Hazardous Materials: Vapor Pressure of Unrefined Petroleum Products and Class 3 Materials

Published date20 May 2020
Citation85 FR 30673
Record Number2020-10377
SectionProposed rules
CourtPipeline And Hazardous Materials Safety Administration
Federal Register, Volume 85 Issue 98 (Wednesday, May 20, 2020)
[Federal Register Volume 85, Number 98 (Wednesday, May 20, 2020)]
                [Proposed Rules]
                [Pages 30673-30680]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-10377]
                =======================================================================
                -----------------------------------------------------------------------
                DEPARTMENT OF TRANSPORTATION
                Pipeline and Hazardous Materials Safety Administration
                49 CFR Parts 171, 172, 173, 174, 177, 178, 179, 180
                [Docket No. PHMSA-2016-0077 (HM-251D)]
                RIN 2137-AF24
                Hazardous Materials: Vapor Pressure of Unrefined Petroleum
                Products and Class 3 Materials
                AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
                Department of Transportation (DOT).
                ACTION: Advance notice of proposed rulemaking (ANPRM); withdrawal.
                -----------------------------------------------------------------------
                SUMMARY: PHMSA is withdrawing the January 18, 2017, ANPRM concerning
                vapor pressure for crude oil transported by rail. PHMSA's decision is
                based on comments received to the ANPRM, as well as an extensive study
                conducted by the Sandia National Laboratories which found that the
                vapor pressure of crude oil is not a significant factor in the severity
                of pool fire or fireball scenarios, and concluded that results of the
                study do not support creating a regulatory distinction for crude oils
                based on vapor pressure. In withdrawing the ANPRM, PHMSA is providing
                notice of its determination that the establishment of vapor pressure
                limits would not improve the safety of rail transportation of crude
                oil. Therefore, PHMSA is no longer considering vapor pressure limits
                for the transportation of crude oil by rail or any other mode.
                Furthermore, PHMSA is also providing notice that, after considering
                comments received to the ANPRM, it is no longer considering imposing
                vapor pressure standards for other unrefined petroleum-based products
                and Class 3 flammable liquid hazardous materials by any mode.
                DATES: As of May 20, 2020, the ANPRM published on January 18, 2017 (82
                FR 5499), is withdrawn.
                FOR FURTHER INFORMATION CONTACT: Lad Falat, Sciences, Engineering, and
                Research (PHH-20), Telephone (202)
                [[Page 30674]]
                366-4545, or Ryan Larson, Standards and Rulemaking Division (PHH-10),
                Telephone (202) 366-8553. U.S. Department of Transportation, Pipeline
                and Hazardous Materials Safety Administration, 1200 New Jersey Avenue
                SE, East Building, 2nd Floor, Washington, DC 20590-0001.
                SUPPLEMENTARY INFORMATION:
                Table of Contents
                I. Background
                 A. PHMSA Regulation of High-Hazard Flammable Trains
                 B. North Dakota Order
                 C. New York Petition
                 D. Advance Notice of Proposed Rulemaking
                 i. Overview of ANPRM Comments
                 ii. Comments in Support of the Vapor Pressure Standard
                 iii. Comments Opposed to Vapor Pressure Standards
                II. Crude Oil Characterization Research Study (Sandia Study)
                 A. Congressional Mandate
                 B. Phases of the Sandia Study
                 i. Initial Phase
                 ii. Task 1
                 iii. Task 2
                 iv. Task 3
                 v. Sandia Study Completion
                III. PHMSA's Decision
                IV. Preemption of all Non-Federal Laws
                I. Background
                A. PHMSA Regulation of High-Hazard Flammable Trains
                 On May 8, 2015, PHMSA published a final rule titled ``Hazardous
                Materials: Enhanced Tank Car Standards and Operational Controls for
                High-Hazard Flammable Trains'' [HM-251; 80 FR 26643]. The final rule
                addressed safety concerns that arose following high-profile rail
                incidents involving crude oil produced in the Bakken region of the
                United States.\1\ The HM-251 rulemaking targeted the hazards associated
                with the shipment of flammable liquids by rail by establishing enhanced
                standards for the tank cars used to transport Class 3 flammable
                liquids, operational controls in the form of reduced operating speeds
                and enhanced braking requirements, rail routing risk assessment and
                notification, and requirements for more accurate classification of
                unrefined petroleum-based products. In the HM-251 notice of proposed
                rulemaking (NPRM) [79 FR 45015], that preceded the May 8, 2015 final
                rule, PHMSA sought comments from the public on the appropriate role of
                vapor pressure in classifying flammable liquids and selecting
                packagings, including the threshold question regarding whether vapor
                pressure limits should be established. After reviewing the comments to
                the NPRM, PHMSA determined that additional research was necessary, and
                accordingly, PHMSA decided not to establish new vapor pressure
                requirements in the final rule. However, PHMSA expressed its intent to
                consider the issues raised by the commenters in a future regulatory
                action depending upon the outcome of extensive research efforts being
                undertaken by the Department.
                ---------------------------------------------------------------------------
                 \1\ The Bakken shale formation, a subsurface formation within
                the Williston Basin (spanning eastern Montana, western North Dakota,
                South Dakota, and southern Saskatchewan), is one of the top oil-
                producing regions in the country and in the world. The Bakken shale
                formation's low permeability (i.e., it is a ``tight'' formation)
                requires hydraulic fracturing to produce oil (so-called ``tight
                oil'') at commercial rates.
