Regulatory Tracker

Liquid Natural Gas by Rail Rule

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Quick Take

In Nov. 2021, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released a proposal that would halt liquefied natural gas (LNG) transport by rail. PHMSA is also working on a companion proposal, which the agency plans to release in 2023.

Why it Matters

The United States is a major producer and exporter of liquefied natural gas (LNG)—natural gas that has been cooled to a liquid state. Historically, LNG has been transported by pipeline, ships, or trucks. LNG is combustible and very cold, and any release from a tank car could result in fires that are difficult to extinguish, boiling liquid expanding vapor explosions (BLEVEs), and releases of methane, among other risks.

PMHSA and the Federal Railroad Administration (FRA), both within the U.S. Department of Transportation (USDOT), have shared regulatory authority over the transportation of hazardous materials, such as LNG, by rail. The two agencies previously considered the bulk transport of LNG in rail tank cars to be too dangerous to permit on a categorical basis, though rail transport of LNG was allowed ad hoc under a PHMSA special permit or in a special portable tank with FRA approval.

Despite the significant safety and environmental concerns raised by commenters and Members of Congress, the Trump administration published a final rule allowing for the bulk transport of LNG in rail tank cars. Environmental groups, tribes, and states challenged the decision in courts and through administrative processes.

Current Status

In its initial priorities, the Biden Administration directed PHMSA to review the LNG-by-rail rule. On Nov. 8, 2021, DOT proposed a rule that would halt LNG transportation by rail. The agency indicated that it is working on a supplemental rulemaking, which it expects to release in 2023.  

Timeline of Events

Obama Administration
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Trump Administration
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Jan. 17, 2017 The Association of American Railroads submits a petition for rulemaking to PHMSA to allow LNG to be transported in rail tank cars. The petition opens by arguing that LNG is “missing from the list of commodities authorized for rail transportation simply due to the historical lack of interest in transporting LNG by rail,” and goes on to argue that transportation of LNG by rail is “undeniably safe[]”.

Feb. 24, 2017, President Trump releases Executive Order 13777, Enforcing the Regulatory Reform Agenda, which directs agencies to evaluate existing regulations, and make recommendations for their repeal, replacement, or modification.

Mar. 28, 2017 President Trump releases Executive Order 13783, Promoting Energy Independence and Economic Growth, which directs agencies to review existing regulations and agency actions that potentially burden the development or use of domestic energy resources.

Oct. 2, 2017 The USDOT announces a review of its existing regulations and other agency actions, inviting the public to provide input regarding things the agency could repeal, replace, suspend, or modify.

Nov. 28, 2017 The USDOT receives a comment from Interested Parties for Hazardous Materials Transportation—a large group of trade associations on the regulatory review, suggesting the agency authorize transportation of LNG by rail.

March 20, 2019 PHMSA releases its Risk Assessment of Surface Transport of LNG.

April 10, 2019 President Trump releases Executive Order 13868, Promoting Energy Infrastructure and Economic Growth, which directs USDOT to propose for notice and comment a rule to permit LNG to be transported in approved rail tank cars.

May 7, 2018 PHMSA accepts the petition for rulemaking from the Association of American Railroads to allow the transport of LNG by rail.

Oct. 24, 2019 PHMSA, in coordination with FRA, publishes a proposed rule to allow for the bulk transport of LNG in rail tank cars that meet certain standards. PHMSA argues that preventing widespread, bulk transport of LNG impedes transportation of the significant amount of new LNG in the United States. The rule garners 456 public comments, including one from the National Transportation Safety Board —an independent agency responsible for investigating transportation accidents and making safety recommendations to transportation agencies—calling the rule “detrimental to public safety.”

Dec. 5, 2019 PHMSA issues a special permit to Energy Transport Solutions, LCC authorizing LNG transport in rail tank cars between Wyalusing, PA, and Gibbstown, NJ.

July 24, 2020 PHMSA, in coordination with FRA, publishes the final rule allowing for the bulk transport of LNG in rail tank cars that meet certain standards.

Aug. 18, 2020 A group of environmental plaintiffs, represented by Earthjustice, file a petition for review of the rule in the D.C. Circuit. Sierra Club v. DOT, No. 20-01317 (D.C. Cir.).

Aug. 18, 2020 Maryland, New York, California, Delaware, the District of Columbia, Massachusetts, Michigan, New Jersey, Pennsylvania, Vermont, Rhode Island, and Washington jointly file a petition for review of the rule in the D.C. Circuit. Maryland v. DOT, 20-01318 (D.C. Cir).

Aug. 20, 2020 The Puyallup Tribe of Indians files an administrative appeal of the final rule.

Aug. 24, 2020 The D.C. Circuit consolidates the environmental and state cases as Maryland v. DOT, No. 20-1318 (D.C. Cir.).

Oct. 26, 2020 The Puyallup Tribe of Indians files a court petition for review of the rule in the Ninth Circuit, which is consolidated with the cases in the D.C. Circuit.

Nov. 13, 2020 PHMSA denies the Puyallup Tribe’s administrative appeal.

Biden Administration
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Jan. 20, 2021 President Biden’s Executive Order 13,990 directs agencies to review policies inconsistent with the administration’s priorities to improve public health, protect the environment, prioritize environmental justice, and reduce GHG emissions. The non-exclusive list of agency actions accompanying the Executive Order identifies the LNG by Rail rule as a list of actions to be reviewed.

Feb. 24, 2021 DOT motions to hold Maryland v. DOT, No. 20-1218 (D.C. Cir.) in abeyance.

Mar. 16, 2021 The court grant’s DOT’s motion to hold the case in abeyance. Maryland v. DOT, No. 20-1218 (D.C. Cir.).

June 15, 2021 The National Academies of Science, Engineering, and Medicine releases its Phase I Report on the transportation of LNG by rail. The report suggests further studies and modeling that should be done to determine the safety of LNG by rail.

Nov. 8, 2021 PHMSA proposes to halt LNG transportation by rail while it works on a supplemental rulemaking. In total, PHMSA receives over 7,000 comments on the proposal. 

Dec. 2021 A coalition of 15 attorneys general file comments in support of the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) proposal to suspend the LNG by Rail rule. Twenty Republican members of the House Transportation and Infrastructure Committee file comments urging against PHMSA’s proposed suspension of the LNG by Rail rule. In total, PHMSA receives over 7,000 comments on the proposal.