Regulation Database – Pipeline and Hazardous Materials Safety Administration
Transport of Liquefied Natural Gas by Rail
Section 5103(b) of the Hazardous Materials Transportation Act (“HMTA”) authorizes the Secretary of Transportation to “prescribe regulations for the safe transportation, including security, of hazardous materials in intrastate, interstate, and foreign commerce.” (49 U.S.C. 5101 et seq.) Under 49 C.F.R. 1.97(b)(3), the Secretary’s authority is delegated to Pipeline and Hazardous Materials Safety Administration (“PHMSA”).
On September 1, 2023, PHMSA issued a final rule suspending authorization for transport of liquified natural gas (“LNG”) by rail, pending a review of the applicable regulatory framework. (88 Fed. Reg. 60356, Sept. 1, 2023). The final rule amends the Hazardous Materials Regulations to suspend authorization for LNG transportation by rail tank car to ensure that, while PHMSA studies the issue, the public is protected from its potential environmental consequences—both direct and indirect.
This rule was first proposed in a Notice of Proposed Rulemaking (NPRM) issued on November 8, 2021. (86 Fed. Reg. 61731, Nov. 8, 2021). In that NPRM, PHMSA emphasized in the NPRM that “[t]ransportation of LNG by rail tank car has not occurred and there is considerable uncertainty regarding whether any would occur in the time it takes for PHMSA to consider potential modifications to the existing, pertinent [Hazardous Material Regulations] requirements,” but that the suspension “guarantees no such transportation would occur before its companion rulemaking has concluded.”
Litigation challenging PHMSA’s LNG rail transport regulations is ongoing (See Sierra Club v. U.S. Dep’t of Transportation in “Litigation” below)
Biden Administration (2021-2025)
Regulation Suspending the Transportation of Liquified Natural Gas by Rail
On September 1, 2023, PHMSA issued a final rule suspending authorization for transport of liquified natural gas (“LNG”) by rail, pending a review of the applicable regulatory framework. (88 Fed. Reg. 60356, Sept. 1, 2023). The final rule amends the Hazardous Materials Regulations to suspend authorization for LNG transportation by rail tank car to ensure that, while PHMSA studies the issue, the public is protected from its potential environmental consequences—both direct and indirect.
This rule was first proposed in a Notice of Proposed Rulemaking (NPRM) issued on November 8, 2021. (86 Fed. Reg. 61731, Nov. 8, 2021). In that NPRM, PHMSA emphasized in the NPRM that “[t]ransportation of LNG by rail tank car has not occurred and there is considerable uncertainty regarding whether any would occur in the time it takes for PHMSA to consider potential modifications to the existing, pertinent [Hazardous Material Regulations] requirements,” but that the suspension “guarantees no such transportation would occur before its companion rulemaking has concluded.”
Trump Administration (2017-2021)
Regulation of Hazardous Materials: Liquefied Natural Gas by Rail
On July 24, 2020, PHMSA finalized regulations permitting the transportation of LNG by rail. (85 Fed. Reg. 44994, July 24, 2020). These regulations were proposed on October 19, 2019, in response to a petition by the Association of American Railroads. (84 Fed. Reg. 56964, Oct. 24, 2019). PHMSA’s initial NPRM noted that the then-current regulations already allowed transport of LNG by highway, and that transport by rail cars would be comparatively safer. As a result, PHMSA concluded that the proposal “has the potential to reduce regulatory burdens and enhance domestic energy production without having a negative impact on safety.” (84 Fed. Reg. 56964, Oct. 24, 2019). The rule was originally proposed in response to a petition by the Association of American Railroads, and may facilitate the transportation of natural gas to markets where pipeline transportation is limited or unavailable.
Litigation
Sierra Club v. U.S. Department of Transportation
Immediately after publication of the final rule allowing LNG transport by rail, environmental groups and a coalition of state attorneys general petitioned for review in the D.C. Circuit alleging that the final rule violated the HMTA, NEPA, and a range of other federal laws. Sierra Club v. U.S. Dep’t of Transportation, No. 20-1317, (Aug. 18, 2020, D.C Cir.). In February 2021, after the Biden Administration took office, PHMSA asked the court to stay the case while the agency reviewed the rule. In September 2023, PHSMA finalized the “suspension rule” described above—pausing but not fully revoking the agency’s prior rulemaking authoring LNG transport by rail. The environmental groups and attorneys general, pointing out that so far “PHMSA has not proposed any modifications to the LNG Rule itself, much less provided any assurance that such modifications will address the LNG Rule’s serious deficiencies,” continue to challenge the original rule. Oral argument was held in September 2024.