Document ID: PHMSA-2021-0058-7072
Agency: phmsa
Document Type: Rule
Title: Hazardous Materials: Suspension of Hazardous Materials Regulations Amendments Authorizing Transportation of Liquefied Natural Gas by Rail
Posted Date: 2023-09-01T04:00Z

[Federal Register Volume 88, Number 169 (Friday, September 1, 2023)]
[Rules and Regulations]
[Pages 60356-60375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-18569]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 172

[Docket No. PHMSA-2021-0058 (HM-264A)]
RIN 2137-AF55

Hazardous Materials: Suspension of HMR Amendments Authorizing 
Transportation of Liquefied Natural Gas by Rail

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 
Department of Transportation (DOT).

ACTION: Final rule.

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SUMMARY: PHMSA, in coordination with the Federal Railroad 
Administration (FRA), is amending the Hazardous Materials Regulations 
to suspend authorization of liquefied natural gas (LNG) transportation 
in rail tank cars pursuant to a final rule published on July 24, 2020, 
pending the earlier of either completion of a companion rulemaking 
evaluating potential modifications to requirements governing rail tank 
car transportation of LNG, or June 30, 2025.

DATES: This final rule is effective on October 31, 2023.

FOR FURTHER INFORMATION CONTACT: Alexander Wolcott, Transportation 
Specialist, Standards and Rulemaking Division, Office of Hazardous 
Materials Safety, (202) 366-8553, 1200 New Jersey Avenue SE, 
Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Overview
II. Background
    A. Historical Regulation of LNG by Rail
    B. A New Regulatory Approach and Enabling Research
    C. Another Hard Look Incorporating NASEM Recommendations and 
Ongoing Research Efforts
    D. East Palestine, OH Derailment
III. Discussion of Comments to the NPRM and Adoption of a Temporary 
Suspension of the July 2020 Final Rule
    A. Comments Requesting an Immediate, Permanent Ban of LNG by 
Rail
    B. Comments Requesting the Removal of the June 30, 2024, Sunset 
Date

[[Page 60357]]

    C. Comments of General Support for the NPRM
    D. Comments Alleging Chilling of Near-Term Demand for LNG 
Transportation by Rail Tank Car Pursuant to the July 2020 Final Rule
    E. Comments Contending That the LNG by Rail Improves Safety
    F. Comments Alleging Environmental Benefits From LNG by Rail
    G. Comments Alleging PHMSA Is Overstepping its Authority by 
Attempting To Regulate Oil and Gas Production
    H. Comments Alleging PHMSA Did Not Meet its Evidentiary Burden 
Under the APA for Temporary Suspension of the July 2020 Final Rule
    I. Comments Alleging That PHMSA's Proposal Will Have 
Miscellaneous Adverse Consequences for Regulated Entities, the U.S. 
Economy, and National Security
    J. Comments Beyond the Scope of This Rulemaking
IV. Regulatory Analyses and Notices
    A. Statutory/Legal Authority
    B. Executive Orders 12866 and 14094, and DOT Regulatory Policies 
and Procedures
    C. Executive Order 13132
    D. Executive Order 13175
    E. Regulatory Flexibility Act and Executive Order 13272
    F. Paperwork Reduction Act
    G. Unfunded Mandates Reform Act of 1995
    H. Environmental Assessment
    I. Privacy Act
    J. Executive Order 13609 and International Trade Analysis
    K. Executive Order 13211
    L. Cybersecurity and Executive Order 14028

I. Overview

    PHMSA, in coordination with FRA, is suspending recent amendments to 
the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180) 
authorizing transportation of ``Methane, refrigerated liquid,'' 
commonly known as liquefied natural gas (LNG) in DOT-113C120W9 
specification rail tank cars while it conducts a thorough evaluation of 
the HMR's regulatory framework for rail transportation of LNG in a 
companion rulemaking under Regulatory Identification Number (RIN) 2137-
AF54, and determines whether any modifications are necessary. 
Transportation of LNG by rail tank car has not occurred since the July 
24, 2020, publication of a final rule authorizing transportation of LNG 
in rail tank cars \1\ and there is considerable uncertainty regarding 
whether any would occur in the time it takes for PHMSA to consider 
potential modifications to existing, pertinent HMR requirements. 
However, this temporary suspension of the HMR provisions authorizing 
transportation of LNG in rail tank cars guarantees no such 
transportation will occur before its companion rulemaking has concluded 
or June 30, 2025, whichever is earlier, thereby: (1) avoiding potential 
risks to public health and safety or environmental consequences (to 
include direct and indirect greenhouse gas (GHG) emissions) \2\ that 
are being evaluated in the companion rulemaking under RIN 2137-AF54; 
(2) allowing for the completion of ongoing testing and evaluation 
efforts undertaken in collaboration with FRA, as well as further 
consideration of the recommendations from external technical experts of 
the National Academy of Sciences, Engineering, and Medicine (NASEM); 
(3) assuring an opportunity for the potential development of any 
mitigation measures and operational controls for rail tank car 
transportation of LNG; (4) reducing the potential for economic burdens 
by ensuring that entities avoid ordering rail tank cars for 
transporting LNG compliant with current HMR requirements when the 
companion rulemaking may adopt alternative requirements; and (5) 
enabling potential opportunities for stakeholders and the public to be 
apprised of, and comment on, the results of ongoing testing and 
evaluation efforts.
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    \1\ PHMSA final rule ``Hazardous Materials: Liquefied Natural 
Gas by Rail,'' 85 FR 44994 (Jul. 24, 2020) (July 2020 Final Rule). 
References within to ``this Final Rule'' or ``the Final Rule'' 
without qualification by reference to ``July 2020'' are meant to 
refer to this notice rather than its July 2020 Final Rule.
    \2\ PHMSA distinguishes between ``direct'' and ``indirect'' GHG 
emissions herein consistent with Council on Environmental Quality 
(CEQ) guidance. See CEQ, ``National Environmental Policy Act 
Guidance on Consideration of Greenhouse Gas Emissions and Climate 
Change,'' 88 FR 1196 (Jan. 9, 2023), which builds upon and updates 
CEQ's 2016 ``Final Guidance for Federal Departments and Agencies on 
Consideration of Greenhouse Gas Emissions and the Effects of Climate 
Change in National Environmental Policy Act Reviews,'' 81 FR 51866 
(Aug. 8, 2016).
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    Towards that end, PHMSA is adding a new special provision 439 that 
prohibits LNG transportation in rail tank cars until issuance of a 
final rule concluding the rulemaking proceeding under a companion 
rulemaking under RIN 2137-AF54, or June 30, 2025, whichever is earlier. 
Rail transport of LNG may still be permitted as authorized by the 
conditions of a PHMSA special permit (SP) under Sec.  107.105, or in a 
portable International Organization for Standardization (ISO) tank 
secured to a rail car pursuant to the conditions of an FRA approval 
under Sec.  174.63. PHMSA is also adopting a modest extension (until 
June 30, 2025, at the latest) of the sunset for the temporary 
suspension period identified in its November 2021 notice of proposed 
rulemaking in this proceeding,\3\ consistent with comments received on 
the NPRM and information obtained after its publication evincing 
greater uncertainty regarding the near-term commercial viability and 
potential environmental and safety risks associated with rail tank car 
transportation of LNG as authorized by the July 2020 Final Rule.
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    \3\ PHMSA, ``Notice of Proposed Rulemaking--Hazardous Materials: 
Suspension of HMR Amendments Authorizing Transportation of Liquefied 
Natural Gas by Rail'' 86 FR 61731 (Nov. 8, 2021) (NPRM).
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II. Background

A. Historical Regulation of LNG by Rail

    LNG is a natural gas that has been cooled and converted to a liquid 
form for easier and more efficient transportation. In the United 
States, pipelines have historically delivered most natural gas, 
although other modes of transportation--such as rail and highway--have 
accounted for a relatively minor portion of natural gas transportation, 
typically in the form of LNG. Before PHMSA published the July 2020 
Final Rule, rail transportation of LNG would have been limited to UN 
portable tank shipments (commonly referred to as ISO tank shipments) 
under an FRA approval and shipments made under SPs issued by PHMSA. 
This approach reflected the unique safety risks presented by rail 
transportation of large volumes of LNG and the historically low demand 
to transport LNG by rail.

B. A New Regulatory Approach and Enabling Research

    Executive Order 13868 (``Promoting Energy Infrastructure and 
Economic Growth'') \4\ was signed in April 2019 and required PHMSA to 
treat LNG the same as other cryogenic liquids, authorize LNG to be 
transported in approved rail tank cars, and to finalize that rulemaking 
within 13 months.\5\ In response, PHMSA published a notice of proposed 
rulemaking titled ``Hazardous Materials: Liquefied Natural Gas by 
Rail'' \6\ in which it proposed to authorize the transportation of LNG 
in existing DOT-113C120W specification tank cars. The initial comment 
period for the NPRM closed on December 23, 2019, and was subsequently 
extended until January 13, 2020, following PHMSA's issuance to Energy 
Transport Solutions, LLC (ETS) in early December 2019 of

[[Page 60358]]

DOT-SP 20534 for the transportation of LNG by rail tank car.\7\
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    \4\ 84 FR 15495 (Apr. 15, 2019).
    \5\ The Secretary has delegated such rulemaking duties to the 
PHMSA Administrator. See 49 CFR 1.97.
    \6\ 84 FR 56977 (Oct. 24, 2019).
    \7\ 84 FR 70492 (Dec. 23, 2019) (DOT-SP 20534).
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    DOT-SP 20534 allowed the transportation of LNG in existing DOT-113 
tank cars from Wyalusing, PA, to Gibbstown, NJ, with no intermediate 
stops. This SP contained safety controls including a requirement to 
conduct remote sensing for detecting and reporting internal pressure, 
location, leakage, and (prior to the initial shipment of a tank car 
under the SP) a requirement to provide training to emergency response 
agencies that could be affected on the route. DOT-SP 20534 expired by 
its terms on November 30, 2021, after ETS had not filed an application 
for renewal until November 29, 2021. After careful consideration, PHMSA 
denied ETS' application for renewal on March 31, 2023.\8\
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    \8\ 88 FR 24844, 2846 (Apr. 24, 2023). PHMSA formally informed 
ETS of the denial of its renewal application by email on March 31, 
2023, noting that (1) ETS's renewal application had made no attempt 
to address the concerns raised in the NPRM in this proceeding, (2) 
nearly three and a half years after issuance of DOT-SP 20534, ETS 
had yet to provide evidence that it had procured either new DOT-
113C120W9 tank cars or existing DOT-113C120W tank cars, and (3) the 
origin and destination facilities specified in DOT-SP 20534 had not 
been built and would need additional authorizations before 
construction could begin. ETS did not seek judicial review of the 
denial.
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    In January 2020, PHMSA established a joint LNG Task Force with FRA 
to undertake testing and evaluation activity on the transportation of 
LNG that could inform potential future regulatory actions, as 
appropriate. In order to identify tasks within that effort, the LNG 
Task Force utilized a risk-based framework focused on knowing the risk, 
predicting the risk, reducing the risk, and preparing for the risk. 
Using that framework, the LNG Task Force identified and undertook 15 
tasks to synthesize ongoing research and outreach activities. Those 
tasks included empirical review of international LNG transportation, 
safety and security route risk assessments, a re-evaluation of the 
costs and benefits of electronically controlled pneumatic (ECP) brakes, 
and the validation of emergency responders' opinions and needs. 
Although the LNG Task Force initially projected completion of its tasks 
by late 2021, much of its work was interrupted or delayed because of 
the coronavirus disease 2019 (COVID-19) public health emergency and 
because of subsequent modification of the scope of its activities. The 
ongoing efforts of the LNG Task Force are discussed further below.
    In parallel with its work under the LNG Task Force, and pursuant to 
a mandate in the ``Further Consolidated Appropriations Act, 2020'' 
(Pub. L. 116-94), PHMSA and FRA partnered with NASEM to conduct a study 
on the transportation of LNG in rail tank cars through a committee of 
the Transportation Research Board (TRB).\9\ The TRB commenced work in 
mid-July 2020. Roughly contemporaneous with the TRB beginning its work, 
PHMSA published the July 2020 Final Rule authorizing the shipment of 
LNG in new DOT-113C120W9 specification rail tank cars with enhanced 
outer tank requirements, subject to all applicable requirements and 
certain new operational controls. The July 2020 Final Rule became 
effective on August 24, 2020 and was swiftly followed by several 
petitions for judicial review. Specifically, six environmental groups, 
a coalition of attorneys general for 14 States and the District of 
Columbia, and the Puyallup Tribe of Indians filed separate petitions 
for review challenging the July 2020 Final Rule. All the petitioners 
asked the court to vacate the July 2020 Final Rule, alleging violations 
of the Hazardous Materials Transportation Act (HMTA; 49 U.S.C. 510 
2012;5127), the Administrative Procedure Act (APA; 5 U.S.C. 553 et 
seq.), and the National Environmental Policy Act (NEPA; 42 U.S.C. 4321 
et seq.). The Puyallup Tribe also alleged violations of the Tribal 
consultation protocols under the National Historic Preservation Act (54 
U.S.C. 300101 et seq.) and Executive Order 13175 (``Consultation and 
Coordination with Indian Tribal Governments''),\10\ as well as 
disparate impacts on the Tribe in violation of Executive Order 12898 
(``Federal Actions to Address Environmental Justice in Minority 
Populations and Low-Income Populations'') \11\ and Title VI of the 
Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.). The petitions were 
subsequently consolidated within a single proceeding in the U.S. Court 
of Appeals for the District of Columbia Circuit \12\ with the court 
granting PHMSA's motion to place the petitions in abeyance while PHMSA 
reviewed the July 2020 Final Rule. PHMSA submitted the latest status 
report in that proceeding in early June 2023. The Court lifted the 
abeyance on July 18, 2023.\13\
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    \9\ In that legislation, Congress earmarked funds for the NASEM 
study for the express purpose of ``inform[ing] rulemaking.'' NASEM 
maintains a website dedicated to the TRB committee's work that 
contains the TRB committee's charter, work product, meeting agendas, 
and other supporting material. See NASEM, ``Safe Transportation of 
Liquefied Natural Gas by Railroad Tank Car,'' https://www.nationalacademies.org/our-work/safe-transportation-of-liquefied-natural-gas-by-railroad-tank-car (last visited May 15, 2023).
    \10\ 65 FR 67249 (Nov. 9, 2000).
    \11\ 59 FR 7629 (Feb. 16, 1994).
    \12\ Under docket no. 20-1317 (consolidated with docket nos. 20-
1318, 20-1431, & 21-1009).
    \13\ On May 17, 2023, Petitioners filed a Joint Motion to Lift 
Abeyance and requested the D.C. Circuit Court to direct the parties 
to submit a proposed briefing schedule. PHMSA, through the 
Department of Justice, filed a response opposing the motion to lift 
the abeyance on June 6, 2023. The Petitioners filed a reply on June 
13, 2023.
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C. Another Hard Look Incorporating NASEM Recommendations and Ongoing 
Research Efforts