                ---------------------------------------------------------------------------
                B. North Dakota Order
                 In December 2014, as PHMSA was in the process of developing the HM-
                251 final rule, the North Dakota Industrial Commission (NDIC) issued
                Oil Conditioning Order No. 25417 (NDIC Order), which requires operators
                in the State of North Dakota to separate the gaseous and light
                hydrocarbons from all Bakken crude oil produced in North Dakota. The
                NDIC Order requires the use of a gas-liquid separator and/or an
                emulsion heater-treater capable of separating the gaseous and liquid
                hydrocarbons; prohibits blending of Bakken crude oil with specific
                materials; and requires crude oil produced to have a vapor pressure
                (determined using ASTM D6377 \2\) no greater than 13.7 pounds per
                square inch (psi), or 1 psi less than the vapor pressure of stabilized
                crude oil as defined in the latest version of ANSI/API RP3000.
                ---------------------------------------------------------------------------
                 \2\ ASTM D6377 refers to ``ASTM D6377--Standard Test Method for
                Determination of Vapor Pressure of Crude Oil: VPCRx (Expansion
                Method).''
                ---------------------------------------------------------------------------
                C. New York Petition
                 On December 1, 2015, the New York State Office of the Attorney
                General (NYSOAG) submitted a petition for rulemaking (P-1669)
                requesting PHMSA establish a vapor pressure standard for crude oil
                shipped by rail [PHMSA-2015-0253-0001 (Dec. 3, 2015)]. Although PHMSA
                codified several additional safety requirements in the HM-251 final
                rule, the NYSOAG petition asserted that the measures implemented by the
                final rule were insufficient to reduce significantly the risk of high
                impact fires or explosions because they did not specifically address
                vapor pressure limits. The NYSOAG petition requested that PHMSA revise
                Sec. 174.310 to establish a Reid Vapor Pressure (RVP) limit that is
                less than 9.0 psi for crude oil transported by rail. The NYSOAG
                petition asserted that limiting the product's vapor pressure would
                reduce the risk of death or damage from fire or explosion in the event
                of an accident. While the NYSOAG petition did not provide any specific
                cost data, the petitioner cited increasing numbers of shipments of
                Bakken crude oil by rail, past train explosions involving shipments of
                Bakken crude oil, Bakken crude oil volatility and flammability, and the
                presence of existing technology to reduce the volatility of crude oil
                as justification for the requested revisions to the Hazardous Material
                Regulations (HMR; Parts 171-180).
                D. Advance Notice of Proposed Rulemaking
                 On January 18, 2017, PHMSA published an ANPRM [HM-251D; 82 FR 5499]
                in response to the NYSOAG petition. The ANPRM solicited public comments
                on the merits of the petition based on the perceived safety benefits of
                establishing vapor pressure limits for unrefined petroleum-based
                products and potentially all Class 3 flammable liquid hazardous
                materials. PHMSA posed 39 questions requesting specific information
                regarding the options for, as well as the benefits of, limiting vapor
                pressure in transportation. PHMSA sought public comment to obtain the
                views of entities impacted by the NDIC Order, as well as those who were
                likely to be impacted by the changes requested in the NYSOAG petition,
                including those likely to benefit from, be adversely affected by, or
                potentially be subject to additional regulation.
                i. Overview of ANPRM Comments
                 In response to the HM-251D ANPRM, PHMSA received comments from
                approximately 80 individuals and organizations. The following table
                categorizes the comments received according to commenters' background.
                [[Page 30675]]
                 Commenters to the ANPRM
                ------------------------------------------------------------------------
                 Number of Description and examples
                 Commenters' background comments of category
                ------------------------------------------------------------------------
                Non-Government Organizations..... 10 Environmental groups
                 (2), Advocacy/lobby
                 groups (5), and other
                 non-governmental
                 organizations (3).
                Governments...................... 6 Local (2), State (4).
                Individuals...................... 54
                Carrier Industry Stakeholders.... 4 Carrier related trade
                 associations.
                Shipper Industry Stakeholders.... 9 Shippers and petroleum
                 related trade
                 associations.
                ------------------------------------------------------------------------
                 PHMSA asked specific questions regarding the general benefits,
                limitations, and impacts of establishing a maximum vapor pressure for
                crude oil or flammable liquids; the safety implications at play when
                considering the proposed vapor pressure standard; the merit and methods
                of measuring vapor pressure for transportation purposes; and general
                packaging questions. While the NYSOAG petition specifically requested
                that PHMSA set a vapor pressure standard for crude oil by rail, PHMSA
                solicited comment in the ANPRM about whether the scope of the safety
                standard should be broadened to include other Class 3 flammable liquids
                by different modes of transportation, such as highway. The ANPRM also
                asked whether risk factors other than vapor pressure should be
                considered in PHMSA's effort to increase the safety of transporting
                flammable liquids.
                 Most comments fit within one of three categories: (1) Generalized
                support for a maximum vapor pressure limit with expressed concerns
                about the associated risks of transporting unrefined petroleum-based
                products in highly populated areas and sensitive environments; (2) not
                supportive of maximum vapor pressure limits citing to a lack of
                evidence demonstrating that limiting vapor pressure would reduce risks
                associated with the transport of unrefined petroleum-based products or
                other Class 3 materials and suggesting that PHMSA should wait until the
                completion of a study on crude oil characteristics recently undertaken
                by Sandia National Laboratories (Sandia) before undertaking any
                rulemaking; or (3) not supportive of vapor pressure requirements being
                applied to shipments by highway.
                ii. Comments in Support of the Vapor Pressure Standard
                 Approximately 60 commenters generally supported setting additional
                safety standards for the transportation of crude oil that would be
                based on specific measurable metrics, such as vapor pressure. Most
                commenters who expressed their support for the proposed RVP standard
                stated that a lower vapor pressure would minimize the severity of fires
                in the event of a train crash or derailment. Several commenters
                asserted that there is ample evidence demonstrating that a higher RVP
                corresponds to more detrimental explosions. However, the comments in
                support of this claim were ultimately anecdotal, providing little to no
                data to substantiate any such correlation. Most of the comments
                supporting the implementation of a vapor pressure standard were
                submitted by members of the public who were concerned about the effects
                that an accident in their community would have on the surrounding
                environment and personal property.
