Hazardous Materials: Liquefied Natural Gas by Rail

I. Background

On July 24, 2020, PHMSA, in consultation with the Federal Railroad Administration (FRA) issued a final rule to amend the Hazardous Materials Regulations (HMR) to authorize the transportation of LNG in a new DOT-113C120W9 tank car and adopted additional operational controls for the safe movement of LNG by rail, effective as of August 24, 2020 (LNG by Rail Rule).^[1] On August 18, 2020, several stakeholder groups filed petitions for judicial review of the LNG by Rail Rule. The petitioners challenged the legality of PHMSA's action on various grounds, including for failing to comply with the National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et seq. The United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) later consolidated each of the petitions into a single case captioned as Sierra Club, et al. v. DOT, et al. (Case No. 20-1317).^[2]

On January 17, 2025, the D.C. Circuit issued a decision on the merits of the consolidated petitions.^[3] The D.C. Circuit held that PHMSA violated NEPA by failing to prepare an environmental impact statement during the rulemaking process. Accordingly, the D.C. Circuit vacated the LNG by Rail Rule in its entirety and remanded the matter to PHMSA for further proceedings.

II. Amendments

PHMSA is adopting conforming amendments to the HMR to address the D.C. Circuit's decision in Sierra Club, et al. v. DOT, et al. (Case No. 20-1317) (Jan. 17, 2025). These conforming amendments are intended to restore the text of the HMR to the version that existed prior to the effective date of the LNG by Rail Rule. No other regulatory changes are being adopted. Accordingly, the text of the following sections will revert to the version in effect prior to August 24, 2020: 49 CFR 172.101, 172.102, 172.820, 173.319, 179.400-5, and 179.400-8. The text of sections that did not exist prior to the LNG by Rail Rule, including §§ 174.200(d), 179.400-26, and 180.515(d), will be deleted in its entirety.

These conforming amendments do not affect the provisions in the HMR that authorize the transportation of LNG by highway, vessel, or by rail in UN T75 portable tanks. Nor do the conforming amendments prohibit interested stakeholders from seeking a special permit to authorize the transportation of LNG in rail tank cars in appropriate cases, or from using DOT-113C120W9 specification rail tank cars to transport hazardous materials in circumstances where that is already permitted under the HMR. PHMSA remains committed to facilitating the safe, reliable, and efficient transportation of LNG by rail and to expanding the use of DOT-113C120W9 specification rail tank cars in transporting other hazardous materials.

PHMSA further notes that it recently issued an Advance Notice of Proposed Rulemaking (ANPRM), titled “ Hazardous Materials: Mandatory Regulatory Reviews to Unleash American Energy and Improve Government Efficiency, ” in a separate rulemaking docket.^[4] That ANPRM solicits stakeholder feedback on opportunities to repeal or amend any provisions in the HMR that place an undue burden on the identification, development, and use of domestic energy resources consistent with President Trump's recent directive in E.O. 14154 (“Unleashing American Energy” ⁵ ). The ANPRM also specifically requests information regarding potential industry demand to transport LNG and other cryogenic liquids by rail tank car. PHMSA encourages any stakeholders who are interested in advancing the transportation of LNG and other hazardous materials by rail to participate in that proceeding. PHMSA is aware of at least one tank car manufacturer that has produced tank cars built to the DOT-113C120W9 specification for use with non-LNG cryogenic materials. This notice of conforming amendments removes the DOT-113C120W9 specification from the HMR. PHMSA notes that stenciling of those and other tank cars must, pursuant to § 179.22(a), reflect current HMR tank car specifications.

III. Regulatory Analyses and Notices

A. Statutory/Legal Authority and Good Cause for Immediate Adoption Without Prior Notice and Comment

Statutory authority for this final rule is provided by the Hazardous Materials Transportation Act (HMTA, 49 U.S.C. 5101 et seq.). Section 5103(b) of the HMTA authorizes the Secretary of Transportation to “prescribe regulations for the safe transportation, including security, of hazardous materials in intrastate, interstate, and foreign commerce.” Id. The Secretary has delegated his rulemaking authority under the HMTA to the PHMSA Administrator at 49 CFR 1.97(b).