    Immediately after taking office, the Biden-Harris Administration 
issued Executive Order 13990 (``Protecting Public Health and the 
Environment and Restoring Science To Tackle the Climate Crisis'') \14\ 
on January 20, 2021. Executive Order 13990 required the review of 
agency regulations and other actions promulgated or adopted between 
January 20, 2017, and January 20, 2021, that are candidates for 
suspension, modification, or rescission because of inconsistency with 
Biden-Harris Administration policies to improve public health, protect 
the environment, prioritize environmental justice, and reduce GHG 
emissions. The Biden-Harris Administration identified the July 2020 
Final Rule in a non-exclusive list \15\ of agency actions that would be 
reviewed in accordance with Executive Order 13990. Additionally, 
section 7 of Executive Order 13990 revoked Executive Order 13868, along 
with several other executive orders and executive actions, and directed 
agencies to promptly take steps, consistent with applicable law, to 
rescind any rules or regulations that had been issued ``implementing or 
enforcing'' those executive orders and executive actions.
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    \14\ 86 FR 7037 (Jan. 25, 2021).
    \15\ U.S. White House, ``Fact Sheet: List of Agency Actions for 
Review,'' https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/fact-sheet-list-of-agency-actions-for-review/ 
(last visited May 16, 2023).
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    In response to Executive Order 13990, DOT published a notice on May 
5, 2021, soliciting comment on potential candidates for review under 
Executive Order 13990 from among existing rules and other DOT 
actions.\16\ DOT received one comment pertaining to the July 2020 Final 
Rule from the Transportation Trades Department of the American 
Federation of Labor and Congress of Industrial Organizations (AFL-CIO). 
The commenter requested a reexamination of the July 2020 Final Rule as 
it believed that rulemaking ``neglected to include meaningful safety 
measures to adequately address the

[[Page 60359]]

inherent risks to this type of operation.'' \17\
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    \16\ 85 FR 23876 (May 5, 2021).
    \17\ Docket No. DOT-OST-2021-0036-0025.
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    The TRB issued its Phase I Report on June 15, 2021,\18\ which 
reviewed the plans and progress of the LNG Task Force and evaluated the 
relevance, completeness, and quality of those efforts. The Phase I 
Report generally praised the LNG Task Force's ``comprehensive as 
planned'' program for making effective use of a ``number of long 
standing and high-quality research and testing programs.'' However, the 
TRB noted that the COVID-19 public health emergency resulted in delays 
in initiation and completion of several tasks. The TRB also noted that 
the interdependency of many of those outstanding tasks complicated its 
and the LNG Task Force's work in developing a complete understanding of 
the risks associated with the transportation of LNG in rail tank cars. 
Specifically, it expressed concern on the incomplete status of tasks 
pertaining to full-scale impact testing, portable tank pool fire 
testing, worst-case scenario analysis, and quantitative risk 
assessment. The Phase I Report made several recommendations including 
proposing that PHMSA and FRA make changes to the planned portable fire 
tank testing, assess the potential for cryogenic damage cascading to 
adjacent tanks, enhance the modeling for worst-case scenarios, evaluate 
explosion hazards from a spill of LNG resulting in vapor dispersion in 
an environment with confined or congested spaces, and add loading and 
unloading operations to the risk assessment. PHMSA subsequently 
modified its LNG Task Force testing activity in response to the Phase I 
Report recommendations by, among other things, undertaking each of the 
following: enhanced impact testing directed toward evaluating post-
weld, heat-treated seams from a DOT-113C120W9-specification tank car; 
enhanced worst-case scenario modeling; performing an enhanced 
quantitative risk assessment; modification of ISO tank pool fire 
testing protocols to better simulate release conditions; and enhanced 
train dynamic simulations to better capture effects from use of 
distributed power and buffer car placement within a train consist 
transporting LNG.
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    \18\ NASEM, ``Preparing for LNG by Rail Tank Car: A Review of a 
U.S. DOT Safety Research, Testing, and Analysis Initiative'' (Jun. 
2021) (Phase I Report), https://www.nap.edu/read/26221/chapter/1.
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    On November 8, 2021, PHMSA published the NPRM in this rulemaking 
proceeding. In that NPRM, PHMSA reviewed pertinent economic data, TRB's 
Phase I Report recommendations, and the status of ongoing work of the 
LNG Task Force en route to proposing a temporary suspension of the 
transportation of LNG by rail tank car until the earlier of either June 
30, 2024, or the publication of a companion rulemaking under RIN 2137-
AF54. PHMSA's proposal reflected its understanding that uncertainties 
acknowledged in the July 2020 Final Rule--e.g., regarding the near-term 
commercial viability of rail tank car transportation of LNG, as well as 
potential safety and environmental benefits and risks of rail tank car 
transportation--had only increased since issuance, thereby ``casti[ng] 
doubt on the continued validity of the balance between potential 
benefits and public safety and environmental risks underpinning the 
[July 2020 Final Rule].'' \19\ PHMSA therefore proposed a temporary 
suspension of the July 2020 Final Rule to allow time for PHMSA to 
review the results of the (then-forthcoming) TRB Phase II Report, 
complete ongoing LNG Task Force testing and evaluation activities, and 
(based on the results of those efforts) modify HMR requirements as 
appropriate within the companion rulemaking under RIN2137-AF54. The 
comment period closed on December 23, 2021. PHMSA received over 10,500 
comments from private individuals, environmental groups, government 
officials, the rail industry, and other stakeholders. See Section III 
for further details.
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    \19\ 86 FR at 61735-36.
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    The TRB issued its Phase II Report on September 9, 2022.\20\ The 
Phase II Report involved a more comprehensive assessment than that 
undertaken in connection with the Phase I Report regarding topics 
relevant to the safe movement of LNG by rail tank car pursuant to both 
SPs and the HMR following issuance of the July 2020 Final Rule. 
Specifically, it examined bulk shipments of LNG by other modes of 
transportation (including vessel and highway) to identify the basic 
principles used in those modes for safety assurance. It also examined 
the effectiveness of regulatory requirements and industry practices 
(e.g., pertaining to speed and routing, as well as other operational 
controls applicable to high-hazard flammable trains) intended to assure 
the safe transportation of bulk rail shipments of other hazardous 
materials.
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    \20\ NASEM, ``Preparing for LNG by Rail Tank Car: A Readiness 
Review'' (Sep. 2022) (Phase II Report), https://www.nap.edu/read/26719/chapter/1.
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    The Phase II Report also made recommendations on necessary near- 
and long-term actions to improve the understanding of the risks 
associated with transporting LNG by rail tank car, mitigate those 
risks, and prevent and prepare for potential incidents. The first 
recommendation suggested launching an LNG safety assurance initiative 
before LNG tank cars are put in service. The safety assurance 
initiative would actively monitor initial plans for and early patterns 
of LNG traffic activity, including the locations and routes of 
shipments, the number and configuration of tank cars in trains, and 
reports of incidents involving a tank car or train carrying LNG. The 
second and final recommendation suggested that PHMSA and FRA should 
review the DOT-113C120W9 tank car specification to ensure that it 
adequately accounts for the cryogenic and thermal properties of LNG 
that could contribute to a tank release in the event of a rail incident 
and potential cascading impacts therefrom. The TRB's elaboration on its 
second recommendation emphasized the value in assessing each of the 
following: the capacity of the pressure relief devices on the new DOT-
113C120W9-specification tank cars to vent a sufficient amount of LNG 
when the tank car is engulfed in an LNG fire in derailment conditions, 
including a rollover event; the effects of adding more and different 
types of insulation in the annular space to ensure sufficient 
performance of the multilayer insulation system when the tank car is 
exposed to heat flux and direct flame impingement from an LNG fire; and 
the potential for the outer tank of the DOT-113C120W9 tank car to 
experience cryogenic brittle failure and loss of vacuum insulation when 
exposed to an LNG pool fire. PHMSA subsequently adjusted its LNG Task 
Force testing activity in response to the Phase II Report 
recommendations by modifying its ongoing worst-case analysis modeling 
and quantitative risk assessment efforts to address the DOT-113C120W9-
specification design element concerns raised by the TRB. In light of 
the new information received from the TRB reports and PHMSA's completed 
research and ongoing tests, PHMSA suspends the regulations adopted in 
the July 2020 Final Rule to allow PHMSA sufficient time to complete its 
analysis to reconsider the determinations made in the July 2020 Final 
Rule.
    The LNG Task Force has completed most of its testing and evaluation 
activities (as modified in response to the TRB Phases I and II 
Reports). Of those remaining activities, PHMSA expects to

[[Page 60360]]

complete its enhanced quantitative risk analysis and worse case 
analysis modeling no later than Q3-2023. This analysis has taken longer 
than expected because it was modified first to address concerns in the 
TRB Phase I Report in June 2021 and then again in response to the TRB 
Phase II Report issued in September 2022. PHMSA is in the process of 
contracting for performance of each of the following remaining tasks: 
(1) enhanced impact testing directed toward evaluating post-weld, heat-
treated seams from a DOT-113C120W9-specification tank car in response 
to the TRB Phase I Report; and (2) enhanced train dynamic simulations 
to better capture effects from use of distributed power and buffer car 
placement within a train consist transporting LNG in response to the 
TRB Phase I Report.

D. East Palestine, OH Derailment

    On February 3, 2023, a mixed-consist freight train operated by 
Norfolk Southern Railway--comprised of two head-end locomotives, 149 
railcars, and 1 distributed power locomotive--derailed in East 
Palestine, Ohio. Thirty-eight railcars derailed, including 11 tank cars 
carrying combustible liquid and flammable gas hazardous materials, 
though none of the railcars were carrying LNG. The derailment resulted 
in a fire impacting the derailed tank cars and damaging 12 additional 
railcars that had not derailed. Included in the derailment and fire 
were five DOT-105 specification tank cars containing vinyl chloride--a 
hazardous material classified as a Division 2.1 flammable gas. These 
DOT-105 specification tank cars were not punctured in the derailment. 
PHMSA is working with the National Transportation Safety Board to learn 
all it can from this incident and determine whether the lessons learned 
should inform rail transportation of other hazardous commodities such 
as LNG.

III. Discussion of Comments to the NPRM and Adoption of a Temporary 
Suspension of the July 2020 Final Rule

    The comment period for the NPRM in this proceeding closed on 
December 23, 2021. PHMSA received over 10,500 sets of comments to the 
rulemaking docket through and after the formal comment period; 
consistent with Sec.  106.70, PHMSA considers late-filed comments to 
the extent possible. PHMSA considered all comments received in the 
development of this Final Rule. The comments submitted to this docket 
may be accessed via http://www.regulations.gov. The following table 
categorizes the commenters. Please note that some commentors submitted 
multiple comments.

------------------------------------------------------------------------
                                               Description and examples
             Commenter                Count           of category
------------------------------------------------------------------------
Non-Government Organizations.......       18  Environmental Groups;
                                               Emergency Response
                                               Organizations; Other.
Government Officials...............        8  Local; State; Federal;
                                               Tribal.
Private Individuals................   10,126  ..........................
Industry Stakeholders..............        3  Trade Associations;
                                               Shippers.
------------------------------------------------------------------------
                     Table of Commenters to the NPRM
------------------------------------------------------------------------

    Comments received could generally be summarized as advancing one or 
more of the following positions:
     Comments requesting an immediate, permanent ban of LNG by 
rail;
     Comments requesting the removal of the June 30, 2024, 
sunset date;
     Comments of general support for the NPRM;
     Comments alleging chilling of near-term demand for LNG 
transportation by rail tank car pursuant to the July 2020 Final Rule;
     Comments alleging that LNG by rail improves safety;
     Comments alleging environmental benefits from LNG by rail;
     Comments alleging PHMSA is overstepping its authority by 
attempting to regulate oil and gas production;
     Comments alleging PHMSA did not meet its evidentiary 
burden under the APA for temporary suspension of the July 2020 Final 
Rule;
     Comments alleging that PHMSA's proposal will have 
miscellaneous adverse consequences for regulated entities, the U.S. 
economy, and national security; and
     Comments beyond the scope of this rulemaking.
    Based on the comments received in response to the NPRM, the 
recommendations in the TRB Phases I and II Reports, the ongoing LNG 
Task Force testing and evaluation activities, and pertinent information 
regarding the near-term commercial prospects for rail tank car 
transportation of LNG, PHMSA has concluded that a temporary suspension 
of the July 2020 Final Rule's authorization for rail tank car 
transportation of LNG in new DOT-113C120W9-specification tank cars is 
appropriate. PHMSA finds that, consistent with the analysis in the 
NPRM, these resources indicate that the uncertainties described in the 
July 2020 Final Rule (e.g., regarding whether, when and how LNG by rail 
tank car transportation will occur, and the safety and environmental 
risks and benefits of such transportation) have only increased since 
its issuance, calling into question the balance between potential 
benefits and public safety and environmental risks PHMSA understood 
itself to be striking in that rulemaking. In contrast (and as explained 
at greater length below in this Section III responding to comments 
received on the NPRM) a temporary suspension will ensure each of the 
following: (1) avoidance of potential safety risks to public and worker 
safety and the environment while PHMSA completes its companion 
rulemaking under RIN 2137-AF54; (2) HMR authorization of rail tank car 
transportation of LNG pursuant to that companion rulemaking reflects 
the best science by accounting for ongoing LNG Task Force testing and 
evaluation activities as informed by the TRB Phases I and II Report 
recommendations; (3) consideration of additional public comment from 
diverse stakeholders in that companion proceeding; and (4) minimizing 
the potential for economic burdens by ensuring that entities avoid 
ordering rail tank cars for LNG service compliant with the requirements 
of the July 2020 Final Rule when the companion rulemaking may alter 
those requirements.\21\ See 86 FR at 61732, 67135-36. As noted in the 
NPRM, stakeholders seeking to transport LNG by rail during the 
suspension period may seek (on an ad hoc basis) either SPs from PHMSA 
or approvals from FRA.
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    \21\ The temporary suspension provided for in this Final Rule 
applies only to rail transportation of LNG tank cars--it does not 
prohibit use of the new DOT-113C120W9 tank car in connection with 
other hazardous, cryogenic liquids.
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    Lastly, the Final Rule extends the duration of the temporary 
suspension an

[[Page 60361]]

additional year (until June 30, 2025, at the latest) beyond the sunset 
date (June 30, 2024) proposed in the NPRM. This extension--which is 
consistent with comments received from stakeholders \22\ on the NPRM 
discussed in section III.B below--is warranted due to delays in 
completion of the LNG Task Force activity (discussed in section III.C 
below) that will inform the companion rulemaking under RIN 2137-AF54. 
Also, economic information discussed in section III.D below shows that 
the commercial prospects for rail tank car transportation pursuant to 
the July 2020 Final Rule have become even more uncertain than they were 
when the NPRM issued in November 2021.
---------------------------------------------------------------------------

    \22\ PHMSA received no comments that specifically requested the 
June 2024 sunset date for the suspension; commenters either sought 
no suspension or a permanent suspension.
---------------------------------------------------------------------------

A. Comments Requesting an Immediate, Permanent Ban of LNG by Rail

    PHMSA received numerous comments requesting the immediate, 
permanent ban of all LNG by rail in lieu of the temporary suspension as 
proposed in the NPRM. Many of these comments were part of write-in 
campaigns comprising approximately 6,650 comments in an initial 
campaign during the formal comment period, and an additional 3,500 
comments in a second campaign coordinated by the National Resource 
Defense Council (NRDC) after the East Palestine derailment in early 
2023 (NRDC Coordinated Write-in Campaign Comments). Other comments were 
stand-alone comments submitted by non-governmental organizations (e.g., 
environmental advocacy organizations); Federal, State, and local 
government officials; and private citizens.
    Many of these comments attributed the need for an immediate, 
permanent ban on the risk to public safety and the environment from 
LNG's material properties--specifically, pointing to its flammability, 
explosive potential, and GHG contributions--in the event of a release. 
Of particular concern for many commenters were the risks of a boiling 
liquid expanding vapor explosions (BLEVEs) or asphyxiation in the event 
of a release of LNG during an accident or incident. Some commenters 
elaborated on their safety concerns by highlighting the potential 
limitations (e.g., of personnel and equipment resources and training) 
of emergency response personnel to respond to an incident involving 
rail transportation of LNG in their jurisdictions. Other commenters 
alleged that the new DOT-113C120W9 tank car specification was 
inadequate or untested for rail transportation of LNG and that a more 
robust safety history--coupled with more robust, mandatory operational 
controls (such as limits on train length, tank car weight, and maximum 
allowable speed) than required in the July 2020 Final Rule--would be 
necessary to ensure safety. Other commenters cited safety and 
environmental justice concerns for those who live along rail lines that 
would carry LNG, stating that ``bomb trains'' would threaten the safety 
of those who live in these communities--many of which communities may 
be densely-populated or historically disadvantaged. Other commenters 
called for an immediate ban of LNG transportation by rail given 
methane's status as a potent GHG and the Biden-Harris Administration's 
commitments to reducing GHG emissions. And commenters from the NRDC 
campaign called for a ban on LNG by rail in the ``in the wake of the 
devastating train derailment in East Palestine, Ohio.'' \23\ Lastly, 
some commenters contended that if the ``. . . rule was already bad 
enough to reconsider, it should be repealed outright.'' \24\
---------------------------------------------------------------------------

    \23\ NRDC Coordinated Write-in Campaign Comments.
    \24\ Beyond Extreme Energy with 198 methods Comment at 1.
---------------------------------------------------------------------------

PHMSA Response
    PHMSA acknowledges the concerns raised by these stakeholders and 
agrees that any risks related to the transportation of LNG by rail 
should be examined closely and properly mitigated to ensure safety for 
the public and the environment. Accordingly PHMSA is suspending LNG 
transportation by rail tank car pursuant to the July 2020 Final Rule 
until the conclusion of the companion rulemaking under RIN 2137-AF54 or 
June 30, 2025, whichever is earlier. This will provide PHMSA an 
opportunity to conduct a thorough evaluation of the HMR's regulatory 
framework for rail transportation of LNG based on the information 
received from the LNG Task Force testing and evaluation efforts, TRB 
Phases I and II Reports, and stakeholders' written comments. PHMSA also 
encourages those stakeholders to consider submitting comments in 
response to any future notice of proposed rulemaking issued by PHMSA in 
the companion rulemaking under RIN 2137-AF54.

B. Comments Requesting the Removal of the June 30, 2024, Sunset Date

    PHMSA received comments requesting removal of the sunset date of 
June 30, 2024, proposed in the NPRM so that the proposed suspension 
would be in effect until the companion rulemaking under RIN 2137-AF54 
has concluded. Delaware Riverkeeper Network (DRN) commented that in the 
NPRM, PHMSA justified the sunset date by indicating that the TRB Phase 
II Report was expected in mid-2022 and that PHMSA needed time to 
incorporate those results and publish a rule. DRN argued that ``this 
rationale begs the question--why not wait until PHMSA actually 
incorporates the results of the Phase II Report and concludes the 
rulemaking process?'' They further stated that ``the unpredictability 
of the COVID-19 pandemic indicates that timelines are not as 
predictable as they were pre-2019.'' \25\
---------------------------------------------------------------------------

    \25\ DRN Comment at 2.
---------------------------------------------------------------------------

    The International Association of Fire Fighters (IAFF) suggested an 
objective-based approach whereby the suspension would only be lifted if 
certain criteria have been met. IAFF further urged ``. . . the FRA to 
establish specific criteria to be attained prior to the lifting of the 
proposed suspension.'' \26\ Similarly, comments from the AFL-CIO and 
others supported suspending LNG by rail tank car until LNG Task Force 
testing and evaluation efforts are complete, stating they ``. . . 
support PHMSA's suspension of the implementation of the rule until a 
time when the agencies have completed a more thorough safety review.'' 
\27\ Other commenters proposed longer suspension periods than had been 
proposed in the NPRM.
---------------------------------------------------------------------------

    \26\ IAFF Comment at 2.
    \27\ TDD Comment at 1.
---------------------------------------------------------------------------

PHMSA Response
    PHMSA in the NPRM specifically sought comments on the proposed 
suspension date, including the sunset date, and whether PHMSA should 
modify the proposed expiration of the suspension period.\28\ PHMSA 
appreciates and acknowledges the points made by commenters and, 
consistent with the discussion in the introduction to section III 
above, is extending the sunset date for the suspension period an 
additional year such that rail tank car transportation of LNG pursuant 
to the July 2020 Final Rule will be suspended until the earlier of 
either (1) a final rule concluding the companion rulemaking under RIN 
2137-AF54, or (2) June 30, 2025. This one-year extension beyond the 
sunset date (June 30, 2024) proposed in the NPRM will give PHMSA 
adequate time to complete LNG Task Force testing and evaluation 
activities (and delays in

[[Page 60362]]

receipt of the TRB Phases I and II Reports) that had been delayed 
because of the COVID-19 public health emergency and additional scoping 
and contracting issues, and thereafter integrate those results into 
each of a notice of proposed rulemaking and final rulemaking in the 
companion rulemaking under RIN 2137-AF54.
---------------------------------------------------------------------------

    \28\ 86 FR at 61737.
---------------------------------------------------------------------------

C. Comments of General Support for the NPRM

    PHMSA received numerous comments in support of the NPRM's proposed 
suspension, including comments from Governor Jay Inslee of Washington 
State; the Attorneys General of Maryland, New York, Connecticut, 
Delaware, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, 
Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the 
District of Columbia; and the Puyallup Tribe of Indians. Many 
commenters who supported the temporary suspension proposed in the NPRM 
also urged PHMSA to subsequently ban LNG in the companion rulemaking 
under RIN 2137-AF54. Commenters supporting the NPRM's proposed 
suspension of the July 2020 Final Rule generally articulated the same 
safety and environmental concerns as those calling for an immediate, 
permanent bans of rail tank car transportation of LNG discussed in 
section III.A above.
PHMSA Response
    PHMSA acknowledges the thousands of comments submitted in support 
of the NPRM. Although some of those commenters also urged PHMSA to 
permanently ban rail tank car transportation of LNG in the companion 
rulemaking under RIN 2137-AF54, PHMSA submits that it will need to 
complete (and review the results of) the LNG Task Force testing and 
evaluation efforts before it will be in a position to speak to the 
contents of a forthcoming notice of proposed rulemaking in that 
companion rulemaking. PHMSA encourages stakeholders to consider 
submitting comments in response to any future notice of proposed 
rulemaking issued by PHMSA in the companion rulemaking under RIN 2137-
AF54.

D. Comments Alleging Chilling of Near-Term Demand for LNG 
Transportation by Rail Tank Car Pursuant to the July 2020 Final Rule

    PHMSA received several comments \29\ on the NPRM's observations of 
increased uncertainty regarding whether there will be near-term demand 
for rail tank car transportation of LNG pursuant to the July 2020 Final 
Rule. Specifically, CSX noted in its comments that it had several 
projects in development to transport LNG by rail in or before 2024, and 
that ``[t]he continued investment in and pursuit of those projects, 
which require design, permitting, and construction with long lead 
times, would be impaired if the July 2020 Final Rule were suspended 
indefinitely, delaying them potentially for years and harming CSX's 
reliance interests and imposing costs and lost business opportunities 
on CSX and its partners'' (emphasis added). CSX subsequently met with 
PHMSA on February 17, 2022, and elaborated on their written comments by 
noting that those projects had been shelved and that the issuance of 
the NPRM was the occasion for those decisions. The Attorney General for 
the State of Louisiana, Jeff Landry, joined by State Attorneys General 
from Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, 
Indiana, Kentucky, Mississippi, Missouri, Montana, Nebraska, New 
Hampshire, Ohio, South Carolina, South Dakota, Texas, Utah, Virginia, 
West Virginia, and Wyoming (Landry, et. al.) similarly contend that 
``the proposed rule itself is the cause of the regulatory uncertainty 
of which it complains'' (emphasis in original) in that it ``discourages 
companies from making any capital investment in LNG by rail, 
specifically the DOT-113C120W9 specification tank cars that the 2020 
Rule authorized.''
---------------------------------------------------------------------------

    \29\ CSX Comments at 1; PHMSA, Doc. No. PHMSA-2021-0058-7064, 
``Summary of CSX Listening Session'' (Feb. 17, 2022); Landry, et al. 
Comments at 1, 4.
---------------------------------------------------------------------------

PHMSA Response
    PHMSA finds these comments unconvincing statements of the near-term 
commercial viability of rail tank car transportation of LNG pursuant to 
the July 2020 Final Rule. The suspension proposed in the NPRM and 
adopted in this Final Rule is not ``indefinite'' as characterized by 
CSX; rather, it is time-limited to the earlier of a date certain (June 
2025) or to the completion of the milestone of issuing a final rule in 
the companion rulemaking under RIN 2137-AF54. Even if the NPRM affected 
one or more of CSX's nascent projects exploring rail tank car 
transportation of LNG, CSX or other entities could have applied for, 
and may still apply for, an alternative regulatory vehicle (e.g., an SP 
under Sec.  107.105,\30\ or an FRA approval for rail transportation via 
portable tank) to allow work to proceed on those projects during the 
suspension period. PHMSA is unaware of CSX, its collaborators in those 
projects, or any other entities having pursued alternatives. Indeed, in 
its written comments and again during its February 17, 2022, meeting 
with PHMSA, CSX personnel acknowledged that the choice of package 
(i.e., the particular DOT-specification rail tank car or ISO tank) 
employed in rail transportation of LNG is merely one decision within a 
multi-step, multi-year project development and execution chain 
involving, among other things, the construction of origin facilities 
and off-loading facilities, and the acquisition of one or more enabling 
Federal and State permits. The projects CSX and others may have been 
pursuing were prolonged, highly contingent processes in which there are 
multiple potential bases for material delay or cessation of a project 
throughout the development cycle. That said, PHMSA understands the 
shelving of CSX's or any other entities' projects following the 
proposal of a time-limited, temporary suspension for which there could 
be alternative rail transportation methods evinces less an alleged 
``chilling'' of investment than the significant uncertainty discussed 
in the NPRM regarding whether there would be any commercially viable 
projects for rail transportation of LNG in the near-term.
---------------------------------------------------------------------------

    \30\ Applications for a Special Permit submitted under Sec.  
107.105 must demonstrate that such Special Permit will achieve at 
least an equivalent level of safety as to what is provided under the 
HMR, and in particular, should address any outstanding safety 
questions or concerns including those raised in this rulemaking.
---------------------------------------------------------------------------

    And PHMSA understands that a variety of forces have created--and 
will continue to create throughout the suspension period--headwinds for 
the near-term commercial viability of any project for rail 
transportation of LNG. The NPRM explained that the near-term commercial 
prospects for LNG by rail (which the July 2020 Final Rule had 
acknowledged were uncertain at its issuance) had grown even more 
uncertain due to near-term structural changes in international markets 
including (1) massive investment in greatly increased export capacity 
by competing providers such as Qatar, and (2) reduced demand for LNG 
customers seeking to reduce their GHG emissions.\31\ The comments 
submitted by CSX, other industry stakeholders, and Landry, et. al. did 
not attempt to rebut this evidence, or PHMSA's finding that the near-
term commercial uncertainty for rail transportation of LNG had 
increased. Further, the structural headwinds for rail transportation of 
LNG are likely to accelerate in the near future, as the U.S. Energy 
Information Administration (EIA) predicts that the capacity of

[[Page 60363]]

pipeline-supplied U.S. LNG export terminals are expected to increase 
significantly beginning around 2025 which some analysts note could 
depress the offtake prices for LNG in the international export market--
which could divert demand for LNG exports that could have been serviced 
by LNG by rail.\32\ Further, the supply shocks of the conflict in 
Ukraine have highlighted both in the United States and abroad the 
volatility of natural gas prices and fragility of international LNG 
market supply, accelerating movement among historical consumers of 
natural gas toward renewable energy and reduced reliance on LNG 
exports.\33\ Meanwhile, domestic consumption of natural gas in the 
United States is expected to fall in the next decade due to increasing 
electrification driven by consumer preferences and Federal and State 
policy initiatives to reduce GHG emissions.\34\ Durably high commodity 
(e.g., steel) prices and interest rates \35\ would also tend to 
discourage capital investment in the manufacture of a new fleet of DOT-
113C120W9-specification tank cars for dedicated commercial LNG service.
---------------------------------------------------------------------------

    \31\ 86 FR at 61735-36.
    \32\ EIA, ``U.S. LNG Export Capacity to Grow as Three Additional 
Projects Begin Construction,'' (Sept. 6, 2022), https://www.eia.gov/todayinenergy/detail.php?id=53719 (last visited May 12, 2023). See 
also A. Shiryaevskaya et al., Bloomberg, ``World Gas Supply Shifts 
from Shortage to Glut with Demand Muted'' (Apr. 16, 2023); L. 
Hampton, Reuters, ``Wave of New LNG Export Plants Threatens to Knock 
Gas Prices'' (Mar. 14, 2023).
    \33\ See Intl. Energy Agency (IEA), World Energy Outlook: 2022 
at 3, 25-26 (Oct. 2022); The Economist ``War and Subsidies Have 
Turbocharged the Green Transition'' (Feb. 13, 2023); Inst. for 
Energy Economics and Financial Analysis, Global LNG Outlook: 2023-
2027 at 4-5 (Feb. 15, 2023).
    \34\ See EIA, Annual Energy Outlook 2023 at 25 (Mar. 2023).
    \35\ N. Ruggiero, S&P Global Commodity Insights, U.S. Steel 
Sentiments Hit New High for 2023 As Mills Increase Finished Prices'' 
(Mar. 13, 2023); R. Druzin, Argus Media, ``U.S. Steel Price Driven 
Up by Multiple Factors'' (Mar. 14, 2023); M. Derby, Reuters, 
``Premature for Fed to Call End to Rate Hikes with Inflation Still 
High, Williams Says (May 9, 2023).
---------------------------------------------------------------------------

    PHMSA finds this recent evidence, coupled with the evidence 
discussed in the NPRM, augurs uncertainty regarding the commercial 
prospects for rail transportation of LNG that will continue beyond the 
originally proposed suspension period and into the longer suspension 
period adopted in this final rule.\36\ Following the conclusion of the 
(temporary) suspension period, stakeholders would be able to evaluate 
whether the commercial prospects for rail tank car transportation of 
LNG pursuant to the July 2020 Final Rule merit pursuing.
---------------------------------------------------------------------------

    \36\ Amidst the limited domestic and international commercial 
prospects discussed here, it is hardly surprising that rail 
transportation of LNG has occurred by neither (1) existing DOT-
113C120W tank cars pursuant to DOT-SP 20534 issued by PHMSA to ETS 
in 2019, nor (2) ISO tanks pursuant to an FRA approval issued to the 
Alaska Railroad Company in 2015.
---------------------------------------------------------------------------

E. Comments Contending That the LNG by Rail Improves Safety

    PHMSA received several comments arguing temporary suspension of the 
July 2020 Final Rule would forfeit safety benefits.\37\ Some of those 
comments pointed to the physical properties (e.g., auto-ignition 
temperatures) of LNG they assert make its rail transportation 
inherently safer than transportation of natural gas in other physical 
states. Others contended that, absent the July 2020 Final Rule, 
industry would be forced to utilize other modes of transportation of 
natural gas--in particular, highway transportation via MC-338 cargo 
tanks--which would entail more frequent accidents and incidents than 
rail transportation. Some comments generally praised the DOT-113C120W9-
specification tank car approved for use in transporting LNG in the July 
2020 Final Rule because it was an improvement on the proven, existing 
DOT-113C120W-specification tank cars that PHMSA had approved for use in 
rail tank car transportation of LNG via SP. Lastly, RSI asserted that 
by discouraging investment in DOT-113C120W9 tank cars for LNG service, 
PHMSA was discouraging construction of those enhanced tank cars for use 
in transporting other cryogenic liquid hazardous materials.
---------------------------------------------------------------------------

    \37\ CSX Comments at 1; Landry, et al. Comments at 1, 4, 5; RSI 
Comments at 2, 4; ``Comments of U.S. House of Representatives 
Committee on Transportation and Infrastructure--Republican Minority 
Members'' at 2-3 (Dec. 22, 2021) (House T&I Minority Comments).
---------------------------------------------------------------------------

PHMSA Response
    PHMSA finds these contentions unconvincing. As presented, each of 
those arguments suggest that any potential benefits of rail tank car 
transportation of LNG will be lost if PHMSA suspends the July 2020 
Final Rule as proposed in the NPRM. But that binary understanding 
confuses the temporary, time-limited suspension proposed in the NPRM 
and adopted in this final rule with a permanent or indefinite ban on 
rail tank car transportation of LNG. A temporary suspension would mean 
that any safety benefits would only be unavailable for the suspension 
period--i.e., until the end of June 2025 (at the latest). See 86 FR at 
61737-38. Further, any such potential, time-limited comparative 
advantage turns on whether any rail transportation of LNG pursuant to 
the July 2020 Final Rule would in fact have occurred during the 
suspension period, but, as explained above, market conditions now and 
in the near future do not support demand to transport LNG in rail tank 
cars. That demand, which was uncertain at issuance of the July 2020 
Final Rule has become only more uncertain since given the commercial 
headwinds facing the development of that market.\38\ Further, any time-
limited comparative advantage from leaving the July 2020 Final Rule 
undisturbed would also be mitigated by the availability of other 
regulatory vehicles (FRA approvals and PHMSA SPs) that entities can 
pursue during the suspension period.
---------------------------------------------------------------------------

    \38\ The NPRM also explains there is also significant 
uncertainty regarding the commercial prospects of mode-switching 
(from rail tank car to MC-338 cargo tanks carried by truck) given 
that such mode-switching would sacrifice (potentially significant) 
economies of scale offered by rail tank car transportation of LNG. 
See 86 FR at 61737. This observation was not addressed by any of the 
comments submitted by the House T&I Minority, Landry, et al., RSI, 
or CSX.
---------------------------------------------------------------------------

    Uncertainty regarding whether the July 2020 Final Rule's 
authorization of rail transportation in DOT-113C120W9-specification 
tank cars ensures adequate protection of public safety has only 
increased since the time of issuance of each of the July 2020 Final 
Rule and the NPRM proposing its suspension. The July 2020 Final Rule 
itself acknowledged that its authorization of rail transportation of 
LNG in the new DOT-113C120W9 tank car did not turn only on the tank car 
itself; rather, a number of other factors (including, but not limited 
to, the material properties of LNG and natural gas, the quantity of LNG 
that will be moved by rail, the routes involved, the availability of 
emergency response planning resources, etc.) affected the risks 
involved in rail tank car transportation of LNG. See 86 FR at 
61734.\39\ Subsequently, the TRB Phase I Report highlighted gaps 
(discussed in section II.C above) within the LNG Task Force testing 
efforts undertaken to improve confidence in

[[Page 60364]]

the safety benefits of rail transportation of LNG. TRB's subsequent 
Phase II Report identified additional areas warranting additional 
research and evaluation to ensure the safety of rail transportation of 
LNG in the DOT-113C120W9-specification tank car. Although PHMSA has 
revised the LNG Task Force's testing and evaluation activities in 
response to the TRB Phases I and II Report recommendations, that work 
continues; and even after completing the activities PHMSA must evaluate 
the results and determine whether and how to make permanent 
modifications to the HMR governing rail transportation of LNG. Further, 
the comments submitted in response to the NPRM proposing suspension of 
the July 2020 Final Rule show a lack of consensus among stakeholders 
regarding whether some of the critical safety challenges known when 
PHMSA issued the July 2020 Final Rule have been addressed. For example, 
a comment submitted by IAFF on the NPRM noted that ``the capabilities 
of fire fighters and emergency medical responders to safely and 
effectively respond to hazmat incidents involving LNG rail cars has not 
improved since our 2019 comments'' notwithstanding any PHMSA and FRA 
outreach and engagement efforts in the interim.\40\
---------------------------------------------------------------------------

    \39\ PHMSA disagrees with Landry, et al. that PHMSA's 
authorization of rail transportation of LNG in existing, less robust 
DOT-113C120W tank cars pursuant to DOT-SP 20534 reveals PHMSA's 
concerns regarding safety of the DOT-113C120W9 tank car as 
pretextual. Landry, et al. Comments at 4. The conditions it 
imposed--a defined, limited duration, a single route, and various 
operational controls--facilitate understanding and bounding of 
safety and environmental risks notwithstanding transportation within 
a legacy DOT-113C120W tank car. In contrast, the July 2020 Final 
Rule's nationwide, perpetual authorization of rail tank car 
transportation of LNG in a new tank car specification could entail a 
fundamentally different risk profile than DOT-SP 20534 or any other 
special permits that PHMSA may issue authorizing (on an ad hoc 
basis) rail tank car transportation of LNG. In addition, no LNG was 
ever shipped under DOT-SP 20534, which has now expired and which 
PHMSA has declined to renew.
    \40\ IAFF, Doc. No. PHMSA-2021-0058-6442, ``Comments Regarding 
Suspension of Hazardous Materials Regulations Amendments Authorizing 
Transportation of Liquefied Natural Gas (LNG) by Rail'' at 1-2 (Dec. 
23, 2021).
---------------------------------------------------------------------------

    Additionally, comments touting the inherent safety advantages of 
rail tank car transportation of liquefied natural gas miss the larger 
safety issue toward which much of the LNG Task Force testing evaluation 
activity is directed. Natural gas in liquid form, undisturbed within a 
DOT-113C120W9 tank car is a very stable material that will not combust 
unless it vaporizes which only happens if the material warms. Further, 
any vapor present in the outage of the tank car will be of a 
concentration that is too high to combust. Rather, the principal safety 
concern--highlighted by PHMSA in the July 2020 Final Rule, in the NPRM 
and comments thereon, and in TRB's evaluation of safety risks 
associated with rail transportation of LNG--pertains to consequences 
should either there be a release of LNG to atmosphere, or a tank car be 
exposed to harsh conditions during an incident or accident. LNG 
releases can expose personnel and materials to extreme cold (as low as 
-120 [deg]C or -260 [deg]F) and can be an asphyxiant within a confined 
space. When released to the atmosphere (as a result of a puncture of 
the inner and outer tanks during an accident or incident), liquid 
methane will convert to a gas that has a relatively low auto-ignition 
point (about 540 [deg]C or 1000 [deg]F) in addition to being highly 
combustible when exposed to an ignition source such as fire or 
electrical sparking. When methane ignites, it burns at very high 
temperatures (about 1330 [deg]C, or 2426 [deg]F), potentially resulting 
in exposure of personnel and materials--including (potentially) 
undisturbed DOT-113C120W9 tank cars adjacent to an LNG pool fire to 
significant radiant heat hazards. Although PHMSA had undertaken (via 
the LNG Task Force) a robust testing regime to develop a fulsome 
understanding of those potential, significant hazards of LNG when 
transported by rail tank car in parallel with the development and 
issuance of the July 2020 Final Rule, the subject matter expert 
recommendations within each of the TRB's Phases I and II Reports 
underscore the value in obtaining that understanding from completing 
enhanced testing and evaluation activities before LNG begins moving in 
DOT-113C120W9 rail tank cars pursuant to the July 2020 Final Rule. A 
temporary suspension gives the LNG Task Force and PHMSA an opportunity 
to complete that critical work.
    PHMSA also disagrees that suspension of the July 2020 Final Rule 
would discourage investment in enhanced, DOT-113C120W9-specification 
tank cars for use in rail transportation of any cryogenic liquid 
hazardous materials--not just LNG. PHMSA acknowledges that the HMR (at 
49 CFR part 179 Subpart F) contemplates use of DOT-113C120W9-
specification tank cars for transportation of other materials 
authorized for transportation in the DOT-113 series tank cars in that 
DOT-113C120W9 tank cars will also meet and exceed the minimum DOT-
113C120W standard. However, factors influencing whether to invest in 
new DOT-113C120W9-specification tank cars for use in transporting those 
other cryogenic liquids are very different from the factors driving 
decision making on investing in those tank cars for LNG service. For 
example, those other cryogenic liquid hazardous materials would likely 
be destined for more mature domestic and international markets than the 
(currently) speculative domestic and international market for LNG 
transported by rail tank car. Perhaps for this reason, PHMSA is aware 
of at least one entity having submitted an order for construction of 
new DOT-113C120W9-specification tank cars for cryogenic ethylene 
service--even as, over three years after the July 2020 Final Rule 
issued, PHMSA is unaware of a single order from a commercial entity for 
a new DOT-113C120W9 specification tank car for LNG service.\41\
---------------------------------------------------------------------------

    \41\ In addition, DOT-113C120W9-specification tank cars 
constructed for cryogenic ethylene (or other cryogenic liquid) 
service could not be converted for LNG service easily or 
immediately: each tank car would have to be cleaned and purged; the 
physical configuration of critical, installed components of each 
tank car (e.g., pressure relief valve piping, valves, and other 
service equipment) would have to be changed; and the re-configured 
tank car would have to obtain a design certification from the 
American Association of Railroads Tank Car Committee. Mechanically 
converting one car--separate from the approval process for the Tank 
Car Committee--could take several months to over a year.
---------------------------------------------------------------------------

    For the reasons discussed above and in section III.D, PHMSA 
concludes that uncertainty on critical issues regarding the safety 
profile of rail tank car transportation of LNG pursuant to the July 
2020 Final Rule has increased since its issuance--and will persist 
through the suspension period adopted in this final rule until PHMSA 
and FRA have had an opportunity to complete and review the results of 
the LNG Task Force's testing and evaluation activities and implement 
any necessary regulatory amendments in the companion rulemaking under 
RIN2137-AF54.

F. Comments Alleging Environmental Benefits From LNG by Rail

    PHMSA received several comments arguing temporary suspension of the 
July 2020 Final Rule would forfeit important environmental benefits. 
Comments describe several mechanisms for such environmental benefits 
including potential reduction in flaring from oil and gas production 
activities and reduced GHG emissions compared to highway transportation 
of the same volume of LNG in MC-338 cargo tanks.\42\
---------------------------------------------------------------------------

    \42\ House T&I Minority Comments at 2-3; Landry, et al. Comments 
at 5-7; CSX Comments at 1-2; RSI Comments at 2, 5.
---------------------------------------------------------------------------

PHMSA Response
    For largely the same reasons discussed in section III.E above, 
PHMSA finds these arguments unconvincing. The statements in those 
comments regarding the environmental benefits of the July 2020 Final 
Rule were offered without any evidentiary support and little analysis, 
frustrating evaluation against the comments submitted in response to 
the NPRM attributing potential environmental harms (including those 
pertaining to commodity releases and lifecycle and indirect GHG 
emissions) to rail tank car

[[Page 60365]]

transportation of LNG. As explained in the NPRM, both environmental 
benefits and risks of rail tank car transportation of LNG are a 
function of whether, when, and where viable market opportunities for 
such transportation develops. The July 2020 Final Rule acknowledged 
considerable uncertainty regarding those questions--and as explained in 
the section III.D above, the commercial prospects for rail tank car 
transportation of LNG are more speculative now than in July 2020 or 
even when the NPRM in this proceeding issued in November 2021.
    These considerations are particularly relevant to the mechanisms 
for environmental benefits identified in those comments charactering 
the environmental benefits of the July 2020 Final Rule. Whether a 
market will emerge during the suspension period (or for that matter, 
may ever emerge) for capture of methane that would be otherwise be 
flared from oil and gas production operations and transported by rail 
tank car is not a straightforward proposition. In addition to the non-
trivial capital investment for rail tank cars, such an approach would 
require, among other things, liquefaction equipment at the production 
site and gasification equipment at the destination and enabling Federal 
or state regulatory authorizations--and each of those elements may need 
to be procured sooner at break-even or lower cost than alternatives 
such as capture and transportation via pipeline or MC-338 cargo tank 
carried by truck (or, by extension, by rail tank car via FRA approval 
or PHMSA SP). And even if such a market opportunity would have arisen, 
meaningful evaluation of the GHG emissions benefits would inevitably 
involve myriad assumptions (e.g., accident/incident rates for rail and 
highway transportation; lifecycle emissions from construction and 
operation of the tank cars and related equipment; potential indirect 
effects such as emissions associated with upstream production induced 
by newly-available takeaway capacity) that increase uncertainty 
regarding GHG impacts. Similarly, modal shifting between highway 
transportation of LNG via MC-338 cargo tank and rail tank car may not 
be as easy or as desirable as those comments assume. As discussed above 
in section III.D, highway transportation sacrifices economies of scale 
that is among the principal advantages of rail tank car transportation 
of LNG.
    For the reasons discussed above, PHMSA concludes that uncertainty 
regarding the potential environmental benefits and harms from rail tank 
car transportation of LNG pursuant to the July 2020 Final Rule will 
continue throughout the suspension period adopted in this Final Rule. 
This persistent uncertainty on a critical potential benefit identified 
for the July 2020 Final Rule militates in favor of its temporary 
suspension as the LNG Task Force completes its testing and evaluation 
activity and PHMSA implements any necessary regulatory amendments in 
the companion rulemaking under RIN 2137-AF54.

