Norton Rose Fulbright: U.S. Proposes Stringent Standards For Rail Transport Of Flammable Liquids

Norton Rose Fulbright: U.S. Proposes Stringent Standards For Rail Transport Of Flammable Liquids

By Eva Fromm O'Brien, Bob Greenslade, Jennifer Blair Caplan, Alan Harvie and Jean Piette

On July 23, 2014, the Pipeline and Hazardous Materials Safety Administration ("PHMSA"), an agency within the US Department of Transportation ("DOT"), issued a Notice of Proposed Rulemaking ("NPRM") and an Advanced Notice of Proposed Rulemaking ("ANPRM") intended to improve the safe railroad transportation of large quantities of flammable liquids (primarily crude oil) at a projected cost of between approximately $2.63 and $6.02 billion.1 

Oil and gas production in the United States and Canada has increased dramatically over the past decade, in large part due to the development of unconventional hydrocarbon resources.  Because the growth in pipeline infrastructure has not matched production, there has also been a corresponding increase in rail transport of crude oil and condensate liquids.  According to PHMSA, there were 10,800 carloads of crude oil transported by Class I railroads in the United States in 2009—in 2013, there were over 400,000 carloads. 

Over the past year, several significant incidents involving derailments of trains carrying crude oil from the Bakken Shale Formation, along with a tragic accident in Lac-Mégantic, Quebec, Canada, have led to both voluntary efforts by industry and increased federal oversight on both sides of the border.  DOT, PHMSA, and the Federal Railroad Administration ("FRA") have issued various emergency orders, safety advisories, safety alerts, and other announcements in an effort to increase awareness about this issue and to encourage voluntary commitments to new safety initiatives. 

The NPRM is the latest and most comprehensive regulatory effort to date.  If finalized as proposed, the rules would impose stringent new tank car standards and alternative braking measures, to be aggressively phased in between 2017 and 2020.  The regulations would also  impose speed restrictions, route assessment requirements, and material sampling and characterization enhancements.  Finally, the NPRM would formalize an Emergency Order requiring certain railroads shipping Bakken crude oil to notify State Emergency Response Commissions ("SERCs").  The ANPRM requests comments on expanding comprehensive oil spill planning requirements to the railroad transport of crude oil.

The standards proposed by PHMSA are in line with comparable recently-enacted regulations by the federal government of Canada, although depending on which option PHMSA chooses, the final standards issued in the US may be more stringent than currently imposed in Canada.  This briefing provides a discussion on the proposed PHMSA standards and on the ANPRM, as well as a discussion on the Canadian standards.

NPRM for Enhanced Tank Car Standards and High-Hazard Flammable Trains

The bulk of PHMSA's proposed regulations would apply to what the agency is calling "high-hazard flammable trains" ("HHFTs"), which would be defined as any single train carrying 20 or more tank carloads of Class 3 (flammable liquids) materials.  The proposal would phase in new tank car standards and alternative breaking measures and impose speed restrictions, route assessment requirements, and material sampling and characterization enhancements.  The agency is also proposing to require notification to SERCs by each railroad transporting one million gallons or more of Bakken crude oil in a single train.

Except for the SERC notification provisions, the text of the proposed regulations would apply to the rail shipment of any flammable liquid.  However, it is clear from the rule preamble that the proposal stems from the dramatic increase in crude oil railway shipments and a significant, but lesser, increase in rail shipments of ethanol.  In fact, PHMSA states that only the transportation of crude oil and ethanol would be affected because they are the only materials transported in trains of 20 cars or more.

Phase-out of DOT Specification 111 tank cars 

Currently, DOT Specification 111 tank cars ("DOT 111") carry the vast majority of flammable liquids shipped by rail.  According to PHMSA, there are approximately 80,500 DOT 111 tank cars and 17,300 CPC 1232 tank cars in flammable liquids service.  CPC 1232 tank cars are DOT 111 tank cars meeting specifications established in 2011 by Casualty Prevention Circular ("CPC") 1232, which was issued by the Association of American Railroads ("AAR").  CPC 1232 tank cars include a thicker shell, head protection, top fittings protection, and higher flow capacity pressure relief valves.