PHMSA has good cause to issue this final rule without providing notice and comment pursuant to § 553(b)(B) of the Administrative Procedure Act (APA, 5 U.S.C. 551 et seq.). The final rule contains conforming amendments required by the D.C. Circuit's vacatur of ( printed page 26456) the LNG by Rail Rule.^[6] Because this action is compelled by the D.C. Circuit decision, PHMSA finds that notice and opportunity for public comment are unnecessary under § 553(b)(B) of the APA.

PHMSA also finds good cause for making these conforming amendments immediately effective. Section 553(d)(3) of the APA provides that a rule should take effect not less than 30 days after publication in the Federal Register , except when a rule relieves a restriction or when good cause is found by the agency and published within the rule allowing for earlier effect.^[7] Good cause exists for the immediate effect of these conforming amendments because the provisions of the HMR being removed no longer have the force and effect of law, and operators and the public will benefit from accurate regulatory text reflecting the current regulatory environment.^[8] No additional time is necessary to conform operator behavior. PHMSA previously suspended the LNG by Rail Rule,^[9] and no operators have been transporting LNG by rail tank car pursuant to that final rule.

B. Executive Order 12866 and Regulatory Planning and Review

This notice has been evaluated in accordance with E.O. 12866 (“Regulatory Planning and Review”) ^[10] and DOT Order 2100.6B (“Rulemaking and Guidance Procedures”) and is considered not significant. Therefore, this notice has not been reviewed by the Office of Management and Budget (OMB). In addition, this rule is not an E.O. 14192 regulatory action because this rule is not significant under E.O. 12866.^[11] As the conforming amendments in the notice merely reflect the current state of the regulations following judicial review, PHMSA finds that the conforming amendments impose no incremental compliance costs, nor do they adversely impair safety.

C. Executive Order 13132

PHMSA has analyzed this notice in accordance with the principles and criteria contained in E.O. 13132 (“Federalism”) and finds there are no federalism implications from this final rule.^[12]

D. Executive Order 13175

This document was analyzed in accordance with the principles and criteria contained in E.O. 13175 (“Consultation and Coordination with Indian Tribal Governments”) ^[13] and DOT Order 5301.1A (“Department of Transportation Tribal Consultation Policies and Procedures”). Because none of the amendments in this notice have tribal implications or impose substantial direct compliance costs on Indian tribal governments, the funding and consultation requirements of E.O. 13175 do not apply.

E. Regulatory Flexibility Act and Executive Order 13272

The analytical requirements of the Regulatory Flexibility Act, as amended by the Small Business Regulatory Flexibility Fairness Act of 1996 (RFA, 5 U.S.C. 601 et seq. ), do not apply when the agency finds good cause under the APA to adopt a rule without prior notice and comment.^[14] Because PHMSA has “good cause” under the APA to forego comment on the amendments herein, no RFA analysis is required.

F. Paperwork Reduction Act

Under the Paperwork Reduction Act of 1995 (Pub. L. 96-511, codified at 44 U.S.C. 3501 et seq.), no individual is required to respond to an information collection unless it has been approved by OMB and displays a valid OMB control number. Pursuant to 44 U.S.C. 3506(c)(2)(B) and 5 CFR 1320.8(d), PHMSA must provide interested members of the public and affected agencies an opportunity to comment on information collection and recordkeeping requests.

PHMSA has analyzed this rulemaking in accordance with the Paperwork Reduction Act. As detailed in the LNG by Rail Rule, Section V.C., “Section 172.820,” PHMSA previously required any rail carrier transporting a tank car quantity of UN1972 (Methane, refrigerated liquid (cryogenic liquid) or Natural Gas, refrigerated liquid (cryogenic liquid, with high methane content)) to comply with additional safety and security planning requirements for transportation by rail. Following the publication of the LNG by Rail Rule, PHMSA published both a 60-day and 30-day notice and comment period to provide an opportunity for public comment on the estimated increased reporting burden. PHMSA did not receive comments on either notice, and the reporting requirement was subsequently approved by OMB.

However, following the judicial vacatur of the LNG by Rail Rule, the reporting requirements are no longer necessary. As a result, PHMSA will submit a withdrawal of the information collection requirements to OMB under OMB Control Number 2137-0612, “Hazardous Materials Security Plans,” to reflect the removal of this burden.

G. Unfunded Mandates Reform Act of 1995

PHMSA analyzed the amendments in this notice pursuant to the Unfunded Mandates Reform Act of 1995 (UMRA, 2 U.S.C. 1501, et seq.) and determined that the amendments do not impose enforceable duties of $100 million or more (or $169 million adjusted for inflation) in any given year, on state, local, or tribal governments, or on the private sector. Because the amendments impose no new incremental compliance costs beyond those already assessed in the LNG by Rail Rule, PHMSA's earlier UMRA analysis need not be changed.