G. Comments Alleging PHMSA Is Overstepping Its Authority by Attempting 
To Regulate Oil and Gas Production

    PHMSA received comments alleging that PHMSA's proposed suspension 
of the July 2020 Final Rule overstepped its statutory authority under 
the HMTA by attempting to discourage oil and gas production 
activity.\43\
---------------------------------------------------------------------------

    \43\ Landry, et al. Comments at 1, 4.
---------------------------------------------------------------------------

PHMSA Response
    Those arguments mischaracterize PHMSA's intentions and misapprehend 
pertinent law.\44\ Indeed, PHMSA nowhere in either the NPRM or in this 
Final Rule identifies decreasing oil and gas production activity as an 
explicit goal of its suspension of the July 2020 Final Rule. Instead, 
Landry, et al. divines that intention from a reference to ``[induced] 
natural gas extraction'' within a list of several considerations in the 
NPRM that are probative to the safety and environmental risks attendant 
to rail tank car transportation of LNG.\45\ But PHMSA's acknowledgement 
in the NPRM of the common-sense proposition that new oil and gas 
production activity--and any attendant environmental benefits as well 
as risks (including release to atmosphere of methane lost during 
extraction and transportation) associated with those activities--could 
be a reasonably foreseeable consequence of authorizing new takeaway 
capacity is consistent with its obligations under NEPA. See 86 FR 
61735-36 & n. 35. It is also consistent with the reasoning supporting 
the July 2020 Final Rule, which (along with its supporting 
documentation) explicitly identified potential indirect effects on each 
of upstream production activity and downstream fuel switching from coal 
as justifications for that rulemaking.\46\
---------------------------------------------------------------------------

    \44\ This argument is also in tension with exhortations 
elsewhere in the Landry, et al. comments for PHMSA to consider 
policy issues (pertaining to U.S national security and consumers' 
home heating bills) that are arguably more ``attenuated'' and less 
``tethered'' to PHMSA's authority under the HMTA. See Landry, et al. 
Comments at 1, 7-10. Indeed, Landry, et al. also urges PHMSA to 
consider the indirect relationship between the rulemaking and 
production activity by claiming that rail tank car transportation 
could yield reductions in flaring from oil and gas production 
activities. Id. at 7.
    \45\ Landry, et al. Comments at 4 (citing 86 FR at 61736).
    \46\ See 85 FR at 44995. See also Final Regulatory Impact 
Assessment, Doc. No. PHMSA-2018-0025-0479, at 4, 32-33 & n. 48; 
Final Environmental Assessment, Doc. No. PHMSA-2018-0025-0478 at 35-
36, 52.
---------------------------------------------------------------------------

    Nor, moreover, would any indirect effect on production activity 
from PHMSA's exercise of its authority under the HMTA to regulate 
interstate rail transportation of hazardous material implicate, as 
suggested by Landry, et al., the ``major questions'' concerns 
articulated in Utility Air Regulatory Group v. EPA (573 U.S. 302 
(2014)), and in West Virginia v. EPA (597 U.S. (2022)). Neither case 
disturbed the longstanding tolerance of minor, incidental, or 
accidental effects when an agency takes actions within the core of its 
statutory responsibilities. And here, PHMSA is doing just that: 
imposing a temporary suspension of a recent (July 2020) exercise of its 
authority under the HMTA to prescribe regulations governing interstate 
transportation by rail of hazardous materials to temporarily restore 
the status quo ex ante preceding the July 2020 Final Rule. Lastly, 
given that (as explained in section III.D above) there is considerable 
uncertainty regarding the commercial viability of rail tank car 
transportation of LNG, the limited-duration suspension adopted in this 
Final Rule hardly resembles the fact sets before the Supreme Court in 
either of the above decisions in which EPA was said to have 
``discover[ed] . . . an unheralded power to regulate `a significant 
portion of the American economy.' ''

H. Comments Alleging PHMSA Did Not Meet Its Evidentiary Burden Under 
the APA for Temporary Suspension of the July 2020 Final Rule

    PHMSA also received comments claiming that the NPRM did not make 
the required showing under the APA for suspension of currently-
effective regulations.\47\ Landry, et al. in particular characterizes 
controlling precedent as establishing a uniquely high burden for 
temporary suspension of existing regulations. PHMSA must, in their 
view, provide ``a detailed justification of new facts that contradict 
facts underlying . . . prior policy'', as well as ``a more `reasoned 
explanation' to justify suspension of a regulation'' than merely the 
``inauguration of a new President.'' PHMSA must also demonstrate an

[[Page 60366]]

``awareness that it is changing position.'' Landry, et al. ultimately 
concluded that PHMSA ``had not provided any . . . explanations'' 
demonstrating compliance with those purported requirements.
---------------------------------------------------------------------------

    \47\ House T&I Minority Comments at 2 & n.8; Landry, et al. 
Comments at 3-4.
---------------------------------------------------------------------------

PHMSA Response
    These criticisms misapprehend controlling precedent. Indeed, PHMSA 
does not understand the cited decisions to stand for the proposition 
suggested in those comments that ``reasoned decision-making'' in the 
context of suspension of currently effective regulations necessarily 
entails a heightened evidentiary burden. Rather, the Supreme Court 
explicitly stated that the evidentiary burden for agency action is not 
heightened when that action is a change. F.C.C. v. Fox Studios, 556 
U.S. at 502, 514-15 (2009). And although agencies suspending currently 
effective regulations must acknowledge a change in their position, 
address any tensions between conflicting factual findings, and confront 
any serious reliance interests on the old policy, those common-sense 
expectations do not constitute a different, uniquely higher evidentiary 
standard for suspending a currently-effective regulation; rather, those 
are the sort of issues an agency may need to address (as applicable) 
when adopting any change in its regulations. See Motor Veh. Mfrs. Ass'n 
v. State Farm Ins., 463 U.S. 29, 51-52 (1983).
    Nor did Landry, et al.'s comments provide any analysis explaining 
how PHMSA had run afoul of judicial guardrails for suspending 
currently-effective regulations. They simply asserted that PHMSA had 
failed to ``explain[ ]'' its compliance with pertinent APA 
requirements. But the NPRM acknowledged that it proposed a change in 
position from the July 2020 Final Rule: it stated in multiple places 
that rail tank car transportation of LNG authorized by the July 2020 
Final Rule would be temporarily suspended. See, e.g., 86 FR at 61731-
32. Further, PHMSA described at length its rationale and the evidence 
relied on in making that change. Specifically, information (including 
the TRB Phase 1 Report, COVID-related delays in the execution of LNG 
Task Force testing and evaluation efforts that had been expected to 
corroborate the conclusions in the July 2020 Final Rule, and potential 
fundamental shifts in the domestic and international market dynamics) 
that had emerged following issuance of the July 2020 LNG Final Rule 
cast doubt on the validity of PHMSA's understanding of the potential 
benefits and risks on which that rulemaking's policy decisions rested. 
See 86 FR at 61735-36. And (as explained in section III.D above) 
because uncertainty on these considerations has only increased since 
the NPRM's issuance in November 2021, PHMSA has now decided to impose 
that suspension with a marginally longer (but still time-limited) 
duration. Lastly, this decision does not rest, as Landry, et al. 
suggests, on specious reasoning that ``no policy is better than the old 
policy solely because a new policy might be put in place . . .''; 
rather, temporary suspension ensures that no rail car transportation of 
LNG pursuant to the July 2020 Final Rule will occur during the time 
needed for PHMSA to develop confidence regarding its potential risks 
and benefits within the companion rulemaking under RIN 2137-AF54.

I. Comments Alleging That PHMSA's Proposal Will Have Miscellaneous 
Adverse Consequences for Regulated Entities, the U.S. Economy, and 
National Security

    PHMSA also received a handful of comments warning of miscellaneous 
adverse effects from the NPRM's proposed suspension of the July 2020 
Final Rule.\48\ Certain members of the U.S. House Transportation and 
Infrastructure Committee and Landry, et al. caution suspension of the 
July 2020 Final Rule could increase household energy expenses and 
compromise U.S. energy independence and geopolitical influence. 
Meanwhile RSI warns that the NPRM's invocation of economic uncertainty 
and ``hypothetical concerns'' as considerations when tailoring HMR 
requirements could portend shifting regulatory requirements for the 
transportation of other hazardous materials. RSI also contends that a 
more appropriate tool for addressing PHMSA's concerns with the July 
2020 Final Rule would be to exercise its authority under Sec.  107.339 
to obtain emergency orders from a U.S. District Court to address 
``imminent hazards.''
---------------------------------------------------------------------------

    \48\ House T&I Minority Comments at 1, 3; Landry, et al. 
Comments at 7-8; RSI Comments at 3.
---------------------------------------------------------------------------

PHMSA Response

    PHMSA finds these comments unconvincing. The claim that temporary 
suspension of the July 2020 Final Rule could affect U.S. household 
energy prices or the geopolitical balance of power strains credulity 
given that no DOT-113C120W9 tank cars intended for commercial LNG 
service have been sold and the commercial viability of such rail tank 
car transportation is increasingly uncertain. Additionally, RSI's 
concern that PHMSA could invoke changing market dynamics to modify 
longstanding HMR requirements for other hazardous materials is 
misplaced. Unlike other hazardous materials, the rail tank car 
transportation of LNG is not a mature market--in fact, as discussed 
elsewhere in this Final Rule, no such market has emerged in over three 
years since the July 2020 Final Rule issued and a market may not emerge 
at all. Nor does PHMSA's decision to temporarily suspend the July 2020 
Final Rule hardly address merely ``hypothetical concerns''; rather, (as 
discussed in sections III.E and F above) the potential safety and 
environmental hazards associated with LNG could be significant, and it 
is PHMSA's responsibility under the HMTA to evaluate and adjust the HMR 
to ensure its transportation by rail tank car is conducted in a manner 
that protects public safety and the environment. Additionally, PHMSA's 
decision in this Final Rule to adjust pertinent HMR requirements on a 
time-limited basis and before any rail tank car transportation of LNG 
commences (or is likely to commence), minimizes the risk of stranded 
investments or lost business opportunities for regulated entities 
should PHMSA's ongoing evaluation of the safety and environmental risks 
and benefits merit imposing additional or conflicting safety 
requirements in the companion rulemaking under RIN 2137-AF54.
    In addition, the final rule addresses any potential public safety 
and environmental risks from rail tank car transportation of LNG via a 
generic, nationwide, time-limited suspension following notice-and-
comment rulemaking is a more appropriate approach than utilizing the 
emergency order authority recommended by RSI. The July 2020 Final Rule 
was a legislative rule that itself was the product of notice-and-
comment rulemaking, and the APA establishes a presumption that a 
subsequent legislative rule providing for its modification (to include 
its temporary suspension) should similarly involve notice-and comment 
rulemaking. See 5 U.S.C. 553. In addition, PHMSA's emergency order 
authority may be difficult to assert on a time-limited, precautionary, 
nationwide basis like the temporary suspension adopted in this Final 
Rule. Each of PHMSA's Sec.  107.339 emergency order authority and the 
Secretary`s authority to address imminent hazards under 49 U.S.C. 
5122(b) are seldom exercised. A finding of ``imminent harm'' may make 
it more difficult for any controls addressing that harm to be removed 
later based on

[[Page 60367]]

PHMSA's evaluation of whether and how to amend pertinent HMR 
requirements in a companion rulemaking under RIN 2137-AF54.

J. Comments Beyond the Scope of This Rulemaking

    PHMSA received miscellaneous comments beyond the scope of this 
rulemaking. These comments pertained to concerns regarding PHMSA's 
process in developing, and reasoning in adopting, the July 2020 Final 
Rule; concerns with the adequacy of conditions imposed by PHMSA within 
DOT-SP 20534 issued to ETS in 2019; a requested ban on fracking (the 
process of hydraulic fracturing to extract oil or gas) and all fossil 
fuels; and additional miscellaneous comments unrelated to this 
rulemaking or rail tank car transportation of LNG. A number of 
commentors requested repeal of any existing regulatory approvals or 
regulatory provisions--whether by FRA or PHMSA--authorizing rail 
transportation of LNG.

PHMSA Response

    Although PHMSA appreciates the concerns raised by the commenters 
that the NPRM's proposal to suspend the transportation of LNG by rail 
tank car authorized by the July 2020 Final Rule did not go far enough 
to protect public safety and the environment, PHMSA declines to adopt 
their far-reaching recommendations in this proceeding. However, PHMSA 
encourages those stakeholders to consider submitting comments in 
response to any future notice of proposed rulemaking in PHMSA's 
companion rulemaking under RIN 2137-AF54, as well as to engage other 
Federal and State regulatory authorities with jurisdictional 
responsibilities for the issues they asked PHMSA to address.

IV. Regulatory Analyses and Notices

A. Statutory/Legal Authority

    Statutory authority for this final rule is provided by the HMTA. 
Section 5103(b) of the HMTA authorizes the Secretary of Transportation 
to ``prescribe regulations for the safe transportation, including 
security, of hazardous materials in intrastate, interstate, and foreign 
commerce.'' The Secretary has delegated the authority granted in the 
HMTA to the PHMSA Administrator at Sec.  1.97(b).

B. Executive Orders 12866 and 14094, and DOT Regulatory Policies and 
Procedures

    Executive Order 12866 (``Regulatory Planning and Review''),\49\ as 
amended by Executive Order 14094 (``Modernizing Regulatory 
Review''),\50\ requires that agencies ``should assess all costs and 
benefits of available regulatory alternatives, including the 
alternative of not regulating.'' Agencies should consider quantifiable 
measures and qualitative measures of costs and benefits that are 
difficult to quantify. Further, Executive Order 12866 requires that 
``agencies should select those [regulatory] approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety, and other advantages; distributive impacts; and 
equity), unless a statute requires another regulatory approach.'' 
Similarly, DOT Order 2100.6A (``Rulemaking and Guidance Procedures'') 
requires that regulations issued by PHMSA and other DOT Operating 
Administrations should consider an assessment of the potential 
benefits, costs, and other important impacts of the proposed action and 
should quantify (to the extent practicable) the benefits, costs, and 
any significant distributional impacts, including any environmental 
impacts.
---------------------------------------------------------------------------

    \49\ 58 FR 51735 (Oct. 4, 1993).
    \50\ 88 FR 21879 (April 11, 2023).
---------------------------------------------------------------------------

    Executive Order 12866 and DOT Order 2100.6A require that PHMSA 
submit ``significant regulatory actions'' to the Office of Management 
and Budget (OMB) for review. Executive Order 14094 amended Executive 
Order 12866, which defines significant regulatory actions. This 
rulemaking is considered a significant regulatory action under section 
3(f) of Executive Order 12866 as amended by Executive Order 14094. This 
final rule has, therefore, been reviewed by OMB.
    PHMSA concludes that the temporary suspension of transporting LNG 
by rail tank car is not expected to have an economic impact because LNG 
transport by rail tank car is not expected to occur during the 
suspension period. As explained in section III.D above, since issuance 
of the July 2020 Final Rule, the commercial prospects for rail tank car 
transportation of LNG have become increasingly unlikely. LNG has not 
been transported in any rail tank cars (whether pursuant to the July 
2020 Final Rule, SP issued by PHMSA, or FRA approval), and PHMSA is 
unaware of any planned movements in the near future. Indeed, the 
development of the necessary infrastructure--including construction of 
DOT-113C120W9 tank cars, loading and unloading facilities, vessel 
handling facilities if sea transport is required, liquification 
facilities, and regasification facilities--to transport LNG by rail as 
authorized by the July 2020 Final Rule demands significant financial 
investment, long-term commitment, and considerable planning associated 
with constructing a new LNG tank car fleet (which construction may 
itself be subject to delays because of limited capacity in the rail car 
manufacturing industry). PHMSA is unaware of any orders having been 
placed for the manufacture of new DOT-113C120W9 tank cars for 
commercial LNG service. This absence of commercial demand occurred 
despite the highest prices for domestic U.S. natural gas markets and 
LNG export markets in nearly a decade.\51\ Additionally, it appears LNG 
export prices have risen faster than the domestic price which has 
resulted in a substantial increase in US LNG exports over the last 
decade. However, the increase in export capacity does not appear to 
have translated into increased demand for tank cars, possibly due to 
the majority of the increase in liquefication capacity occurring at 
waterfront LNG facilities.\52\
---------------------------------------------------------------------------

    \51\ See EIA, ``Price of U.S. Liquefied Natural Gas Exports'', 
https://www.eia.gov/dnav/ng/hist/n9133us3m.htm (last accessed May 
24, 2023); EIA, ``Average Cost of Wholesale U.S. Natural Gas in 2022 
Highest Since 2008'', https://www.eia.gov/todayinenergy/
detail.php?id=55119#:~:text=In%202022%2C%20the%20wholesale%20U.S.,on%
20data%20from%20Refinitiv%20Eikon (last accessed May 24, 2023).
    \52\ For approved and under construction U.S. LNG projects see 
EIA, ``U.S. LNG export capacity to grow as three additional projects 
begin construction'', https://www.eia.gov/todayinenergy/detail.php?id=53719 (last accessed June 28, 2023).
---------------------------------------------------------------------------

    PHMSA expects no economic impact due to the temporary suspension. 
Indeed, PHMSA's temporary suspension may in fact reduce economic burden 
by discouraging a shipper from ordering rail tank cars compliant with 
the July 2020 Final Rule when the companion rulemaking (under RIN 2137-
AF54) may adopt different requirements. Additionally, should any 
potential shippers need to transport LNG by rail tank car during the 
suspension period, they could avail themselves of the PHMSA SP or FRA 
approval processes for such transport.\53\ Further, temporary

[[Page 60368]]

suspension guarantees avoidance of potential adverse public safety and 
environmental impacts (including, but not limited to, contribution of 
direct and indirect GHG emissions) that could have arisen from rail 
tank car transportation of LNG under the HMR. Lastly, the limited 
duration of the suspension will also mitigate any potential adverse 
economic, public safety, or environmental impacts that could arise in 
the unlikely event that demand for rail tank car transportation under 
the July 2020 Final Rule would have materialized during the suspension 
period in the absence of this final rule.
---------------------------------------------------------------------------

    \53\ As noted earlier in this final rule, PHMSA previously 
denied an application for renewal of a special permit, in part, on 
the basis that the application for renewal did not discuss any of 
the concerns raised in the NPRM in this proceeding. PHMSA will 
consider all applications for a special permit that meet the 
requirements set forth in 49 CFR 107, Subpart B and notes that each 
special permit application is considered on its own merits.
---------------------------------------------------------------------------

    In addition to the PHMSA SP and FRA approval alternatives, shippers 
could transport LNG by highway via MC-338 insulated cargo tanks. All of 
these alternatives for LNG shippers would involve higher costs than 
rail transportation, but they are available in the unlikely case that 
market conditions evolve to warrant LNG transportation prior to June 
30, 2025, or the completion of the companion rulemaking.\54\
---------------------------------------------------------------------------

    \54\ Id. at 33-34, 56 (discussing higher direct GHG emissions 
from highway transportation) and 37-38 (discussing higher risk of 
crashes from highway transportation).
---------------------------------------------------------------------------

C. Executive Order 13132

    PHMSA analyzed this rulemaking in accordance with the principles 
and criteria contained in Executive Order 13132 (``Federalism'') \55\ 
and its implementing Presidential Memorandum (''Preemption'').\56\ 
Executive Order 13132 requires agencies to assure meaningful and timely 
input by State and local officials in the development of regulatory 
policies that may have ``substantial direct effects on the states, on 
the relationship between the national government and the states, or on 
the distribution of power and responsibilities among the various levels 
of government.''
---------------------------------------------------------------------------

    \55\ 64 FR 43255 (Aug. 10, 1999).
    \56\ 74 FR 24693 (May 22, 2009).
---------------------------------------------------------------------------

    This rulemaking may preempt State, local, and Native American Tribe 
requirements, but does not contain any regulation that has substantial 
direct effects on the States, the relationship between the national 
government and the States, or the distribution of power and 
responsibilities among the various levels of government.
    The HMTA contains an express preemption provision at 49 
U.S.C.5125(b) that preempts State, local, and Tribal requirements on 
certain covered subjects, unless the non-Federal requirements are 
``substantively the same'' as the Federal requirements, including the 
following:
    (1) the designation, description, and classification of hazardous 
material;
    (2) the packing, repacking, handling, labeling, marking, and 
placarding of hazardous material;
    (3) the preparation, execution, and use of shipping documents 
related to hazardous material and requirements related to the number, 
contents, and placement of those documents;
    (4) the written notification, recording, and reporting of the 
unintentional release in transportation of hazardous material; and
    (5) the design, manufacture, fabrication, inspection, marking, 
maintenance, recondition, repair, or testing of a packaging or 
container represented, marked, certified, or sold as qualified for use 
in transporting hazardous material in commerce.
    This final rule addresses subject items (2) and (5) above, which 
are covered subjects, and therefore, non-Federal requirements that fail 
to meet the ``substantively the same'' standard are vulnerable to 
preemption under the Federal hazmat law. Moreover, PHMSA will continue 
to make preemption determinations applicable to specific non-Federal 
requirements on a case-by-case basis, using the obstacle, dual 
compliance, and covered subjects tests provided in Federal hazmat law.

D. Executive Order 13175

    PHMSA analyzed this rulemaking in accordance with the principles 
and criteria contained in Executive Order 13175 and DOT Order 5301.1 
(``Department of Transportation Policies, Programs, and Procedures 
Affecting American Indians, Alaska Natives, and Tribes''). Executive 
Order 13175 and DOT Order 5301.1 require DOT Operating Administrations 
to assure meaningful and timely input from Native American Tribal 
government representatives in the development of rules that 
significantly or uniquely affect Tribal communities by imposing 
``substantial direct compliance costs'' or ``substantial direct 
effects'' on such communities or the relationship and distribution of 
power between the Federal government and Tribes.
    In addition to the petitions filed by the environmental groups and 
State attorneys general mentioned above, the Puyallup Tribe also 
challenged the July 2020 Final Rule and alleged violations of the 
Tribal consultation protocols under the National Historic Preservation 
Act and Executive Order 13175 and disparate impacts on the Tribe in 
violation of Executive Order 12898 and Title VI of the Civil Rights Act 
of 1964.
    PHMSA assessed the impact of this final rule and concluded that it 
will not significantly or uniquely affect Tribal communities or Tribal 
governments. This rulemaking does not impose substantial compliance 
costs on Tribal governments or communities, nor does it mandate Tribal 
action. Insofar as PHMSA expects the final rule will not adversely 
affect the safe transportation of hazardous materials generally, PHMSA 
does not expect it will entail disproportionately high adverse risks 
for Tribal communities. This final rule could in fact reduce risks to 
Tribal communities, as it could avoid the release of hazardous 
materials (in particular, LNG) by railroad in the vicinity of Tribal 
communities. For these reasons, PHMSA has concluded that the funding 
and consultation requirements of Executive Order 13175 and DOT Order 
5301.1 do not apply.

E. Regulatory Flexibility Act and Executive Order 13272

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires 
agencies to consider whether a rulemaking would have a ``significant 
economic impact on a substantial number of small entities'' to include 
small businesses, not-for-profit organizations that are independently 
owned and operated and are not dominant in their fields, and 
governmental jurisdictions with populations under 50,000. The 
Regulatory Flexibility Act directs agencies to establish exceptions and 
differing compliance standards for small businesses, where possible to 
do so and still meet the objectives of applicable regulatory statutes. 
Executive Order 13272 (``Proper Consideration of Small Entities in 
Agency Rulemaking'') \57\ requires agencies to establish procedures and 
policies to promote compliance with the Regulatory Flexibility Act and 
to ``thoroughly review draft rules to assess and take appropriate 
account of the potential impact'' of the rules on small businesses, 
governmental jurisdictions, and small organizations. The DOT posts its 
implementing guidance on a dedicated web page.\58\
---------------------------------------------------------------------------

    \57\ 67 FR 53461 (Aug. 16, 2002).
    \58\ DOT, ``Rulemaking Requirements Related to Small Entities,'' 
https://www.transportation.gov/regulations/rulemaking-requirements-concerning-small-entities (last visited Jun. 17, 2021).
---------------------------------------------------------------------------

    This rulemaking has been developed in accordance with Executive 
Order 13272 and DOT's procedures and policies to promote compliance 
with the Regulatory Flexibility Act and ensure that potential impacts 
of draft rules on

[[Page 60369]]

small entities are properly considered. Consistent with the analysis 
above, PHMSA certifies that the temporary suspension of the July 2020 
Final Rule will not have a significant economic impact on a substantial 
number of small entities.

F. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), 
no person is required to respond to any information collection unless 
it has been approved by OMB and displays a valid OMB control number. 
Pursuant to 44 U.S.C. 3506(c)(2)(B) and 5 CFR 1320.8(d), PHMSA must 
provide interested members of the public and affected agencies an 
opportunity to comment on information collection and recordkeeping 
requests.
    PHMSA has analyzed this rulemaking in accordance with the Paperwork 
Reduction Act. PHMSA currently accounts for security plan burdens under 
OMB Control Number 2137-0612, ``Hazardous Materials Security Plans.'' 
In the July 2020 Final Rule, PHMSA required any rail carrier 
transporting a tank car quantity of UN1972 (Methane, refrigerated 
liquid (cryogenic liquid) or Natural gas, refrigerated liquid 
(cryogenic liquid)) to comply with the additional rail transportation 
safety and security planning requirements. Following publication of the 
July 2020 Final Rule, PHMSA published both a 60-day \59\ and 30-day 
\60\ notice and comment period to provide an opportunity for public 
comment on the estimated increase in burden. PHMSA did not receive 
comments to either notice. Subsequently, PHMSA submitted the revision 
to OMB and received approval for the increased burden. As PHMSA 
implements a temporary suspension of the authorization to ship LNG by 
rail tank car pursuant to July 2020 Final Rule, PHMSA estimates this 
rulemaking would result in a decrease in the burden associated with 
additional rail transportation safety and security planning 
requirements imposed by the July 2020 Final Rule. Because this final 
rule contains revisions to an information collection approved under OMB 
control number 2137-0612 that are subject to review by OMB under the 
PRA Act, PHMSA has submitted the revised information collection to OMB 
and will publish a subsequent Federal Register notice to advise the 
public when OMB has approved the revisions. The following reflects this 
estimated decrease in burden:
---------------------------------------------------------------------------

    \59\ 85 FR 46220 (Jul. 31, 2020).
    \60\ 85 FR 73128 (Nov. 16, 2020).
    \61\ Occupation labor rates based on 2022 Occupational and 
Employment Statistics Survey (OES) for ``Transportation, Storage, 
and Distribution Managers (11-3071)'' in the Transportation and 
Warehousing industry. See https://www.bls.gov/oes/current/oes113071.htm. The hourly mean wage for this occupation ($52.36) is 
adjusted to reflect the total costs of employee compensation based 
on the BLS Employer Costs for Employee Compensation Summary, which 
indicates that wages for civilian workers are 69.0 percent of total 
compensation (total wage = wage rate/wage % of total compensation).
    \62\ Ibid.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Decrease in               Decrease in  Decrease in
                                                                Change in   Decrease in     Burden        total       Salary        total        total
              Decrease in primary route analysis                number of     number of   hours per      burden      cost per      salary       burden
                                                                railroads      routes       route        hours      hour \61\       cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class I Railroads............................................            0          (2)           80        (160)       $75.88    ($12,141)           $0
Class II Railroads...........................................            0          (1)           80         (80)        75.88      (6,071)            0
Class III Railroads..........................................            0          (1)           40         (40)        75.88      (3,035)            0
                                                              ------------------------------------------------------------------------------------------
    Total....................................................            0          (4)  ...........        (280)  ...........     (21,248)            0
--------------------------------------------------------------------------------------------------------------------------------------------------------

 
                                                                                                      Decrease in               Decrease in  Decrease in
                                                                Change in   Decrease in     Burden        total       Salary        total        total
             Decrease in alternate route analysis               number of     number of   hours per      burden      cost per      salary       burden
                                                                railroads      routes       route        hours      hour \62\       cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class I Railroads............................................            0          (2)          120        (240)       $75.88    ($18,212)           $0
Class II Railroads...........................................            0          (1)          120        (120)        75.88      (9,106)            0
Class III Railroads..........................................            0          (1)           40         (40)        75.88      (3,035)            0
                                                              ------------------------------------------------------------------------------------------
    Total....................................................            0          (4)  ...........        (400)  ...........     (30,354)            0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Total Annual Decrease in Number of Respondents: 0.
    Total Annual Decrease in Number of Response: 8.
    Total Annual Decrease in Burden Hours: 680.
    Total Annual Decrease in Salary Costs: $51,598.
    Total Annual Decrease in Burden Costs: $0.

G. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (UMRA; 2 U.S.C. 1501 et 
seq.) requires agencies to assess the effects of Federal regulatory 
actions on State, local, and Tribal governments, and the private 
sector. For any notice of proposed rulemaking or final rule that 
includes a Federal mandate that may result in the expenditure by State, 
local, and Tribal governments, or by the private sector of $100 million 
or more in 1996 dollars in any given year, the agency must prepare, 
amongst other things, a written statement that qualitatively and 
quantitatively assesses the costs and benefits of the Federal mandate.
    This rulemaking does not impose unfunded mandates under the UMRA. 
As explained above, it is not expected to result in costs of $100 
million or more in 1996 dollars on either State, local, or Tribal 
governments, in the aggregate, or to the private sector in any one 
year, and is the least burdensome alternative that achieves the 
objective of the rule.

H. Environmental Assessment

    The National Environmental Policy Act of 1969 (NEPA), as amended 
(42 U.S.C. 4321 et seq.),\63\ requires federal agencies to consider the 
environmental impacts of their actions in the decision-making process. 
NEPA requires Federal agencies to assess the environmental effects of 
proposed Federal actions prior to making decisions and involve the 
public in the decision-making process. Agencies must prepare an 
environmental assessment (EA) for an action for which a categorical 
exclusion is not applicable and is either unlikely to have significant 
effects or when significance of the action is unknown. In accordance 
with these requirements, an EA must briefly discuss: (1) the need for 
the action; (2) the alternatives considered; (3) the environmental 
impacts of the action and alternatives; and (4) a listing of the 
agencies and persons consulted. If, after reviewing the EA and public 
comments if

[[Page 60370]]

applicable, in response to a draft EA (DEA), an agency determines that 
a proposed action will not have a significant impact on the human or 
natural environment, it can conclude the NEPA analysis with a finding 
of no significant impact (FONSI).
---------------------------------------------------------------------------

    \63\ See also 40 CFR parts 1501 to 1508.
---------------------------------------------------------------------------

(1) The Need for the Action
    PHMSA has determined that the recommendations from the TRB, its 
ongoing research, and recent events stemming from the COVID-19 public 
health emergency predicate the need to re-evaluate the amendments 
authorized in the July 2020 Final Rule. Research activity that PHMSA 
had expected would enhance its understanding of the risks attendant in 
rail transportation of LNG has been delayed, and uncertainties have 
increased in whether there will be any potential benefits, and in the 
underlying economic dynamics bounding those risks (e.g., the quantity 
of LNG that will move by rail, and the routes involved). Therefore, 
PHMSA is amending the HMR to suspend authorization of LNG 
transportation in a rail tank car pending further analysis and 
completion of a companion rulemaking that will consider changes to the 
conditions under which LNG could be moved by rail, to potentially 
include additional safety, environmental, and environmental justice 
protections. This action will provide PHMSA an opportunity to review 
recent actions that could be obstacles to Administration policies 
promoting public health and safety, the environment, and climate change 
mitigation; and to evaluate the results of ongoing and delayed research 
efforts to ensure the safe transportation of LNG by rail tank car.
(2) Alternatives to the Action
    In this rulemaking, PHMSA considered the following alternatives:
No Action Alternative
    If PHMSA were to select the No Action Alternative, current 
regulations authorizing the transport of LNG in rail tank cars would 
remain in effect and no provisions would be amended or added. 
Therefore, the HMR would continue to authorize the transportation of 
LNG in DOT-113C120W9 tank cars with a 9/16-inch outer tank composed of 
TC-128B normalized steel. The following operational controls and safety 
measures would also remain in effect:
     Each tank car must be operated in accordance with Sec.  
173.319, which includes:
    [cir] testing of relief valves every 5 years
    [cir] annual replacement of rupture discs
    [cir] thermal integrity tests following an average daily pressure 
rise during any shipment exceeding 3 psig per day
    [cir] other requirements specific to liquids in cryogenic tank 
cars.
     49 CFR part 179, subpart F contains detailed design, 
construction, and operational requirements for DOT-113C120W tank cars 
with the specification suffix ``9'' to be used in rail transportation 
of LNG.
     Trains transporting 20 or more tank cars of LNG in a 
block, or 35 such tank cars throughout the train, must be equipped and 
operated with a two-way EOT device, pursuant to the requirements in 49 
CFR part 232, subpart E, or a distributed-power (DP) locomotive as 
defined in 49 CFR 229.5.
     The offeror must remotely monitor each tank car while in 
transportation for pressure and location.
     The offeror must notify the carrier if the tank pressure 
rise exceeds 3 psig over any 24-hour period.
     Trains transporting any quantity of LNG must comply with 
the route planning requirements in Sec.  172.820, which requires rail 
carriers transporting LNG by rail tank car to conduct an annual route 
analysis considering, at a minimum, 27 risk factors listed in appendix 
D to part 172.
     Each LNG tank car must have:
    [cir] a reclosing pressure relief device with a start-to-discharge 
pressure of 75 psig;
    [cir] a non-reclosing pressure relief device set to discharge at 
the tank test pressure;
    [cir] a maximum permitted filling density (percent by weight) of 
37.3 percent;
    [cir] a design service temperature of -162 [deg]C (-260 [deg]F);
    [cir] a maximum pressure when offered for transportation not to 
exceed 15 psig;
    [cir] a minimum steel thickness, after forming, on the outer tank 
shell and tank heads of 9/16 inch, which is thicker than the 
requirement for other DOT-113C120W tank cars; and
    [cir] an outer tank shell constructed of AAR TC-128, Grade B 
normalized steel plate as specified in Sec.  179.100-7(a), which has a 
higher tensile strength of 81,000 psi which makes it stronger than that 
used for the existing DOT-113 outer shell.
    The final environmental analysis (FEA), which--except for the 
finding of no significant impact therein--is incorporated by reference 
into this final rule, examined how the above requirements were imposed 
to reduce risks to human safety and the environment from the 
transportation of LNG in rail tank cars and incidents occurring as a 
result of this transportation.\64\ The No Action Alternative would 
allow the shipment of LNG in rail tank cars, and PHMSA could continue 
to consider whether additional mitigations are necessary based on the 
expert recommendations from the TRB Phase I and Phase II Reports and 
results from ongoing, delayed testing and evaluation activity by the 
LNG Task Force.
---------------------------------------------------------------------------

    \64\ See Docket No. PHMSA-2018-0025-0478.
---------------------------------------------------------------------------

Selected Action Alternative
    This Selected Action Alternative as it appears in this final rule, 
adding a new special provision to the HMR that would suspend the 
transportation of LNG in rail tank cars while PHMSA undergoes a 
comprehensive review to ensure the safe transportation of LNG by rail 
in accordance with ongoing research and incorporation of 
recommendations from the TRB, as well as the best available economic 
analysis and science. Rail transport of LNG would be permitted only as 
authorized by the conditions of a PHMSA special permit (49 CFR 107.105) 
that would apply only to the railroad(s) operating under such a permit 
or in a portable tank secured to a rail car pursuant to the conditions 
of an FRA approval (49 CFR 174.63). The amendments included in this 
alternative are more fully discussed in the preamble and regulatory 
text sections of this final rule.
(3) Probable Environmental Impacts of the Action and Alternatives
No Action Alternative
    If PHMSA selected the No Action Alternative, current regulations 
would remain in place without suspension. As described in the FEA, the 
No Action Alternative could pose risks to public safety and the 
environment because the authorization under the HMR to offer shipments 
of LNG by rail tank car would remain in place. LNG poses potential 
hazards as a cryogenic liquefied flammable gas, including cryogenic 
temperature exposure, fire, and asphyxiation hazards. Transportation of 
any hazardous material introduces risk to safety and the environment, 
and each additional tank car increases the overall risk of an incident 
occurring and the quantity that could be released in the event of a 
derailment. While this is true for all hazardous materials 
transportation, PHMSA seeks to better understand the risks inherent to 
LNG transportation in the DOT-113C120W9, especially given that the July 
2020 Final Rule authorized large quantities to be transported in rail 
cars. The July 2020 Final Rule FEA

[[Page 60371]]

explained that transporting LNG in rail tank cars is expected to be 
safer than transporting LNG by truck on highways--however, it is 
possible that allowing LNG to be transported in rail tank cars would 
increase the amount of LNG transported, and therefore a direct 
comparison of the risks by rail and highway may be misleading. PHMSA 
will also consider, based on existing rail infrastructure locations and 
anticipated routes, whether transportation of LNG in rail tank cars 
could pose disproportionate harm or risk to communities of color or 
low-income communities. As described in the preamble to this final 
rule, various market and other uncertainties exist regarding specific 
routes that may be used for the transport of LNG by rail tank car.
    No release of LNG vapor to the environment is allowed during the 
normal transportation of LNG in tank cars whether by roadway or 
railway. However, methane is odorless, and LNG contains no odorant, 
making detection of a release resulting from an incident difficult 
without a detection device. Releases of LNG due to venting or to 
accidents/incidents, without immediate ignition, involving either an 
MC-338 cargo tank, a portable tank, or a DOT-113C120W9 rail tank car 
have the potential to create flammable vapor clouds of natural gas 
because recently gasified LNG does not dissipate in the atmosphere as 
quickly as ambient-temperature natural gas. Large releases of LNG due 
to the breach of the inner tank of these transport vessels could result 
in a pool fire, vapor fire, and explosion hazards if methane vapors 
become confined. These flammability hazards pose a risk of higher 
potential impacts than localized cryogenic hazards.
    Some commenters on the July 2020 Final Rule argued that the 
authorization of LNG by rail would further incentivize the production 
of natural gas, which is a fossil fuel. Methane has much greater heat 
trapping potential in the atmosphere than carbon dioxide in the short 
term. Thus, methane is considered a potent GHG, and comprises a 
significant portion of the United States' GHG emissions. While methane 
leaks are highly unlikely during transportation in the DOT-113C120W9 
due to tank car design, increased natural gas production could lead to 
indirect environmental impacts of increased methane emissions released 
during production, loading and unloading, or at other times during its 
life cycle. In considering whether the authorization could further 
incentivize the production of natural gas, PHMSA will consider the 
scope of existing natural gas production and transportation via natural 
gas pipeline and other modes of transportation.
    The FEA for the July 2020 Final Rule discussed potential 
environmental benefits that could be associated with the authorization 
to transport LNG by rail tank car. First, PHMSA discussed that the 
authorization could allow for the delivery of natural gas to locations 
dependent on more polluting energy forms, such as coal, diesel, heating 
oil, or firewood.\65\ Use of natural gas in such areas, whether foreign 
or domestic, could allow for a reduction in polluting and climate-
warming emissions. Additionally, the authorization to transport LNG by 
rail tank car could potentially replace some shipments of LNG by 
highway. As discussed in the FEA for the July 2020 Final Rule, highway 
transportation is less efficient in comparison to rail transportation 
when considering fuel use, combustion emissions, and climate change 
impacts. However, in order to supplement, reduce, or replace highway 
transportation, rail infrastructure would need to exist between the 
origin and destination locations or be developed. Finally, the FEA 
explored industry claims that the authorization could incentivize the 
capture, storage, and liquefaction of natural gas over venting and 
flaring of natural gas during oil production and other industrial 
activities, in areas where natural gas pipeline capacity is 
unavailable. Facilitating the productive end use of by-product methane 
could reduce the venting and flaring of natural gas, which causes 
methane and carbon dioxide emissions. Similar to other above-described 
benefits, it is difficult to predict the extent to which industries 
would invest in the equipment, technology, and expertise necessary to 
pursue natural gas capture, storage, and liquefaction necessary to 
pursue LNG transportation by rail. A suspension of the authorization to 
transport LNG by rail could curtail these potential benefits in the 
near term.
---------------------------------------------------------------------------

    \65\ See, e.g., EPA, Press Release, ``State of Alaska and 
Fairbanks North Star Borough receive $14.7 Million EPA grant to 
improve air quality,'' (Nov. 2020), https://www.epa.gov/newsreleases/state-alaska-and-fairbanks-north-star-borough-receive-147-million-epa-grant-improve-air (``The Borough will use the grant 
funds to continue a woodstove changeout and conversion program 
focused on converting more wood burning appliances to cleaner 
burning liquid or gas-fueled heating appliances, which have a very 
low output of particulate pollution and higher fuel efficiency. Wood 
smoke contributes up to 60 to 80 percent of fine particle pollution 
levels measured in the Fairbanks North Star Borough.'').
---------------------------------------------------------------------------

Selected Action Alternative
    Under this Selected Action Alternative, PHMSA will amend the HMR to 
suspend authorization of LNG transportation in rail tank cars pending 
further analysis and completion of a companion rulemaking or June 30, 
2025, whichever is earlier. Therefore, the HMR will not authorize 
shippers to transport bulk quantities of LNG by rail tank car. Instead, 
LNG by rail will only be permitted pursuant to a DOT SP or in portable 
tanks subject to FRA approval. The Selected Action Alternative will 
avoid the risks that transportation of LNG in rail tank cars, and 
particularly potential derailments of rail cars transporting LNG, could 
pose to public safety and the environment. PHMSA will be able to 
further consider whether the transportation of LNG could pose 
disproportionately high or adverse effects on minority and low income 
communities, which have historically borne the brunt of deleterious 
Federal policy decisions. PHMSA will also be able to further consider 
whether shipping LNG in rail tank cars is consistent with public health 
and safety, environmental protection, including climate change 
mitigation; and to evaluate the results of ongoing and delayed research 
efforts and collaboration as part of an accompanying rulemaking under 
RIN 2137-AF54.
    However, as noted above and in the FEA for the July 2020 Final 
Rule, the authorization to transport LNG in DOT-113C120W9 specification 
tank cars could have yielded some environmental benefits or 
improvements, which will not be realized during the suspension period. 
The scope of potential environmental effects of suspending the July 
2020 Final Rule depend on whether use of MC-338 for transportation of 
LNG increases as a result of the suspension of the DOT-113C120W9 or 
whether environmental benefits of the authorization have been realized 
that would not occur during the suspension. PHMSA is unaware of any 
order from a commercial entity for a new DOT-113C120W9-specification 
tank car for LNG service. Thus, no increased use of MC-338 tank cars 
for LNG service is expected as a result of this suspension.
    In the unlikely event that the use of MC-338 cargo tank cars for 
LNG transportation increases due to the inability to transport LNG in 
rail tank cars, a few environmental effects could result. First, 
highway transportation of LNG requires more diesel engine vehicles and 
would result in more emissions, including volatile organic compounds, 
carbon dioxide, nitrogen

[[Page 60372]]

oxides, sulfur oxides, and particulate matter of 10 microns or less. 
Next, increased highway congestion also increases the potential for a 
highway incident involving LNG, depending on the extent of the 
increase. In the event highway transportation increases as a result of 
this rule, these environmental effects would be speculative and minor, 
and PHMSA finds that they are warranted during the suspension period 
while PHMSA undertakes a full analysis of risks inherent in 
transporting LNG in rail tank cars.
    The July 2020 Final Rule FEA noted that the transportation of LNG 
could allow natural gas to reach markets that lack this access and 
could potentially reduce and replace the burning of more polluting and 
carbon-intensive sources of energy such as coal, wood, and diesel. As 
noted above, the July 2020 Final Rule has not resulted in these 
replacements or emissions reductions, such that the suspension would 
not reverse any such benefits. The July 2020 Final Rule FEA also 
explained that authorization to transport LNG in rail tank cars had the 
potential to reduce the wasteful and carbon-intensive practice of 
natural gas flaring because it could provide a market for by-product 
natural gas in areas where natural gas pipeline transportation is not 
available. The July 2020 Final Rule has not resulted in this benefit, 
and there is no indication that this benefit would have occurred 
anytime in the foreseeable future in the event that it remained 
available. Thus, PHMSA does not anticipate negative environmental 
effects from the suspension of the July 2020 Final Rule.
(4) Agencies and Persons Consulted During the Consideration Process
    PHMSA has coordinated with FRA, the Federal Aviation 
Administration, the Federal Motor Carrier Safety Administration, and 
the U.S. Coast Guard in the development of this rule. The final rule 
has also been made available to other Federal agencies within the 
interagency review process contemplated under Executive Order 12866.
(5) Environmental Justice
    Executive Order 12898 (``Federal Actions to Address Environmental 
Justice in Minority Populations and Low-Income Populations''),\66\ 
directs Federal agencies to take appropriate and necessary steps to 
identify and address disproportionately high and adverse effects of 
Federal actions on the health or environment of minority and low-income 
populations to the greatest extent practicable and permitted by law. 
DOT Order 5610.2C (``U.S. Department of Transportation Actions to 
Address Environmental Justice in Minority Populations and Low-Income 
Populations'') establishes departmental procedures for effectuating 
Executive Order 12898 promoting the principles of environmental justice 
through full consideration of environmental justice principles 
throughout planning and decision-making processes in the development of 
programs, policies, and activities--including PHMSA rulemaking.
---------------------------------------------------------------------------

    \66\ 59 FR 7629 (Feb. 11, 1994).
---------------------------------------------------------------------------

    PHMSA has evaluated this final rule under DOT Order 5610.2C and 
Executive Order 12898 and has determined it will not cause 
disproportionately high and adverse human health and environmental 
effects on minority and low-income populations. The final rule is 
national in scope; it is neither directed toward a particular 
population, region, or community, nor is it expected to result in any 
adverse environmental or health impact to any particular population, 
region, or community.
    This final rule could reduce risks to minority populations, low-
income populations, or other underserved and disadvantaged communities. 
Insofar as these HMR amendments could avoid the release of hazardous 
materials, the final rule could reduce risks to populations and 
communities--including any minority, low-income, underserved, and 
disadvantaged populations and communities--in the vicinity of railroad 
lines. However, as noted in the FEA for the July 2020 Final Rule, 
access to LNG may result in potential economic benefits for underserved 
communities because of the efficiencies of transporting LNG by rail, 
and thereby domestic production, distribution, and consumption of 
natural gas could increase. These potential economic benefits that 
could result from the transportation of bulk quantities of LNG by rail 
car would not be realized by underserved communities in the short term. 
In addition, to the extent that suspending shipment of LNG by rail tank 
car could increase demand for shipping LNG by truck on highways, these 
HMR amendments could increase risks to environmental justice 
communities in the vicinity of those highways.
    Further, this rule advances the policy goals of the most recent 
environmental justice Executive Order 14096--Revitalizing Our Nation's 
Commitment to Environmental Justice for All,\67\ which deepens the 
Administration's whole-of-government approach to environmental justice 
to better protect communities from pollution and other environmental 
justice concerns.
---------------------------------------------------------------------------

    \67\ 88 FR 25251 (Apr. 21, 2023). Executive Order 14096 
supplemented the efforts of Executive Order 12898.
---------------------------------------------------------------------------

(6) Finding of No Significant Impact
    The adoption of the Selected Action Alternative's suspension will 
prohibit the transportation of LNG in rail tank cars while PHMSA and 
FRA undertake a comprehensive analysis of safety and environmental 
issues associated with the transportation of LNG by rail. As such, the 
HMR amendments in this final rule will have no significant impact on 
the human environment. The Selected Action Alternative will allow PHMSA 
to review new information to evaluate the potential impact on safety, 
environmental justice, and GHG emissions. Further, based on PHMSA's 
analysis of these provisions described above and insofar as there has 
been no significant progress toward the movement of LNG by rail tank 
car, PHMSA finds that codification and implementation of this rule will 
not result in a significant impact to the human environment.

I. Privacy Act

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the 
public to better inform its rulemaking process. DOT posts these 
comments, without edit, including any personal information the 
commenter provides, to http://www.regulations.gov, as described in the 
system of records notice (DOT/ALL-14 FDMS), which can be reviewed on 
DOT's website at http://www.dot.gov/privacy or DOT's complete Privacy 
Act Statement in the Federal Register published on April 11, 2000.\68\
---------------------------------------------------------------------------

    \68\ 65 FR 19475 (Apr. 11, 2000).
---------------------------------------------------------------------------

J. Executive Order 13609 and International Trade Analysis

    Executive Order 13609 (``Promoting International Regulatory 
Cooperation'') \69\ requires that agencies must consider whether the 
impacts associated with significant variations between domestic and 
international regulatory approaches are unnecessary or may impair the 
ability of American business to export and compete internationally. In 
meeting shared challenges involving health, safety, labor, security, 
environmental, and other issues, international regulatory cooperation 
can identify approaches that are at least as protective as those

[[Page 60373]]

that are or would be adopted in the absence of such cooperation. 
International regulatory cooperation can also reduce, eliminate, or 
prevent unnecessary differences in regulatory requirements.
---------------------------------------------------------------------------

    \69\ 77 FR 26413 (May 4, 2012).
---------------------------------------------------------------------------

    Similarly, the Trade Agreements Act of 1979 (Pub. L. 96-39), as 
amended by the Uruguay Round Agreements Act (Pub. L. 103-465), 
prohibits Federal agencies from establishing any standards or engaging 
in related activities that create unnecessary obstacles to the foreign 
commerce of the United States. Pursuant to the Trade Agreements Act, 
the establishment of standards is not considered an unnecessary 
obstacle to the foreign commerce of the United States, so long as the 
standards have a legitimate domestic objective, such as providing for 
safety, and do not operate to exclude imports that meet this objective. 
The statute also requires consideration of international standards and, 
where appropriate, that they be the basis for U.S. standards.
    PHMSA participates in the establishment of international standards 
in order to protect the safety of the American public. PHMSA has 
assessed the effects of this rulemaking to ensure that it does not 
cause unnecessary obstacles to foreign trade. While the suspension the 
transport of LNG by rail tank car has potential to impact the United 
States' export of bulk LNG internationally, there has been no 
significant reliance interest or progress toward the near-term movement 
of LNG by rail tank cars. As such, PHMSA expects the amendments herein 
to pose a minimal impact to international trade if adopted. Therefore, 
PHMSA is amending the HMR to suspend authorization of LNG 
transportation in a rail tank car pending further analysis to ensure 
potential future regulatory actions to allow bulk transport of LNG by 
rail promote public health and safety, the environment, and climate 
change mitigation. Accordingly, this rulemaking is consistent with 
Executive Order 13609 and PHMSA's obligations under the Trade Agreement 
Act, as amended.

K. Executive Order 13211

    Executive Order 13211 (``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'') \70\ 
requires Federal agencies to prepare a Statement of Energy Effects for 
any ``significant energy action.'' Executive Order 13211 defines a 
``significant energy action'' as any action by an agency (normally 
published in the Federal Register) that promulgates, or is expected to 
lead to the promulgation of, a final rule or regulation that (1)(i) is 
a significant regulatory action under Executive Order 12866 or any 
successor order and (ii) is likely to have a significant adverse effect 
on the supply, distribution, or use of energy (including a shortfall in 
supply, price increases, and increased use of foreign supplies); or (2) 
is designated by the Administrator of the Office of Information and 
Regulatory Affairs (OIRA) as a significant action.
---------------------------------------------------------------------------

    \70\ 66 FR 28355 (May 22, 2001).
---------------------------------------------------------------------------

    Although this rule is a significant action under Executive Order 
12866, PHMSA expects it to have an annual effect on the economy of less 
than $200 million. Further, this action is not likely to have a 
significant adverse effect on the supply, distribution, or use of 
energy in the United States. While the amendment to suspend the 
transport of LNG by rail tank car has potential to impact the supply, 
distribution, or use of energy in the United States, PHMSA does not 
anticipate any near-term movement of LNG by rail tank cars. For 
additional discussion of the anticipated economic impact of this 
rulemaking, please see section IV.B above.

L. Cybersecurity and Executive Order 14028

    Executive Order 14028 (``Improving the Nation's Cybersecurity'') 
\71\ directed the Federal government to improve its efforts to 
identify, deter, and respond to ``persistent and increasingly 
sophisticated malicious cyber campaigns.'' Consistent with Executive 
Order 14028, the Transportation Security Administration (TSA) in 
October 2022 issued a Security Directive to reduce the risk that 
cybersecurity threats pose to critical railroad operations and 
facilities through implementation of layered cybersecurity measures 
that provide defense-in-depth.\72\ PHMSA has considered the effects of 
the final rule and determined that its regulatory amendments will not 
materially affect the cybersecurity risk profile for rail 
transportation of hazardous materials.
---------------------------------------------------------------------------

    \71\ 86 FR 26633 (May 17, 2021).
    \72\ TSA, Security Directive No. 1580/82-2022-01, ``Rail 
Cybersecurity Mitigation Actions and Testing'' (Oct. 24, 2022).
---------------------------------------------------------------------------

List of Subjects in 49 CFR Part 172

    Education, Hazardous materials transportation, Hazardous waste, 
Labeling, Markings, Packaging and containers, Reporting and 
recordkeeping requirements.

    In consideration of the foregoing, PHMSA is amending 49 CFR chapter 
I as follows:

PART 172--HAZARDOUS MATERIALS TABLE, SPECIAL PROVISIONS, HAZARDOUS 
MATERIALS COMMUNICATIONS, EMERGENCY RESPONSE INFORMATION, TRAINING 
REQUIREMENTS, AND SECURITY PLANS

0
1. The authority citation for part 172 continues to read as follows:

    Authority:  49 U.S.C. 5101-5128, 44701; 49 CFR 1.81, 1.96 and 
1.97.

0
2. In Sec.  172.101, amend the Sec.  172.101 Hazardous Materials Table, 
by revising the entry for ``Methane, refrigerated liquid (cryogenic 
liquid) or Natural gas, refrigerated liquid (cryogenic liquid), with 
high methane content)'' to read as follows:

Sec.  172.101   Purpose and use of the hazardous materials table.

* * * * *

[[Page 60374]]

                                                                                                Sec.   172.101 Hazardous Materials Table
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                 (8)                                          (9)                          (10)
                                                                                                                       -----------------------------------------------------------------------------------------------------------------
                                  Hazardous materials   Hazard                                                                       Packaging (Sec.   173.***)                 Quantity limitations (see Sec.        Vessel stowage
             Symbols                descriptions and   class or  Identification    PG      Label    Special provisions ------------------------------------------------------      Sec.   173.27 and 175.75)     -----------------------
                                    proper shipping    division       Nos.                 codes     (Sec.   172.102)                                                        ------------------------------------
                                         names                                                                             Exceptions         Non-bulk            Bulk            Passenger      Cargo aircraft    Location     Other
                                                                                                                                                                                aircraft/rail         only
(1)                               (2)................       (3)             (4)    (5)  (6).......  (7)...............  (8A)............  (8B)............  (8C)............  (9A)............  (9B)............      (10A)        (10B)
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                                                              * * * * * * *
                                  Methane,                  2.1          UN1972  .....  2.1.......  T75, TP5, 439, 440  None............  None............  318, 319........  Forbidden.......  Forbidden.......          D           40
                                   refrigerated
                                   liquid (cryogenic
                                   liquid) or Natural
                                   gas, refrigerated
                                   liquid (cryogenic
                                   liquid, with high
                                   methane content).
 
                                                                                                              * * * * * * *
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 60375]]

* * * * *

0
3. In Sec.  172.102, amend paragraph (c)(1) by adding special provision 
439 in numerical order to read as follows:

Sec.  172.102   Special provisions.

* * * * *
    (c) * * *
    (1) * * *
    439 UN1972 is not authorized for transportation by rail tank car 
until either issuance of a final rule concluding the rulemaking action 
proceeding under RIN 2137-AF54, or June 30, 2025, whichever occurs 
first. For information and the status of RIN 2137-AF54, please refer to 
the Office of Management and Budget's Office of Information and 
Regulatory Affairs at www.reginfo.gov.
* * * * *

    Issued in Washington, DC, on August 23, 2023, under authority 
delegated in 49 CFR 1.97.
Tristan H. Brown,
Deputy Administrator, Pipeline and Hazardous Materials Safety 
Administration.
[FR Doc. 2023-18569 Filed 8-31-23; 8:45 am]
BILLING CODE 4910-60-P