Under the proposed regulations, the use of DOT 111 tank cars in HHFT service would be phased out beginning in 2017.  The phase-out would proceed according to packing group.  Specifically, the phase-out would ban the use of DOT 111 tank cars for Packing Group I flammable liquids transported by an HHFT beginning on October 1, 2017.  The ban would be extended to Packing Group II on October 1, 2018, and Packing Group III on October 1, 2020. 

As the phase-out progresses, HHFTs would use DOT Specification 117 (discussed below) and equivalent tank cars for the transport of flammable liquids.  DOT 111 tank cars would not need to be retired, but service would be limited to non-HHFT shipments. 

Braking systems

In the preamble, the agency discusses several types of alternative braking measures and proposes phase-in of these measures for HHFT trains and new DOT Specification 117 Tank Cars (discussed in the next section).  A brief description of these measures follows:

  • Electronic Controlled Pneumatic brake systems ("ECPs") send an electronic command to the breaking systems for all cars in the train, thereby reducing the time before the pneumatic brakes are engaged.
  • Distributed Power ("DP") is a system that provides control of a number of locomotives dispersed throughout the train.  DP allows the lead locomotive to control the rearward locomotives and increase breaking rates.
  • Two-way end of train ("EOT") devices communicate (via radio) an emergency brake command from the controlling locomotive to the emergency air valve at the rear of the train, allowing the rear cars to receive the brake signal more quickly.

The phase-in would begin on October 1, 2015, with a two-way EOT device requirement for HHFTs.  DP systems would be required by October 1, 2016.  Tank cars manufactured after October 1, 2015, for use in an HHFT would have to be equipped with ECP brakes.  After October 1, 2015, HHFTs comprised entirely of tank cars meeting the new DOT standards would have to be operated in "ECP brake mode." 

New DOT Specification 117 tank cars

PHMSA is proposing a new tank car specification ("DOT 117") and an equivalent performance standard ("DOT 117P") for use in HHFTs.  Three options are being proposed for DOT 117 cars.  From the  most stringent to least stringent, the options are as follows:

  • Option 1 (PHMSA and FRA Designed Car) – These cars would feature increased wall thickness (9/16 inch), thermal protection (including a reclosing pressure relief device), a minimum 11-gauge jacket, a full-height ½ inch head shield, features to prevent unintended actuation of bottom handles, ECP brakes, and rollover protection for top fittings.   
  • Option 2 (AAR 2014 Recommended Car) – These cars would be based on the most recent standard recommended by AAR.  This tank car would feature many of the same features as the Option 1 car, but would not require rollover protection or ECP brakes.
  • Option 3 (Enhanced Jacket CPC-1232) – These cars would be based on the CPC-1232 standard, but would have improvements to the bottom outlet handles and the pressure relief valve.  There would also be no option to use a weaker steel type or to exclude a jacket.  Option 3 would require a shell thickness of 7/16 inch, compared to the 9/16 inch thickness for Options 1 and 2.

In conjunction with establishing DOT 117, PHMSA is proposing performance requirements pursuant to which tank cars constructed under other standards could be used in HHFT service.  Tank cars meeting the performance standard would be designated DOT Specification 117P.  New cars would need to meet an equivalent level of safety, and must meet the exact requirements specified in the new rule.  Existing cars would need to meet the same requirements, except for those associated with top fittings protections. 

The preamble indicates that these tank car provisions will be among the most expensive portions of the proposed rule, depending on which of various options are ultimately adopted.  PHMSA estimates approximate costs at $3.03 billion for Option 1, $2.59 billion for Option 2, and $2.48 billion for Option 3.2

Speed restrictions

Currently, rail operators are abiding by a voluntary 50-mph speed limit for crude oil shipments and the AAR has recommended that such trains limit speeds to 40 mph if they have one or more non-CPC 1232 tank cars or are within the limits of any high-threat urban area.3 

PHMSA is proposing to codify the voluntary 50-mph speed limit and is also proposing three options for 40-mph speed limits.  Option 1 would limit HHFTs to 40 mph in all areas.  Under Option 2, the speed would be limited to 40 mph only in areas with more than 100,000 people.  Option 3 would limit HHFTs to 40 mph only in high-threat urban areas.

The preamble indicates that speed restrictions could also be among the most expensive portions of the proposed rule, depending on which of the various options are ultimately adopted.  PHMSA estimates approximate costs at $2.87 billion for Option 1, $260 million for Option 2, and $27.4 million for Option 3.

Rail routing assessment 

In 2008, PHMSA published a final rule requiring rail carriers to "select a practicable route posing the least overall safety and security risk to transport security-sensitive hazardous materials."4  These materials did not include crude oil.  The route selection must be made after an assessment of at least 27 factors specified in the 2008 rule.  PHMSA is now proposing to extend to all HHFTs these route assessment and selection requirements for transport security-sensitive hazardous materials.  

Written sampling and testing program

PHMSA's Hazardous Materials Regulations ("HMR") require that offerors classify and describe hazardous materials prior to shipment.5  However, the HMR does not provide specific minimum requirements for characterization tests.  Given the variability of mined gases and liquids, PHMSA is now proposing to require a written sampling and testing program for these materials, including crude oil.  The program must address "key elements," such as:

  • Frequency of sampling and testing to account for appreciable variability of the material.
  • Methods that ensure that a representative sample is taken, as well as sampling at various points along the supply chain.
  • Testing methods to enable "complete analysis, classification, and characterization" of the material.
  • Statistical justification for sample frequencies.

Although the regulatory packing group classifications (I, II, and III) for flammable liquids are based only on flash point and boiling point, the rule preamble and recent PHMSA orders indicate that other critical parameters should be assessed for crude oil.  These include corrosivity, vapor pressure, specific gravity at loading and reference temperatures, and the presence and concentration of certain compounds, such as sulfur.  Also of note, PHMSA has recently collected crude oil samples via a closed syringe-style cylinder to ensure volatilization does not occur prior to analysis.6  The agency may expect offerors to employ similar methods. 

Notification to SERCs for crude shipments

On May 17, 2014, DOT issued an Emergency Order requiring each railroad operating trains containing one million gallons7 or more of Bakken crude to notify SERCs about the operation of these trains in their respective states.  PHMSA is now proposing to codify, clarify, and possibly expand this requirement and is requesting comments.

The core issues under consideration appear to be whether:  (1) the notification requirement should be expanded to all types of crude oil; and (2) the one million-gallon threshold is appropriate, or should be replaced by an alternative (such as the 20-car HHFT threshold).  Also notable, PHMSA is requesting feedback on confidentiality issues, including whether notifications should be designated as Sensitive Security Information pursuant to 49 CFR Part 15. 

ANPRM regarding Oil Spill Response Plans for High-Hazard Flammable Trains

Concurrent with the NPRM, discussed above, PHSMA published an ANPRM to seek public comments and information regarding a possible expansion of Oil Pollution Act of 1990 ("OPA") comprehensive oil spill response plan ("OSRP") requirements.  Under current regulations, most crude by rail shipments are only subject to basic OSRP requirements, due to per-tank car regulatory thresholds.  The ANPRM seeks comments on whether the threshold should be applied based on the total volume carried by a train. 

Background on current regulations

In 1996, PHMSA's predecessor agency, the Research and Special Programs Administration ("RSPA"), published a final rule establishing requirements for OSRPs pursuant to OPA.  Under this rule, there are two types of OSRPs: (1) a basic OSRP, which is required for oil shipments in packaging having a capacity of 3,500 gallons or more; and (2) a comprehensive OSRP, which is required for oil shipments in a package containing more than 42,000 gallons.

Both basic and comprehensive OSRPs must address a range of foreseeable response scenarios, identify individuals and personnel who are qualified to play a role in spill response, establish employee training, list equipment necessary for oil spills, institute notification procedures for oil spills, and list procedures to follow during a response.  However, comprehensive OSRPs must be submitted to the Administrator of the FRA for review and updated to reflect significant changes.  Comprehensive OSRPs also have more stringent requirements for:

  • communication with federal officials;
  • incorporation of national and local contingency plans;
  • contractual assurances of sufficient equipment and personnel necessary to handle a worst-case scenario oil spill; and
  • training procedures for employees.

The typical rail tank car has a capacity of 30,000 gallons.  Each rail car is viewed as a single packaging unit for purposes of triggering basic or comprehensive OSRP requirements.  Thus, almost all rail carriers shipping crude oil must have a basic OSRP, but are not required to meet the more stringent requirements for comprehensive OSRPs and are not required to submit their OSRPs to the FRA. 

