Cargo Tank Trucks: Improved Incident Data and Regulatory Analysis Would Better Inform Decisions about Safety Risks
Published: 2013-09-11T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Cargo tank trucks deliver gasoline and other flammable liquids daily for consumer use. Trucks are loaded and unloaded through external bottom lines that, after loading, may contain up to 50 gallons of liquid and are known as "wetlines." Concerns have been raised about the safety of wetlines, since a collision may rupture them, releasing flammable liquid and possibly causing fatalities and property damage. PHMSA is responsible for regulating the safe transportation of hazardous materials and has proposed rules prohibiting the transport of flammable liquids in wetlines.
In 2012, The Moving Ahead for Progress in the 21st Century Act required GAO to examine this issue. This report discusses (1) the extent that PHMSA's data reliably identify wetline safety risks, (2) options for addressing wetline safety risks, and (3) how well PHMSA has assessed the costs and benefits of addressing these risks through regulation. GAO analyzed PHMSA's wetline incident data for 1999 to 2011, reviewed PHMSA's regulatory cost-benefit analyses, and interviewed agency officials and industry and safety stakeholders.
section_title: What GAO Found
paragraphs: The Department of Transportation's (DOT) Pipeline and Hazardous Materials Safety Administration's (PHMSA) incident data cannot be used to reliably identify risks from incidents involving collisions with and spills from tank trucks' bottom lines ("wetlines") because the incidents are not specifically identified in PHMSA's database and the data contain inaccuracies. PHMSA requires carriers to report hazardous material incidents, but the reporting form does not specifically capture wetline incidents. PHMSA officials identify wetline incidents through a resource-intensive process of reviewing carrier-reported incident narratives and other information. However, GAO found that the narratives do not always clearly indicate whether an incident is wetline related and that information about the consequences of incidents, including fatalities, is not always accurate. PHMSA has made efforts to improve its data, such as adding quality checks, but this has not affected how wetline incidents are reported, and inaccuracies remain.
One technology to purge liquid from wetlines exists, but use of this system is limited, and industry and safety stakeholders expressed concerns about it, such as concerns about the safety of retrofitting existing trucks with the device and its cost. Although other options have been proposed to address wetline risks, none has been pursued, and there are concerns about their safety and feasibility as well. For example, wetlines could be drained at loading terminals, but this creates issues over storing the drained fuel and whether it could be resold.
PHMSA analyzed the costs and benefits of its proposed 2011 rule to prohibit transportation of flammable liquids in unprotected wetlines, but did not account for uncertainties in its analytical assumptions and limitations in the underlying incident data. For example, PHMSA's analysis overstated the number of fatalities the proposed rule would prevent when considering actual past incidents. Furthermore, PHMSA based its cost analysis on the assumption that carriers would install a certain type of wetline purging system, but its limited adoption makes that cost uncertain. Federal guidance recommends that agencies account for uncertainty in regulatory analysis, such as limitations in PHMSA's data and uncertainty in its assumptions. Without having done so, PHMSA's analysis may not accurately represent the costs and benefits of its proposed rule.
section_title: What GAO Recommends
paragraphs: DOT should improve its wetline incident data by requiring carriers to specifically report wetline incidents and by improving its information on incident consequences. DOT should also address uncertainty in the assumptions and data underlying its regulatory cost-benefit analysis. DOT did not agree or disagree with the recommendations, but provided technical comments.

section_title: Letter
paragraphs: Americans rely on flammable liquids such as gasoline for daily personal  and industrial use, but transporting these liquids poses inherent safety  risks to people and property. Cargo tank trucks transporting flammable  liquids in the United States are loaded and unloaded through external  pipes under the tank compartments. These pipes, when they contain  flammable liquid, are known as “wetlines” and can collectively carry up to  50 gallons of liquid per truck. The National Transportation Safety Board  (NTSB), among others, has identified wetlines as a potential hazard  because a broadside collision with a tank truck can rupture the wetlines,  spilling flammable liquid and creating the potential to fuel fires and  therefore increased damage and fatalities from such incidents. In 1997,  such an incident occurred in Yonkers, New York, when a passenger car  collided with a tank truck under a highway overpass. The collision  ruptured the truck’s wetlines, resulting in a passenger fatality and the  destruction of the overpass. The incident, cleanup, and subsequent  infrastructure repairs created significant and costly traffic delays in the  region.
In 1998, after investigating the Yonkers incident, NTSB recommended  that the Department of Transportation (DOT) prohibit transportation of all  hazardous materials in wetlines. DOT subsequently proposed rules to  prohibit the transportation of flammable liquids in unprotected external  product piping (“wetlines”), but did not adopt final rules in those  proceedings. In January 2011, the Pipeline and Hazardous Materials  Safety Administration (PHMSA), an operating administration of DOT,  again proposed a rule to prohibit the transportation of flammable liquids in  unprotected wetlines and released an initial analysis of the proposed  rule’s costs and benefits. PHMSA updated its cost-benefit analysis in  March 2012, but did not release this version publicly. The Moving Ahead  for Progress in the 21st Century Act (MAP-21), enacted in July 2012,  temporarily stopped PHMSA from issuing a final wetlines rule except in  very specific circumstances and required us to examine the risks of and  alternatives to transporting flammable liquids in wetlines. In this report we  discuss: (1) the extent that PHMSA’s data can be used to reliably identify  wetline safety risks, (2) options for addressing wetline safety risks, and (3)  how well PHMSA has assessed the costs and benefits of addressing  these risks through regulation.
To evaluate the extent that PHMSA’s data can be used to reliably identify  wetline safety risks, we examined PHMSA’s process for identifying  wetline incidents among its reported hazardous materials (hazmat)  incidents, analyzed how useful PHMSA’s incident data from January 1999  through March 2011 are for identifying such incidents, and examined  whether these data accurately captured information about the incidents’  consequences. We reviewed the reliability of these data by examining  them for missing data and inconsistencies, reviewing PHMSA’s process  for obtaining wetline incident data and maintaining them in the agency’s  incident database, and reviewing the agency’s related internal controls.  We concluded that the data were sufficiently reliable for the purposes of  our report. To describe options for addressing wetline safety risks, we  identified options by reviewing documents filed in the current and prior  PHMSA wetline safety rulemakings and interviewing petroleum and  related transportation industry and safety stakeholders (see app. I for a  list of stakeholders we interviewed). We also asked stakeholders about  their views on the advantages and disadvantages of these options and  reviewed comments filed in the most recent PHMSA wetline rulemaking.  We placed particular focus on examining the wetline purging system,  because it is the option used in PHMSA’s wetlines rulemaking analysis  and the only option we identified that has been installed to address  wetline risks. To evaluate how well PHMSA has assessed the costs and  benefits of its January 2011 proposed wetline rule, we reviewed PHMSA’s  associated regulatory cost-benefit analysis, examined the reliability of  PHMSA’s supporting wetline incident data used to inform the analysis,  and interviewed PHMSA officials about their efforts. See appendix I for a  more detailed description of our objectives, scope and methodology.
We conducted this performance audit from September 2012 to  September 2013 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: Flammable Liquid Distribution
paragraphs: Every day, tens of thousands of cargo tank trucks transport hazardous  materials classified as flammable liquids (primarily gasoline and fuel oil)  for sale in the United States. This involves some safety risk because of  the volatile nature of flammable liquids, the volume of liquid transported  (up to 9,200 gallons per truck), and the numbers of trucks and passenger  vehicles on the road. Tank trucks that carry flammable liquids have three  main components—the truck, the trailer, and the cargo tank. The tank  may be divided into several compartments—usually four or five—allowing  the truck to carry different petroleum products in a single trip, such as  different grades of gasoline and diesel fuel. Although the design of cargo  tank trucks can vary depending on the model and manufacturer, the  components in figure 1 are common features.
The rule proposed by PHMSA in January 2011 would require that  flammable liquids be eliminated from bottom loading and unloading lines,  such as by purging the bottom lines of product, or that bottom lines be  protected with approved bottom protection devices. The rule would apply  to cargo tank trucks that typically transport gasoline, diesel, and fuel oil  from distribution terminals—of which there are nearly 400 nationwide—to  retail outlets or gas stations (see fig. 2).
