Week Ending June 26, 2020

DOT Final Rule on LNG by Rail Includes Thicker Tank Cars, Safety Limitations

DOT Final Rule on LNG by Rail Includes Thicker Tank Cars, Safety Limitations

A final rule from the Department of Transportation (DOT) to allow transportation of LNG by railroad includes safety measures such as a thicker outer tank for LNG tank cars and limitations on the number of tank cars that can be in one train.

The ruling may not result in widespread use of railroads for natural gas transportation, but it could serve niche markets where pipeline infrastructure or other gas transportation options are not available, said Charlie Riedl, executive director of the Center for LNG.

The rule provides potential to have reasonably priced fuel transportation alternatives, Riedl said in a brief interview June 23.

The Center for LNG, natural gas producers and others provided DOT’s Pipeline and Hazardous Materials Administration (PHMSA) with comments in support of the proposed rule. The final rule puts LNG in the same classification of other industrial chemicals suitable for railroad transportation, Riedl noted.

Opposition to the proposed rule came from more groups and individuals, including the National Association of State Fire Marshals, the National Transportation Safety Board (NTSB), members of Congress, attorneys general from 15 states and the District of Columbia and some environmental groups. Safety concerns, a lack of protections in the notice of proposed rulemaking, insufficient training for first responders and environmental issues were among the reasons cited by those opposing the proposal.

The final rule, issued in consultation with the Federal Railroad Administration, includes some precautions such as thicker outer tanks for transporting LNG in DOT-113 specification tank cars and operational controls for trains carrying LNG tank cars, DOT said in a statement. The new rule “carefully lays out key operational safeguards to provide for the safe transportation of LNG by rail to more parts of the country where this energy source is needed,” said Transportation Secretary Elaine Chao.

The final rule complies with an executive order issued by President Donald Trump in April of 2019, DOT said.

Federal hazardous materials regulations have authorized the transportation of flammable cryogenic materials for many years in DOT-113 tank cars. The final rule incorporates newly designated additional safety requirements, such as an enhanced thicker carbon steel outer tank.

It also requires remote monitoring of the pressure and location of LNG tank cars, with enhanced braking when a train is transporting 20 or more tank cars loaded in a continuous block, or 35 LNG tank cars anywhere in the train.

The rule also calls for railroads to conduct route risk assessments to evaluate safety and security.

The Pennsylvania Independent Oil and Gas Association (PIOGA), the Association of American Railroads and others filed comments in support of the proposed rule. While pipelines are the preferred method of transporting natural gas, moving LNG by rail could address pipeline bottlenecks in New England and the Permian Basin, lowering fuel costs to customers in the Northeast and mitigating the flaring of natural gas in the Permian Basin, the Center for LNG said.

The final rule “will help underserved markets with limited access to energy infrastructure benefit from natural gas, economically and environmentally,” the group said in a June 22 statement.

Riedl said the DOT-113 tank cars, when carrying LNG, hold about 30,000 gallons of the fuel. A train with 35 LNG tank cars would provide the transportation equivalent of about 109,000 Mcf of natural gas. That may seem like a limited amount of gas compared with LNG ship transportation and pipeline capacity, but the rule provides a viable option where other transportation methods are limited, Riedl said.

PHMSA regulations allow rail transportation of cryogenic liquids with similar properties to super-cooled LNG, including liquid carbon dioxide, argon, ethylene, and hydrogen chloride. When the proposed rule was subject to comments, railroad groups said speed restrictions and limitations on the length of trains should not be adopted by the agency.

NTSB said it would be detrimental to public safety if PHMSA approves the rule as it was proposed because there are unanswered questions about the DOT-113 rail tank car specifications for transporting LNG, no clear safety record for those tank cars, no operational controls for railroads to use and evidence contrary to PHMSA’s assertion that moving LNG by rail would be limited to a few tank cars within longer trains carrying other materials.

The final rule stated that DOT-113 tank cars have a long history of safe transportation of cryogenic material, essentially operating as vacuum-insulated, tank-within-a-tank facilities with stainless steel tanks enclosed by carbon steel outer tanks. It calls for use of thicker outer tanks that must be made of TC-128 Grade B steel, which has a reduced probability of tank failure due to cracking and increased resistance to puncture compared with ASTM A516-70 steel that is the current industry standard.

Each of the enhancements provided for in the final rule will improve tank car crashworthiness, PHMSA said. It noted that in case of a rail accident, a puncture of the inner tank could only occur after the outer tank is breached. “In such a scenario, any LNG released from the breach of the inner tank will also be released into the environment and not be contained in the space between the two tanks, even if the outer tank is made of stainless steel that maintains  strength and ductility at cryogenic temperatures,” the final rule explained.

Calling for an outer tank of stainless steel to withstand cryogenic temperatures and puncture resistance, along with train forces during transport, would be prohibitively expensive, PHMSA said.

The final rule is set to become effective 30 days after publication in the Federal Register.

By Tom Tiernan ttiernan@fosterreport.com

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