> UNITED STATES OF AMERICA
>
> DEPARTMENT OF TRANSPORTATION
>
> PIPELINE & HAZARDOUS MATERIALS SAFETY ADMINISTRATION
>
> HAZARDOUS MATERIALS: IMPROVING THE SAFETY OF RAILROAD
>
> TANK CAR TRANSPORTATION OF HAZARDOUS MATERIALS
>
> PUBLIC MEETING
>
> Wednesday,
>
> May 14, 2008
>
> The above captioned matter convened pursuant to notice at 9:00 a.m.
>
> [CHAIRPERSON:]{.underline}
>
> Charles Hochman
>
> Director
>
> Office of Hazardous Material Technology
>
> Pipeline and Hazardous Materials Safety Administration
>
> [Department of Transportation Panel:]{.underline}
>
> Cheryl West-Freeman
>
> Office of Hazardous Materials Safety
>
> PHMSA
>
> Lucinda Henriksen, Esquire
>
> Office of Chief Counsel
>
> FRA
>
> William Schoonover
>
> Staff Director, Hazardous Materials
>
> Office of Safety Assurance and Compliance
>
> Federal Railroad Administration
>
> Eloy Martinez
>
> Program Manager
>
> Office of Research and Development
>
> FRA
>
> Jeffrey Horn
>
> Senior Industry Economist
>
> Office of Safety Analysis
>
> FRA
>
> [PRESENTER-PARTICIPANTS:]{.underline}
>
> Frank Reiner
>
> Emergency Preparedness and Transportation
>
> Chlorine Institute
>
> Julie Bart
>
> Manager of Rail and Logistic Services
>
> Chlor-alkali Division
>
> PPG Industries
>
> Howard Kaplan
>
> Vice-President
>
> Chemicals and Byproducts
>
> U.S. Magnesium
>
> Neil Ackerman
>
> OxyChem
>
> Kirk Steely
>
> Director of Logistics
>
> Chlor-alkali Products Division
>
> Olin Corp
>
> Henry Ward
>
> Director of Transportation Safety and Security
>
> Dow Chemical Company
>
> Midland, Michigan
>
> [PARTICIPANTS - IDENTIFIED ON RECORD:]{.underline}
>
> Ted Willke
>
> PHMSA
>
> Randall Trische
>
> Union Tank
>
> Robert Fronczak
>
> Assistant Vice President
>
> Environment and Hazardous Materials
>
> Association of American Railroads
>
> Bob Hulick
>
> Trinity Rail
>
> Tom Chick
>
> American Chemistry Council
>
> [I N D E X]{.underline}
>
> [Agenda Item:]{.underline} [Page]{.underline}
>
> Opening, Mr. Schoonover 5
>
> Introductions & Opening remarks, Mr. Hoffman 5
>
> Prepared statements:
>
> The Chlorine Institute, Frank Reiner 15
>
> PPG, Julie Bart 30
>
> U.S. Magnesium, Howard Kaplan 41
>
> OxyChem, Neil Ackerman 61
>
> Dow Chemical, Henry Ward 83
>
> Discussions of Administrator\'s Questions 93

[P R O C E E D I N G S]{.underline}

9:10 a.m.

MR. SCHOONOVER: As a reminder, there\'s a sign-in sheet in the back. We
ask that you do, at some point, sign in.

Before Mr. Hochman begins, I just wanted to go through and provide a
safety briefing. We are at the Washington Plaza Hotel, at 10 Thomas
Circle, NW, as a reference point, in case we have to call 911. The
Washington Plaza Hotel is an alarmed building, so the alarms are on the
back wall. If it does go off, the exits are through this door to the
service area, to the right, and then a left turn and you\'ll see two
double doors, left through those double doors and out of the building.
And ask that you look to your left and right and see who\'s there and
make sure everybody\'s out there.

Qualified people with CPR? Okay. Bob and Bob, I\'m going to ask you guys
to assist us. I\'ll call 911. I would also ask that you turn your cell
phones onto either vibrate or turn them off while we have the court
reporter and with that, Charles.

MR. HOCHMAN: Good morning. As a first item given to me, everybody check
their boarding pass. If it says anything other than Hawaii, you\'re on
the wrong flight.

Good morning. For the record, today is Wednesday, May 14, 2008. My name
is Charles Hochman. I am the Director of the Office of Hazardous
Materials Technology within the Pipeline and Hazardous Materials Safety
Administration. And I will be serving as chair of today\'s public
meeting. This is a public meeting on PHMSA\'s Notice of Proposed
Rulemaking published on April 1, 2008, which is directed at improving
the safety of pressure tank cars used to transport poison inhalation
hazard materials.

PHMSA is conducting this rulemaking in concert with the Federal Railroad
Administration, and in order to unify all records concerning this topic
in one docket, we have designated FRA Docket Number 2006-25169 as the
electronic docket for the rulemaking. Once again, that\'s FRA Docket
2006-25169. The docket is accessible at www.regulations.gov. PHMSA\'s
designation for this rulemaking is Docket HM-246.

Before proceeding, I want to identify others on the Department of
Transportation panel for this hearing. Starting on my left, your right,
is Cheryl Freeman, an engineer within the Office of Hazardous Materials
Safety in PHMSA. Eloy Martinez, a Program Manager in the Office of
Research and Development, FRA. MR. MARTINEZ: Good morning.

MR. HOCHMAN: Jeffrey Horn, a Senior Industry Economist in the Office of
Safety Analysis, FRA. Lucinda Henriksen, an attorney within the Office
of Chief Counsel, FRA. And Bill Schoonover, the Staff Director for
Hazardous Materials, Office of Safety Assurance and Compliance, FRA.

This is the first of four days of public meetings that the agencies will
conduct on this proposed rule. The purpose of these meetings is to
receive oral comments responsive to the Notice of Proposed Rulemaking.
The [Federal Register]{.underline} notice published on April 14, 2008,
sets forth in some detail the subject matters that the agencies would
like to explore at each of these meetings. The NPRM, the notice
announcing these meetings, and the accompanying Regulatory Impact
Analysis, which is in the docket, all pose questions addressing issues
about which the agencies seek information and views. There certainly may
be additional items suggested by the Notice that parties may wish to
address, and these meetings are intended to provide an opportunity to
explore those issues, as well.

In order to foster an orderly and focused process, we ask the parties,
insofar as reasonably possible, to observe the topical organization
found in the notice. If that means that your organization means to speak
on two or more days, that\'s fine. If you find that this presents a
hardship, please see me or Ms. Henriksen at the first break, and we can
discuss the best way of ensuring that you are able to fully participate.

In addition, FRA Administrator, Joseph Boardman, has asked that we
utilize these public meetings to pose and discuss a series of specific
questions related to the proposed rule, and AAR\'s new interchange
standards for tank cars transporting poison inhalation hazard materials.

As noted in the April 14th notice, today we intend to focus on issues
related to chlorine service. Our purpose is to ensure that we leave no
stone unturned and understand the implications of the proposed rule for
transportation of this commodity, as well as any related issues and
options.

Similarly, tomorrow we intend to focus on anhydrous ammonia service. On
the morning of May 28th, we intend to concentrate on other TIH
commodities transported by railroad tank car.

Clearly, there are cross-cutting issues that may affect transportation
of all commodities, and speakers should feel free to address those
issues in that light.

We will try to reserve the operational restriction issues, which
principally impact the railroads, but may have implications for shippers
as well, for the afternoon of May 28th.

Finally, on May 29th, we will hear from anyone who has previously not
spoken; and we will welcome back any parties who would like to offer
summary testimony after having listened to other witnesses or speakers.
FRA Administrator Boardman may join us for that concluding day.

At this point, I\'d like to introduce Dr. Ted Willke, the Associate
Administrator for Hazardous Materials, sitting in the back. Thanks for
joining us, Ted.

As we go through these public meetings, I know you\'ll be conscious of
the fact that the Department of Transportation is acting in response to
a statutory mandate, as well as the National Transportation Safety Board
recommendations. The principal question before us is whether, through an
approach such as the one contained in the Notice of Proposed Rulemaking,
we can specify performance requirements for new tank cars that are
effective in preventing release of TIH materials in derailments and
collisions; and practical for implementation, given the current state of
engineering knowledge and practice.

There are, of course, many issues that we need to explore related to the
potential life cycle costs of implementing the proposed rule, potential
impacts on small entities, and whether there are alternatives that might
achieve the same results. Further, we seek comments on whether, if
adopted as proposed, the rule could lead to intermodal diversions and
whether or under what circumstances that might be viewed as an
acceptable alternative.

Again, speakers should feel free to discuss issues not specifically
raised by the Department in the underlying rulemaking documents, but
relevant to consideration of the impact and feasibility of the proposed
rule, any any potential alternatives.

For example, we are aware that there is a concern among some shippers
and leasing companies, that new tank cars could be built and delivered
under the proposed rule only after some period of time. Meanwhile, cars
may need to be replaced \-- existing cars that are nearing the end of
their useful life and due for retirement or to augment capacity. A
number of questions have been raised regarding the ability of tank
owners to realize the full value represented by investment in tank cars
purchased during this interim period if no grandfathering is accepted.

Now is the time to put those issues on the table, providing as much
information as possible regarding potential options and impacts related
to the proposal.

In a moment, counsel will explain the procedures for this meeting. I
want to emphasize that it will be important for every person who speaks
to identify himself or herself by name and organization and to use the
microphones provided.

Ms. Henriksen will now briefly describe how we intend to conduct this
meeting.

MS. HENRIKSEN: Good morning. First, as Bill mentioned, there\'s a
sign-in sheet at the back, back where the water pitchers are. So if you
haven\'t signed in yet, we\'d appreciate it if you would, just so we can
have an accurate record of attendance this morning.

Also, in the [Federal Register]{.underline} notice that Charlie
mentioned, which announced these public meetings, we asked persons
wishing to present oral statements to let us know beforehand. We have
five persons who previously indicated that they wanted to speak today.
These include Frank Reiner, representing the Chlorine Institute. Julie
Bart from PPG. Howard Kaplan from U.S. Magnesium. Neil Ackerman from
OxyChem. As well as Kirk Steely of Olin Corp. Have I missed anyone that
let us know beforehand? Hopefully no. Okay. Good.

We plan to let each of our five speakers make their presentations, and
if there are any others that \-- any other individuals that are here
today that would like to speak but haven\'t told us beforehand, we will
open the floor up after our five presenters go to start with, for
statements from those folks. You can \-- on the sign-in sheet, there\'s
a little block you can check off, or just come up and \-- at our first
break \-- and let us know that you want to speak.

As Charlie mentioned, the purpose of this meeting is to hear your
comments, concerns, issues, anything related to the NPRM. We will keep
this meeting relatively informal, but in order to ensure that we proceed
in an orderly and efficient manner, we ask you to abide by a few rules
of procedure.

First, this meeting is not intended to be a forum for debate, and there
will be no cross examination of speakers. Members of the panel up here
may ask questions of the speakers. Our questions will be for the
purposed of clarification or to solicit additional relevant information,
and we may ask speakers to address comments or issues raised by other
commentors.

However, if we do not question anyone, it does not mean that we agree or
disagree with that speaker\'s statement, whether it\'s a legal
proposition or a factual statement. If anyone is in the meeting room
that wishes to ask questions, provided the speaker is willing to take
questions, feel free to do so once that speaker is done.

Although we want to try to engage meeting participants and have as open
a discussion as possible, please note that the panel may not be able to
give specific answers today to concerns raised at this meeting.
Necessarily, as part of the rulemaking process, the agencies need to
consider all comments and concerns raised throughout the public comment
period, both here at the public meetings as well as comments submitted
in writing to the docket. In this connection, please note that the
closing date for written comments on the NPRM as noted in the NPRM
document tself, is June 2, 2008. Written comments should be forwarded to
the address indicated in the NPRM document.

As Charlie mentioned, I believe, this meeting is being transcribed by a
court reporter. Accordingly, as a practical matter, when you come up to
give your statements, I think practically you can have you choice. You
can take a seat and relax on a neighboring table, or you could actually
use the wireless microphone. But in order to ensure that we have an
accurate transcript, if you could state your name and spell it as well
for the convenience of our court reporter, that would be great.

A copy of the transcript ultimately will be placed in the docket.
Charlie mentioned, it\'s FRA docket 2006-25169, and its available on
line at the www.regulations.gov site. If anyone needs that, just at a
break come on up and we\'ll jot it down for you. If anyone has any
questions as well, regarding accessing the docket, just let us know.

In addition, if anyone\'s prepared a written copy of your oral comments,
if you could give them to the court reporter as well as us beforehand
\-- they\'re certainly not necessary \-- but that would help.

And at this time, I think we can move to our first speaker unless there
are any issues, questions from anybody? No.

MR. HOCHMAN: All right. Chlorine Institute.

MR. REINER: Good morning. My name is Frank Reiner, R-E-I-N-E-R. I am the
Vice-President of Transportation and Emergency Preparedness at the
Chlorine Institute. We thank the Department for providing an opportunity
to offer comments regarding DOT\'s Notice of Proposed Rulemaking focused
on improving the safety of transporting rail tank car shipments of
certain hazardous materials.

The Chlorine Institute is a 220-member trade association of chlor-alkali
producers, re-packagers, distributors, users and suppliers to the
industry. The Institute\'s producer members account for 98 percent of
the total chlorine production in North America.