                 Most of the commenters in favor of vapor pressure limits expressed
                support for a vapor pressure limitation for crude oil by rail
                specifically. Many of these commenters referenced the conditioning
                requirements in the NDIC Order as evidence of the feasibility and
                necessity of implementing an RVP standard and encouraged PHMSA to
                follow suit. While many supporters of a vapor pressure standard were in
                favor of the standard proposed in the NYSOAG petition, some suggested
                that the standard should be as low as 4.0 psi. These commenters alluded
                to certain practices and requirements currently in place in the oil
                production industry that require reducing the volatility of crude, such
                as pipeline operational standards and degasification requirements in
                place in Texas. One such commenter recommended setting a standard
                between 4-8 psi.
                 Similarly, commenters from David & Associates and the Natural
                Resources Defense Council (NRDC) pointed to certain national and State
                vapor pressure limitations that are in place for gasoline as evidence
                of the merit and feasibility of nationwide vapor pressure
                restrictions--stating that the restrictions would reduce the
                consequences of a potential incident by reducing the release of evolved
                gases from the transported product. However, David & Associates
                conceded that those restrictions were implemented with the intent of
                minimizing the pollution associated with volatile organic emissions
                rather than with the intention of mitigating safety risks during
                transportation. NRDC further urged PHMSA to set an interim standard
                until all necessary data is collected, rather than setting a permanent
                standard without sufficient evidence.
                 A small number of commenters stated that if a vapor pressure
                standard is implemented, it should not apply to transportation by
                highway. One commenter from the Scenic Hudson Group noted that the
                safety hazards by rail outlined in the NYSOAG petition are also
                concerns for shipments carried out on waterways, such as the Hudson
                River. One member of the public was in favor of setting the vapor
                pressure limit for all modes of transportation.
                 A commenter from the Department of Environmental Conservation of
                New York was in support of additional safety measures other than a
                vapor pressure limit for shipments of crude oil and suggested that
                direct limits on C1-C4 hydrocarbons would be more effective than
                restricting vapor pressure.
                 A comment jointly submitted by the Attorneys General of New York,
                California, Illinois, Maine, Maryland, and Washington (State AGs)
                supported a nationwide limit on the vapor pressure of crude oil
                transported by rail in the United States, noting that PHMSA is not
                required to determine that vapor pressure is the ``best metric'' to use
                in decreasing fire and explosion risks before developing a vapor
                pressure regulation.
                iii. Comments Opposed to Vapor Pressure Standards
                 Twenty-one commenters strongly opposed the proposed vapor pressure
                limitations on either crude oil or other Class 3 flammable liquids by
                highway or rail. Some commenters completely rejected the use of vapor
                pressure as a basis for classification, while others suggested that
                PHMSA wait until the completion of the Sandia Study after which data
                regarding the volatility of crude oil would be available. Several
                commenters noted the lack of empirical data to support the claims in
                the
                [[Page 30676]]
                petition. PHMSA further categorized the comments received under the
                following topic areas.
                Vapor Pressure
                 Several commenters rejected the premise of the NYSOAG petition and
                the concept that the volatility of crude oil is the primary cause of
                large explosions and uncontrollable fires in train accidents. In their
                comments, American Fuel & Petrochemical Manufacturers (AFPM), American
                Petroleum Institute (API), and NDIC similarly assert that vapor
                pressure is not the primary cause of ignition in crude oil by rail
                accidents. Instead, these commenters attributed the fires associated
                with the rail incidents cited in petition P-1669 to the presence of a
                flammable substance and source of ignition during the accidents.
                Commenters--such as the International Liquid Terminals Association
                (ILTA) and API--echoed that reducing the volatility of crude oil prior
                to shipment would not decrease the expected degree, consequence, or
                magnitude of a release or the likelihood of a fire during an accident
                since the magnitude of a combustion event correlates to the
                flammability, rather than the vapor pressure, of the hazardous liquid
                released. To further the point, AFPM noted that there are several Class
                3 flammable liquids that have low vapor pressures that present similar
                ignition risks to Bakken or Permian Basin crude oil and other unrefined
                petroleum-based products. API also expressed its belief that focusing
                on vapor pressure to mitigate or reduce severity would not achieve the
                desired results and, that if implemented, the rule would not
                significantly reduce the primary hazard of crude oil, since it would
                still be a flammable liquid regardless of the vapor pressure. API
                further stated that the more volatile compounds would have to be
                removed from crude oil and transported in pressurized tank cars or
                pipelines as a separate stream of flammable liquids or gases if a vapor
                pressure limit is set below current levels.
                 Several commenters cited the petition's lack of evidence or other
                scientific basis for its claim that reducing vapor pressure will
                improve safety. ILTA stated that there was no basis for the assertion
                that limiting the vapor pressure of crude oil prior to shipment would
                decrease the expected degree, consequence, or magnitude of a release or
                the likelihood of a fire during an accident. Similarly, the North
                Dakota Petroleum Council (NDPC) noted that there are currently no peer
                reviewed scientific studies supporting the belief that an appropriate
                level for vapor pressure is already known. API further recommended
                investing in and improving the methods for transporting crude safely,
                rather than imposing new unilateral RVP limits that are not based on
                any scientific evidence.
                 Other commenters stated that applying a vapor pressure limit to all
                modes would materially alter the products being transported and could
                have many unintentional consequences that could potentially disrupt the
                oil and natural gas supply chain, which would require both the industry
                and PHMSA to reevaluate the current system to determine whether the
                packaging specifications were still appropriate for a materially
                altered product.