In the 1980s, to address volatile organic compound emission reduction  requirements, as well as worker safety issues, the petroleum industry  changed cargo tank-loading procedures from loading through the  manhole covers on the top of the truck to loading through the bottom  lines. Prior to this change, the bottom lines were used for unloading only  and therefore generally did not contain more than a residual amount of  flammable liquids during transport. In using bottom lines for loading,  because the lines are at the lowest point on the truck, they do not drain  into the main tanks but contain fuel. Bottom lines containing fuel are  referred to as “wetlines.”
section_title: Wetline Incidents and Reporting
paragraphs: Wetline incidents result from collisions involving tank trucks that lead to  the release of flammable liquid from wetlines. Such incidents range from  easily contained spills to catastrophic situations. Carriers that transport  hazardous materials, including flammable liquids like gasoline, are  required to report incidents involving the release of hazmat to PHMSA.  Carriers, for example, must submit an electronic or paper incident  reporting form within 30 days of the incident. This form is designed to  provide information about the vehicle and container involved in the  incident, the component of the container that failed, the type and quantity  of product released, and, if applicable, fatalities, injuries, and the dollar  value of significant damages associated with the incidents.includes a space for carriers to write a descriptive narrative of the  incident. Information from these forms appears in PHMSA’s publicly   The form also  available web-based incident database.database for its safety oversight work, including regulatory efforts.
According to PHMSA, it uses the  While most wetline incidents identified by PHMSA did not result in fires,  spilled flammable liquid can ignite and create the potential for fatalities as  well as increased property and environmental damages. Incidents may be  the result of a tank truck striking a stationary object or a moving  passenger vehicle striking the tank truck. Figure 3 shows examples of two  types of wetline incidents.
PHMSA is responsible for regulating the safe and secure transportation of  hazardous materials to reduce the risks to people and the environment. In  1989 and 1990, PHMSA’s predecessor, the Research and Special  Programs Administration, promulgated final rules that prohibited external  product piping, such as bottom lines, from retaining hazardous liquids  unless the cargo tank truck is equipped with bottom damage protection  devices. Citing concerns about the potential costs of modifying fuel  terminal operations, the lack of data on incidents, and the lack of  information on possible alternatives to empty wetlines after bottom  loading, the Research and Special Programs Administration exempted  tanks transporting gasoline and other flammable liquids from the  regulation. Thus, the resulting regulations, in general, pertain to certain  poisonous liquids, oxidizer liquid, liquid organic peroxide, or corrosive  liquids, but not to gasoline.
The 1997 Yonkers incident drew attention to the safety risks of wetlines  because it involved a fatality as well as unusually high damages.  Specifically, its destruction of a highway overpass resulted in severe  property damage, and the incident’s location in a congested area led to  severe economic costs. Following NTSB’s recommendation that DOT  prohibit transport of hazardous materials in wetlines, Research and Special Programs Administration and later PHMSA)  submitted a draft proposed rule to the Office of Management and Budget  (OMB) to address the issue in 2000 and later issued a proposed rule in  2004. PHMSA withdrew its 2004 proposed rulemaking in 2006 because it  concluded that the benefits of the rule would not justify the costs.
PHMSA proposed another wetline rule in 2011. Figure 4 shows the  timeline of key events and major regulatory efforts to address wetline  risks.
The NTSB considers the practice of transporting flammable liquids in wetlines to be an  unsafe practice and contends that incidents similar to the Yonkers incident are likely to  occur in the future. 76 Fed. Reg. 4847, 4848 (Jan. 27, 2011).
Section 33015 of MAP-21 prohibits DOT from issuing a wetlines final rule prior to either the  completion of GAO’s mandated study or until July 2014, whichever is earlier, unless DOT determines  that a risk to public safety, property, or the environment is present or an imminent hazard exists and  that the regulations will address the risk or hazard.
section_title: PHMSA’s Incident Data Cannot Be Used to Reliably Identify Wetline Incidents, Although Efforts to Improve Data Quality Have Been Implemented
paragraphs: PHMSA’s incident data do not reliably capture the risks and  consequences of wetline incidents because these incidents are not  specifically identified in its database, and PHMSA’s incident data also  contain inaccuracies. Although PHMSA requires reporting of hazmat  incidents through incident reporting forms, it does not require carriers to  explicitly state on the form whether the incident is wetline-related.  Consequently, to identify wetline incidents, PHMSA officials must review  carrier-reported narratives and other information, a review that is  resource-intensive. Moreover, this review may not result in an accurate  accounting of the number and consequences of wetline incidents  because the information does not always clearly indicate whether the  incident is wetline-related and because of inaccuracies and omissions in  the data. PHMSA has made efforts to improve its data, such as  implementing quality checks, but this does not affect how wetline  incidents are reported, and errors remain. This limits the usefulness of  these data as supporting information for PHMSA’s wetline regulatory  analysis.
subsections: section_title: Limitations with PHMSA’s Incident Data Make It Difficult to Identify Wetline Incidents
paragraphs: PHMSA’s hazmat incident database does not specifically code incidents  as wetline-related because its incident reporting form does not require  carriers to explicitly report whether an incident is wetline-related.  Consequently, it is not possible to retrieve a list of wetline incidents  through PHMSA’s database. To identify wetline incidents, PHMSA staff  must analyze incident narratives and other carrier-reported information for  characteristics that are indicative of wetline incidents.identifying these incidents resource-intensive and somewhat subjective,  since the determination of which incidents are wetline-related is not  always based on complete information, as incident data may be unclear  or missing. OMB guidance states that agencies should develop a process  for reviewing information quality as part of information resources  management, including when collecting and maintaining the information  to be used for regulatory analysis, which is one of PHMSA’s uses for its  incident data.
Annually, PHMSA receives reports of about 15,000 to 20,000 hazmat  incidents, and the percentage of these incidents that PHMSA identified as  wetline-related is relatively small. To support PHMSA’s 2011 cost-benefit  analysis, PHMSA officials said that a team spent months reviewing  incident data to identify wetline incidents and, as of January 2011,  identified 172 wetline incidents occurring over the 10-year period from  January 1999 through December 2008.the January 2011 proposed rule and related cost-benefit analysis.  According to PHMSA’s updated March 2012 draft cost-benefit analysis,  after commenters in the wetline rulemaking docket questioned whether  some of these incidents should have been identified as wetline incidents,  PHMSA reexamined the 172 incidents it originally identified and updated  the analysis to include incidents through March 2011. This led PHMSA to  a provisional figure of 132 wetline incidents, which PHMSA used in its   These incidents were used in  updated 2012 draft cost-benefit analysis.issued a final rule on this subject, information in either the 2011 or draft  2012 analysis is subject to change.
To identify wetline incidents for both the 2011 and 2012 reviews, PHMSA  officials said they conducted a broad search of cargo tank truck incidents  in the database and then reviewed incident reports’ narrative descriptions.  If a description was insufficient to make a determination, officials  reviewed the content of other fields in the incident’s database entry such  as component failure information, packaging identification, the amount  and type of hazardous material released, and location of the vehicle at  the time of the accident. PHMSA officials said their incident database  provided sufficient information about incidents to make a judgment about  each incident. However, the amount of time, staff, and specialized  knowledge required for this process was more extensive than if PHMSA  required carriers to identify whether incidents are wetline-related on the  incident reporting forms. Officials also stated that, since their method of  identifying wetline incidents by reviewing narrative descriptions required  substantial resources, the agency was not able to direct additional  resources to follow up with carriers to clarify missing or unclear data as  part of the review to identify wetline incidents, except in cases involving  fatalities.