H. National Environmental Policy Act

The National Environmental Policy Act of 1969 (NEPA, 42 U.S.C. 4321, et seq.) requires Federal agencies to prepare a detailed statement on major Federal actions significantly affecting the quality of the human environment. PHMSA has determined that the amendments in this document simply reflect the LNG by Rail Rule as vacated by judicial review and do not require further NEPA analysis.

I. Privacy Act Statement

In accordance with 5 U.S.C. 553(c), the DOT solicits comments from the public to inform its rulemaking process. The DOT posts these comments, without edit, including any personal information the commenter provided, to www.regulations.gov, as described in the systems of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/​privacy.

J. Executive Order 13609 and International Trade Analysis

Under Executive Order 13609 (“Promoting International Regulatory Cooperation”),^[15] agencies must consider whether the impacts associated with significant variations between domestic and international regulatory approaches are unnecessary or may impair the ( printed page 26457) ability of American business to export and compete internationally. In meeting shared challenges involving health, safety, labor, security, environmental, and other issues, international regulatory cooperation can identify approaches that are at least as protective as those that are or would be adopted in the absence of such cooperation. International regulatory cooperation can also reduce, eliminate, or prevent unnecessary differences in regulatory requirements. The conforming amendments to the LNG by Rail Rule in this notice are required by the D.C. Circuit's vacatur of the LNG by Rail Rule and do not impact international trade.

K. Energy-Related Executive Orders 13211, 14154, and 14156

E.O. 13211 (“Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use”) ^[16] requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” Under the executive order, a “significant energy action” is defined as any action by an agency (normally published in the Federal Register ) that promulgates, or is expected to lead to the promulgation of, a final rule that (1)(i) is a significant regulatory action under Executive Order 12866 or any successor order and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy (including a shortfall in supply, price increases, and increased use of foreign supplies); or (2) is designated by the Administrator of the Office of Information and Regulatory Affairs (OIRA) as a significant energy action. These conforming amendments to the LNG by Rail Rule set forth in this Notice are not a “significant energy action” under E.O. 13211, as they are not a significant regulatory action, and they are not likely to have a significant adverse effect on supply, distribution, or use of energy.

These conforming amendments are also not a significant regulatory action under E.O. 12866 and are therefore not likely to have a significant adverse effect on the supply, distribution, or use of energy for purposes of the requirements of E.O. 14154 (“Unleashing American Energy”) ^[17] and E.O. 14156 (“Declaring a National Energy Emergency”).^[18] That said, PHMSA has issued, in a separate rulemaking docket, an Advance Notice of Proposed Rulemaking (ANPRM) titled “ Hazardous Materials: Mandatory Regulatory Reviews to Unleash American Energy and Improve Government Efficiency. ” ¹⁹ That ANPRM solicits stakeholder feedback on opportunities to repeal or amend HMR provisions placing an undue burden on the identification, development, and use of domestic energy resources as contemplated by E.O. 14154. The ANPRM also specifically requests information regarding potential industry demand to transport LNG and other cryogenic liquids by rail tank car.

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

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

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

2. In § 172.101, in the Hazardous Materials Table, revise the entry for “Methane, refrigerated liquid (cryogenic liquid) or Natural gas, refrigerated liquid (cryogenic liquid, with high methane content) ” (UN1972) to read as follows:

3. In § 172.102, in paragraph (c)(1), remove and reserve special provisions 439 and 440.

4. In § 172.820, revise paragraphs (a) and (b)(1) to read as follows:

5. The authority citation for part 173 continues to read as follows:

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

6. In § 173.319, revise paragraph (d)(2) to read as follows:

7. The authority citation for part 174 continues to read as follows:

Authority: 49 U.S.C. 5101-5128; 33 U.S.C. 1321; 49 CFR 1.81 and 1.97.

8. In § 174.200, remove paragraph (d).

9. The authority citation for part 179 continues to read as follows:

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

10. In § 179.400-5, revise paragraph (b) to read as follows:

11. In § 179.400-8, revise paragraph (d) to read as follows:

12. Remove § 179.400-26.

13. The authority citation for part 180 continues to read as follows:

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

14. In § 180.515, remove paragraph (d).