The Advance Notice of Proposed Rulemaking

In the ANPRM, PHMSA states that it is considering whether it is more appropriate to consider the train in its entirety when setting the threshold for comprehensive OSRPs, instead of basing applicability on the volume of each individual tank car.  PHMSA comments that the increasing reliance on HHFTs poses a risk that was not contemplated when RSPA made its threshold determination.

This new rule stems from Safety Recommendation (R-14-5), which was issued to PHMSA by the National Transportation Safety Board ("NTSB") in January 2014 after several recent train accidents.  In the Safety Recommendation, NTSB stated that "[b]ecause there is no mandate for railroads to develop comprehensive plans or ensure the availability of necessary response resources, carriers have effectively placed the burden of remediating the environmental consequences of an accident on local communities along their routes." 

The ANPRM seeks comments on a variety of topics regarding the appropriate thresholds for comprehensive OSPRs.  Among these topics are questions of cost-effectiveness, changes in OSRP requirements as it applies to trains carrying large volumes of crude oil, and estimated costs of compliance with any new requirements.

Canadian efforts to upgrade regulations for rail transport of flammable fiquids

The Government of Canada has recently adopted Regulations Amending the Transportation of Dangerous Goods Regulations (Update of Standards) which have come into force on July 15, 2014.  The new amendments formalize into regulation:

  • the requirements of consignors of crude oil to properly classify the  crude oil by a test or lab report, to certify that shipping documents fully and accurately describe the crude oil and to keep shipping records; and
  • the new design and construction standards for DOT 111 rail tank cars carrying crude oil and other dangerous substances.

Proof of classification

The classification of flammable liquids such as crude oil is based on the flash point and boiling point of the liquid.  Since crude oil is a naturally occurring mixture of various substances, the representativeness of a given sample can vary greatly, based on many factors.  Hence, there can be difficulties in classifying crude oil for the purpose of meeting the requirements of the Transportation of Dangerous Goods Regulations.

Consignors must now keep a record of how they classify crude oil for transportation purposes.  This addresses a gap in the information available to inspectors to validate the classification.  It also addresses a recommendation from the Transportation Safety Board of Canada, made on September 11, 2013, to review classification procedures and processes.

The proof of classification is to be available from the consignor of crude oil, and carriers are able to ask consignors to provide such proof to them.  The amendment eliminates confusion and uncertainty about what actually constitutes proof of classification.

Consignor's certification

A consignor's certification is a statement that is added to the shipping document certifying that the consignment of crude oil has been prepared in accordance with the applicable regulations.  The International Civil Aviation Organization's Technical Instructions for the Safe Transport of Dangerous Goods by Air, the International Maritime Dangerous Goods Code and the United States Code of Federal Regulations, Title 49 already require consignor's certification.  Therefore, adopting this certification requirement harmonizes Canadian rules with international regulations.

New tanker car standards

The new standard for rail tank cars (Standard TP14879) includes a requirement for all new tank cars used for the transport of dangerous goods in packing groups I and II to implement features for increased safety.  These features are already in place for new tank cars carrying some dangerous goods, including those for crude oil, and as under the Association of American Railroads rules, all DOT 111 tank cars ordered on or after October 1, 2011 for petroleum, crude oil and ethanol service included in packing groups 1 and 2 must have the additional safety features that are now being added in the Canadian regulations.  They include top-fitting protection, half head shields, increased thickness of the heads and the shell for non-jacketed tank cars and the mandatory use of normalized steel.  


The regulations that are proposed for the US will impose a significant financial burden on those offerors who own or lease railcars that are used for the transport of crude oil and ethanol, and it will be a challenge for rail car manufacturers to keep up with the ever-increasing demand for these railcars.  Ultimately, however, the proposed changes should have a positive impact the safe transportation of flammable liquids by rail.   


1 The NPRM and ANPRM have not yet been published in the Federal Register.  The comment period for each will run for 60 days following formal publication.

2 Total estimated costs range between approximately $2.63 and $6.02 billion.  The most significant cost categories are tank car standards ($2.48 to $3.03 billion), speed restrictions ($27.4 million to $2.87 billion) and enhanced breaking systems ($517 million).

3 High-threat urban areas are defined in 49 CFR § 1580.3.

4 See 73 Fed. Reg. 72,182 (Nov. 26, 2008).

5 49 CFR § 173.22.

6 See Operation Safe Delivery Update, available here.

7 This corresponds to approximately 35 tank cars of crude oil.

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