Dianne Phillips is a Partner in Holland & Knight's Boston office
On June 6, 2019, the Pipeline and Hazardous Materials Safety Administration of the U.S. Department of Transportation (PHMSA) announced the availability for comment of its draft Environmental Assessment for a Special Permit to transport liquefied natural gas (LNG) by rail. This follows President Trump's Executive Order described in our blog but relates to a long-pending request by Energy Transport Solutions, LLC (ETS) for a Special Permit. Comments are due by July 8, 2019, and may be submitted online via www.regulations.gov to Docket No. PHMSA-2019-0100.
ETS seeks the special permit to transport LNG by rail in specialized tanks cars known as DOT-113s to customers who are principally exporters of LNG to foreign markets in unit train configurations of up to 100 tanks cars. Currently LNG may be transported by truck when properly packaged in specialized insulated cargo tank trailers, but similar rail tank cars are not presently approved by regulation and must be approved by special permit. Previously, we wrote about efforts to change the regulations. Other petroleum-based liquids, like LPG and propane, have been shipped by rail for years. Additionally, rail shipments of LNG are authorized in Canada.
PHMSA analyzed data regarding DOT-113 safety incidents (damage) and found that the vast majority of incidents causing damage to the DOT-113s did not result in a loss of hazardous materials. In addition, PHMSA conducted an analysis of potential failure scenarios, including a cascading failure of multiple DOT-113 tank cars and a potential boiling liquid expanding vapor explosion (BLEVE). This analysis included evaluation of radiant heat exposure, cryogenic temperature exposure, and flammable vapor cloud scenarios. PHMSA concluded that from an overall risk to the public perspective, rail transportation is still the safest and preferred option considering the quantity and distance transported. PHMSA then weighed the environmental impacts, including indirect effects and cumulative impacts, finding no significant environmental impacts from granting this special permit.
In summary, "PHMSA proposes that transportation of LNG by a DOT-113C120W rail tank car, as an alternative to transport of LNG in MC-338 cargo tanks on the road, would provide a more cost-efficient mode of transport than truck and reduce the environmental impact of transporting LNG. Moreover, the existing regulatory requirements that govern the movement of cryogenic materials similar to LNG are expected to provide adequate safety measures for LNG shipped in DOT-113C120W tank cars."
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