have to grow would be reduced or eliminated, and our ability to recover from disruptions would be limited. Reductions in velocity, capacity and recoverability would negatively impact the service you expect from us.

Union Pacific is focused on creating value for our customers. Working together, we provide you with transportation solutions to meet your customers’ needs. I encourage you to provide feedback to PHMSA on the proposed rule and how it will affect your business. We have provided examples of letters you could send and instructions on how to submit comments. Your participation, whether through online comments or formal letters, will help ensure that the value you receive from Union Pacific is not diminished. It will also protect our ability to grow together in the future.

We appreciate your business and hope you will take action on this important matter. If you have any questions, please contact your Union Pacific Representative.

Sincerely,

Eric Butler
Executive Vice President – Marketing & Sales

Click here for "Comment Process Instructions" and "Example Letters."

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Bloomberg BNA, 9/11:

Rockefeller, Wyden Say Crude-by-Rail Safety Legislation May Be Necessary

Legislation may be needed to address shortcomings in the Transportation Department's crude-by-rail safety rule, according to Sen. Jay Rockefeller (D-W.Va.) and other senior lawmakers.

The proposed rule, which would require thousands of updated tank cars and impose speed and braking requirements, isn't strong enough, Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee, told Bloomberg BNA.

SNIP

Sen. Ron Wyden (D-Ore.), the former chairman of the Senate Energy and Natural Resources Committee, also said the proposed rule has “some gaps.” Specifically, Wyden said, the rule doesn't address the flammability of oil being shipped into Oregon from Canada.

More here.

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Chicago Tribune, 9/12:

Close potential loophole on rail tank cars, suburbs urged

Chicago area communities must act soon to demand the federal government tighten proposed regulations on railroad tank cars that carry crude oil and other hazardous materials, a coalition of suburbs says..

Federal regulators especially need to close a potential loophole regarding the number of tank cars allowed on “high-hazard” trains. Otherwise, many of the cars that critics say are unsafe could remain in service, the group contends.

The loophole is “a fundamental defect that must be rectified to adequately protect the safety of the public and the environment,” said Karen Darch, village president of Barrington.

Continue here.

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U.S. Senator Ron Wyden (OR) news release:


Wyden, Merkley, Feinstein and Boxer Call on DOT to Provide More Hazmat Train Information to First Responders
Monday, September 29, 2014

Washington, D.C. – Oregon’s U.S. Senators, Ron Wyden and Jeff Merkley, were joined today by California’s U.S. Senators, Dianne Feinstein and Barbara Boxer, in pressing the Department of Transportation to require that first responders be notified before trains carrying 20 or more carloads of crude oil, ethanol or other flammable liquids travel through their communities.

In 15 pages of comments submitted to the rulemaking docket, the senators identified shortfalls and inconsistencies in DOT’s current proposal, which only covers trains carrying 35 cars (1,000,000 gallons) or more of oil from the Bakken region centered in North Dakota. In an accompanying letter to Secretary of Transportation Anthony Foxx, the senators called for an existing emergency order regarding advanced notification be immediately expanded to cover any trains carrying 20 carloads or more of crude oil, ethanol and some 71 other flammable liquids transported by railroads.

“We believe railroads should supply first responders with more transparent information about crude-by-rail and other flammable liquid shipments traveling through communities in Oregon, California, and other states across the nation,” the senators wrote. “Doing so would reduce the public health and environmental dangers these shipments pose by allowing for better emergency planning, training and coordination between local, state and federal authorities, as well as the private sector, which plays an important role in responding to transportation accidents.”

The senators cited information and concerns sent to Wyden and Merkley from the National Transportation Safety Board in June, when the NTSB urged more timely and detailed information to better protect communities from potential accidents involving crude oil and other hazardous materials.

Underscoring the need to increase transparency requirements, two serious accidents would not have met the current threshold for reporting requirements: a 2008 train derailment of 13 cars carrying hazardous materials in Oklahoma and an accident in Ohio, where 49 hazardous materials cars derailed – but only 18 of which counted toward the DOT’s advanced notification standard. Both accidents resulted in fiery explosions that required the evacuation of nearby residents.

The senators stressed the urgency of revising the current requirements, noting that ethanol and oil shipments have increased from 75,000 carloads in 2005 to more than 700,000 last year, including substantial volumes of oil produced outside the Bakken region.

Crude-by-rail shipments from New Mexico to California have more than tripled since last May, when refineries rejected a proposed Kinder Morgan pipeline in favor of railroad shipments. Likewise, Oregon communities are seeing a growing volume of Utah and Canadian oil transported through towns, cities and rural areas, including many of the state’s scenic and environmentally sensitive rivers.

Senators Wyden and Merkley have previously called on the DOT to increase the amount of information shared with State Emergency Response Commissions and met with first responders in Oregon to hear input from local officials on public safety.

Read the letter to DOT Secretary Anthony Foxx here and the full comments to the DOT here.