                All Class 3 Flammable Liquids
                 Certain commenters specifically opposed the proposal to extend
                vapor pressure limits to all Class 3 flammable liquids. Dow Chemical
                stated that establishing a vapor pressure limit to encompass all
                flammable liquids by any mode of transportation would not improve the
                safe transportation of chemical products. Their comment reiterated the
                point made by several other commenters that the HMR already address the
                risk of flammability based on the material's flashpoint and boiling
                point. Currently the HMR designate a liquid as ``flammable'' if it has
                a flash point of not more than 60 [deg]C, regardless of vapor pressure.
                 API cautioned that imposing a vapor pressure limit for all Class 3
                flammable liquids has potential to change fundamentally how all these
                products are classified and packaged. The American Coatings
                Associations (ACA) and Railway Supply Institute (RSI) added that crude
                oil presents unique risks because of its variable chemical properties
                that do not extend to [are not exhibited with] other Class 3 flammable
                liquids, such as manufactured goods which undergo strict quality
                assurance processes to ensure properties and characteristics are within
                defined parameters.
                 The Council on Safe Transportation of Hazardous Articles (COSTHA)
                opposed applying a vapor pressure standard to other Class 3 materials
                based on investigation and studies regarding crude oil. The ILTA and
                COSTHA noted that extending this classification criterion to other
                flammable liquids would have a significant impact on fuels, raw
                chemical products, consumer products, and even health services. RSI
                further added that without sound scientific information and data, an
                expansion of vapor pressure limits to all Class 3 flammable liquids
                would be an arbitrary change that would impose additional costs. ILTA
                added that limiting the vapor pressure of Class 3 flammable liquids
                would also cause conflicts between regulatory agencies and industry.
                For example, the Environmental Protection Agency (EPA) regulates fuel
                properties to ensure proper emissions performance, and ASTM
                International (ASTM) maintains standards for vehicle fuel that include
                specified limits on the RVP of gasoline, which exceed 9 psi. ILTA and
                RSI similarly warned that setting a limit conflicts with the vapor
                pressure limits mandated by one of these other entities would cause
                numerous commercial and regulatory burdens.
                Not by Highway
                 While the NYSOAG petition requested a vapor pressure limit for
                shipments made by rail, PHMSA asked in the ANPRM whether the proposed
                limit should also apply to transportation by highway. Three of the four
                commenters that responded to this specific question were opposed to a
                vapor pressure limit by highway.
                 National Tank Truck Carriers (NTTC) stated that while trucks are
                the main method for transporting refined petrochemicals from the fuel
                rack to gas stations, refined fuel risks are inherently different than
                those associated with transporting crude oil. PHMSA already considered
                the risks inherent in transporting refined fuels in its combustible
                fuel rulemaking and found them to be effectively managed under the
                current HMR. Accordingly, NTTC recommended Federal Motor Carrier Safety
                Administration (FMCSA) involvement as the agency tasked with regulating
                all highway transportation of goods in interstate commerce.
                 NDPC stated that imposing a vapor pressure reduction requirement on
                highway transportation will force oil and gas producers to conduct
                unnecessary and extremely burdensome additional sampling at the well
                site to ensure compliance with the new standard. NDPC expressed that
                imposing vapor pressure limitations by highway may make oil leases
                unprofitable.
                 NDIC further opposed a vapor pressure limit by highway because
                there have not been any crude oil truck transport Boiling Liquid
                Expanding Vapor Explosion (BLEVE) events in North Dakota.
                Regulatory Authority
                 Several commenters in opposition to the proposed vapor pressure
                standard specifically stated that PHMSA did not have the authority to
                proceed with
                [[Page 30677]]
                setting a vapor pressure limitation due to restrictions from recent
                executive orders and the Fixing America's Surface Transportation (FAST)
                Act (FAST Act; Pub. L. 114-94). Similarly, two commenters stated that
                granting the NYSOAG's petition would conflict with PHMSA's obligation
                to harmonize the HMR with international regulations.
                 Signed on January 30, 2017, Executive Order 13771, ``Reducing
                Regulation and Controlling Regulatory Costs,'' directs agencies to
                repeal two regulations for every new regulation they issue. Commenters
                such as API stated that given the financial burden that this rule would
                impose, it would be imprudent to move forward with a vapor pressure
                standard as it would severely limit PHMSA's ability to implement any
                other regulatory actions. In addition, on March 28, 2017, Executive
                Order 13783, ``Promoting Energy Independence and Economic Growth,''
                obligated PHMSA to identify and revise any regulatory actions that
                potentially burden domestic energy production. Citing the
                implementation costs that would be associated with the proposed vapor
                pressure limits, several commenters alluded to the restrictions imposed
                on PHMSA by Executive Orders 13771 and 13783. In its comment, NDPC
                noted that any new regulation that requires ``stabilization'' or sets a
                vapor pressure threshold for crude oil prior to transportation would
                impose substantial cost impacts on the oil and gas production and
                transportation industries. According to AFPM, accepting the petition
                would force offerors and carriers to treat crude oil or other flammable
                liquids as Division 2.1 flammable gases, or incur unreasonable
                pretreatment costs.
                 According to comments from AFPM, API, and NDPC, the foreseen
                economic burden would be due not only to the costs of the additional
                operational infrastructure and equipment that would be required to meet
                new vapor pressure limits, but also to economic losses caused by
                resulting conflicts with international standards. Similarly, NDPC
                further noted that crude oil is more valuable when it is allowed to be
                sold with all of its constituent hydrocarbons and that crude oils with
                greater concentrations of light ends can be more valuable because each
                of the constituents can be refined and sold at the most economically
                efficient location in the supply chain. NDPC explained that separating
                the oil prematurely into its individual hydrocarbon constituents
                earlier in the supply chain to comply with a regulatory vapor pressure
                standard can reduce the overall value of a given barrel of oil as
                produced at the wellhead and removing light ends prior to
                transportation reduces the volume of crude oil that producers are
                ultimately able to sell to refiners and others in the marketplace.