The Institute\'s members have a long-standing commitment to
transportation safety. That commitment has been demonstrated through
supporting development of technology and best practice in transportation
and handling of chlorine with the objective of reducing risk of
accidents, and minimizing the consequences should an accident occur. The
Institute\'s overriding goal is zero releases in production,
distribution, and use of this essential chemical.

The Institute is pleased that the Department of Transportation has taken
a visible leadership role in the continuous improvement of rail safety
by beginning this rulemaking process. The statutes involved clearly
establish that DOT, and DOT alone, has the authority and the
responsibility to institute mandatory safety standards for hazardous
materials

railcars. Carriers have a duty to transport any railcar which meets
those legal standards. This rulemaking and the accompanying commentary
clearly reassert that role. We welcome the opportunity to comment on the
proposal today in order to help develop a final rule that meets our
common goals of continued safe shipment of essential chemicals.

Chlorine itself is a naturally-occurring chemical element that is
essential to life. Chlorine chemistry is used to manufacture thousands
of products critical to society\'s needs, and in particular, provides
affordable and reliable disinfection for the benefit of public health.
Many consumer and industrial products may not, in the end, contain any
chlorine, but still rely on chlorine chemistry in their production.

Any suggestion that chlorine can be replaced in our nation\'s economy is
pure fantasy. In 95 percent of the uses, there is no ready substitute.
Action to limit the production, distribution, or use of chlorine would
have an immediate and severe detrimental impact on health and safety of
the U.S. public.

In order to realize the benefits of chlorine, it is essential to deliver
the product from the production locations to the end use locations,
which are often significant distances apart. Rail transportation of
hazardous material is a safe and cost-effective way to move this
product, and the continued ability to economically transport this
material via rail is essential to both the economy and to public health
and safety.

Historically, rail transportation of TIH materials, and chlorine in
particular, has been very safe. With over 1.5 million loaded moves of
chlorine by rail since 10965, there have been only ten tank car
breaches. This impressive safety record has only been possible through
the cooperative safety initiatives which have included carriers,
shippers, and government.

Recent railcar accidents demonstrate that rail carriers must take action
to reduce or eliminate derailments and collisions of trans transporting
TIH materials. At the same time, TIH shippers and regulators must take
actions to improve accident survivability of rail tank cars transporting
TIH material.

The Institutes members support the continuous improvement in the design,
development, and testing of tank cars with features which increase
accident survivability. We strongly agree with DOT\'s conclusion that
enhancing the safety of rail tank cars and the transportation of all
hazardous materials, including TIH materials, is an ongoing and
multi-faceted challenge.

The Chlorine Institute has consistently advocated development of a
performance specification for puncture resistance. It is our belief than
an important element of accident survivability is improved puncture
resistance. To this end, CI funded a study conducted by Quest
Reliability to investigate and estimate the effect of improved steels
with high fracture toughness. That study indicated significant
improvement, about two-times, in resistance to puncture is possible with
some of these steels.

The Next Generation Rail Tank Car Project, which, while looking at all
aspects of car design, has done significant analysis and testing in the
area of puncture resistance. That project has identified innovative
designs and materials with potential to manage energy and achieve
significantly improved resistance to puncture in accident situations.
That program is ongoing and has not yet finalized on a design.

In reviewing the NPRM, the Institute is concerned about the conditions
specified for design of head puncture resistance systems. The head
impact load case may not be realistic based on accident experience.
There is a need to review that case and better understand the
assumptions around the punch location and the speed of impact. The
proposed performance test represents an exponential increase in severity
over the existing head protection requirements. This requirement may
place a burden on some shipper-owners with benefits not quantified by
real world conditions.

We are very concerned that the performance criteria for the head and
possibly the shell as specified in the NPRM cannot be met with designs
currently available or under review. The loading conditions must be
reviewed to assure that the specifications do not result in requirements
that are beyond real accident conditions or beyond what \-- or beyond
requirements that can be met. The data and analysis that has been
provided to us by the Next Generation Rail Tank Car Project indicates
that particularly the head requirement may not be achievable with
designs currently under review.

Volpe has developed a design that has been reported to meet the head and
shell protection requirements of the NPRM. To be certain that this
design does meet those proposed requirements, it must be tested. During
discussions at the FRA Technical Symposium on May 7th and 8th, it was
unclear when that testing will occur. It was the clear opinion of many
participants at that session that the Volpe concept must be subjected to
both component and full-scale testing to be accepted as a proven design.
We believe the results of that testing constitute an indispensable input
to this rulemaking.

Although the Department\'s goal is well understood, mandating a new
safety requirement without a proven design may lead to an unmet mandate.
We believe that any such mandate requires design qualification to
support the rulemaking on the Regulatory Impact Analysis. This rule
should not proceed until a design which complies with the rule has been
tested and verified.

We are concerned that the implementation schedule as proposed in the
rule is not realistic. The Institute appreciates the need to move the
rulemaking forward with all appropriate speed. However, without a proven
design to meet the performance requirements, the Institute cannot accept
a rulemaking process and result that would potentially stop the rail
transportation of chlorine and bring about the associated damage to our
nation\'s health and economy. It is essential that car designs which
meet the requirement of any final rule be available to shippers prior to
any requirement to build to that specification in order to allow for
uninterrupted distribution.

The implementation schedule should be replaced with one developed as
part of a joint industry-government effort. From the inputs received at
the FRA Technical Symposium, it will be at least two years, and as along
as ten years, until a proven design is ready for full-scale manufacture.
An implementation schedule must include time for development testing,
prototype build, service trial, manufacturing changeover, and
manufacturing. A realistic plan needs to be developed which defines both
the period prior to production of the NPRM compliant car and the fleet
changeover period, based on allowing adequate time for the milestones
outlined.

While no design has been demonstrated to meet the requirements of the
proposed rule, the concepts under review are in some respects new and
untried in service. The normal process would be to build a number of
prototype cars and put them in service for some time period to monitor
their performance. A service trial is necessary to assure that new
designs perform well in service and that no unexpected detrimental
consequences occur. No time period for a service trial is provided in
the proposed rule. Safety considerations dictate that a service trial
period be provided.

The rulemaking outlines an accelerated schedule for replacement of cars
manufactured from non-normalized steel. In reviewing both AAR and FRA
sponsored research, the acceleration has not been adequately justified.
This is particularly true since the NPRM proposes that the entire fleet
will be replaced in a relatively short period. While we do not object to
prioritizing removal of these cars in any fleet replacement program, no
evidence has been presented to demonstrate that doing so will materially
impact accident performance, and thus rail transportation safety.

The proposed rule would allow use of cars equipped with prescribed head
and shell protection systems at 286,000 pounds gross rail load without a
special permit. This is a positive step in removing unnecessary
regulatory burden on shippers using the heavier cars. We do remain very
concerned about the impact of light loading that may be required due to
the inability to handle these heavier cars on many lines and at some end
use locations. These infrastructure constraints could result in more
railcars. More railcars could negatively impact the risk reduction
premise of the rule.

Since this is a performance-based rule, a mechanism to monitor
compliance is necessary. We are concerned that those outlined in the
proposal are not defined well enough to assure a timely and efficient
review of proposed designs.

We support the verification options outlined in the proposal that allow
for latitude in the method. However, we are concerned about two elements
proposed in Appendix C. A reference is made to the use of reliable and
conservative procedures in the verification when using analytical
techniques. This requires a more precise definition. No time frame is
given in the rule for an FRA response or decision when compliance
documentation is submitted. In order to support fleet replacement, a
time period and process for review must be defined.

We fully support the operation modifications that are proposed.
According to NTSB reports, both recent chlorine incidents resulted from
railroad operational errors. One of these was in dark territory at
higher speed that would be allowed under these proposed requirements.
The first line of defense in preventing the release of TIH material in a
rail accident in preventing the incident from occurring.

The current DOT 105J500W chlorine cars have survived the overwhelming
majority of accidents to which cars of this design have been subjected.
In fact, the preamble of the proposed rule notes that chlorine has never
been catastrophically released in an incident where the car was moving
at less than 30 miles an hour. We suggest that the fact that chlorine
railcar releases have not occurred in highly populated areas is no
coincidence. It reflects that trains moving through such areas are
normally operated at slower speeds than they are in less densely
populated regions. The proposed operational requirements in dark
territory would almost certainly result in an immediate and dramatic
reduction in risk of release.

The cost benefit analysis included in the regulatory justification is
flawed. Many of the assumptions on car cost both current and for a car
meeting the requirements are significantly below reality. Much of the
analysis uses a 600 pound car as the basis for current, when in fact, a
very small number of cars are built to that specification. Almost all
are 500 pound cars which should be used as the base car in this
analysis.

The analysis assumes that over 80 percent of TIH cars could be
transferred to other services. This is clearly not the case with
chlorine cars which constitute 40 percent of the TIH fleet to which this
regulation would apply. Due to the specialized nature of the cars
currently used in chlorine service, no practical use for the chlorine
car would exist for movement of other commodities.

Many of the assumptions and the basis used

for the cost benefit analysis are flawed. While we understand that this
NPRM is not justified on cost alone, we do think it is important that
industry, government, and the public understand the commitment of
resources that will be required to implement the rule as written.

It is apparent after review of the NPRM and participation in the
DOT-sponsored Technical Symposium on May 7th and 8th, that significantly
more work will be required to develop a design which accomplishes the
intent of the rule.

This effort will require input from government and industry. To a
shipper, that means continued uncertainty. The NPRM provides a shipper
or car purchaser no alternative that will allow them to purchase or
build a car now with any assurance that \-- of acquiring an asset that
will have a reasonable economic life.

The Department should define either an interim car which can be acquired
to meet the transportation needs until the cars envisioned in the rule
are available to the market, or should provide for a grandfathering
schedule. Any interim solution should allow for the purchase or lease of
cars with a reasonably certain economic life while the final design of
the new car is being determined. There is a need for the Department to
take a lead in providing an interim solution in order to assure
uninterrupted availability of tank cars for TIH service.

The Chlorine Institute strongly supports DOT\'s holistic efforts to
continually improve hazardous materials transportation safety through
this rulemaking focused on improved design and operational requirements.
Prior to issuance of a final rule, a validated and tested design must be
finalized. In the interim, DOT must provide a solution for those who
need cars now. The lack of an interim solution has the potential to
cripple some shippers and damage our nation\'s economy.

We thank DOT for allow us to provide input, and ask that these comments
be considered in development of the final rule. We welcome the
opportunity to continue to assist DOT in building on a record of safe
rail transportation of essential chemicals.

I will be happy to take any questions at this time.

MR. SCHOONOVER: I guess I\'ll start. I\'m not going to be bashful.
Frank, you used the term \"reasonably certain economic life.\" I\'m
wondering if you can provide us some idea of what you \-- what you
consider reasonably certain economic life.

MR. REINER: Well, typically, railcars are looked at as having an
economic life of 30 to 35 years. Certainly, that would be, you know, a
certain life. If there were some life identified shorter, a more rapid
period, but something definitive that there is \-- these cars being
built to whatever standard is defined in the interim will be
grandfathered for 30 years, or 20 years, or 25 years, some specific
provision for how long they would be available for service.

MR. SCHOONOVER: Okay. And the other question I had was, you mentioned
that in the Regulatory Impact Analysis, the cost of cars was not
accurately depicted?

MR. REINER: That\'s correct.

MR. SCHOONOVER: Can you give us some ideas on what we\'re looking at
there?

MR. REINER: I think we had provided to the Department some estimates of
actual car cost, and we can certainly provide that again. In the \-- the
numbers used in the analysis were significantly below those costs that
we had provided, which were based on the quotes that were provided to
individual shippers. And really, the cost \-- the cost of a railcar is
not the cost to build that railcar, but what it costs the shipping
community to acquire that railcar. And in some cases, I believe the
numbers in the analysis were even below the \-- what we understand are
the costs to build those railcars.

MR. SCHOONOVER: Okay. Thank you.

MR. HORN: Actually, I have one question related to your comment about
heavier cars. You noted that some of the end user locations can\'t
handle those cars. I was wondering if you could provide some, not
necessarily today, but provide some specification as to how many, where
they\'re located, what exactly impact it is \-- more detail to that.

MR. REINER: Okay. I\'m really not prepared to give a percentage or
locations today, but I \-- we do have some data we had collected
informally, and we can see what we can get to you.

MR. HORN: That\'d be great if you could submit that to the docket.

MR. REINER: Okay.

MR. HORN: Thanks.

MS. FREEMAN: Frank, also in terms of the 286 car, you mentioned you had
some concerns about light loading that might occur because of that.
Would you like to talk a little bit more about that? Is that \-- how big
a problem do you think that would be?

MR. REINER: Well, I think what winds up happening is you wind up having
more cars as a result. Because you have to light load, you have the
heavier car, you can no longer ship 90 tons in the car, so depending,
you know, if there were 30 percent of the locations, for instance, that
could not \-- could not fully be loaded, you\'re light loading 30
percent of your cars by 23,000 pounds or some number near that, you
would certainly have an impact on the number of cars that would be
required for this service.

MS. FREEMAN: Thank you.

MR. HOCHMAN: Frank, would you be willing to take questions from the
floor if anybody has them?

MR. REINER: Certainly.

MR. HOCHMAN: Any questions from the people in the room for Mr. Reiner?

MR. TRISCHE: Randall Trische with Union Tank. Randall Trische,
T-R-I-C-H-E. I don\'t have a question, but some supporting information.
I do believe that we do not only have to consider some of the customers,
their ability to handle the 286, but several of the short lines also, I
believe, will not handle anything above the 263,000 pound car.