In identifying consequences of wetline incidents, PHMSA has little  information besides what is provided by the carriers. Specifically, only one  wetline incident that occurred during the 1999 to 2011 incident study  period was investigated by NTSB and PHMSA, and PHMSA officials said  they were unaware of any other investigations of wetline incidents by  federal, state, or local authorities during this period.PHMSA’s record of the consequences of wetline incidents is based  almost solely on information provided by carriers without corroborating  information from other sources. Additionally, information provided by  carriers is not always clear. For example, PHMSA officials said that  carriers may misidentify components or use colloquialisms in the narrative  (such as “fill tube” or “drop tube”) to denote bottom lines. Further, officials  said that terminology used in the report could vary depending on whether  the carrier’s corporate safety officer, the driver, or an attorney fills out the  form.
PHMSA officials stated that they considered a number of factors in  identifying wetline incidents for the 2011 proposed rule, such as  characteristics that could indicate an incident was wetline-related in the  absence of more definitive information and exceptions included in the  proposed rule that would exclude certain incidents. For example, PHMSA  officials told us they considered any tank truck incident involving a  collision or crash with a fire to be a wetline incident, regardless of the  amount of released flammable liquid. The specific cause of incidents  involving fires may be difficult to pinpoint, since the fire may destroy the  forensic evidence needed to make that determination. Therefore, PHMSA  officials assumed that incidents where the fire was not attributable to any  one part of the vehicle were wetline-related because this approach would  be less likely to exclude a severe incident that was caused by wetlines.  However, this also means that the analysis could include severe incidents  where the fire was the result of other factors, such as a puncture to the  cargo tank. PHMSA officials stated that punctures to the cargo tank  require forceful impact and are rare in incidents that do not involve a truck  overturn. Therefore, in tank truck incidents with large spillages and fires,  the fire likely began from the release of flammable liquid from bottom  lines, according to PHMSA officials. Stakeholders disagree on whether  this is a reasonable approach, with some supporting it because it can  address potential underreporting of incidents with fires and others stating  that the practice artificially magnifies the benefits of the proposed  regulation by including incidents that would not be prevented by  eliminating wetlines. In applying regulatory factors to the identification of  wetline incidents, PHMSA excluded some incidents involving bottom line  spillage due to exceptions in the proposed wetlines rule, such as  incidents involving smaller trucks that the proposed rule would exclude  from regulation.
In determining whether particular incidents were wetline-related, PHMSA  did not clearly document its decision-making process. For example, in  reviewing incidents that occurred from 2009 to 2011, PHMSA identified  13 incidents as “possibly” wetline-related from the incident narrative  information and subsequently used other incident information in making a  final determination that 7 of those incidents were wetline-related.  Although officials documented these incidents in a spreadsheet, they did  not include details about the specific decision-making process PHMSA  used to make a final determination for each incident. Therefore, it is not  clear how the agency concluded that 7 of the 13 “possibly” wetline-related  incidents were wetline-related and that the other 6 incidents were not.
Our review of the reported incident data and narratives confirmed that it is  challenging to identify wetline incidents. Using incident data other than  the narratives, we attempted to identify wetline incidents on the basis of  common characteristics of such incidents—involving a cargo tank truck, a  release of flammable liquid, bottom line failure, and spillages or fires. In  doing so, we were unable to generate a list of incidents that approximated  PHMSA’s list of wetline incidents. Specifically, our search of the database  turned up approximately 270 incidents from January 1999 through March  2011 that PHMSA did not identify as wetline-related because they  involved driver error or spills from areas other than wetlines, among other  reasons. Conversely, some PHMSA-identified wetline incidents did not  show up in our search results for reasons such as that they were coded  as involving portable tanks instead of cargo tanks, indicating probable  carrier error in reporting the incident.
Additionally, inconsistencies with the component failure information in  PHMSA’s incident data limit the usefulness of this information for  identifying wetline incidents. The incident reporting form has a field for  carriers to report up to two components that were the most catastrophic  failure points in the incident, such as reporting failure of the bottom  lines.  PHMSA officials told us that although reporting this information is  not optional, carriers sometimes leave this field blank, and the electronic  version of the form lacks controls to force the entry of data in this field.  Furthermore, carriers sometimes provide inaccurate information. For  example, among the 132 incidents PHMSA identified as wetline-related,  99 of the database entries for those incidents either did not list a code  indicating bottom-line failure or had blank codes.filling out the incident reporting form includes a list of possible failure   PHMSA’s guidance for  codes, but does not provide definitions of the codes. PHMSA officials said  they do not have much confidence in using the failed components  information for identifying wetline incidents. PHMSA officials  acknowledged that missing data make it difficult to analyze incidents, but  also said that the agency does not follow up with the carrier in these  cases to confirm or correct the information unless the incident involves  fatalities or injuries.
Our review of the narratives for the 132 PHMSA-identified wetline  incidents revealed that almost one-third of the narratives did not clearly  identify the incidents as wetline-related because they lacked sufficient  detail about the incident, used inconsistent terminology, or were blank.  For example, some narratives indicated damage to other components  that could have been the source of the spill. Other narratives did not  indicate a collision resulting in a flammable liquid release. We also found  instances of inconsistency in the database, such as narrative descriptions  that did not corroborate other information provided in the database  entry. Table 1 shows the extent to which we were able to identify wetline incidents from the narratives.
In addition to the limitations in identifying the number of incidents, we also  found PHMSA’s incident data inaccurately portray the consequences of  wetline incidents, thus limiting their reliability for regulatory analysis.  Internal control standards for federal executive branch agencies require  that agencies have relevant, reliable, and timely information for decision- making and external reporting purposes. OMB also has data quality  guidelines for regulatory purposes. Because much of the economic  benefit of the proposed wetline regulation would be the avoided fatalities  and damages from wetline incidents, inaccuracies in these data raise  concerns about their reliability for accurately quantifying some benefits of  the proposed rule. Specifically, we found problems with incident data  related to fatalities and damages:
Fatality Data. Among the 132 wetline incidents identified by PHMSA  since 1999, there are 7 that PHMSA’s incident data show had one or  more fatalities, with a total of 11 fatalities. However, the fatalities in 3  of the 7 incidents were misclassified as to whether they were caused  by a hazmat release and thus preventable by the elimination of  wetlines. According to PHMSA’s incident-reporting guidance, hazmat- related deaths are directly attributed to the release of hazmat, such as  a fatality caused by a fire resulting from the release of gasoline from  wetlines. Nonhazmat-related deaths could occur in a hazmat incident  but are attributed to other causes, such as internal injuries resulting  from blunt force trauma during a collision. This distinction can have  significant implications for the proposed rule’s cost-benefit analysis.  Since the avoidance of hazmat-related deaths is a major portion of the  rule’s calculated benefit, nonhazmat-related deaths are not included in  the calculation as they would not be prevented by the rule. We found  that fatalities in 2 of the 4 incidents recorded in PHMSA’s database as  hazmat-related were actually nonhazmat-related according to  documentation about the incidents, which we confirmed with PHMSA  officials. Conversely, the fatality in 1 of the 3 incidents with fatalities  recorded as nonhazmat-related was later determined to be hazmat- related.
Other Damage Data. Information on the dollar value of incident  damages was sometimes missing or potentially inaccurate, since  costs reported as “$0” in the database may represent no cost or an  unreported cost. PHMSA officials stated they have not always  followed-up with carriers to obtain missing cost information and that  carriers do not always have full cost information. Specifically, costs  not incurred directly by carriers like response and cleanup costs may  not be known to the carrier at the time of submitting the form.  Further, incidents with minor costs might not reflect any costs  because carriers are not required to report total costs of $500 or less;  however, in such cases, the data do not indicate whether a cost of $0  indicates an actual “no cost” that would not have to be reported or a  greater cost that was unreported. Although carriers are expected to  contact PHMSA with significant updates to cost estimates up to a year  after reporting, officials stated that carriers often do not.