                 Several commenters--including Independent Petroleum Association of
                America (IPAA) and the American Exploration and Production Council
                (AXPC)--urged PHMSA to reconsider the ANPRM and suggested that setting
                a vapor pressure standard prior to the completion of the Sandia Study
                would be premature and incongruous with congressional mandates outlined
                in the FAST Act. AFPM noted that the FAST Act reflects Congress's
                judgment that the completion of the Sandia Study should be a condition
                precedent to any further regulation of the transportation of crude oil.
                NDIC, NDPC, AFPM, and several other commenters stated that PHMSA should
                delay any decision regarding a vapor pressure standard for crude oil
                until the results of the Sandia Study studies are available. To this
                point, AFPM added that Task 4 (of the Sandia Study) was specifically
                intended to examine whether tight oils might have an elevated risk of
                ignition in the event of a rail accident as compared to other crude
                oils.
                 Two others commented that implementing a vapor pressure standard
                would undermine international harmonization efforts and impact trans-
                border shipments. API stated that, per international agreement, PHMSA
                is obligated to ensure harmonization with the United Nations (UN)
                Recommendations on the Transport of Dangerous Goods Model Regulations,
                which are designed to enhance global trade, economic development,
                improve safety and compliance-enforcement capability while simplifying
                training requirements for multi-modal cross regional transport of
                dangerous goods. API noted that unilateral or arbitrary changes to the
                HMR domestically that do not align with UN Model Regulations
                requirements would severely impact trans-border shipments and create
                significant regulatory uncertainty for shippers and carriers.
                HMR Is Sufficient Based on Known Risks
                 Several commenters stated that the existing regulatory framework of
                the HMR, which includes the system of hazard classification and
                packaging requirements, adequately addresses the risks associated with
                the transportation of hazardous materials. A commenter from Dow
                Chemical stated that the HMR provides a comprehensive framework to
                address the risks associated with the transportation of flammable
                liquids that includes defined criteria for the classification of
                flammable liquids and specification of appropriate packaging
                requirements. The commenter further stated that as defined in the HMR,
                a flammable liquid has a flash point of not more than 60 [deg]C,
                regardless of vapor pressure. As such, a flammable liquid can ignite
                and burn regardless of vapor pressure.
                 In addition to the HMR's basic framework, several commenters
                opposed the establishment of a vapor pressure limit in consideration of
                the already completed HM-251 rulemaking. The HM-251 rulemaking adopted
                the DOT-117 tank car specification and other safety provisions that
                were found to be protective of human health and the environment,
                further strengthening the protections provided by the HMR. Commenters
                such as RSI suggested that given recently adopted measures from the HM-
                251 final rule, setting additional requirements at this time would be
                premature and economically burdensome. Specifically, RSI noted that
                PHMSA does not yet know the full effect of these regulatory efforts,
                many of which have only been implemented within the last few years or
                are still in the process of being implemented (i.e., the transition
                from DOT-111 specification tank cars to DOT-117s and DOT-117Rs). As
                such, RSI noted it would be premature to implement additional
                regulations impacting the transportation of crude oil and other
                flammable liquids by rail prior to full implementation of these
                regulatory initiatives and before PHMSA can analyze and understand
                their collective safety impact.
                 API stated that safety measures like the ones set forth in the HM-
                251 rulemaking were simply a better option for minimizing safety risks
                as compared to limiting vapor pressure to minimize safety risks. It
                further stated that PHMSA should invest in and improve the methods to
                transport crude oil safely, rather than impose new unilateral RVP
                limits that may not reduce accidents or casualties and are not based on
                any scientific evidence. A commenter from AWM Associates noted that the
                issue appears to be related to shippers failing to properly classify
                the Bakken crude oil and suggests that PHMSA should increase criminal
                prosecution of shippers that fail to properly classify their hazardous
                materials and those who ship the hazardous materials in unauthorized
                containers.
                [[Page 30678]]
                II. Crude Oil Characterization Research Study (Sandia Study)
                 In addition to the ANPRM, DOT, the U.S. Department of Energy (DOE),
                and Transport Canada (TC) have conducted a collaborative research
                program designed to better understand the risks associated with large
                volume rail transport of crude oil in general, particularly
                unconventional (tight) oil. The research was carried out by Sandia, a
                DOE Federally Funded Research and Development Center. As a Federally
                Funded Research and Development Center, Sandia draws upon its deep
                science and engineering experience and serves as an independent,
                objective advisor to DOE and conducts research to inform the policy
                debate for decision makers. To carry out the objectives of the Sandia
                Study, DOE called upon a multidisciplinary team with world-class
                experts and state-of-the-art facilities, instrumentation, and
                diagnostic capabilities to perform complex large-scale combustion
                testing and analysis.
                A. Congressional Mandate
                 Section 7309 of the FAST Act requires the Secretaries of DOE and
                DOT to submit a report to Congress on the results of the ongoing Sandia
                study of crude oil characteristics within 180 days of its completion.
                Now completed, the results of the Sandia Study are summarized in
                Section B below.
                B. Phases of the Sandia Study
                i. Initial Phase
                 DOT and DOE began their effort by commissioning a review of
                available crude oil chemical and physical property data and literature.
                This review focused on crude oil's potential for ignition, combustion,
                and explosion. A partial list of properties surveyed included density
                (expressed as API gravity), vapor pressure, initial boiling point,
                boiling point distribution, flash point, gas-oil ratio, and ``light
                ends'' composition (dissolved gases--including nitrogen, carbon
                dioxide, hydrogen sulfide, methane, ethane, and propane--and butanes
                and other volatile liquids). Although the review yielded a large
                database encompassing a wide variety of crude oils and their
                properties, it also illustrated the difficulty in using available data
                as the basis for accurately defining and comparing crude oils due to
                the wide range in variability, specifically variability in the sample
                point, sampling methods, and analytical methods.
