Prez Orders Regs to Transport LNG by Rail in New England

Executive Order Directs Agencies to Initiate Rulemaking to Allow LNG Transportation by Rail, with Focus on New England Needs.

10 May, 2019, Washington DC –

Executive Order #13868:
Promoting Energy Infrastructure and Economic Growth
(Issued 4/10/19)

“By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:

“To fully realize [the] economic potential [of the nation’s] robust energy supplies, the United States needs infrastructure capable of safely and efficiently transporting these plentiful resources to end users. […] {Derived from EO #13868 Section 1}

“[Currently], LNG may be transported by truck and, with approval by the Federal Railroad Administration, by rail in flatbed-mounted tanks, but Department of Transportation regulations do not authorize LNG transport in rail tank cars. The Secretary of Transportation shall propose for notice and comment a rule, no later than 100 days after the date of this order, that would treat LNG the same as other cryogenic liquids and permit LNG to be transported in approved rail tank cars. […]{~Sct. 4, b}

“The Secretary of Transportation, in consultation with the Secretary of Energy, shall submit a report to the President, regarding the economic and other effects caused by the inability to transport sufficient quantities of natural gas and other domestic energy resources to the States in New England. {~Sct. 7, a}”

LNG is natural gas that has been chilled to –260°F (–167°C) in a process that removes water, carbon dioxide, and other compounds, leaving mostly methane fluid that takes up less than 1/600th the volume it occupied as a gas. LNG does not combust, and can’t ignite in its liquefied state. The risk comes if an LNG tank ruptures and LNG is exposed to the air, triggering rapid conversion back into a flammable gas before it evaporates. In its “normal” gaseous state, natural gas dissipates rapidly, and has a narrow ignition window it is only able to ignite when mixed with air at a ratio of about 5 to 15 percent, unlike other flammable materials carried by rail. LNG won’t dissolve in water and, if spilled, generally evaporates, leaving no residue behind.

LNG rail transportation practically non-existent

Transporting LNG by rail is currently extremely limited in the United States. The Alaska Railroad (ARRC) is authorized to ship LNG using ISO T-75 containers on flatcars. The Florida East Coast Railway (FEC) is powered by LNG, and hauls the fuel as revenue cargo from a liquefaction plant to ports in the state, under a government waiver. Canada’s transportation department allows LNG to be shipped in DOT-113 tank cars.

LNG-by-rail presents a clear competitive advantage. This past January, New England ports landed six imported LNG cargoes at an average price of $8.88 per million British Thermal Units in January, even though the same quantity of Appalachian natural gas traded at $3.25 {Jennifer A Dlouhy, Bloomberg, 11.Apr.2019}

LNG tank types

Changes to the Hazardous Materials and Carriage by Rail regulations (49 C.F.R Parts 172, 173 and 174) are needed before LNG can be commonly transported by rail tanker cars without a special permit. In January 2017 AAR filed a petition for rulemaking with the U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (PHMSA) and PHMSA responded on May 7, 2018, [but] there hasn’t been any further movement on the subject. AAR asserts that LNG is “similar in all relevant properties to other hazardous materials that are currently authorized to be transported by rail,” such as crude oil, hydrogen chloride and other liquefied gases that are widely transported over American rails. Since 2001, there have been two accidental releases of cryogenic liquids approved for U.S. rail transport in DOT-113 tank cars.

… The Executive Order directs the Secretary of Transportation to initiate a rulemaking to address obsolete regulations based upon the 2001 edition of the National Fire Protection Association’s (NFPA) NFPA 59A Standard for the Production, Storage and Handling of LNG. {Dianne R. Phillips, ENERGY AND NATURAL RESOURCES BLOG, Holland & Knight 04.Apr.2019}.

[…] The order follows a multiyear lobbying campaign by railroads and natural gas advocates, who argue it is needed to serve customers in the U.S. Northeast, where there aren’t enough pipelines {Dlouhy, Bloomberg}