Concerns have been previously raised about the quality of PHMSA’s  incident data, including its usefulness for identifying wetline incidents. In a  2009 report on its data, PHMSA acknowledged the limitation that its  wetline data analysis depends on reviewing narrative descriptions  provided by carriers in reporting forms because wetline incidents are not  specifically coded in the data. Also that year, senior PHMSA officials’  congressional testimony stated that identifying wetline incidents is staff- intensive and requires detailed analysis of database entries. More  recently, a 2013 National Academies Transportation Research Board  report sponsored by PHMSA stated that detailed data on the nature of  damages in incidents involving the release of hazardous materials are  necessary for studying the performance of the container transporting the  product. The report stated that while PHMSA’s database collects some of  this information, it is not sufficiently detailed.
To address concerns about its data, PHMSA has made data process  changes intended to improve the accuracy and completeness of its  incident database. For example, PHMSA officials said that in 2012 the  agency initiated a thorough review and follow-up audits of all incidents  that result in deaths or injuries, which they said increases the likelihood of  identifying wetline incidents. However, these changes do not address that  wetline incidents are not specifically identified through the incident  reporting process and do not apply to the inaccuracies in older incident  data. Some of the steps PHMSA has taken according to officials included  the following:  In 2005, PHMSA updated its incident reporting form and process by,  among other things, providing more specific options for identifying the  part of the vehicle that failed and requiring carriers to submit report  updates up to 1 year after an incident when information about incident  fatalities or significant damages changes.
Also in 2005, PHMSA implemented an electronic reporting option that  incorporates checks to improve completeness before the form is  approved in the database.
Since about 2 years ago, PHMSA has provided training and outreach  to carriers on filling out the incident form more accurately and  completely and to encourage online reporting.
The agency implemented an improved data quality process starting in  2009, including updating its incident database to correct information it  determined to be inaccurate. Before that time, the agency generally  did not make changes to carrier-reported information in the system.  Specifically, PHMSA reviews submitted incident reporting forms for  accuracy and completeness and conducts follow-up with carriers to  resolve missing information in the database.
To address concerns about under-reporting of incidents, PHMSA  attempts to discover potentially reportable incidents by reviewing  incident reports submitted to the National Response Center and  monitoring the news media.may need reporting by carriers and, if warranted, may contact the  carrier to request submittal of a reporting form, a process that has  identified some wetline incidents, according to PHMSA officials.
PHMSA tracks severe incidents that  In an effort to improve the accuracy of its fatality and injury data,  PHMSA developed a worksheet to better track and confirm  information about fatalities and injuries. In 2012, PHMSA began  working with the Federal Motor Carriers Safety Administration to  investigate hazmat incidents involving fatalities, injuries, and fires.  Also in 2012, PHMSA began retaining coroner’s or medical  examiner’s reports associated with each fatality.
Although these efforts could improve PHMSA’s incident data going  forward, they have no effect on some of PHMSA’s older wetline incident  data. The agency relied on data back to 1999 in analyzing costs and  benefits of its proposed wetline rule. As previously discussed, upon  reexamination of its data, PHMSA changed the number of wetline  incidents supporting its current proposed rule. However, because of the  subjective nature of how wetline incidents are identified, the possibility still  exists that PHMSA’s identification of some incidents as wetline-related  may be inaccurate. Industry stakeholders told us they believe PHMSA’s  data overstate the prevalence of wetline incidents and that their low  number does not justify regulation. Conversely, some safety stakeholders  said such incidents may be underreported. Additionally, as we have  mentioned earlier, we found inaccuracies in these data, limiting their  reliability for accurately quantifying the consequences of wetline incidents.  In particular, flaws with the fatality and damages data have the potential  to skew calculations of the rule’s benefit of avoiding wetline-related  fatalities. This calls into question whether these data are sufficiently  reliable to support regulatory analysis unless PHMSA makes adjustments  for the potential uncertainty in the analysis. Without accurate data on the  number and consequences of wetline incidents, the consequences of  wetline incidents remain unclear and the benefits of wetlines regulation  may not be accurately calculated in PHMSA’s regulatory analysis.
section_title: Stakeholders Identified Existing and Potential Options to Address Wetline Risks, but Have Concerns about Safety, Costs, and Implementation
subsections: section_title: An Existing Purging System to Address Wetline Safety Risks Is in Limited Use
paragraphs: A purging system is a device a carrier or manufacturer can install on a  cargo tank truck that removes liquid from the truck’s bottom lines after a  driver finishes loading the cargo tanks at the fuel terminal. One company,  Cargo Tank Concepts, manufactures a purging system that uses  compressed air from an auxiliary tank to push the liquid in the bottom  lines through small ancillary lines and into the cargo compartments (see  fig. 5). When the purge is complete, the lines retain only residual amounts  of liquid and vapor.
Cargo Tank Concepts designed two versions of the purging system:  automatic and manual. With the automatic system, after the driver  finishes loading the cargo tank, electronic sensors detect liquid in the  bottom lines and the system automatically begins to purge. One major  petroleum company installed the automatic purging system on its cargo  tank truck fleet starting in the late 1990s. Cargo Tank Concepts has also  equipped a few trucks owned by other carriers with the automatic version  to demonstrate the purging system. The manual system engages when  the driver pushes a button to activate the purge, typically after loading the  cargo tank. According to the purging system manufacturer, as of June  2013, there were no manual purging systems in use.three industry stakeholders, and two safety stakeholders told us that they  anticipate other purging solutions would be developed if PHMSA’s   PHMSA officials,  proposed wetlines rule were to go into effect.manufacturers that an industry publication reported were developing  wetline purging systems. Both companies told us they have not produced  any systems other than prototypes; however, both said they could move  forward with development, and eventually production, if PHMSA finalizes  a wetlines rule.
Industry associations and companies, manufacturers, repair shops,  federal agencies, and safety groups identified advantages and  disadvantages of using a purging system to address wetline risks. Due to  limited use, most stakeholders do not have first-hand experience with the  wetline purging system and its performance. Thus, stakeholders’  familiarity with the more technical aspects of the system varied and some  stakeholders, particularly safety groups, declined to comment. However,  based on their expertise with cargo tank trucks and transporting  flammable liquids, stakeholders provided views on using such a system in  that operating environment.
According to stakeholders, the advantages of using a purging system  include:
Addressing wetline safety risks: Purging removes all but a residual  amount of liquid from the bottom lines, in accordance with one of the  ways to meet the standard in PHMSA’s proposed rule. Removing  flammable liquid from the bottom lines may reduce fatalities and the  number and severity of injuries in the event of a broad-side collision  between a passenger vehicle and a cargo tank truck. The absence of  liquid in the bottom lines may also reduce property and environmental  damages associated with hazardous materials spilling from the  bottom lines.
Identifying faulty valves: Depending on the design of a purging  system, it may permit detection of faulty internal emergency valves. If  an emergency valve is not working properly, liquid may leak from a  cargo tank compartment into the bottom lines. In the event of a  collision with wetlines, a faulty emergency valve could cause a carrier  to lose liquid from an entire cargo tank compartment. If a purging  system attempts to purge liquid when the line should be clear, a driver  may be alerted that there is a problem; if the driver were not alerted,  the faulty valve could go undetected until the next inspection.
Stakeholders also raised a number of concerns about purging systems,  but disagreed about the significance of them:
Retrofitting: Industry stakeholders are concerned about the safety of  installing purging systems on in-service tank trucks due to the risk that  welding on the tanks—if not completely free of gasoline vapor— creates a risk of explosion. Specifically, 9 industry stakeholders and 3  safety groups we interviewed raised this issue, and 18 of the 21 of the  industry associations and companies providing comment in response  to PHMSA’s 2011 proposed wetlines rule reinforced those concerns  as being a risk if the proposed regulation required retrofitting.  However, stakeholders also acknowledged that there are procedures  that allow welding to be done safely, and repair shops routinely weld  on cargo tanks when they require repair. Cargo Tank Concepts did  not characterize the concern about retrofitting as significant, but the  company has developed a “nonwelded” alternative to address industry  concerns, which it has installed on one truck. However, three industry  stakeholders expressed concern about the durability of such an  installation, two of whom added that the “nonwelded” alternative  would still entail “hotwork” such as cutting into the tank. According to  Cargo Tank Concepts, the nonwelded installation involves drilling but  not cutting, welding or other types of “hotwork.”
Installation time: Stakeholders’ estimates on the amount of time  needed to install a purging system on an existing tank truck varied  from 8 to 40 hours. While Cargo Tank Concepts provided the lowest  estimate of 8 hours, an industry stakeholder with firsthand experience  installing a purging system estimated that installation takes from 30 to  34 hours of labor. The higher estimates include time to “de-gas” the  cargo tank to reduce risk of explosion, increasing the cost of  installation compared to that on new cargo tanks since those would  not need to be de-gassed. PHMSA’s regulatory assessment that  considers different timeframes for implementing a wetlines rule  assumes such retrofitting could be done concurrent with 5-year  interval inspections, which involve de-gassing the tank.
Delays: An industry analysis of PHMSA’s proposed regulation and six  industry stakeholders suggest that use of the purging system could  delay drivers at fuel terminals, potentially causing backlogs, while  others said that the purging system will not delay drivers because it  can operate while drivers are completing necessary final steps before  leaving a fuel terminal. One industry stakeholder said that the purging  system would lengthen unloading times, since the system uses the  truck’s air compressor thereby lowering the pressure available for  facilitating unloading and slowing unloading speeds. According to  Cargo Tank Concepts, the system uses very little air, and air that is  used is replaced quickly by the air compressor and therefore would  have no impact on unloading.
Vapor release: Because purging systems use air to push liquid into  the tank, the systems increase the pressure in the tank. In 2005, the  California Air Resources Board expressed concern that this increase  would exceed the tank’s design limit, causing it to vent gasoline vapor  into the air potentially in violation of emissions limits, a concern  echoed by one industry stakeholder we interviewed and in nine  comments submitted in response to PHMSA’s proposed regulation.  However, according to Cargo Tank Concepts, the increase in air  pressure is too small to trigger the pressure release valves and cause  such release.
Malfunction: Since PHMSA’s proposed rule prohibits wetlines without  adequate collision protection, in the event of a purging system  malfunction, a truck would likely not be able to leave a terminal unless  it could purge its bottom lines. One industry stakeholder was unsure  how carriers would address the issue of potential malfunction of a  purging system, but speculated that the truck would have to be off- loaded, potentially to another truck or, if the truck was at a fuel  terminal, via an off-loading station. PHMSA officials said it might be  possible to create a regulatory exception to allow one-time movement  of the cargo to its unloading destination or to transfer the cargo to a  different truck. In either case, the truck with a faulty system could then  not be reloaded until after the purging system is repaired. Cargo Tank  Concepts also noted that in the event of a purging system  malfunction, only the product in the bottom lines would have to be  removed, not the entire contents of the tank.
Maintenance: Industry stakeholders agree that the purging system  would result in additional maintenance and repair costs to the carrier.  In comments submitted to PHMSA in response to the proposed rule,  six industry stakeholders expressed concerns about the unknown cost  of maintenance and repair of the purging system, as well as the  absence of data on factors such as maintenance, reliability, down- time, and repair and replacement costs. Two industry stakeholders we  interviewed expressed concern that extreme operating conditions— very cold or hot climates, for example—could affect the system and  therefore maintenance costs. However, according to one industry  stakeholder familiar with the system, issues with the purging system  are fairly easy to address. Cargo Tank Concepts commented that they  have sold hundreds of purging systems that are operating reliably and  incur low maintenance costs.
Compliance: Four industry stakeholders said that compliance with  PHMSA’s proposed regulation could be an issue for carriers. One of  those stakeholders said this could be a particular issue with the  manual purging system that required drivers to proactively initiate  purging, as some drivers may forget to initiate the purge, while others  may skip purging to save time. Additionally, that stakeholder  suggested that drivers may have a disincentive to purge bottom lines  if using the vehicle’s compressed air system for that purpose reduced  the efficiency of other truck operations. Furthermore, according to two  stakeholders, it could be difficult for carriers or third parties to verify  compliance, given that some bottom lines lack glass panes that allow  visual verification of the amount of liquid present in the bottom line.  PHMSA officials did not view this as a major concern and told us that  regulatory compliance cannot always be fully monitored. PHMSA also  noted that carriers could choose other methods of eliminating wetlines  besides the purging system.
section_title: Other Options to Address Wetline Safety Risks Are Not in Use, and Many Are Hypothetical
paragraphs: Stakeholders identified other options to address wetline safety risks in  addition to the purging system. However, none of the other options are in  use by the industry and many are hypothetical, making it is difficult to  assess their costs, benefits, and feasibility. DOT summarized a number of  options to address wetline safety risks in a 1999 preliminary cost-benefit  analysis, but additional information about options other than the purging  system was limited to propositions and conjecture. Therefore, we relied  on views from industry and safety stakeholders to determine the  advantages and disadvantages of each option. Table 2 summarizes  options and key advantages and disadvantages as identified by  stakeholders.
For all the options, the most obvious advantage is the potential to address  wetline safety risks, but according to stakeholders, the extent that these  options address those risks varies. Some options would leave traces of  fuel in the cargo tank trucks’ bottom lines, while others would retain  wetlines but potentially reduce risk by shielding them or altering wetline  design to minimize spillage in the event of a collision.
Some stakeholders’ concerns with the wetline purging system apply to  other options as well, such as concerns about the safety of retrofitting  cargo tank trucks. For at least three of the other options, retrofits are  either not feasible or inadvisable, which would mean these options could  only be implemented on new tank trucks, delaying safety benefits. In  addition, the entity that would bear the initial cost of implementation varies  among the options. For example, one stakeholder said that carriers would  bear the initial cost of installing side-guards on tank trucks to shield them  from collisions, since that option would require changes to the cargo tank  design. In contrast, short loading lines that would replace the longer  bottom lines for loading tanks could require changes to the cargo tank  design and modifications to the loading rack, so the carriers and the fuel  terminals would both incur initial costs. Stakeholders suggested that other  agencies, such as the Environmental Protection Agency or the  Occupational Safety and Health Administration, may need to be consulted  on the design and implementation of some options due to potential  environmental and/or worker-safety concerns.
section_title: PHMSA Analyzed Costs and Benefits for a Proposed Wetlines Rule, but Uncertainties Limit the Usefulness of the Analysis
subsections: section_title: PHMSA Proposed a Rule to Address Wetline Safety Risks and Analyzed Associated Costs and Benefits
paragraphs: In January 2011, PHMSA issued a notice of proposed rulemaking to  prohibit the transport of flammable liquid in the bottom lines of cargo tank  trucks unless the vehicle is equipped with bottom damage protection  devices, along with an analysis of the proposal’s costs and benefits. In  March 2012, PHMSA updated the assumptions of its cost-benefit analysis  in response to comments submitted by stakeholders in the rulemaking  and also changed its methodology (for discussion of the changed  methodology, see app. II). We reviewed the assumptions and  methodology in the March 2012 working draft document because they  reflected PHMSA’s more current thinking; however, this document was  provided in draft form and has not been released publicly. PHMSA has  not issued a final rule on this subject; therefore, information in either the  2011 or 2012 analysis is subject to change. PHMSA officials told us they  ceased all work on the rulemaking in response to the MAP-21  requirement that PHMSA not issue a final rule pending the completion of  our study. PHMSA may, however, issue a rule earlier if it determines that  a risk to public safety, property, or the environment is present or an  imminent hazard exists and that the regulation will address the risk or  hazard.
PHMSA based its cost-benefit analysis on the assumption that the  industry would comply with the proposed rule by installing a wetline  purging system on cargo tank trucks—specifically the manual version of  the system offered by Cargo Tank Concepts. PHMSA’s analysis  included multiple compliance scenarios that varied in the amount of time  the industry would have to comply with the rule. The longest scenario  called for compliance within 20 years, which, given PHMSA’s assumption  that tank trucks have a 20-year life, would mean the device could be  installed on only new trucks and no retrofitting would be needed. The  shortest scenario called for compliance within 5 years and assumed the  industry would retrofit many of its existing tank trucks concurrently with a  truck’s required 5-year inspection, at which time PHMSA officials told us  trucks are cleaned of gasoline and vapor as part of the inspection  process, reducing the risk of explosion from welding on an existing tank.
PHMSA’s 2011 analysis found that costs exceeded benefits in all of the  compliance scenarios, while the 2012 analysis concluded that benefits  exceeded costs on a present value basis by about $2 million in the 20- year scenario; but costs exceeded benefits in the three scenarios with  shorter compliance time frames. Table 3 describes the costs and benefits  considered in the analysis.
PHMSA withdrew a previous proposed wetlines rule in 2006 because it  determined that the rule’s potential benefits did not justify its costs. The  agency issued its more recent proposal in 2011 because the agency still  views preventing wetline incidents as an important safety issue and,  according to PHMSA officials, given further development of the wetline  purging system, preventing wetline incidents can now be done in a  manner that is cost-beneficial. In contrast, 11 of the 12 industry  stakeholders we spoke with opposed the proposed rule for reasons such  as their belief that wetlines are not a major safety issue and their  concerns about the possible solutions, which were previously discussed  in this report.supported the rule, while three others took no position. Four other safety  groups we contacted declined to be interviewed because they had no  position on the issue.
section_title: Uncertainty Associated with Aspects of PHMSA’s Cost-Benefit Analysis Limits Its Usefulness for Supporting the Proposed Rule
paragraphs: OMB has issued guidance for agencies engaged in rulemaking on the   The  use of data and treatment of uncertainty in cost-benefit analysis.guidance states that market data is a rich source of information, and that  estimating cost when active markets do not exist is more difficult,  requiring appropriate proxies. Accordingly, an agency should discuss the  quality of available data used and in the absence of adequate data, the  agency will need to make certain assumptions. With regard to uncertainty,  the guidance states that estimates of benefits and costs are typically  uncertain because of imprecision in underlying data and assumptions.  Because uncertainty is common when conducting cost-benefit analysis,  OMB states that the effects of uncertainty should be analyzed and  reported. To address plausible changes in the assumptions and numeric  inputs of a cost-benefit analysis, OMB recommends that agencies  consider providing a sensitivity analysis to show how the results of the  analysis might vary to account for such uncertainty. Limitations of the  analysis because of uncertainty or biases surrounding data or  assumptions should, according to OMB, be discussed. Additionally, the  OMB guidance provides that when uncertainty has significant effects on  the final conclusion about net benefits, the agency should consider  additional research prior to rulemaking.
PHMSA’s calculated benefits are based on the assumption that use of the  purging system by tank truck carriers will prevent all wetline incidents; the  value of this benefit is based on PHMSA’s analysis of its past incident  data to identify wetline incidents and their associated consequences.  Other assumptions in the analysis are based on testimonial information  and observation, rather than market data. Specifically, cost calculations  are based on information from the purging system’s manufacturer  regarding the purchase and installation costs of the technology.  Additionally, information about purging system performance—an input  that can affect both benefits and costs—is based on 1) information from  the manufacturer, 2) anecdotal information about the performance of the  technology provided by the major carrier that is using the automatic  version of the system, and 3) PHMSA’s observation of a prototype  version of the manual purging system that shows how the technology  works but is not actually installed on a tank truck. Although PHMSA  included sensitivity analyses in its 2011 and 2012 cost-benefit analyses to  account for some uncertainties, issues with the data and assumptions  that can affect costs and benefits were not addressed through sensitivity  analysis. Consequently, some costs and benefits in the analysis may be  more uncertain than PHMSA has accounted for.
PHMSA’s analysis assumes a cost of $2,300 to equip each new or  existing cargo tank truck with a manual wetline purging system, plus the  cost of installation labor, rather than the higher cost of the automatic  version currently used, which the manufacturer sells for $3,800 or $3,950  depending on the size of the tank truck. PHMSA assumed companies would opt for the manual system because of its lower cost and used that  as the cost basis in its analysis. As previously discussed, there are no  manual systems in use to date, and some industry stakeholders  suggested that carriers may prefer the automatic system for compliance  and simplicity reasons, despite its higher cost. Thus, although there is a  limited market for the automatic purging system, the lack of market use to  date for the manual system makes the cost of compliance with the  regulation uncertain despite a stated price from the manufacturer.
Were the proposed rule issued, such action would likely generate  demand for the purging technology, which could have several effects.  Specifically, it could enable the product to be produced at a lower cost  due to achieving economies of scale related to a higher level of  production, and it could also attract more companies into the market to  produce alternative purging systems. Although we are aware of only one  company offering purging system technology at the time of our review, at  least three patents for other purging systems have been granted, making  industry competition a possibility. Consequently, in the absence of  market-based information for the manual purging system, it is difficult to  develop assumptions on the cost of the technology for the cost-benefit  analysis. While these factors could have an impact on the sales price of  the unit, PHMSA’s analysis does not fully account for these cost  uncertainties and, to the extent that market information exists for the  automatic purging system, such information is not used to support costs  in the analysis. PHMSA’s analysis presents a sensitivity analysis only for  a lower cost of the purging system on the basis that a more competitive  market could develop if its proposed rule were finalized and that the  manufacturer recently began offering the manual purging system at a  lower price.
Additionally, stakeholders we spoke with mentioned a number of other  cost-related concerns:  Installation approach. As previously discussed, stakeholders raised  safety concerns about potential welded retrofitting needed to install  purging systems under the shorter compliance scenarios, due to the  risk of explosion if cargo tanks are not thoroughly de-gassed. Safety  measures to address these concerns could add additional cost.  However, PHMSA’s analysis addressed these concerns by stating  that carriers could install nonwelded purging systems. PHMSA  officials also told us that because the compliance scenarios were  created with 5-year intervals, retrofitting could occur concurrently with  5-year inspections when tanks are normally cleared of flammable  product and vapor. PHMSA officials also stated that there are  procedures to de-gas tanks to make them safe for such work.
Installation time. PHMSA’s analysis does not include the cost of  down-time to install the purging system, even for scenarios requiring  retrofitting because the analysis assumes the work can be done  concurrently with routine inspections. However, stakeholders reported  a range of time needed to install a purging system, which could take  longer than the inspections; thus it is unclear that the inspection and  retrofitting could actually be done simultaneously.
Maintenance. PHMSA assumes maintenance on a purging system will  cost $3 per year per truck, based on an assumption about the cost of  inspecting the device every 5 years. Stakeholders with experience  using the technology said this cost is too low and told us the  technology required occasional repairs or replacement. According to  PHMSA’s analysis, it includes a low-cost maintenance estimate  because it states that pneumatic technologies like the purging system  require very little maintenance because they have few moving parts  that can fail.
We also found uncertainty in PHMSA’s data and assumptions related to  benefits:
Fatalities. As previously discussed, we identified inaccuracies in  PHMSA’s analysis regarding the number of fatalities that could be  avoided by the proposed wetlines rule, and PHMSA did not include a  sensitivity analysis to account for its rule potentially preventing fewer  deaths than assumed in its cost-benefit analysis. Both the 2011 and  2012 cost-benefit analyses stated there were 4 incidents with hazmat- related fatalities during the incident study period (resulting in 5  fatalities). After discussing the inaccuracies with PHMSA officials,  they agreed it would be more accurate for their analysis to reflect 4  fatalities occurring from 3 fatal wetline incidents. Questions over  PHMSA’s wetline fatality analysis have been raised before. In a 2001  letter critiquing a prior wetlines proposed rule, OMB encouraged DOT  to more fully address the uncertainty in the cause of fatalities in its  wetlines cost-benefit analysis, specifically to address uncertainty with  whether fatalities might be caused by factors other than the release of  hazardous materials and would therefore not be avoided by a rule  addressing wetlines.
Because fatalities are a major contributor to the calculated value of  the benefits of the regulation, a reduction of even one fatality in the  analysis could have significant impact on the amount of calculated  benefits for the proposed rule. For example, PHMSA’s 2012  analysis concluded that with 4 fatal incidents during the study period  and an average of 1.67 people per vehicle, the proposed rule would  avoid 6.7 fatalities for a benefit of about $3.4 million per year.the analysis recalculated with 3 fatal incidents, the annual benefit of  avoided fatalities would be about $2.5 million per year, about $1  million less. This is significant, given that avoided fatalities comprise  more than half of the almost $6.5 million total annual benefit of the  proposed rule. In the 2012 draft cost-benefit analysis, PHMSA’s 20- year compliance scenario showed a total net benefit of about $2  million, which was the only scenario where benefits exceeded costs.  Thus, while PHMSA has not issued a final rule on this subject and  information in either the 2011 or draft 2012 analysis is subject to  change, had the analysis been calculated with one less fatal incident,  costs would have exceeded benefits in that scenario as well.
Effectiveness. PHMSA’s analysis assumes its proposed rule would  prevent all wetline incidents, implying that the purging systems  installed to prevent these incidents would be 100 percent effective.  However, PHMSA’s analysis does not acknowledge that the system  may malfunction, may not prevent wetline incidents due to certain  intervening factors, and that the system may not always be used as  intended. We are aware of two wetline incidents that have occurred  since 2008 involving trucks equipped with an automatic wetline  purging system. According to the carrier involved in both incidents, in  one instance, the driver had turned off the system and, in the other, a  problem with the lining of the cargo tank prevented the system from  functioning properly. Based on this information, it does not appear  there was a functional problem with the purging device in either  instance; however, wetline incidents occurred nonetheless.
Most Catastrophic Incident. PHMSA’s 2011 and 2012 analyses  included additional benefits from avoiding a low-probability, high- consequence event like the 1997 Yonkers incident. Even though the  Yonkers incident occurred prior to the years for which data were used  for the primary analysis of expected benefits, this incident was  included in the analysis—meaning that it comprised a portion of the  expected benefits due to accidents avoided—under the assumption  that a severe incident such as this would happen very infrequently.  Specifically, in both of these analyses, the expected benefits of  avoiding an incident of this level of consequence were allocated over  a 20-year period—meaning that the agency assumed such a  catastrophic incident could be expected to occur once every 20 years.  PHMSA officials told us they considered allocating the benefits over a  longer 40-year period in response to industry criticism that there has  been only one such extraordinary incident on record but that the  agency has not reached a final decision on this issue. When assumed  to be a 20-year event, the expected benefits of avoiding a Yonkers- like incident in the 2012 benefit cost analysis comprise about 1/3 of  the proposed rule’s benefits. Given the apparent rarity of such an  incident, it is uncertain whether 20 years, 40 years, or some other  time period is an appropriate assumption of the frequency of such an  event. However, PHMSA did not account for this uncertainty in a  sensitivity analysis.
section_title: Conclusions
paragraphs: Wetline incidents have ranged from minor incidents to serious accidents  that have claimed lives and damaged property. Because PHMSA does  not specifically provide an option to indicate a wetline incident on its  incident reporting form, it is difficult to identify the number of wetline  incidents from PHMSA’s incident data. Additionally, due to inaccuracies in  the data, the magnitude of the risk they pose to safety is also unclear.  Although PHMSA has made changes to improve the quality of its incident  data, the concerns we identified call into question the data’s usefulness  for characterizing key aspects of the benefits of avoiding these incidents,  particularly the extent to which a wetlines rule would prevent fatalities.  Furthermore, PHMSA’s economic analysis does not account for these  limitations. Thus, the analysis does not adequately convey the uncertainty  of PHMSA’s calculated benefit of the rule. Furthermore, PHMSA’s  analysis has not adequately addressed the market uncertainty with regard  to the cost of the purging system, given that it is in limited use and the  particular version of the system assumed in the analysis, to date, has not  been in use.
While NTSB has called on PHMSA to address wetline risks, industry  stakeholders have raised concerns about PHMSA’s proposed regulation,  particularly given that they view wetline incidents as occurring infrequently  and that there could be other safety risks with the assumed option to  address wetline safety risks. Without adjusting its cost-benefit analysis to  account for the uncertainties due to the limited market for the purging  system and limitations with PHMSA’s incident data, the consequences of  wetline incidents remain unclear and the costs and benefits of wetline  regulation may not be accurately calculated in PHMSA’s regulatory  analysis.
section_title: Recommendations for Executive Action
paragraphs: To improve the reliability of data used to identify wetline incidents, we  recommend that the Secretary of Transportation direct the Administrator  of PHMSA to take the following two actions:
Revise incident reporting to better capture wetline incidents and their  consequences, such as by requiring specific reporting of wetline  incidents by modifying the reporting form to include a specific indicator  of such incidents, and adjusting the incident reporting form to indicate  whether there are minimal costs versus no costs when costs are  below the $500 reporting threshold.
Address limitations with the accuracy and completeness of  information used to assess the impact of wetline incidents, such as by  specifying circumstances when PHMSA should seek missing cause  and cost information, and potentially using sources other than the  carrier to acquire information (such as investigations by local law  enforcement or other federal agencies), particularly for the most  severe incidents for which having accurate incident information is  critical to oversight.
To strengthen the agency’s rulemaking analysis, we recommend that the  Secretary of Transportation direct the Administrator of PHMSA to take the  following action:
Strengthen the regulatory assessment of the proposed wetline rule’s  costs and benefits to better address the uncertainty of underlying  factors. Such action could include incorporating more real-world  information about purging systems or, if considered, other wetline  solutions, and conducting additional sensitivity analyses for areas of  uncertainty that are not addressed by improved data collection.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Department of Transportation for  review and comment. DOT indicated that PHMSA would take this report  into consideration as it continues to consider rulemaking and works to  improve its incident data collection and internal review procedures. The  department did not agree or disagree with our recommendations, but  provided technical comments that we incorporated as appropriate.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of Transportation, and other interested parties.  In addition, the report is available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or flemings@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
subsections: section_title: Objectives
paragraphs: This report discusses (1) the extent that the Pipeline and Hazardous  Materials Safety Administration’s (PHMSA) data can be used to reliably  identify wetline safety risks, (2) options for addressing wetline safety risks,  and (3) how well PHMSA has assessed the costs and benefits of  addressing these risks through regulation.
section_title: Scope and Methodology
paragraphs: To evaluate the extent that PHMSA’s data reliably capture wetline  incidents, we examined PHMSA’s process for identifying wetline incidents  and the data for the incidents that the agency has identified as being  wetline-related occurring from the beginning of January 1999 to the end  of March 2011. Our evaluation assessed PHMSA’s efforts against federal  internal control standards that require agencies to have relevant, reliable,  and timely information for decision-making and external reporting  purposes, and Office of Management and Budget (OMB) data quality  guidelines for regulatory purposes. Specifically, we analyzed the  narrative information for these incidents to determine how useful this  information is for identifying the incidents as being wetline-related. We  examined the extent to which the incidents’ coding of the component of  the tank truck that failed could be indicative of a wetline incident. We also  examined the extent to which these data accurately reported information  about incident fatalities and to what extent they reported information  about other incident damages. We selected 12 incidents to review as  case studies to learn more about PHMSA’s process for recording  information about these incidents and to look for potential irregularities  between PHMSA’s database and other available information about the  incidents. We selected these incidents to span the 1999 to 2011 time  frame, to represent a range of minor to major incidents as measured by  reported fatalities and other damages, and to include any incidents that  were investigated by PHMSA or the National Transportation Safety Board  (NTSB). We also included two incidents that PHMSA had determined to  be wetline-related in its 2011 analysis but later determined not to be  wetline incidents in its draft 2012 analysis. We reviewed the reliability of  these incident data by examining them for missing data and  inconsistencies, reviewing PHMSA’s process for obtaining wetline data  and maintaining them in the agency’s database, and related internal  controls. We concluded that the data were sufficiently reliable for the  purposes of our report. Our conclusion that PHMSA’s incident data are  not sufficiently reliable for use in its regulatory analysis is independent of  our conclusion that the data are sufficiently reliable for our purpose, since  our purpose was to assess to what extent the data reliably identify wetline  incidents and their characteristics. Based on the information PHMSA  provided about how it uses these data for this purpose and the availability  of PHMSA’s incident data through its online incident database, we were  able to make this assessment. We reviewed documents on and  interviewed PHMSA officials about the agency’s prior and ongoing efforts  to improve the quality of its hazmat incident data.focuses specifically on the issue of wetlines, we did not assess PHMSA’s  progress in improving its hazardous materials incident data in general.
To describe options to address wetline safety risks, we reviewed  documentation from PHMSA’s current and most recent prior related  rulemaking efforts to identify what options have been proposed to  address wetline safety risks and which major safety and industry  stakeholders have been engaged on this issue. For contextual  information about the feasibility of these options, we also visited a fuel  terminal where cargo tank trucks are loaded. We reviewed documents  from and interviewed associations and experts representing safety  advocacy and various components of industry involved in the  transportation of flammable liquids to understand stakeholder views on  the options to address wetline safety risks. Specific stakeholders we  interviewed are listed in table 4.
We placed particular focus on examining the wetline purging system,  since it is the option used in PHMSA’s wetlines rulemaking analysis and  the only option we are aware of that has been installed to address wetline  risks. To better describe this option, we reviewed documentation about  the system and interviewed the system manufacturer, Cargo Tank  Concepts. We also interviewed stakeholders with direct experience with  the system. We interviewed Sunoco—a petroleum marketer, carrier, and  terminal operator that has installed the system on its tank truck fleet—and  visited a Sunoco terminal near Philadelphia, Pennsylvania, that  distributes flammable liquid products to tank trucks equipped with the  purging system. We also interviewed Baltimore Cargo Tank Services, a  tank service company that has installed the system on tank trucks. Based  on reviews of patent applications and an industry trade publication, we  identified other companies that may be able to produce similar wetline  purging technology and interviewed two of them: Civacon and Franklin  Fueling Systems.
Because most of the options to address wetline safety risks are  theoretical—and the one solution that has been implemented is not  widespread—our ability to present specific information about solutions’  costs and benefits was limited. Instead, we focused on identifying to what  extent stakeholders agree or disagree on information about these options,  including the feasibility of implementing them in the current operating  environment.
To evaluate how well PHMSA has assessed the costs and benefits of  addressing wetline risks through regulation, we reviewed prior  Department of Transportation rulemakings on wetlines to understand the  history of the agency’s work on this issue and focused our analysis on the  current proposed rule, beginning with the Notice of Proposed Rulemaking  that PHMSA issued in January 2011. We analyzed PHMSA’s January  2011 cost-benefit analysis and an updated working draft version of the  analysis from March 2012. We reviewed PHMSA’s process and  assumptions used for developing these analyses and the reasons for  changes between them. We reviewed comments in the rulemaking record  and interviewed stakeholders about their views on PHMSA’s efforts to  address wetline safety risks. We assessed PHMSA’s efforts against OMB  guidance for use of data and cost-benefit analysis to support rulemaking.
We also reviewed PHMSA’s non-regulatory efforts to address wetline  safety risks, which consisted of an effort to raise awareness of emergency  responders, following the agency’s withdrawal of its most recent prior  proposed rule in 2006.
We conducted this performance audit from September 2012 to  September 2013 in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
section_title: Appendix II: PHMSA’s Wetline Proposed-Rule Cost-Benefit Methodology and Related Changes
paragraphs: To support its proposed wetline rule, PHMSA developed analyses of the  rule’s costs and benefits: PHMSA released a first analysis with the  proposed rule in January 2011 and provided us a working draft of an  updated analysis from March 2012 that the agency did not release  publicly. In updating its cost-benefit analysis in 2012, PHMSA made  several changes to its methodology for calculating costs and benefits that  affect the outcomes of the analysis and may affect the ability to compare  its scenarios.
Both the 2011 and 2012 analyses are built on the assumption that tank  trucks have a useful life of 20 years. Therefore, the entire tank truck fleet  in existence at the time of a rule’s effective date would presumably be  replaced during the course of the 20 years that followed. The 2011 and  draft 2012 analyses include four alternative scenarios with varying time  periods for achieving compliance with the proposed rule—specifically in 5,  10, 15, or 20 years. Were a rule to require compliance within 20 years,  carriers could achieve compliance by equipping only new trucks with a  wetline purging system. If compliance were required sooner, some  degree of retrofitting of existing tank trucks would be required, in addition  to equipping any vehicles that are new in the compliance timeframe.
All four scenarios in the 2011 analysis were analyzed over a 20-year  timeframe. The primary cost in the 2011 analysis is the installation of  wetline purging systems over a 20-year period, which included all new  tank trucks during that time and, in the case of the three shorter  compliance scenarios, the additional cost of retrofitting some tank trucks  that would not have been replaced by the time compliance was required.  Benefits in the 2011 analysis were the value of associated fatalities and  other damages from wetline incidents the rule is assumed to avoid over  the 20-year period. In the 2011 analysis, benefits are greater in the  shorter compliance scenarios because tank trucks are equipped with  purging systems sooner and therefore more incidents are avoided. In the  20-year scenario, only 5 percent of trucks are equipped each year so it  takes until year 20 when all vehicles would be equipped and all incidents  in that year would be avoided. In contrast, in the 5-year compliance  scenario, by year 5, all future incidents are assumed to be avoided,  resulting in greater estimated benefit, but also increased cost, due to the  need to equip sooner—requiring many trucks to be retrofit with purging  systems—and the continued cost of equipping trucks in years 6-20 as  retrofitted trucks need replacement.
In contrast, the 2012 cost-benefit analysis did not calculate all costs and  benefits of the rule over a 20-year period, but rather calculated costs for  each truck required to be equipped with a purging system within the  compliance time frame and the benefits associated with that equipage for  the remaining life of each equipped truck. This changes the number of  years over which costs and benefits are calculated:
For the 20-year compliance scenario, the 2012 analysis includes  costs for equipping all new tank trucks purchased during the 20 years,  and measures benefits for 20 years after each truck is equipped. That  is, a truck that is bought new in year 15 will have benefits associated  with that equipage until year 35.
For the 5-year compliance scenario, all trucks are either equipped  new or retrofit during the first 5 years, and the benefits associated with  the remaining life of that truck are assessed. While trucks purchased  new in those 5 years will have benefits measured over the 20-year life  of each truck, the benefits associated with the retrofit trucks are  calculated for a shorter period of time depending on PHMSA’s  assumptions about the remaining life of those vehicles. Benefits  accrue until a retrofitted truck is presumed retired from service.
PHMSA did not include in its 2012 assessment the costs or benefits  associated with a new truck that would replace the truck that had been  retrofit. For example, if a truck was retrofit in year 3 of the analysis and it  was assumed that it had a remaining life of 10 years, benefits associated  with that truck were included in the analysis only through year 13; the  costs from equipping a new replacement truck in year 13 and the  resulting benefits thereafter were not included. Consequently, the 2012  analysis may not be comparable with the 2011 analysis, which used the  same 20-year time-frame for the four scenarios.methodology does not show that equipping trucks sooner would result in  greater societal benefit, likely because benefits are not included for new   Further, this  trucks that would replace retrofit trucks retired within the 20 year  timeframe. Rather, it shows the value of benefits as greater under the  longer compliance timeframe. In contrast, the 2011 analysis shows  greater benefit for the 5-year compliance scenario than the 20-year  scenario, but at significantly higher cost. Table 5 compares the cost and  benefit values and calculation methods for the 20-year and 5-year  compliance scenarios in PHMSA’s 2011 and 2012 analyses.
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Sara Vermillion, Assistant  Director; Amy Abramowitz; Melissa Bodeau; Geoff Hamilton; Andrew  Huddleston; Tara Jayant; SaraAnn Moessbauer; Jaclyn Nelson; Josh  Ormond; Madhav Panwar; Lisa Shibata; and Anne Stevens made key  contributions to this report.