                 An important outcome of the first phase of this research was formal
                recognition of the wide-ranging variability in crude oil sample types,
                sampling methods, and analytical methods and acknowledgement that these
                variabilities limit the adequacy of the available crude oil property
                data set for establishing effective and safe transport guidelines. To
                address this characterization and classification gap, DOT, DOE, and TC
                continued their research to improve the understanding of crude oil
                properties with a particular focus on ``tight'' crude oil. A Sampling,
                Analysis, and Experiment (SAE) plan was designed to characterize tight
                and conventional crude oils based on key chemical and physical
                properties, and identify properties that may contribute to increased
                likelihood and/or severity of combustion events that could arise during
                transport incidents. In addition to analytical procedures, this
                research program included experiment activity protocols such as: Use of
                acquired chemical and physical property data in the development of
                computational models for predicting crude oil behavior in rail
                transport accident scenarios; and execution of experimental activities,
                including actual pool fires and fireballs, to validate and/or improve
                predictive models. The Sandia Study, as initially proposed, comprised
                four separate tasks, with an option to conduct additional Tasks 5 and 6
                (proposing full scale combustion studies, and a comprehensive supply
                chain oil properties survey, respectively) based on the results of
                Tasks 1 through 4. Below, PHMSA describes Tasks 1 through 3 and the
                basis for the determination by Study sponsors DOE, DOT, and TC that
                Tasks 4-6 would no longer be necessary given the definitive results
                from the completion of the first three tasks, which are more fully
                described below.
                ii. Task 1
                 Task 1 (Project Administration and Outreach) covered the initial
                procurement of crude oil samples, testing materials, equipment, and
                analytical lab contracts. It also included coordination and outreach
                with sponsors, Steering Committees, technical associations, and subject
                matter experts. Task 1 was ongoing throughout the study.
                iii. Task 2
                 Task 2 (Sampling and Testing) investigated which commercially
                available crude oil sampling and analysis methods can accurately and
                reproducibly collect and analyze crude oils for vapor pressure and
                composition, including dissolved gases. Results of Task 2 were
                published on November 1, 2017 as SAND2017-12482. Revision 1--Winter
                Sampling, published on June 1, 2018 as SAND2018-5909, incorporated
                additional seasonal data and compositional analysis results that had
                become available since publication of the initial report. Both reports
                compared performance of commercially available methods to that of a
                well-established mobile laboratory system that currently serves as the
                baseline instrument system for the U.S. Strategic Petroleum Reserve
                Crude Oil Vapor Pressure Program. The experimental matrix evaluated the
                performance of selected methods for (i) capturing, transporting, and
                delivering hydrocarbon fluid samples from the field to the analysis
                laboratory, coupled with (ii) analyzing for properties related to
                composition and volatility of the oil, including vapor pressure, gas-
                oil ratio, and dissolved gases and light hydrocarbons. Several
                combinations of sampling and testing were observed to perform well in
                both summer and winter sampling environments, though conditions apply
                that need to be considered carefully for given applications. Methods
                that performed well from Task 2 were utilized subsequently in Task 3.
                iv. Task 3
                 The purpose of Task 3 (Pool Fire and Fireball Experiments in
                Support of the US DOE/DOT/TC Crude Oil Characterization Research Study)
                was to compare combustion behavior of several crude oil types spanning
                a measurable range of vapor pressure and light ends content
                representative of U.S. domestic conventional and tight crude oils.
                Results of Task 3 were published on August 24, 2019 as SAND2019-
                9189.\3\
                ---------------------------------------------------------------------------
                 \3\ Available at https://www.osti.gov/servlets/purl/1557808.
                Task 3 results and conclusions were peer-reviewed by independent
                fire experts and sampling and characterization subject matter
                experts. See id. at 4. In addition, Task 3 results and conclusions
                were reviewed by PHMSA, Federal Railroad Administration, DOE, and TC
                scientists and engineers.
                ---------------------------------------------------------------------------
                 Task 3 consisted of an experimental observation of physical,
                chemical, and combustion characteristics of selected North American
                crude oils:
                 The objective of the pool fire experiments was to measure
                parameters necessary for thermal hazard evaluation (namely, burn rate,
                surface emissive power, flame height, and heat flux to an engulfed
                object) by a series of 2-meter diameter indoor and 5-meter diameter
                outdoor experiments.
                 The objective of the fireball experiments was to measure
                parameters required for thermal hazard evaluation (namely, fireball
                maximum diameter, height at maximum diameter, duration,
                [[Page 30679]]
                and surface emissive power) using 400-gallons of crude oil per test.
                 Observed results were then extrapolated in calculating thermal
                hazard distances resulting from full scale 30,000-gallon pool fires and
                fireballs. The Sandia Study noted that the methodology described above
                incorporated steady-state assumptions that would tend to overstate
                calculated hazard distances.
                 The crude oil samples used for the experiments were obtained from
                several U.S. locations, including ``tight'' oils from the Bakken region
                of North Dakota and Permian region of Texas, and a conventionally
                produced oil from the U.S. Strategic Petroleum Reserve stockpile. These
                samples spanned a measurable range of vapor pressure (VPCRx(T)) and
                light ends content representative of U.S. domestic conventional and
                tight crude oils.