MR. REINER: Right.

MR. HOCHMAN: Any other questions or statements regarding Mr. Reiner\'s
presentation? Thank you, Frank.

MR. REINER: Okay. Thank you.

MR. HOCHMAN: Our next presenter will be Julie Bart with PPG.

MS. BART: I\'m not used to sitting and talking. I like to use my hands a
lot, so I think I\'ll stand. I have to wear these goofy reading glasses,
and I\'ll be taking them on and off, so I hope that won\'t bother too
many people.

I\'d like to thank you for the opportunity to speak today. My name is
Julie Bart, B-A-R-T, and I\'m the manager of rail and logistic services
for the chlor-alkali division of PPG Industries.

PPG is a diverse manufacturer of chemicals, protective coatings, glass
and fiberglass. It\'s a multimillion dollar business, multinational
business, with manufacturing facilities and other interests in more than
60 countries, with sales of \$14 billion dollars in 2007, of which,
about \$6.3 billion dollars was generated in the United States.
Approximately 30,000 of the more than 47,000 PPG employees worldwide
work in the United States, where the company operates 50 major
facilities in 23 states. That\'s all the statistics.

I\'m going to talk like this because I want to make sure everybody can
hear me. I have to read. Yeah, the lawyers said I had to read, couldn\'t
make up stuff as I go.

PPG owns or leases more than 2599 railcars and is one of the largest
merchant suppliers of chlor-alkali products in the United States,
chloro-alkali being chlorine and caustic. PPG and the chemical industry
are committed to continuous improvement, especially in the area of
safety, security, environmental performance, through the responsible
care program. This commitment is evident in PPG\'s safety record with
the railroads, having earned 33 safety recognitions from the railroads
in the past eight years.

PPG welcomes the opportunity to provide input to the chlorine tankcar
design enhancements that PHMSA \-- and thanks PHMSA for taking this
collaborative approach. However, PPG sees several significant issues
that need to be addressed as PHMSA moves forward with the rulemaking.

First, any regulation that requires the replacement of the existing car
fleet to an enhanced design needs to have an option for retrofitting the
cars or somehow grandfathering the cars. Many shippers need to build
cars now and in the next few years, before the enhanced design will be
available. Tank car owners need some assurance that the capital they\'re
investing in today will not be wasted.

Secondly, PPG has significant concerns with the timeline proposed in the
rule. Specifically, PPG believes that it is not appropriate to mandate a
two-year design development and testing deadline, just not practical.
Many of the builders have stated that the design \-- that the design of
such a radically changed car and component testing will take much longer
than that. We note that the Dow Union Tank Car Next Gen Project has been
working for more than two years and still has several more years before
even a prototype fleet is available for testing. Also, the proposed
timeline does not include enough time to adequately trial the prototype
car.

Instead of specifying a date, the rule should specify a well thought out
test plan, including a statistically significant test fleet, service
trial, and intermediate inspections. The rule should also have a process
to approve a final design. Rushing a radically new tank car into
service, especially in chlorine service, will end up with adding
significant overall risk and is not in the best interest of the chemical
industry, the railroads, or the public in general.

The proposed replacement timeline concerns PPG in several other regards.
First, the requirement to replace non-normalized steel cars earlier than
normalized steel cars has no practical basis. The performance of
non-normalized cars has not been significantly different than normalized
cars, and therefore does not support an accelerated replacement
schedule. Also, this accelerated change-out provision in the rule would
require PPG to change out 75 percent of its fleet in the first three
years. This huge capital expenditure over such a short period will have
a significant impact on PPG\'s earnings and will put PPG at a
significant disadvantage relative to its competition.

As an alternate, PPG would like to suggest the rule be changed to
require that each owner submit a schedule for replacement that allows
the owner to evenly balance with the builders over the implementation
period, and so that each shipper can reasonably manage their replacement
based on their fleet needs and the builders availability.

Secondly, the timeline requires a complete replacement of the fleet
within six years. This will again cause a significant capital burden for
PPG over the short period of time. PPG believes that this capital
expenditure will be on the order of eight to ten times the normal
capital spending, that\'s assuming that we can spend it equally over the
six year period. And this spending, what it does, is it robs spending
away for us to make plant improvements, safety and environmental
improvements that would have more tangible benefit to PPG. If the
replacement schedule were lengthened to 12 years, the result would be a
more manageable schedule and would increase our railcar capital
expenditures by four to five-X, rather than the \-- per year, rather
than the proposed schedule.

PPG is disappointed that the rulemaking doesn\'t include more rail
operating provisions, such as mandating employing existing technology to
eliminate dark track on TIH routes; positive train control on TIH\'s
trains; or requiring double-shelf couplers in all cars and key trains.
All such as these will have \... to a relatively small hazmat fleet.

Okay. And now I\'ll move on to the Regulatory Impact Analysis. PPG
believes that the Regulatory Impact Analysis was done prematurely. True
manufacturing and maintenance costs cannot be determined until a proven
design is available and until the railcar manufacturers have a chance to
estimate the cost to convert their manufacturing facilities and build
the proven design. Certainly the numbers used in converting the
manufacturing facilities is understated in the analysis.

PPG also takes exception to several of the assumptions used in the
Regulatory Impact Analysis. The assumption that the railcar would be
transferred to another service is less likely than estimated. The
chlorine milk car is a relatively small car, 17,400 gallons, typically.
It has a relatively large tare weight, making it suboptimal for most
applications, and less energy efficient. It does not ship many other
products by rail, and the chlorine cars \-- and this is a significant
fleet for us \-- so the chlorine cars have no other efficient use at
PPG.

And you said, well, you can sell the cars. Well, selling the cars is \--
for more than scrap value is not likely an option because \-- for PPG,
given that the large portion of the fleet is older, non-normalized cars.
They\'re not attractive to anybody. No one wants to buy them. Also,
cleaning, maintenance \-- okay, that\'s it.

Also, cleaning and maintenance and inspection costs used in the analysis
appear to be significantly understated by as much as 100 percent for
chlorine. It might be valid for other products, but in the chlorine
application, they\'re significantly understated. Perhaps the way to
address this in the Regulatory Impact Analysis would be to do some kind
of a product assessment, not sure how you would handle that.

Another concern about the Regulatory Impact Analysis is the base car
that was used was the 600 pound car. PPG feels this is not the correct
basis. The DOT approved rail package for chlorine is the 500 psi car and
should \-- and this car should be used as the basis. The 500 pound car
is the predominant car in use. Using the 500 pound car as a basis, in
the base discussion, and based on what I\'ve talked to the builders,
will cost \-- wait a minute \-- start over.

If you use the 500 car as the base, and the base \-- and based on my
discussions with builders, the cost over the base car would be closer to
\$80,000, and this would have a huge impact on the outcome of the
analysis. So consideration should be given to adjusting the analysis.

Following up on one of the comments that Frank Reiner made, we believe
that the 286 car is going to be a significant burden to our customers in
that their plants have \-- will have significant issues and will have to
adjust to receive a 286 car and that\'s likely to take some time. So
there will be some light loading for a considerable period of time until
our customers can figure out how to replace bridges and track within
their plants. So I think that needs to be considered in the Regulatory
Impact Analysis as well.

In summary, I would like to thank the FRA and PHMSA for holding these
hearings. PPG sincerely hopes that a mutually-agreed upon realistic
solution to improve the safety \-- safety \-- I don\'t even know what I
wrote here \-- hazardous rail transportation can be reached by
implementing a methodical process for continuously evaluating
opportunities to improve rail transportation in a more realistic manner,
and by involving all affected parties in the process, we believe this
can be achieved. I made it through without stumbling too much. Are there
any questions? You can tell I\'m not a professional speaker.

MR. SCHOONOVER: Julie, one question. I just wanted a clarification. The
\$80,000?

MS. BART: Right.

MR. SCHOONOVER: Is the cost of a 600 pound car versus a 500 pound car?

MS. BART: That would be \-- we believe that\'s the amount to get us from
the base car to this proposed standard that was spelled out by Volpe.
That\'s the number \-- the 500 pound car to the proposed standard. And
that\'s a \-- based off of the limited drawings that we saw. And I\'m
\--

PARTICIPANT: (off mike) I\'ll say one thing the base car \...

MS. HENRIKSEN: Sorry, sorry to interrupt. Could you possibly walk up to
the microphone and \-- just so we can get it on the record.

MR. STEELY: This is Kirk Steely with Olin. Just to reiterate. That\'s
exactly the number and in my comments, I\'ll do that, and I was a little
surprised, but that\'s exactly the number we estimate \-- \$80,000 per
car difference between the base, the 105J500W car and the car proposed
in this rulemaking.

MR. HOCHMAN: Thank you.

MS. BART: And if anybody else has any questions from the floor, I\'d be
willing to accept those as well. Just have to get my lawyers to approve
my answers, so \-- that\'s why I had to read my speech.

MR. HORN: Actually, I had the same question that I had for Frank. If you
can provide more detail about who it\'s impacting with the 286, and
provide more detail. The Regulatory Analysis admitted that there\'s
probably be an issue here, but we don\'t know whom and how much, and in
order to assess that in the final rule, we need data from \--

MS. BART: Okay. I can take that on as a task to get you, at least for
PPG\'s current shipping \-- current customers, we would be glad to
provide some feedback. One of the challenges we have when we start
talking about that is if I go to a plant and I say is your plant track
286 compliant, they\'ll look at me like, well, I don\'t know. What do
you mean 286 compliant? And it has to do with the length of the railcar
and wherever the new design\'s going to be for the turning radiuses
within the plants. There\'s just several considerations that have to be
taken into consideration and we don\'t know that, but I think we\'ll try
\-- we\'ll make a stab at it with our customers and get back to you with
what we know.

MR. HORN: Well, if you could highlight whether any of them are
considered small businesses, that would help too.

MS. BART: Oh, that\'s an interesting point. Yes. We certainly will do
that.

MR. HORN: That\'s \-- at least SBA would be concerned, so we need to
take even further notice of that.

MS. BART: Okay.

MR. HORN: But anything you could provide on that area to the docket
would be very advantageous. On the maintenance and inspection costs, if
you could provide detail to that \-- your comment on that, that would be
greatly helpful too.

MS. BART: Okay. I can certainly do that. I think that we see \-- we see
a lot of external corrosion on a chlorine milk car that you might not
see in the general fleet, and so that raises the maintenance cost. It\'s
hard on paint, it\'s hard on \-- it\'s hard on a lot of things, and so
while those cars might \-- the cost you stated in there might be true
for the average car, it\'s \-- I don\'t believe it to be true for the
chlorine car.

MR. HORN: Given the product that would be logical.

MS. BART: Yes, and so I can see why you did the analysis, if you do it
like for all TIH cars it might make sense, but for the subfleet of
chlorine, there\'s a particular issue there. Any other questions?

MR. HOCHMAN: Thank you, Julie. Any other \-- any questions from the
audience? No.

MS. BART: Good.

MR. HOCHMAN: Our next presenter will be Howard Kaplan from U.S.
Magnesium.

MR. KAPLAN: Good morning. We appreciate the opportunity to testify here
today on the issue of railroad safety and tankcar transportation for
hazardous materials, in particular, chlorine. My name is Howard Kaplan.
I am Vice-President of Chemicals and Byproducts for U.S. Magnesium, LLC,
located in Salt Lake City, Utah.

We\'d like to address the many issues surrounding the safety of railcar
transportation as raised in the NPRM. First, though, I would like to
give you a little background about U.S. Magnesium. Safe production and
shipment of chlorine is critical to the employees and customers of U.S.
Magnesium, and safe transportation is required for the safety of the
public. We applaud the efforts of the DOT and the FRA to continue to
improve the safety of chlorine shipments.

U.S. Magnesium is the only surviving magnesium metal producer in North
America. It\'s located in Rally, Utah, on the shores of the Great Salt
Lake, which provides the feed stock for our process, and we employ
almost 500 people. Currently we produce about 55,000 tons a year of
magnesium, and similar quantities of chlorine as a co-product.

Magnesium is critical to aluminum alloy, for all aluminum sheets, cans,
truck bodies, aircraft skins, and many aluminum castings as well. It\'s
used in the automotive industry to reduce weight and fuel consumption.
It\'s irreplaceable in producing titanium, zirconium, beryllium, and
geranium for aircraft, nuclear and chemical uses, and it\'s also
important in military applications, such as fuels, explosives, and
flares. It is thus very critical for a growing United States economy,
provides a number of environmental benefits, and is important in
national defense as well.

The benefits of chlorine to the economy and to the national health and
well being are well known, and they\'re well documented in the NPRM and
have been discussed already by Frank Reiner in the testimony of the
Chlorine Institute. However, it must be noted that without the
production, sale, and transport by rail of chlorine from our Rally
plant, it is highly doubtful that U.S. Magnesium would continue to
survive.

Our predecessors developed an entirely new process that allowed chlorine
to be extracted from magnesium chloride and captured for sale as a
co-product of magnesium. Previously, it had been vented to the air
pursuant to Clean Air Acts. That venting was wasteful, uneconomic, and
not very environmentally beneficial. In 1989 U.S. Magnesium admitted
approximately 55,000 tons of chlorine into the air and by 2006, that
number has been reduced to essentially zero. Thus, the inability to ship
chlorine from our plant could possibly result in the closure of the
plant and the elimination of the only North American supply of
magnesium.

Since end user markets for products such as bleach and water treatment
chemicals are so distant from our plant, and because bleach can only be
shipped relatively short distances in the high temperatures of the west,
economics preclude the production of most of these products at our plant
in favor of safe shipment of chlorine to remote locations.

Let\'s talk now about the items in the NPRM, first of all with respect
to the safety in shipment. Recognizing the need for significant
improvements in railcar safety, U.S. Magnesium became a member of the
New Generation Railcar Coordination Panel in 2006, along with Dow, Oxy,
Bear and the Chlorine Institute, with the objective of promoting the
development of a significantly improved, safer railcar.

As you know, the panel is working on an order of magnitude improvement
in fair resistance versus other proposed railcar designs of that time
that had only small improvements in impact resistance. We anticipate
helping to enfold that panel\'s work into the FRA\'s proposed new
rulemaking to achieve these substantial improvements for the industry.
However, there are many issues involved, including the timing, the
standards of improvement, and commercial and financial issues that must
be addressed and dealt with in a practical and scientific manner.

The uncertainties in the ability to achieve the proposed levels of
improvement in the NPRM and the timing of when cars can be
service-tested and proven and finally be built, has the potential to
cripple an industry that needs cars to continue to run our business and
to serve the customers and the public.

Industry must have cars to deliver product during the interim period.
Currently, no one will lease new chlorine cars under any circumstances,
and any new car purchase is fraught with uncertainty as to lifetime and
ultimate cost. Concerns about the NPRM car design and liability have
caused some lessors to exit the chlorine leasing business entirely,
further exacerbating the problem.

Let me comment, then, on the standards and the level of the standards
proposed. We believe these levels of impact resistance must be based on
sound science and realistic levels. Preliminary results of the Next
Generation \... efforts and Volpe efforts, seem to indicate that the 25
mile per hour puncture resistance under the current testing regime may
be practical and achievable. However, significant additional testing
must be done to prove this level. Prototypes must then be made,
construction methods and designs have to be finalized, and construction
of cars and service performance must be judged before a design can be
finalized and a car maker or car makers can begin conversion of their
production and before negotiations can begin on pricing and delivery of
cars.

Similar issues exist if the cars can be retrofitted rather than being
built brand new. Realistically, we believe this effort will likely take
as much as three, perhaps as many as ten years to be achieved for 25
miles per hour.

On the other hand, the 30 mile per hour standard proposed for the heads
of the new cars does not seem to be achievable with current technology
being investigated. The justification for this higher level requirement
is unclear to me, and we\'re not sure that it can be justified as well.
In any case, it is unlikely that this standard can be achieved with the
current technology being studied, and significantly longer time may be
required to meet this standard and to complete service testing and
qualifications for the head requirements.

With regard to the timing. We believe the timeline for the remainder of
the development of satisfactory designs must be planned out much more
realistically, taking into account these issues. Prototypes have to be
developed, pilot cars have to be produced, and there must be a service
trial involved. This is a major program, replacement of some 15,000
railcars nationwide. It should only be done after major testing of
service experiences. No changes to existing fleets should be required
before the development is complete, and the NPRM must have time when it
begins only when commercially available, fully tested cars can be
produced.

We are certain that car manufacturers will have more comments on this
issue, but a two year period for the finalization of the design and
production is unrealistic and certainly unachievable.

We do encourage the recent discussions on proposals for an interim car
standard to meet the immediate commercial needs of the industry. But
there must be some leeway on the useful life span, for example, some
kind of grandfathering, that must be allowed to avoid a commercial
disaster on new car purchases, and more than one car design must be
allowed as well.

With regard to non-normalized steel cars. Based on the FRA\'s sponsored
research that we\'re familiar with, we do not believe that early
replacement of non-normalized steel cars is justified, as those cars
show similar puncture resistance to normalized steel cars. As all of the
cars will, eventually, be replaced on an expedited basis, this
requirement seems unjustified. The almost 3600 non-normalized cars
estimated by FRA in the NPRM will be very difficult to replace on such a
tight timetable.

With regard to the thermal protection systems. The NPRM specifies
different thermal protection for new cars versus older ones via
performance spec, as compared to a design spec. We believe that the
performance spec should be extended to the older cars as well, which
might be retrofitted.

On the timing of production of new cars. Again, the car manufacturers
ultimately must be the ones to comment on the timeframe for replacement,
as they are the builders. Again, however, we do not believe that a six
year timeframe is realistic, or achievable, even after the design is
finalized. And of course, that replacement period must not start until
the final designs are completed and become fully service-tested and
commercially available, and the manufacturers have completed their
retooling. The order of magnitude of production of these cars could
require some equipment that could take quite long delivery periods, so
the retooling is not a simple issue.

On the 286,000 pound limit. Obviously, new cars will certainly weigh
more than existing cars. It is very critical to the industry to insure
that cars can continue to carry a full 90-ton payload in order to
minimize the number of cars shipped, and it\'s imperative that the
railroads be required to upgrade their infrastructure to insure that
they can carry the full 286,000 pound weight. Light loading of cars
increases the number of cars required, which increases the safety risk
as more cars have to be shipped. We fully support this as part of the
NPRM.

I might point out that as I testified a few weeks ago at the STB, we
have some twelve miles of local spur that services not only our plant
but also other customers on this UP line that is not capable of 286, and
the railroad has been absolutely unwilling to upgrade the track. They
insist that we do it on our own cost, despite the fact that the AAR is
mandating the heavier weighted cars as part of their interchange ruling,
which makes it seem highly likely that railroad should also comply and
do their part in that effort.

Let me talk a bit on the commercial implications of the timeframe on our
company\'s fleet management, procurement of railroad cars, and I will
talk a little bit about some of the NPRM issues on railroad operational
limits.

Again, as we\'ve noted, we fully support the improvement of railcar
safety in the transportation of chlorine and other TIH commodities.
However, practical business necessity requires that we maintain
sufficient cars throughout the coming years to operate our business.
Thus, the timeframes for development and then conversion must be kept
achievable.

It also must be recognized that there will be competition among chlorine
producers for the new cars, and that a smaller producer like U.S.
Magnesium \-- we produce only about two percent of the chlorine in the
United States \-- may find itself commercially disadvantaged by larger
producers, and we may be unable to buy or lease cars in a timely manner
as required by the NPRM, particularly because of the larger purchasing
power of some bigger producers.

Some producers, like U.S. Magnesium, both own and lease cars, and the
replacement of leased cars might not be under our control, which further
complicates this issue. The uncertainty of the timing, and the recent
AAR attempts to limit new car purchases after May 1st, also complicates
the issue, and companies like U.S. Magnesium may have to buy cars in the
next couple of years before the design becomes finalized and the
ultimate new cars become available.

Therefore, individual consideration must be given to each company to
give replacement schedules based on fleet makeup, types of cars and age,
quantities of cars available for purchase or lease, and delivery
schedules, et cetera. The arbitrary requirement to replace half the
fleet by 50 percent of the time and replacing all of the non-normalized
steel cars early as well, may not prove possible to all chlorine
producers. There will also be car competition as well from the other TIH
car purchasers.

Now we have not yet commented on the speed and safety requirements for
the railroad. We commend the FRA for including these requirements in the
NPRM. We support all efforts to support safety via these parts of the
NPRM since we cannot control the safety of a railcar when it is not in
our possession. The root cause of the recent incidents as discussed in
the NPRM have been reported to be railroad operational errors as
reported by the NTSB, not specifically related to container issues or
issues of speed.

USM and its customers, and the public, depend upon the continued safe
operation by the railroads and encourage their comments on the NPRM. The
first line of defense against leakage in transport, however, is to
eliminate the incidents which are the railroad\'s responsibility.

We do wish, however, to point out that regulations reducing speed and
affecting routes and other issues may increase the time of transport of
our chlorine. This effectively increases the number of rail cars we need
to do our business, and this should also be taken into account when
considering timetables and procedures for replacements of rail cars and
in dealing with specific shippers\' requirements.

With respect to comments on the financial analysis. As you heard before,
the industry certainly feels that the analysis is flawed in a number of
manners. We don\'t wish to justify the conversion to new cars and the
safety improvements on the basis of cost, but as Frank mentioned, we do
believe that the public and government, all parties involved, should be
aware of the real cost.

All of the railcars in the industry\'s chlorine fleet will have to be
replaced or retrofitted as part of this NPRM. The limited number of
600-pound cars and as part of the AAR interchange specification cars
that are currently in operation, most likely cannot be retrofitted
because of excessive weight. Industry never intended to convert to these
cars as the solution for ultimate impact resistance. If all new cars are
required, they could easily cost as much as \$200,000 each, based on
current costs that we see out there for the cars in production and
adding in all the crash resistance materials. For the estimated 6000
cars in the U.S. chlorine service, this could lead to a total cost of as
much as \$1.2 billion dollars, for just the chlorine industry, not the
\$350 million dollar cost estimated in the NPRM for all TIH railcars.
Retrofitting of some existing cars is possible, but not certain.
Therefore, the Regulatory Impact should consider total replacement of
existing cars as the basis, and it should not be based on the
non-retrofittable Trinity car, which is an expensive and has only a
temporary only small incremental improvement over existing cars.

We strongly implore the DOT and the FRA to validate its sovereigncy over
railcar designs and to work with the AAR to force them to vacate their
interchange ruling which further complicates the railcar situation to no
significant advantage to the public safety.

We also believe that existing TIH cars will be more expensive to convert
to other service and in the financial analysis early retirement of
existing cars \... lives is a further significant cost of the rulemaking
conversion as well. Short term purchases of very limited lifetime
intermediate cars can also add to the cost significantly. Maintenance
costs of the new cars, inspections, et cetera, will also be
significantly higher than estimated in the NPRM.

In summary then, without the safe rail transportation of chlorine, U.S.
Magnesium would quite possibly go out of business and the vital chlorine
supplies to western United States producers and repackagers,
municipalities for water purification, and for production of wastewater
treatment chemicals and a variety of other end uses would not be
available.

The uncertainty in the regulations in designs, and predicted higher
costs for temporary cars to keep our fleet in operation has already led
to us having to reconsider expansion plans and maintenance plans due to
the higher capital cost, and could contribute to the failure of our
company and the loss of the only magnesium producer in the United States
in the next couple years as a result of these regulations.

We support the FRA\'s efforts to maximize safety in chlorine
transportation and we look forward to working together with all parties
to achieve optimum safety and cost efficiency in the handling of this
vital material.

I\'ll submit these comments to the website for your reference and will
also put in some background articles on our company for your reference.
In the meantime, we\'re happy to answer any questions on these issues.
Thank you again for your time and your consideration of our comments.

MR. MARTINEZ: I\'m going to take Jeff\'s questions. I have several
questions associated specific to your company. Can you provide the fleet
size that you currently have for the transport of chlorine?

MR. KAPLAN: I\'d like to get it under some confidence, but yes, I can do
that.

MR. MARTINEZ: Can you also provide an estimate for what percentage of
that fleet would be transferring the chlorine over dark territory or
signal territory? You can do that in confidence as well, I suppose, but
\--

MR. KAPLAN: I have very little prospect of being able to do that without
the help of the railroad, but I can ask. We\'re currently working with
the UP who\'s our sole supplier \-- we\'re captured to them. We\'ve
asked them to go through and analyze for each of our shipment routes
whether they are fully 286,000 pound capable, and they\'re working on
that. It\'s going to take a little bit of time. We do expect to have our
track upgraded by fall so it will handle the 286,000 pound cars. But
I\'ll have to ask them about that as well because that\'s just something
I\'m not privy to.

MR. MARTINEZ: And the last question that I have is what percentage of
your fleet is non-normalized versus normalized?

MR. KAPLAN: It\'s around 20 to 25 percent I would say that\'s
non-normalized at this point. The biggest problem for us, though, is
that some of the producers fully own their fleets, others of the
producers are like us, they lease a large portion of our fleets. In
fact, we have, until recently, only been a lessor of cars. We are having
to get into the purchasing business because of the uncertainties over
the regulations in order to make sure we have enough cars around. And
the capital cost has a severe detriment to our ongoing capital programs
and to future expansion programs.

MR. MARTINEZ: Thank you.

MR. HOCHMAN: Any other questions for Mr. Kaplan?

MR. HORN: I have one.

MR. HOCHMAN: Sorry, Jeff.

MR. HORN: Yes, you noted the 12 mile spur. I assume that indirectly
you\'ve just insinuated it was UP that wouldn\'t upgrade that and that
\--

MR. KAPLAN: Actually we\'re paying \-- we are going to be sharing the
cost with another consumer located next to us for doing that upgrade.
And it might also upgrade the local railyard, which is kind of ironic as
well.

MR. HORN: Okay. You also noted \-- it\'s basically quasi-unrelated, but
you\'re the only magnesium producer. Is it extremely competitive market
for magnesium from the international market that\'s also driving your
concern?

MR. KAPLAN: The reason that we are the only one left is because of the
international competition that\'s come out of particularly China in the
last ten years, which has forced most of the other producers out of
business. We are fortunate that our process is unique and that we are a
net producer and seller of chlorine as a coproduct. Most of the other
plants were actually consumers of chlorine in their process, and so we
get a significant benefit from the chlorine which unfortunately is being
eroded because of transportation issues and railcar issues. But we are
fortunate in that respect. That\'s helped us survive. Also growing our
plant to higher volumes has helped us survive, and as I said, the
incremental capital cost for all of these railcars does place some of
our long term capital plans for expansion in jeopardy, which does reduce
our competitiveness.

MR. HORN: Thank you.

MR. SCHOONOVER: The only question I had was on \-- was is U.S. Magnesium
considered a small business?

MR. KAPLAN: We employ almost 500 people. Revenues are fairly
significant. It\'s in the \$100 to two million dollar a year range,
depending upon the market, so I don\'t think we would qualify on that
basis. We also are part of a larger conglomerate company, but we are a
stand-alone business. So if those qualify as a small business, yes,
otherwise not. I don\'t think that they do.

I should point out though, that most of our customers probably do. You
know, bleach customers are typically smaller, less than 100 employees,
and much lower revenues and that kind of thing.

MR. HOCHMAN: Does anybody have any questions for Mr. Kaplan?

MR. FRONCZAK: Bob Fronczak, F-R-O-N-C-Z-A-K with the Association of
American Railroads. Not a question, just a comment. The AAR standard
doesn\'t require 286. In order to get a full 90 ton load of chlorine,
you\'re going to have to go above 263 though.

MR. HORN: I\'ve got one more question for you. You actually are
applauding the operational restrictions. Is there anything in particular
about them you like, or anything you\'d encourage further or revised,
based on the NPRM\'s proposals?

MR. KAPLAN: I don\'t really have anything particular to add on that
particular thing. We were hoping that at the end of the day we\'re not
going to end up with a situation where what used to be a two-week coring
trip to a customer turns into a four week coring trip, because that will
significantly affect our situation and railcars required. But other than
that, I mean, obviously, as you review the incidents, they have been
caused by operational issues and those need to be eliminated and we
support the reduction in speed in signal territory as an interim basis,
you know, we think that\'s justified.

MR. HORN: Thank you.

MS. FREEMAN: I just have a question for yourself or one of the two other
speakers. I\'m just trying to clarify in my own mind about the 286. I
thought that going to 286 as proposed would allow for the same size load
but the increased weight would be to offset the new performance
requirements, but the load would be approximately the same. So could you
just \-- one of you just clarify for me how much lighter are we talking?
If the 286 is a heavier car, how much lighter load are you talking about
having?

MR. KAPLAN: the current situation for most railcars in the U.S. fleet is
that the gross shipping weight is on the order of 263, in some cases,
268,000 pounds for a 90-ton load on the existing railcars. The exception
to that is the Trinity railcar, which is denoted by name in the AAR
standard, which has a fully loaded 90-ton weight of 286,000 pounds.
Anything that you do to the rest of the railcars, the 500 pound railcar
to improve the crash resistance is certainly going to add weight. For
example, as you add head shields and as you add more insulation, it\'s
going to add weight, and it\'s going to bring it somewhere nearer to
that 286,000 pound limit.

In the absence of a final design, I don\'t think anybody can say whether
it will \-- if you make all the modifications whether you will still be
able to load 90 tons in it and meet the 286,000 pound limit or not,
since we don\'t have a final design, and therefore don\'t know what it
will weigh. But the Trinity car would certainly not meet these NPRM
regulations, is already at 286 with 90 tons, so there\'s no way you\'re
going to be able to add any crash resistance to that by modifying the
shell, et cetera, and have it still carry the 90-ton load.

Right now, if you do not have the track that\'s 286,000 pounds compliant
\-- we\'re shipping those railcars at ten tons less than maximum, so you
use ten percent more cars. But that\'s a very small part \-- I don\'t
know if anybody has any numbers \-- I don\'t know how many of those cars
are actually out there in the 6000 car fleet.

MS. FREEMAN: Thank you.

MR. HOCHMAN: Any other questions for Mr. Kaplan? If not, I suggest we
take a 15 minute break because I\'m getting antsy.

(Whereupon, a 15 minute recess off the record was taken.)

MR. HOCHMAN: If everybody could take their seat, I\'d like to start the
meeting again, please.

Our next presenter will be Neil Ackerman from OxyChem.

MR. ACKERMAN: Good morning. My name is Neil Ackerman. I\'m the Director
of Supply Chain for OxyChem. Spelled A-C-K-E-R-M-A-N.

OxyChem is a leading North American manufacturer of basic chemicals and
vinyl resins. Our various business units ship approximately 70,000
railcars per year, of which 45,000 of these are hazardous materials,
made up of 10,000 chlorine railcar shipments per year.

Safe and reliable transportation of our products is critical for the
success of our company, and essential if we\'re going to meet the needs
of our customers and the public.

OxyChem has a long-standing commitment to the protection of our
employees, the community, and our environment, and we strive to
continuously improve in all of these areas. Through our participation in
the Next Generation Rail Tankcar Project, our company has made a public
commitment to replace our existing chlorine tankcar fleet with a tankcar
that has a targeted design objective of five-to-ten-fold improvement in
safety and security performance over the existing design.

We are supportive of the DOT\'s efforts to continually improve the
safety of our nation\'s rail transportation system and share DOT\'s goal
and commitment to reduce the potential risk of chemical rail
transportation issues. Clearly, we recognize DOT\'s authority and
responsibility to establish mandatory standards for the design of
hazardous materials railcars and ensure these are handled safely by the
rail carrier industry.

We welcome the opportunity to comment on the proposed rule in order to
assure the final rule meets our common goals of continued safe shipment
of chlorine and other essential chemicals. Our comments are based on the
following beliefs: that real and significant improvements in rail
shipment safety are achievable; a holistic approach is essential to
maximize these improvements; and improvements in railcar design must be
augmented with operational improvements or restrictions.

Technologies exist that can be used or adapted to make dramatic
improvements in the crash survivability of railcars. Changes in
technology utilization and operating practices can significantly reduce
the frequency and severity of rail accidents and derailments. And
lastly, any changes to mechanical designs, standards, practices, or
properties, must be properly evaluated, and very importantly, tested, to
ensure that new risks are not being introduced and the desired outcomes
be achieved.

Regarding a few of the specific topics. On the puncture resistance
performance standard. OxyChem is a strong supporter of a performance
standard for tankcars that is centered on puncture resistance as we feel
that improvements in this area will directly correlate to accident
survivability. We also believe that this performance standard should
include a standardized test method for comparing the relative puncture
performance of different tankcar designs. There is a need for repeatable
test results that can be reasonably predicted using modeling, to provide
some confidence that a paper design will produce a final product \-- a
suitable final product once it is built and tested.

While the Next Generation Tankcar Project is aggressively pursuing an
appropriate design, as well as many other activities that are underway,
the implementation timing remains unknown. We are concerned that certain
elements contained in the proposed rule could introduce levels of design
complication that had not been previously anticipated with the Next
Generation Project, and which could certainly impact the implementation
schedule. This would be especially true in cases where car designs
involve radically different and untested concepts and/or technologies.

We would consider the Volpe concept car, to the extent we understand it,
to be one example of a design that might require more time to fully
evaluate than the proposed rule is providing for. OxyChem firmly
believes that testing of new designs is essential to the process and
that testing protocols must be included in the final rule.

In addition to the impact survivability testing, we strongly believe
that the service trial testing of any new railcar design is critical,
particularly where designs that differ substantially from existing rail
equipment design are contemplated. There must be a process to ensure
that in addition to improved puncture resistance, such new designs can
be reasonably expected to survive the day-in, day-out stresses that
railcars endure. It would not be acceptable to improve the design of a
car for better accident survivability while potentially containing
failure mechanisms related to stresses endured in normal day-in, day-out
service.

Regarding operational requirements. OxyChem was disappointed by the lack
of requirements for operational improvements and restrictions on the
rail carriers under the proposed rule. We believe that such requirements
are necessary in order to reduce the likelihood of PIH cars being
involved railroad accidents. While the preamble references various
operational considerations and reviews DOT is currently undertaking, the
proposed rule contains only one temporary operating restriction related
to train speed over dark track, and one permanent change that is an
extension of what already exists in Circular OT-55.

OxyChem is surprised that additional operational issues were not more
seriously addressed, despite the fact that the NTSB directly attributed
both recent incidents involving the breach of chlorine railcar to
railroad operational issues and breakdowns.

While speed in the presence of signal versus dark track are clearly
elements that can impact the likelihood and severity in an accident,
there are other factors that we need to consider. Would suggest these
considerations would be factors such as traffic density and
bidirectional traffic, number of switches off of a main line, and the
frequency of such switches, population densities, positive train
control, and the placement of PIH cars at the back of the train as
previously recommended by the NTSB.

We know of one class, one railroad, that has been granted a special
permit to operate outside the requirements in order to better manage
their PIH movements over non-signal track. While the special permit
provides for train speeds of 35 miles per hour versus the interim
standard of 30 miles per hour, it includes a number of other operational
requirements that are obviously intended to reduce the chances of an
accident involving PIH cars. These other types of operational
improvements and restrictions should be considered in addition to the
speed restrictions alone.

The proposed rule appears to be relying on a car design and modeling
results that shows typical car closing speeds and rerailments as
approximately half of the initial train speed as its foundation for
making significant impact on PIH rail transportation safety. OxyChem
believes that inclusion of the aforementioned operating practices would
make significant further improvements and that they need to be
considered in this rulemaking.

Regarding the Regulatory Impact Analysis, as mentioned by the previous
speakers, we believe the cost benefit analysis greatly underestimates
the overall economic impact and resources required. First, many of the
base cost assumptions, whether they be engineering hours required for
car design, incremental costs for adding the enhanced crash worthiness
upgrades, the number of PIH cars that can be moved to another service,
and the associated cost with doing this, do not adequately reflect the
real world impacts of implementing the rule.

Secondly, in analyzing the cost impact of the new car design, DOT has
used a base case that assumes implementation of the AAR casualty
prevention circulars that require upgrade of chlorine and ammonia cars.
This was done despite the fact that there was no industry consensus
regarding the changes. The assumptions used in the cost benefit analysis
contained in the Regulatory Impact Analysis could be used to show that
AAR was imposing unreasonable requirements around the cost benefit test.
And DOT is on record as stating that the process that led up to the
adoption of the circular was flawed. They\'re not consistent with the
consensus process that\'s used through the AAR tankcar committee.

While OxyChem understands that this proposed rule might not be justified
alone on cost, we do feel that the cost should be adequately
represented.

Regarding the thermal protection systems, I believe this was mentioned a
couple times earlier, but the wording in the proposed section
173.314(k)(1) could be interpreted to prevent cars built prior to the
rule from not being retrofitted to meet the puncture resistance
requirements. We did not see this prohibition in the preamble and doubt
this was intentional, but we feel that the thermal protection
specifications should be applicable to all cars.

And regarding the 286,000 which there\'s already been much discussion
around, once again I\'ll just reiterate that our concern there is
similar to what others mentioned, the potential for light loading, the
potential for additional cars, and as of yet, at least from our
perspective, the unknown impact on the infrastructure with shortline
railroads, our customers, and I realize there\'s already been a request
out to get that data. We\'ll certainly try to help with that, but the
same concerns there on what the overall impact of that would be.

OxyChem appreciates the opportunity to offer comments today, and we will
continue to work cooperatively with the DOT and others on a common goal
to reducing potential risk of PIH shipments by rail.

MR. HOCHMAN: I have a question for clarification. You talked about the
need for the rule to have standard test protocols. I would encourage you
and others in their written comments to the docket to make suggestions
on what those test protocols should be.

MR. ACKERMAN: Okay. We\'ll be happy to do so.

MR. HOCHMAN: Thank you. Lucinda? Jeff?

MR. HORN: Well, of course I have a question. Based on your comments
about operational restrictions, I appreciate the fact that you provided
a little bit more detail to it, but could you submit to the docket a
little bit more detail than you provided today as to some of those
suggestions and how they might be implemented? Just put a little bit
more flesh on that meat so we can consider it more fully after the
comment period?

MR. ACKERMAN: Okay. We will be happy to.

MR. HORN: And just as a point of note, I have four commentors note that
the light loading issue and the flawed analysis, I would note that that
flawed analysis actually took that increase in car into consideration in
the process of assessing the cost.

MR. MARTINEZ: And I would just reiterate the same type of questions that
I had previously. Could you give us a sense what the size of your fleet
is, what the breakdown of the age of your fleet is, how many
non-normalized cars do you still have, what percentage of the fleet
operates in dark territory in your estimate \-- those sorts of
questions.

MR. ACKERMAN: Okay.

MR. MARTINEZ: That\'s a blanket question to the industry.

MR. ACKERMAN: Yeah, we\'ll certainly need assistance from the railroads
in assembling that information.

MR. MARTINEZ: I guess additionally, do you own most of your cars or do
you lease most of your cars? Do you have a breakdown of that as well?

MR. ACKERMAN: We can provide you that.

MR. MARTINEZ: Okay.

MR. HOCHMAN: Are there any questions for Mr. Ackerman? Get off easy.

MR. ACKERMAN: Thank you.

MR. HOCHMAN: Our next presenter is Kirk Steely from Olin Corporation.

MR. STEELY: My name is Kirk, that\'s K-I-R-K, Steely, S-T-E-E-L-Y. I
appreciate the opportunity to come today before PHMSA and the FRA, and
the DOT to make comments on this NPRM. I\'m the Director of Logistics
for Olin Chlor-alkali Products Division, which is one of the largest
shippers of chlorine by rail in North America today. We have been safely
manufacturing chlorine in the United States for over 100 years, and
safely shipping it for over 80.

Now I should say that I wasn\'t around when we first started shipping
chlorine by rail, but there\'s a picture in our division of a rail car,
an Olin rail car, newly built in 1925. So chlorine has been shipped by
rail certainly since 1925, and Olin has done that since that time.

We have always subscribed to the philosophy, and continue to do so
today, that when it comes to distribution safety and the non-accidental
releases of hazardous chemicals, the goal is, and can only be, zero. In
fact, we live by the goal of zero philosophy. We also believe that the
rail shipment of chlorine and other PIH chemicals is without a doubt,
one of the safest methods of transportation in North America. However,
recent tragic incidents have brought about the AAR\'s tankcar circular
1187, and now this DOT proposed rulemaking on PIH tankcar performance
standards.

Olin supports the FRA\'s improved tankcar concept, since it is
consistent with our goal of zero incidents in the distribution of our
products. But let us not forget for a moment that the sole reason we are
gathered here today is because of railroad-caused derailments of PIH
cars that have tragically resulted in recent fatalities.

The issue at hand is not the non-accidental release of PIH materials,
but the release of materials due entirely to conditions within the
control of the railroads. And as others have said, we\'re a little bit
disappointed in this rulemaking and understand that the concept here is
a new design of a railcar. So to simply put this, the purpose of this
rulemaking is to make PIH cars more railroad-proof.

It is frustrating to us that the shippers must bear virtually the entire
cost increase required under this proposed rulemaking. And this is on
top of the so-called risk premium that railroads are passing on to PIH
shippers, a premium that has resulted in nearly tripling of rates on PIH
chemicals since 2005.

As a shipper, we feel that we have a major stake in this issue and feel
obligated to comment today so at least our views are expressed and
captured on the record. We are not prepared to discuss the technical
merits of the new railcar design today, particularly. Olin is not a
railcar design company, but rather we\'re a manufacturer and shipper of
chlorine.

We do reiterate strongly the fact that we do support this initiative and
the objectives listed within this NPRM, but we have serious concerns
regarding the cost and availability of railcars in the next three to
five years. Some of these comments have been made by others, and some of
this will be duplicative.

Again, we must recognize that virtually all costs in this proposed rule
are being borne by the shippers. In the FRA\'s own rules in the NPRM,
DOT believes that the impact from this increase cost in the tank cars
would be substantially passed from the manufacturer to the tankcar
owners, and when it comes to the increased fuel costs of the heavier
car, initially this is a cost that will be born by the railroads,
however, the railroads would likely pass much of this cost on to PIH
material shippers through higher shipping rates. I\'m not sure what the
DOT means when they say substantially and likely, but as a shipper, I
know exactly what that means.

To us, it is very unclear as to the basis of the FRA\'s economic
evaluation because that certain doesn\'t much match our economics, and
many have commented on that. But first let me take a minor exception to
a small but key comment by the FRA where it was stated in the economics
section that the AAR and shippers have active plans to make major
changes in tankcar fleet that moves PIH commodities. The implication
being that all shippers were in the process of replacing the entirety of
their fleet. Other than the AAR unilateral action in Circular 1187, and
the Next Generation Tankcar Project, we know of no other shippers who
have active plans to replace their fleet within the next eight to ten
years. Olin certainly did not. So baselining the economics with the
assumption that shippers were planning to replace the entirety of their
fleets is simply not a factual statement.

Also, as I\'ve said before, freight rates have approximately tripled
since 2005 for PIH materials shipped by rail as the railroads pass along
these freight costs. On a conservative basis, this will cost the
shipping community an additional \$1.9 billion dollars over the eight
year implementation timing in this NPRM, at a period when, in the FRA\'s
own words, rates may flatten out.

Also to replace a current fleet of PIH railcars of over 15,000 cars, we
estimate that would conservatively cost the shippers around \$1.2
billion dollars, a number that Mr. Kaplan also mentioned, over the next
eight years. And that\'s based on the estimated incremental cost over
the existing railcar design of approximately \$80,000 per car. And
again, that\'s the incremental cost, that\'s not taking the full cost of
implementation, which from a capital asset point of view would be
required, but we\'re talking about an excess of a billion dollars on an
incremental basis.

Also, which has not been brought up, the economics or that we can see,
no consideration in the economics has been given for railcar lease
contracts or depreciation of railcar assets that extend beyond the
implementation horizon. I\'m not sure about other shippers in this room,
but Olin has railcar leases that don\'t expire until beyond 2020. We
could find ourselves with leases on railcars that we\'re obligated to
pay, with no ability to use those cars. So in essence, the shipping
community potentially could be paying over three billion dollars extra
over the next eight years to solve an issue that we didn\'t create, plus
potentially, we could be paying for railcars that we cannot use.

Now these comments are not intended to imply that Olin does not support
this activity, and clearly it\'s been stated this is not an economic
decision alone. We certainly support all the efforts to make railroads
and rail transportation safer, however, we must ensure that the
economics that are presented in the NPRM are presented fairly and
correctly.

It has been brought up a couple of times, and we must also as we look
forward, have some reasonable flexibility to manage our rail fleet in a
time of continuing uncertainty. Today, as Mr. Kaplan had stated, there
is not a single railcar builder who will lease new cars to shippers.
However, we continue to have railcar leases expire for which owners are
unwilling to renew. Railcars that are reaching the end of their useful
life, either mechanically or economically, and railcars that continue to
be destroyed by the railroads \-- in fact, this year, Olin alone has had
seven railcars that have been scrapped due to railcar incidents.

I suppose we could simply buy all the railcars that we need, since
people won\'t lease them to us, but with an eight year useful life as
stated in the NPRM, that\'s not particularly good economics, and the
capital constraints are enormous. But even that assumes that there is
some interim design that all parties can agree upon that could be built
and could be used in commerce. And today, that\'s a question that I\'m
not sure anybody in this room can answer as to what would be available.
We have not been able to obtain leases on new cars in over two years, as
the AAR circulars began to come out, and we currently have no clear
indication on when we might get new chlorine cars of any design.

Given the uncertainties surrounding the technical objectives of this
proposed rulemaking and the uncertainty as to when or even if a new car
will be available in the relatively near future, we offer the following
comments to the FRA for consideration in their final rule.

We believe the FRA should limit the accelerated transition to just the
cars manufactured from non-normalized steel. Many people have argued the
technical merits of this and I\'m not prepared to do that, but we do
support an accelerated timing for this, provided that there is a new
design that is ready for production in time to meet whatever timetable
is decided upon, or an interim transition design can be determined.

Until the new railcar design is proposed in the NPRM and is ready for
production, in order to meet the transition needs of the shippers \--
and this is really, I think, a critical issue, is this transition rail
car \-- we propose that the FRA allow the building of 105J500W railcars
for chlorine service with the known improvements, such as full head
shields and potentially with a slightly thicker jacket, but with a 25
year service life. This build would be with FRA approval, taking into
consideration lease expirations, fleet needs, and scrap replacements,
and the assurance that the shipper has exhausted all reasonable means to
find other replacement cars rather than build new cars.

Basically a 25 year service life is required as a minimum, to convince
tankcar manufacturers to build and lease cars to meet the immediate
transition needs of shippers. Many people in this room today have talked
about the immediate need of cars, and that is an industry issue that
we\'re facing today. Once a new design is in active production and cars
are reasonably available, this transition option would be withdrawn.

We estimate that only about 50 percent of our customers can currently
receive the 286,000 pound car, which limits lading of those cars of the
600 pound car, to about 84 tons. So when we talk about short loading, we
would be short loading, if we went to this car, about half of our loads.
One of the reasons \-- and this lading and other reasons why the AAR
really backed off their requirement in 286. If you look at the earlier
versions of the circulars, they did require the 286 car, but they backed
off of that for reasons that have been stated today \-- basically,
couldn\'t get into the majority of the customers, and rail lines and
short lines were not available to that.

We propose this option of the J500W car over the 600 pound design since
statistically we would have to light load that car to 84 tons and that
would require multiple shipments, and statistically if you look at the
analysis, it becomes kind of a statistical push lading a 500 pound car
at 90 tons, versus a 600 pound car at 84 tons. And even the AAR
recognized that the requirement to be able to ship a 296 car at 90 tons
was not really attainable in the near term.

We also propose that the FRA grandfather any normalized steel rail car
currently in service as of May 2008, until January 1, 2029. This couples
with the accelerated schedule of non-normalized steel cars, and the
availability of a transition car results in the best balance of safety
and practicality.

And as others, we ask that the FRA propose the rulemaking on other
accident reduction initiatives referenced in this rulemaking, with the
same vigor and timing that it\'s pursuing a new railcar. And this is to
assure eliminating the major causes of train accident as listed in the
NPRM, as human factor and track issues, not railcars.

While we applaud and support the efforts of the FRA and strongly support
them to railroad-proof PIH railcars, there are too many uncertainties
regarding the design and practical realities around the implementation
timing. Therefore, it is imperative to implement a reasonable and
manageable transition plan, which includes an agreement upon a
transition or interim railcar.

Olin has been a responsible shipper and manufacturer of chlorine for
over 80 years. We believe in the goal as zero. We support all activities
to achieve that. And we would like to be in production of chlorine and
the manufacture and shipper of that for the U.S. economy for the next
100 years.

We asks that the FRA give serious consideration to these proposals and
we appreciate allowing us to speak today.

MR. SCHOONOVER: Mr. Steely, I thank you. You mentioned in your comments
that the Regulatory Impact Analysis did not consider depreciation or the
lease issues. Just a question, do most of the leases allow for breakage
of those leases if the government were to impose a stricter standard?

MR. STEELY: No.

MR. HORN: My question would relate to the operational restrictions. You
briefly touched upon it, like some of the preceding speakers, but you
didn\'t elaborate whether we should increase them or which ones we
should add beyond what\'s being proposed.

MR. STEELY: Well, specifically, in the NPRM it said it did not address
\-- this NPRM did not address the other operational restrictions that
the FRA and DOT has said that they have ongoing. The only operational
restrictions here were \-- that were addressed, were speed of trains.
Our estimate is that that\'s unlikely to have a dramatic effect, since
most of the losses is in dwell time anyway, and not on the main lines in
the transition, or at least that\'s our view from what we see. What we
have asked is that we approach with the same vigor all the other things
that we know that the FRA and DOT is working on, double-shelf couplings,
acceleration of non-dark territory, and things of that nature, and
pursue that with the same vigor that this is being pursued.

MR. HORN: Thank you. If you provide any written comments to the docket,
I would appreciate elaborating further on that.

MR. STEELY: Okay.

MS. FREEMAN: Mr. Steely, if you are able, could you tell about the seven
cars you mentioned that have been scrapped this year? What was the
situation with those?

MR. STEELY: All of those were in derails. These were not necessarily
chlorine cars, these are fleet cars out of our entire fleet, and
basically today we have had, if I remember the numbers correctly, year
to date we have had approximately 15 cars in \-- that have left the
track that have received some sort of damage. Of those 14, seven were
totally destroyed and had to be scrapped.

MS. FREEMAN: Thank you.

MR. HOCHMAN: Are there any questions for Mr. Steely? Thank you very
much.

MR. STEELY: Thank you.

MR. HOCHMAN: Our last presenter is Henry Ward. Last scheduled.

MR. WARD: Henry Ward, W-A-R-D. I do not have prepared remarks, so bear
with me, and I certainly welcome questions if I don\'t cover the
material people are interested in. I\'m Henry Ward, Director of
Transportation Safety and Security for the Dow Chemical Company,
headquartered in Midland, Michigan. I also am the project lead for the
Next Generation Rail Tankcar Project, so I will talk about that, but any
comments that I make today will be comments by Dow Chemical, and not the
Next Generation Rail Tankcar Project team. So I just want to clarify
that for the record.

First I\'d like to say that Dow shares DOT\'s goal and commitment to
significantly reduce the potential risk of transporting toxic inhalation
hazard materials by rail. We\'re also pleased to see DOT\'s holistic
approach in addressing these issues and the safety aspects of rail
operating practices, track maintenance and tankcar design through
separate rulemaking activities, as well as the agency\'s willingness to
consider other options.

One area that we do see an opportunity for better collaboration is in
the area of safety and security and looking at those issues as one, that
is the way we\'ve been trying to look at that with the Next Generation
Rail Tankcar Project, and would encourage a closer collaboration between
DOT and DHS, TSA in particular, in trying to incorporate security
enhancements at the same time we\'re addressing safety issues. Our
biggest concern would be to have safety standards come out, and then a
year or two later have additional security requirements come out that
might in some way conflict or require changes.

Having said that, a little bit of background on Dow. Dow produces and
uses various toxic inhalation hazard materials, including chlorine, and
we do that to manufacture projects that are needed to meet critical
needs of society for various products, including pharmaceuticals,
agricultural chemicals, and building materials. We are the world\'s
largest producer of chlorine. We are engaged in a comprehensive program
to reduce the risks associated with the production, shipment, and use of
these materials, while continuing to meet the needs of the marketplace.

Back at the first public meeting, I think, that we had on this subject
back in May of \-- I don\'t even remember what year it was \-- we talked
about those initiatives and those are continuing today. The first is the
Next Generation Rail Tank Car Project where Dow made a commitment to
replace our TIH fleets by 2014 with new designs.

The second was supply chain redesign, to look at ways that we could
continue to meet the needs of the marketplace but by doing so in a way
that we ship less of these materials, and to ship them shorter
distances. And our commitment was to reduce the amount of these
materials that we ship by 50 percent by 2015.

In addition to that, we have been equipping our rail tankcars with GPS
and sensor technologies to improve our situational awareness, and to
look at ways that we can use that information to help emergency
responders to more effectively respond to incidents involving these
materials out in the field. Our entire TIH fleet is equipped with that
technology today, and we will be expanding that to other commodities
beginning next year.

And then finally, in the emergency response training area, even though
we try our best to make sure bad things don\'t happen in transportation,
when they do, we want to make sure that emergency responders are
equipped and trained in the best way possible to deal with those types
of emergencies, to mitigate risk to society. And so we have made a
renewed commitment, in partnership with Union Pacific and our other
railroad partners, to step up our training in this area as it relates
the shipment of TIH materials and potential emergencies associated with
that.

To answer some of Eloy\'s questions, I think I can hit on this a little
bit. We are \-- our total TIH fleet is about 1000 cars, but as I
mentioned, we have some projects here that we\'re working on that are
competing projects, and so with our supply chain redesign activities, we
would expect that number to go down over time.

In terms of percent of cars that are non-normalized steel in that fleet
of 1000, it\'s about 18 percent would be non-normalized, none in the
chlorine fleet are non-normalized. They\'ve all been converted to newer
cars. And the three, four commodities that we have that are TIHs as
product would be chlorine, anhydrous HCl, ethylene oxide, and Telon
C-17, which is a chloro-picrin mixture. Again, none of the chlorine tank
cars are non-normalized, and none of the anhydrous HCl cars are
non-normalized. So the non-normalized cars would be in the ethylene
oxide and Telon C-17 fleets.

The average age of our cars in chlorine service is seven years, so we
have a fairly young fleet compared to the industry. And you can ask more
questions if I didn\'t get it all, Eloy.

In partnership with Union Pacific Railroad and Union Tank Car Company,
and in cooperation with FRA, Transport Canada, and the Transportation
Security Administration, we\'ve been working for the past two and a half
years on the Next Generation Rail Tankcar Project, and I can say for a
fact that we\'ve learned a lot about the safety performance of the
current tankcars, as well as a lot about what might be possible in terms
of our ability to achieve significant improvements using new design
concepts and technologies.

As you may know, through that project, we\'ve narrowed our focus to two
design concepts which we believe can achieve a four to six-fold
improvement in the safety performance over the existing chlorine fleet.
And when I say that, that means that the tankcar can withstand a four to
six-fold increase in the amount of energy impacting the car before the
integrity of the commodity tank is breached. So that\'s what we\'re
talking about in that context.

The two design concepts are, one, is a multi-layered foam protection
system where you have a combination of metal jacket layers with a foam
material in between those, so it\'s an energy-absorbing system. The
other is an engineered metal structure system. In the simplest form, you
can think of it as corrugated cardboard, except it\'s metal in terms of
its structure, so that it gives you tremendous strength but without the
weight of solid steel.

We\'re advancing both of those concepts. Some of you are aware that we
did some testing on the multi-layered foam system in Pueblo at the end
of April. We have testing on the engineered metal structure system
scheduled for the end of July, and based on the results of those two
tests, we expect to bring an optimized system forward later in the year,
probably in the September-October time frame for further testing.

We still believe at this point that we can achieve performance in the
four-to-six-X range, but quite honestly, we do not have technologies
that we\'re looking at right now that we believe can go beyond that. So
it\'s really back to the drawing board if we\'re trying to achieve
better performance than that.

Further, what I would say is that when I talk about four-to-six-fold
improvement, it\'s really based on the modeling that has been done to
date, and there\'s been a lot of iterative work with material
characterization and testing and modeling to try to refine and validate
our models. But in the end, we\'re not going to be absolutely confident
of what we can do until we do the head assembly testing out at Pueblo,
and ultimately we\'d like to see the testing in the full scale prototype
cars further down the road.

The project plan shows that full scale prototypes should be available
toward the end of the fourth quarter of this year, and available for
both side and head impact testing at that time. Could things slip? Well,
when you\'re involved in research and development, you get surprises
from time to time, so it\'s possible we could slide into the early part
of next year.

Our request would be that the agency keep this docket open until the
results of those tests can be fully considered, evaluated and considered
in this rulemaking, because we think it\'s extremely important in terms
of knowing what\'s feasible in moving forward.

So, as our modelers have looked at this, and that\'s part of the issue
\-- we need to get all the modelers together so that they are all
looking at the issue the same way. The federal standard \-- proposed
federal standard of a 12 mile \-- 25 mile an hour side impact
performance would essentially represent a six-fold improvement over
where we are today with the current fleet car, and as I said, since
we\'re looking at technologies that get us into the four-to-six-X range,
based on our modeling, we believe we can achieve that side impact
standard. But again, that has to be verified and validated through
physical testing.

However, we do not believe the design concepts and technologies that
we\'re currently evaluating have the ability to meet the proposed head
impact standard of 30 miles an hour. By our calculations, this
represents at least a ten-fold improvement over the baseline car, and we
have not identified anything to date that would enable us to meet that
standard. And quite honestly, again, until the modelers get together and
reach agreement on how to look at these issues, when we look at the
Volpe concept car, we still don\'t know how to get there with that
design. So that\'s work to be done.

In terms of my comments, it will be at least two years before \... the
agency should take action to address the interim need here and quite
honestly we believe that there are some opportunities to continue to
improve tankcar safety moving forward over the interim. The important
thing of course, is if people are going to invest in new assets they
need to be able to rely on a reasonable economic life for those assets.
So that\'s pretty much what I had scribbled on the sheet of paper here,
so I\'m ready for any questions that you might have. Thank you.

MR. HOCHMAN: Jeffrey?

MR. HORN: None this time.

MR. HOCHMAN: Eloy?

MR. MARTINEZ: I\'m all set, thank you.

MR. HOCHMAN: Any questions for Mr. Ward?

MR. TRISCHE: I have a question. Randall Trische with Union Tank.

MR. HOCHMAN: Would you spell your name?

MR. TRISCHE: T-R-I-C-H-E. I know in the NPRM it was listed as a
six-by-six impactor, and wasn\'t this chosen within the NGRTC to avoid
damaging the wall at TPCI and not to represent an actual coupling
affecting the side of the car?

MR. WARD: Yeah, I think, you know, as we\'ve approached this project,
we\'ve approached it in concert with our partners, Union Tank, and Union
Pacific, Dow, as well as the government personnel who were at the table,
and it was really a combination of practicality and speed and what we
were trying to accomplish. We started out with an impactor that was
significantly larger than that, and when we looked at the performance in
the test, again, our objective was to ensure that we had a standardized
test methodology that could be conducted in a safe manner, and we looked
at the full range of energies that we might be trying to test with this
system. There was concern that with the current system at TTCI, with the
wall and the ram car and so forth that in order to manage those energies
to a safe level while still achieving our test objectives, that yes, we
needed to go with a smaller impactor.

Having said that, I think when we looked at what we were trying to do
with a six-by-six impactor, the group concluded that that was roughly
equivalent to a coupler shank with the head broken off, and that there
was some rationale for going with that, above and beyond just trying to
manage the energies within our test constraints.

MR. HOCHMAN: Thank you.

MR. SCHOONOVER: What we\'d like to do now is address some questions that
were provided to us from the FRA Administrator, Joe Boardman. He would
like us to go through these questions, and I\'m going to begin, because
this is the \-- focused on chlorine issues and we\'ve just had several
presenters that were from the chlorine industry. I\'m going to begin
with some questions directed towards the shippers and other tankcar
owners, although anyone can feel free to step up and answer any of the
questions. And I\'d like to begin with question 3.1 for the record \--
and a copy of these questions will be placed into the docket.

You are the fleet owners who will be impacted by both the changes to
DOT\'s tankcar rules and the new AAR interchange standard. So the first
question I would ask is, what are your tankcar fleet needs over the next
three years? Trying to look at this from a short term perspective, and
I\'ll open it up to anyone who would like to step up and address this.

MS. BART: PPG believes that they\'ll need to purchase 60 new railcars
for business needs, and we also believe that \-- we know that we have an
attrition rate of about half a percent of our fleet to one percent,
which would be \-- may be in the order of six to ten cars, to replace
cars that get retired or damaged or scrapped. So that\'s what we
believe, somewhere in the order of 40 to 70 cars.

MR. SCHOONOVER: Is that 40 to 70 cars in addition to \--

MS. BART: No, that\'s total.

MR. SCHOONOVER: That\'s total?

MS. BART: Somewhere in that ballpark.

MR. SCHOONOVER: Okay. Thank you.

MR. WARD: Do I need to do my name again? Henry Ward, Dow Chemical. We do
not anticipate a significant need for new chlorine cars associated with
this, other than coming into compliance with the rule. However, there is
a concern with the other commodities, because based on the work that we
have done, you know, there really is no way to achieve the performance
requirements that we\'re looking at here without a loss in payload
associated with that. And so under the best possible case, what we can
do with our project in terms of a four-to-six-X improvement, we were
looking at a 15 percent loss in payload, and that\'s the best case. To
meet this new standard, I think you\'re talking about a significant
further reduction in payload, all of which translates into that
percentage more cars to move the same commodity. So from a \-- although
today\'s chlorine from an EO and an anhydrous ammonia point of view, at
least, we would see the standard itself driving an increase in the
number of cars out there, just to fulfill the current demand for moving
materials.

And if I could add one other point, with respect to the railroad
operating practices, and requirements in the rule, there has been some
suggestion, and I believe it was even spelled out in the Regulatory
Impact Analysis, that the railroad practices may change just in terms of
how they move these materials, which could translate into longer transit
times associated with holding cars and things of that nature. We of
course can\'t speculate on that too much, but certainly anything that
goes on in that realm is going to increase the requirements for the
number of cars as well, just because of the increased inventory in
transit.

MR. ACKERMAN: Neil Ackerman, OxyChem. We don\'t anticipate a significant
number of cars in the three year period. More than likely it would just
be attrition-related, but we\'re fairly well positioned on our existing
fleet, at least within the next two to three year period.

MR. SCHOONOVER: One question, Mr. Ackerman. Is our attrition rate
roughly similar? Do you find you have a one-half to one percent
attrition rate?

MR. ACKERMAN: In that neighborhood.

MR. STEELY: Kirk Steely with Olin. I guess I would describe this as an
\"it depends\" question. As somebody stated before, certain lessors are
exiting the railcar leasing business, so assuming that they would be
willing to extend current leases that expire within the next two to
three years, then the Olin needs would probably more in a transition
kind of issue. And our losses are in that one percent kind of number, on
the chlorine fleet as we see it today. But should that lessor decide not
to extend leases, then we could be looking at numbers significantly
higher, potentially numbers in the two to 300 railcar needs in the next
two to three years.

MR. SCHOONOVER: Any other? The next question is how many non-normalized
pre-1989 tankcars will be replaced by cars built to the new AAR
interchange standards? And if we haven\'t captured that information
already, if you want to address it.

MR. WARD: Henry Ward. None, right, because our intent is not to replace
anything with an AAR interchange standard car, if I understand your
question. You\'re saying would we do that in the interim?

MR. SCHOONOVER: I \-- my \-- I believe Mr. Boardman is looking for
information on replacements during the interim, until our rule would be
\--

MR. WARD: And the presumption is that\'s the interim solution?

MS. HENRIKSEN: I think his thought behind that question was, absent our
rulemaking, the \-- and again, this is a little speculation here \--
absent our rulemaking, the interchange standard goes forward. So how
many tankcars would all these tankcar owners be replacing in the interim
period. But how many new \-- you need new tankcars, should you go out
and buy 30 new AAR-compliant cars in the next three years? I think
that\'s what he was trying to get a grasp of.

MR. WARD: Okay. Well, I think clearly, absent a decision by the agency
on a reasonable economic life for those assets, there\'s going to be
tremendous inhibiting factor out there, and you know, unless it\'s
absolutely critical, there isn\'t going to be, at least on our part, any
voluntary move to go do that, go build cars to that, any interim
standard. And I would like to suggest to the Administrator and others
that there may be other interim solutions that might ought to be
considered.

MS. BART: I guess I would support Henry\'s comments in that PPG would do
everything they could not to buy an interim car and make what we have
\-- make do with what we have and try most anything else we could do to
not buy the interim car because it has no life, and it\'s not an
economic use of our capital. Capital would be better spent on other
modes of transportation.

MR. REINER: Frank Reiner, the Chlorine Institute. One thing that you
could do to kind of get a handle on the number of cars that need to be
replaced is look on the industry data that was provided that was
age-based, and those cars that are reaching their regulatory life would
give some idea of how many cars, assuming shippers are keeping their
fleets about level, but it would give you an idea of how many cars are
required to be replaced.

MR. SCHOONOVER: I guess that \-- Frank, that provides a partial picture.
One of the problems that you know I\'m seeing in this is that there are
other issues that key into it. If you have a half to one percent
attrition rate, and a certain amount of cars that are damaged or
destroyed, you know, and therefore are removed from your fleet, plus the
issues with leases ending, and many leases are not necessarily for the
full life of the car, so I think what we\'re trying to get a handle on
is what\'s the \-- you know, what are we looking at in the short term as
far as a \-- you know, the impending need to buy cars or to replace the
fleet. And I think the \-- looking at the age of the cars is one of the
indicators. I\'m not sure if that gives us the total picture in what
we\'re looking at.

MR. REINER: Right, and I would agree with that. You also have the cars
that are being replaced for other reasons, and we talk about an economic
life of 30 or 35 years, it can give you a rough estimate of how many
would normally be replaced in this period, and give you an idea of how
many cars are being deferred really by the shippers because of the
uncertainty that has been caused by this lack of an interim standard.

MS. BART: One other comment to consider. You know, we\'re basically
trying to make do with the fleet that\'s available right now, and what
that means is we\'re bringing older cars into service that have been in
storage for quite some time, but you need the car and you\'re not
willing to invest in a new car. And that well has dried up. I mean
there\'s just no \-- that was an option available to us. We didn\'t have
to build cars, and we have not had to build cars, many cars, for the
past two years, because we\'ve been living with this situation for that
period of time.

Now, we\'re, at least in my perspective, the availability of cars coming
from like SO2 service that can be retrofitted and maybe patched up and
put back into service \-- we\'re running out of those options. I mean
we\'re scraping the bottom of the barrel here trying to find a package
to put this stuff in. And so it\'s \-- we \-- I just wanted to bring
forth, we\'ve been living with this for two years now. It\'s not just
going forward.

MR. SCHOONOVER: I guess, Julie, in a optimized world \--

MS. BART: In an optimized world, I would have bought the cars two years
ago. But I didn\'t because I \-- I took older cars, put them in service,
because they were the only things that were available to me that made
sense.

MR. SCHOONOVER: I guess what I\'m looking for is, from a fleet
perspective, right now we estimate there are about 6000 cars in the
chlorine fleet. Are we shy cars in order to optimize? Are we 1000 cars
shy? Are we 500 cars shy to \-- you know, what is, to really optimize
what we\'re doing now, I would assume that if you don\'t have extra
cars, you\'re making unnecessary trips or dealing with the issue in
other ways.

MS. BART: Right.

MR. SCHOONOVER: I think we\'re trying to get a perspective on how many
cars \-- if you could build cars tomorrow, what\'s the gap now between
what you have and what you need?

MS. BART: If I could build cars tomorrow and they didn\'t have to be \--
if I could build a retrofittable car tomorrow, I would build a lot more
than that number that I stated to you. But since I can\'t build a
retrofittable car, we\'re just doing what we can do to get by. I would
replace a lot of these older assets. They\'re costing me a lot of money
on maintenance. We\'re keeping them in service as best we can, trying to
make it through until we get an answer. We\'re fixing cars that we would
have normally \-- we would have scrapped two years ago.

MR. SCHOONOVER: How much does the additional maintenance in keeping
those old cars?

MS. BART: We\'re spending \$25,000 \-- I\'m paying invoices over
\$25,000 to bring a car up into service that needs maintenance, it\'s
been in storage. Totally expect to spend in that ballpark just to get a
car that I can ship in, because I just don\'t want to buy a new car.

MR. SCHOONOVER: You\'re doing that with the assumption that basically
you\'re probably going to be using that for like two or three years at
least, or \--

MS. BART: Hopefully more than that. Maybe closer to five, I\'d say.

MR. SCHOONOVER: Thank you. That\'s very helpful.

MR. KAPLAN: This is Howard Kaplan. I think Frank put his finger on one
of the key numbers and that is the fleet, you know, has a lifetime of 35
years, and you take your 6000 cars, three percent a year, getting on a
generally basis, 200 cars a year that have to be replaced, and certainly
as an industry, we have been delaying that pending all this regulation,
so we\'re behind on that. So if you think over the next three years plus
the two years that Julie refers to \-- we\'re all in the same mess about
what we\'ve been doing, you\'re looking at a thousand cars, basically,
that would need to be replaced over the next three years or so.

And you know, the real hardship here is having to serve two masters. It
is untenable for the industry to have to deal with an AAR standard,
interchange standard, and FRA NPRM proposal that are basically mutually
incompatible. And we\'ve got to have some situation where that standard
needs to be withdrawn, or there has to be some agreed-upon
grandfathering between all parties, whoever wants to take sovereigncy
over this, whether it\'s your department which we think is correct, or
the AAR, some grandfathering where everybody knows exactly what they\'re
paying and how long it\'s going to last, and how long they\'re going to
get useful life out of it. Otherwise we\'re all just in a big pickle.

And I\'ll be glad to answer all these questions. I\'ll send in a
separate letter with the answers, because they kind of get confidential,
but I\'ll send you everything that we plan to do in the next few years.

MR. SCHOONOVER: Thank you. Well, I guess that segues into the next
question, and that is, how likely are you to wait for the new DOT
performance standard car before you make major purchases? Will you wait?
Will you buy now? How are those \--

MR. KAPLAN: (off mike) That\'s exactly right. We wait until we have \...
wait until it hurts too much.

MS. BART: One thing to consider though, is it\'s just not us. If we
can\'t ship it, we can\'t ship chlorine, the people who buy it, the
price will go up and it will impact a lot of other people besides the
chlorine shipper, because there\'s a very, very tight \-- you know, it
gets to a very, very tight supply position, it\'s just a different
economics to consider.

MR. SCHOONOVER: I guess the next question that Mr. Boardman wanted us to
ask was what will the impact of a negative decision about grandfathering
the AAR interchange car or \-- you know, what will the negative impact
of that grandfathering have on a buying decision?

PARTICIPANT: (Comment off mike.) \... answers to these questions \...

MS. HENRIKSEN: We would certainly welcome that, and that\'s kind of the
reason why we put these questions aside and try to talk about it all at
one time as opposed to when you were individually up here speaking, so
we would certainly welcome if you want to take some of these questions,
think about them, and just give it some thought and submit some
information to the docket, or even in one of the future public meetings.
We would certainly welcome that, and we would appreciate it.

MS. BART: Very good.

MR. SCHOONOVER: I guess on questions 3.5 and 3.6, if anybody has any
answers that they\'d like to come forward and make or offer, I think
we\'ll \--

MR. HULICK: Bob Hulick, H-U-L-I-C-K, with Trinity Rail. Bill, on the
question about how many tank car builders have an AAR interchange
standard car available for purchase, Trinity Rail does, obviously, and
we have introduced approximately 90 of those cars into service already,
which would be the chlorine-style car.

MR. SCHOONOVER: Well, I\'d like to \-- I notice we have some tankcar
manufacturers, and Mr. Hulick, thanks for stepping up and answering
that. Realizing that people may need time to think these out and to get
formal answers back, there will be three more days of public meetings,
but I wanted to, I guess, look at the questions towards the tank car
manufacturers, particularly with a view towards the chlorine issue.
Randall?

MR. TRISCHE: Randall Trische with Union Tank. We don\'t have any of
these 600 pound cars \-- AAR cars available, but we are very capable of
manufacturing them within a standard amount of time.

MS. BART: Add one comment to Randall\'s position. I have had no
indication from Union Tank that they would be willing to lease the cars,
and they do not sell cars, at least to me, so Union Tank Car is not in a
position to help us out \-- they won\'t lease us a car, and they won\'t
sell a car that meets the new standard, so \--

MR. HULICK: Bob Hulick, Trinity Rail. Obviously, we face the same
dilemma as a car builder or as a lessor based on not having an interim
standard with some defined economic life. So it makes it extremely
difficult to be able to lease a car. And we welcome discussions as to
how we might resolve that issue so that we could support our customers.

MS. HENRIKSEN: How about \-- this is a suggestion. So, we\'re kind of
trying to decide how to proceed. I\'m actually going to suggest we just
take a couple minute break and maybe everyone here could just take a
look at some of these other questions that our Administrator has come up
with, and understanding, as Julie mentioned, many people may want to
take it back and give it some thought, consult with others. But perhaps
if we took a break and we all had a chance to take a look at the
questions, if there\'s anything relevant that anyone else wants to say
at this point, we can take a few moments to do that. Otherwise, we would
ask, and we would appreciate it if you would take these questions back
and give it some thought and either follow up at future public meetings
or in comments to the docket. Does that sound reasonable?

MR. SCHOONOVER: Yeah, I would suggest we take a break. But before we
break, a question, because it\'s noon, I\'d like a show of hands \-- any
other people in the audience who are prepared or want to make statements
who had not contacted us in advance? Just trying to get a feel for how
long a break we take. Do we take a lunch break or do we just take a five
or ten minute break as Lucinda suggested, reconvene for 20 to 25 minutes
and then call it a day. So \-- is there anybody out in the audience who
wants to make a presentation who we haven\'t heard from already?

Okay, why don\'t we just take ten minutes and give you an opportunity to
look at Mr. Boardman\'s questions and then we\'ll reconvene.

(Whereupon, at 12:05 p.m., a ten minute recess off the record was
taken.)

MR. SCHOONOVER: Okay. We\'ll \--

MR. HULICK: Bob Hulick, Trinity Rail. I\'m sorry I misspoke a minute
ago. The number of 600 pound cars in service, in chlorine service, is
about 190, and there\'s an additional 20 cars in titanium tetrachloride
service of that design. I apologize for the confusion.

MR. SCHOONOVER: Thank you. If anybody has any comments on the questions
that were provided, if you\'d like to step up, please I would ask when
you identify yourself you also identify the question by number, make it
easier.

MR. REINER: Frank Reiner, the Chlorine Institute. We are going to have
to take this back and talk to some of our members to get more
comprehensive answers. I would like to address question 3.6, though, and
it asks if the proposed DOT rule were in effect today, how would that
impact your industry? I think that right now without a validated car,
without a validated design, we would be in much the same situation we
are right now. We would have no car to build that we could be assured
would have any reasonable economic life.

Earlier we had talked about how many cars were needed, and I\'m not
really sure that that matters, whether there\'s one car needed by a
shipper, or there\'s 10,000 cars needed. The fact is that we have
nothing right now that can be built with a definitive economic life, so
we have this great uncertainty, and what we really need is we need DOT
to step forward and provide us with an interim solution, and we need
that done quickly. Thank you.

MR. SCHOONOVER: Anyone else? Tom?

MR. SCHICK: I am Tom Schick, S-C-H-I-C-K. I\'m with American Chemistry
Council. A number of our members have already spoken this morning. I\'m
not going to repeat company-specific things. I just want to come back on
the questions that the Administrator asked, and underline a couple of
points.

Again, the biggest issue here is uncertainty, and it\'s not the
uncertainty between the current car and the proposed rule \-- that
uncertainty is inevitable when you have a rulemaking going on. It\'s
this interim uncertainty, which is caused by not knowing what to buy and
then on top of that, the AAR standard of the CPC is out there which sets
a different level of uncertainty, makes it essentially, as we\'ve heard
this morning, impossible for people to make rational decisions. Leasing
companies are making rational decisions, not to lease at all. Buyers and
sellers of cars are confounded by what to do.

And we will also attempt, when ACC makes comments, to address the
questions that you\'ve put in the docket. But my hope would be that the
interim solution will not be on the same time track as the rulemaking
itself, because the rulemaking is complex. There are questions that have
been raised at the technical symposium, and questions today, and there
will be further questions, and I don\'t think anyone can afford to wait
for resolution of this interim problem until the whole rulemaking is
finished, because that problem can essentially only get worse day by
day.

So I hope that there\'s a solution out there on its own time track and
with a real sense of urgency, to resolve the dilemma that everyone\'s
facing about the interim car.

MR. TRISCHE: Randall Trische with Union Tank. I\'m coming up to comment
on question 2.5, some have been saying that AAR\'s interchange standards
would be the only car that could be considered within the next two
years. I definitely think that car should be considered, but it
shouldn\'t be the only possibility, because I do believe there may be
the possibility to introduce retrofits for some of the 500 pound cars
that may bring them up to 286,000 pound load with the additional weight
only for protection.

And the next couple of questions are asking if the new DOT standard cars
would be available within the next two years for production, and my
opinion and from all the work that has been done thus far, I think
within that timeperiod we should have a prototype, but we\'re looking at
an additional year to a year and a half to ramp up manufacturing and
make changes within our processes, just our building these cars, and as
mentioned before, we\'d have to go through service trials. Because
obviously not anybody\'s going to take the liability of putting a whole
new fleet of brand new and untried cars on the rail.

MR. SCHOONOVER: hanky awe.

MR. HULICK: One other comment. I know this is focused on chlorine today,
but just as an indication with all TIH materials, and we currently have
500 cars that customers would like to build that we have in backlog
awaiting some clarification on where this whole process might go.

MR. HOCHMAN: Any other questions? Any other comments on Mr. Boardman\'s
questions? I guess not. Is there anybody else who would like to make a
statement or presentation?

MS. HENRIKSEN: I would just reiterate. We would greatly appreciate it if
everyone would take some time to take those questions back, to give them
some thought, and you know, come to one of the next public meetings
ready to talk about them, or submit information to the docket,
responsive, including your comments. It would be appreciated, and it
would help us all to come up with a solution to the situation.

Bill was just pointing out that Mr. Boardman may attend the last couple
hearings, couple meetings, excuse me, so it would be \-- it would be
useful for us all to have a handle on some of that information.

MR. HOCHMAN: Just a few closing comments. I would like to thank
everybody for taking time out of their busy schedules to come to D.C.
and bring the nice weather with us, take the monsoon someplace else.
Appreciate very much the comments that we got today. We look forward to
seeing your written comments to the docket. Like to get as much detail
in those comments as possible so that we have a basis for continuing
this process.

Want to let everybody know that this is one of the highest priority
rulemakings in the Department. Mr. Boardman and Karl Johnson, the PHMSA
Administrator, are in conversation with us, with Secretary Peters,
rather frequently. It\'s a high priority project for the Department.

And I would just like to thank everybody once again for taking time out
to provide us with the information and look forward to seeing some of
you tomorrow when we talk about ammonia.

Tomorrow\'s hearing will be at nine o\'clock. Same room. Thank you
everybody.

(Whereupon, the hearing in the above captioned matter was adjourned, to
be reconvened tomorrow morning, Thursday, May 15, 2008, at 9:00 a.m.)