                 Task 3 demonstrated that, even though the three crude oils studied
                had a wide range of vapor pressures, each had very similar calculated
                thermal hazard distances with respect to pool fire and fireball
                combustion. Furthermore, those crude oils evaluated in Task 3 were also
                found to have thermal hazard parameters (surface emissive power, etc.)
                consistent with the known thermal hazard parameters of a variety of
                other alkane-based hydrocarbon liquids--some with higher vapor
                pressures than any observed in the Sandia Study. Based on those data
                points, the Sandia Study concluded that vapor pressure is not a
                statistically significant factor in affecting the thermal hazard posed
                by pool fire and fireball events that might occur during crude oil
                train derailment scenarios. In sum, the Sandia Study demonstrated that
                lowering the vapor pressure of crude oil would not reduce the severity
                of pool fire or fireball scenarios, and concluded that results of the
                study do not support creating a regulatory distinction for crude oils
                based on vapor pressure.
                v. Sandia Study Completion
                 The 2015 version of the SAE Plan for the Sandia Study framed the
                project in terms of six tasks, the first four of which were authorized
                by its sponsors. Task 4 was conceived as an opportunity to generate a
                comprehensive data set of vapor pressures for multiple crude oil types
                to better understand the thermal hazards for pool fires and fireballs.
                The value of Task 4, therefore, was premised on the faulty assumption
                that vapor pressure would be a significant factor determining the
                magnitude of thermal hazards from pool fire and fireball hazards posed
                by different crude oil types.
                 However, the relative independence of thermal hazards from vapor
                pressure observed in Task 3 eliminated the need for additional data
                that would have been collected in Task 4. Consequently, Sandia included
                within the Task 3 conclusions a recommendation against proceeding with
                Task 4.\4\ Subsequently, the Sandia Study sponsors (DOT, DOE, and TC)
                agreed neither to proceed with Task 4 nor optional Tasks 5 and 6.
                ---------------------------------------------------------------------------
                 \4\ Id. at 77-78. The full-scale combustion testing and supply
                chain analysis contemplated in Tasks 5 and 6 were not pursued for
                the same reason.
                ---------------------------------------------------------------------------
                III. PHMSA's Decision
                 PHMSA, after examining the results and conclusions of the Sandia
                Study closely, and in consideration of the public comments to the ANPRM
                from industry, stakeholders, and other interested parties, has
                determined that issuing any regulation setting a vapor pressure limit
                for crude oil transportation by rail is not justified because such a
                regulation would not improve the safety of transporting crude oil by
                rail. PHMSA further notes that the Sandia Study's finding that there
                was no meaningful link between crude oil vapor pressures and thermal
                hazards militates against the imposition of vapor pressure limits for
                transportation of crude oil in modes other than rail.
                 Furthermore, establishing a vapor pressure limit for crude oil by
                rail would unnecessarily impede rail transportation of crude oil
                without providing justifiable benefits. As explained by comments
                submitted in response to the ANPRM, vapor pressure limits on crude oil
                transported by rail would, inter alia, disrupt commodity markets for
                the dissolved gasses that drive crude oil vapor pressure, require
                conforming changes to contractual and equipment specifications
                throughout the value chain, and impose significant compliance costs on
                crude oil producers and rail transportation. None of those significant
                burdens, moreover, would be accompanied by a meaningful safety benefit.
                Thus, this notice of withdrawal provides PHMSA's determination that no
                regulation setting a vapor pressure limit for rail transportation of
                crude oil is necessary or appropriate.
                 PHMSA also has decided, based on its review of comments to the
                ANPRM and its existing regulations, against imposing vapor pressure
                limits for other unrefined petroleum-based products and Class 3
                flammable liquid hazardous materials by any mode.
                 The administrative record similarly did not evince a compelling
                technical basis for imposing vapor pressure limits with respect to
                transportation by any mode of other unrefined petroleum-based products
                and Class 3 flammable liquid hazardous materials. As noted above, those
                comments calling for broader vapor pressure limits were predicated
                largely on anecdotal correlations or by way of analogy to vapor
                pressure limits imposed on either chemically distinct hazardous
                materials (e.g., refined petroleum products such as gasoline), or for
                reasons not always related to transportation safety (e.g., pollution
                control). PHMSA is therefore unconvinced those comments demonstrate
                that regulation of unrefined petroleum-based products and Class 3
                hazardous flammable liquid materials on the basis of vapor pressure
                will result in meaningful safety improvements beyond those provided by
                existing HMR classification requirements predicated on flammability and
                initial boiling point. See 49 CFR 173.21(a). PHMSA further notes that
                the significant compliance and opportunity costs identified in comments
                submitted by diverse industry stakeholders also militate against
                imposing vapor pressure limits on modal transportation of unrefined
                petroleum-based products and Class 3 hazardous flammable liquid
                materials.
                 Accordingly, PHMSA withdraws the January 18, 2017 ANPRM in its
                entirety.
                IV. Preemption of Non-Federal Laws
                 PHMSA, in issuing this withdrawal, has affirmatively determined
                that a national vapor pressure limit for unrefined petroleum-based
                products is not necessary or appropriate. As explained further below,
                PHMSA believes that Federal law likely preempts any non-Federal law
                that attempts to set a vapor pressure limit for these materials. PHMSA
                is aware of two States that already have laws setting vapor pressure
                limits in place for crude oil: North Dakota and Washington. PHMSA is
                also aware of one State legislature that has introduced a similar bill
                that would regulate vapor pressure for oil or gas.\5\ Moreover, six
                additional States: California, Illinois, Maine, Maryland, New Jersey,
                and New York have advocated for a vapor pressure limit.\6\
                ---------------------------------------------------------------------------
                 \5\ See House Bill 4105, 80th Oregon Legislative Assembly--2020
                Regular Session (February 3, 2020), https://olis.leg.state.or.us/liz/2020R1/Downloads/MeasureDocument/HB4105/Introduced (last visited
                Apr. 1, 2020).
                 \6\ In this proceeding, the Attorneys General of California,
                Illinois, Maine, and Maryland filed joint comments with the
                Attorneys General of New York and Washington, supporting a national
                vapor pressure standard. See Comments by the Attorneys General of
                New York, California, Illinois, Maine, Maryland, & Washington,
                Document Id: PHMSA-2016-0077-0074. In addition, the Attorneys
                General of New York, California, Maryland, and New Jersey submitted
                comments against preemption in a proceeding involving Washington's
                law. See Docket No. PHMSA-2019-0149.
                ---------------------------------------------------------------------------
                [[Page 30680]]
                 The Federal hazmat law contains express preemption provisions
                relevant to this proceeding. As amended by Section 1711(b) of the
                Homeland Security Act of 2002 (Pub. L. 107-296, 116 Stat. 2319), 49
                U.S.C. 5125(a) provides that a requirement of a State, political
                subdivision of a State, or Indian tribe is preempted--unless the non-
                Federal requirement is authorized by another Federal law or DOT grants
                a waiver of preemption under section 5125(e)--if (1) complying with the
                non-Federal requirement and the Federal requirement is not possible; or
                (2) the non-Federal requirement, as applied and enforced, is an
                obstacle to accomplishing and carrying out the Federal requirement.
                 Additionally, subsection (b)(1) of 49 U.S.C. 5125 provides that a
                non-Federal requirement concerning any of five subjects is preempted
                when the non-Federal requirement is not ``substantively the same as'' a
                provision of Federal hazardous material transportation law, a
                regulation prescribed under that law, or a hazardous materials security
                regulation or directive issued by the Department of Homeland
                Security.\7\ The ``designation, description, and classification of
                hazardous material'' is a subject area covered under this authority. 49
                U.S.C. 5125(b)(1)(A). To be ``substantively the same,'' the non-Federal
                requirement must conform ``in every significant respect to the Federal
                requirement. Editorial and other similar de minimis changes are
                permitted.'' 49 CFR 107.202(d).
                ---------------------------------------------------------------------------
                 \7\ Unless the non-Federal requirement is authorized by another
                Federal law or DOT grants a waiver of preemption under section
                5125(e).
                ---------------------------------------------------------------------------
                 The preemption provisions in 49 U.S.C. 5125 reflect Congress's
                long-standing view that a single body of uniform Federal regulations
                promotes safety (including security) in the transportation of hazardous
                materials. Some forty years ago, when considering the Hazardous
                Materials Transportation Act, the Senate Commerce Committee
                ``endorse[d] the principle of preemption in order to preclude a
                multiplicity of State and local regulations and the potential for
                varying as well as conflicting regulations in the area of hazardous
                materials transportation.'' S. Rep. No. 1192, 93rd Cong. 2nd Sess. 37
                (1974). A United States Court of Appeals has found uniformity was the
                ``linchpin'' in the design of the Federal laws governing the
                transportation of hazardous materials.\8\
                ---------------------------------------------------------------------------
                 \8\ Colorado Pub. Util. Comm'n v. Harmon, 951 F.2d 1571, 1575
                (10th Cir. 1991).
                ---------------------------------------------------------------------------
                 The current HMR requirements for the classification of unrefined
                petroleum-based products include proper classification, determination
                of an appropriate packing group, and selection of a proper shipping
                name. The HMR contain detailed rules that guide an offeror through each
                of these steps to ensure proper classification of hazardous materials.
                Moreover, for unrefined petroleum-based products, such as crude oil,
                additional requirements were implemented pursuant to a public notice
                and comment rulemaking proceeding.\9\ These Federal requirements for
                classification of these types of materials do not mandate specific
                sampling and testing of vapor pressure, nor do they classify hazardous
                liquids based on vapor pressure. Moreover, there is no current Federal
                requirement to pre-treat or condition crude oil to meet a vapor
                pressure standard before it is offered for transportation.
                ---------------------------------------------------------------------------
                 \9\ Hazardous Materials: Enhanced Tank Car Standards and
                Operational Controls for High-Hazard Flammable Trains, 80 FR 26643
                (May 8, 2015).
                ---------------------------------------------------------------------------
                 Because the HMR does not designate, describe, or classify unrefined
                petroleum-based products differently based on vapor pressure, any non-
                Federal law setting a vapor pressure limit for such materials is likely
                preempted by 49 U.S.C. 5125(b)(1)(A). Indeed, PHMSA has affirmatively
                decided in this proceeding that a national vapor pressure limit is not
                necessary or appropriate, thereby confirming that non-Federal laws
                setting vapor pressure limits are likely not ``substantively the same''
                as Federal law.\10\ Such non-Federal laws may also be ``handling''
                regulations preempted by 49 U.S.C. 5125(b)(1)(B), and may also be
                preempted under 49 U.S.C. 5125(a)(2) as obstacles to accomplishing and
                carrying out Federal law.
                ---------------------------------------------------------------------------
                 \10\ This notice of withdrawal also provides a basis for what
                courts have referred to as ``negative'' or ``null'' preemption. See
                Norfolk & W.R. Co. v. Pub. Utils. Comm., 926 F.2d 567, 570 (6th Cir.
                1991) (``the United States Supreme Court has recognized a form of
                negative preemption when a federal agency has determined that no
                regulation is appropriate.'') (citing Ray v. Atlantic Richfield Co.,
                435 U.S. 151, 178 (1978)).
                ---------------------------------------------------------------------------
                 A person directly affected by a non-Federal requirement may apply
                to PHMSA for a determination that the requirement is preempted by 49
                U.S.C. 5125. See 49 U.S.C. 5125(d); 49 CFR 107.203-107.213. PHMSA is
                currently considering a preemption application filed by North Dakota
                and Montana with respect to Washington's vapor pressure limit, and will
                consider any application filed with respect to other non-Federal vapor
                pressure limits.
                 Issued in Washington, DC, on May 11, 2020, under authority
                delegated in 49 CFR part 1.97.
                Howard R. Elliott,
                Administrator, Pipeline and Hazardous Materials Safety Administration.
                [FR Doc. 2020-10377 Filed 5-19-20; 8:45 am]
                 BILLING CODE 4910-60-P
                

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT