[Federal Register Volume 88, Number 169 (Friday, September 1, 2023)]
[Rules and Regulations]
[Pages 60356-60375]
[FR Doc No: 2023-18569]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 172

[Docket No. PHMSA-2021-0058 (HM-264A)]
RIN 2137-AF55

Hazardous Materials: Suspension of HMR Amendments Authorizing
Transportation of Liquefied Natural Gas by Rail

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
Department of Transportation (DOT).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: PHMSA, in coordination with the Federal Railroad
Administration (FRA), is amending the Hazardous Materials Regulations
to suspend authorization of liquefied natural gas (LNG) transportation
in rail tank cars pursuant to a final rule published on July 24, 2020,
pending the earlier of either completion of a companion rulemaking
evaluating potential modifications to requirements governing rail tank
car transportation of LNG, or June 30, 2025.

DATES: This final rule is effective on October 31, 2023.

FOR FURTHER INFORMATION CONTACT: Alexander Wolcott, Transportation
Specialist, Standards and Rulemaking Division, Office of Hazardous
Materials Safety,<PHONE_NUMBER>, 1200 New Jersey Avenue SE,
Washington, DC 20590-0001.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Overview
II. Background
    A. Historical Regulation of LNG by Rail
    B. A New Regulatory Approach and Enabling Research
    C. Another Hard Look Incorporating NASEM Recommendations and
Ongoing Research Efforts
    D. East Palestine, OH Derailment
III. Discussion of Comments to the NPRM and Adoption of a Temporary
Suspension of the July 2020 Final Rule
    A. Comments Requesting an Immediate, Permanent Ban of LNG by
Rail
    B. Comments Requesting the Removal of the June 30, 2024, Sunset
Date

    C. Comments of General Support for the NPRM
    D. Comments Alleging Chilling of Near-Term Demand for LNG
Transportation by Rail Tank Car Pursuant to the July 2020 Final Rule
    E. Comments Contending That the LNG by Rail Improves Safety
    F. Comments Alleging Environmental Benefits From LNG by Rail
    G. Comments Alleging PHMSA Is Overstepping its Authority by
Attempting To Regulate Oil and Gas Production
    H. Comments Alleging PHMSA Did Not Meet its Evidentiary Burden
Under the APA for Temporary Suspension of the July 2020 Final Rule
    I. Comments Alleging That PHMSA's Proposal Will Have
Miscellaneous Adverse Consequences for Regulated Entities, the U.S.
Economy, and National Security
    J. Comments Beyond the Scope of This Rulemaking
IV. Regulatory Analyses and Notices
    A. Statutory/Legal Authority
    B. Executive Orders 12866 and 14094, and DOT Regulatory Policies
and Procedures
    C. Executive Order 13132
    D. Executive Order 13175
    E. Regulatory Flexibility Act and Executive Order 13272
    F. Paperwork Reduction Act
    G. Unfunded Mandates Reform Act of 1995
    H. Environmental Assessment
    I. Privacy Act
    J. Executive Order 13609 and International Trade Analysis
    K. Executive Order 13211
    L. Cybersecurity and Executive Order 14028

I. Overview

    PHMSA, in coordination with FRA, is suspending recent amendments to
the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180)
authorizing transportation of ``Methane, refrigerated liquid,''
commonly known as liquefied natural gas (LNG) in DOT-113C120W9
specification rail tank cars while it conducts a thorough evaluation of
the HMR's regulatory framework for rail transportation of LNG in a
companion rulemaking under Regulatory Identification Number (RIN) 2137-
AF54, and determines whether any modifications are necessary.
Transportation of LNG by rail tank car has not occurred since the July
24, 2020, publication of a final rule authorizing transportation of LNG
in rail tank cars \1\ and there is considerable uncertainty regarding
whether any would occur in the time it takes for PHMSA to consider
potential modifications to existing, pertinent HMR requirements.
However, this temporary suspension of the HMR provisions authorizing
transportation of LNG in rail tank cars guarantees no such
transportation will occur before its companion rulemaking has concluded
or June 30, 2025, whichever is earlier, thereby: (1) avoiding potential
risks to public health and safety or environmental consequences (to
include direct and indirect greenhouse gas (GHG) emissions) \2\ that
are being evaluated in the companion rulemaking under RIN 2137-AF54;
(2) allowing for the completion of ongoing testing and evaluation
efforts undertaken in collaboration with FRA, as well as further
consideration of the recommendations from external technical experts of
the National Academy of Sciences, Engineering, and Medicine (NASEM);
(3) assuring an opportunity for the potential development of any
mitigation measures and operational controls for rail tank car
transportation of LNG; (4) reducing the potential for economic burdens
by ensuring that entities avoid ordering rail tank cars for
transporting LNG compliant with current HMR requirements when the
companion rulemaking may adopt alternative requirements; and (5)
enabling potential opportunities for stakeholders and the public to be
apprised of, and comment on, the results of ongoing testing and
evaluation efforts.
---------------------------------------------------------------------------

    \1\ PHMSA final rule ``Hazardous Materials: Liquefied Natural
Gas by Rail,'' 85 FR 44994 (Jul. 24, 2020) (July 2020 Final Rule).
References within to ``this Final Rule'' or ``the Final Rule''
without qualification by reference to ``July 2020'' are meant to
refer to this notice rather than its July 2020 Final Rule.
    \2\ PHMSA distinguishes between ``direct'' and ``indirect'' GHG
emissions herein consistent with Council on Environmental Quality
(CEQ) guidance. See CEQ, ``National Environmental Policy Act
Guidance on Consideration of Greenhouse Gas Emissions and Climate
Change,'' 88 FR 1196 (Jan. 9, 2023), which builds upon and updates
CEQ's 2016 ``Final Guidance for Federal Departments and Agencies on
Consideration of Greenhouse Gas Emissions and the Effects of Climate
Change in National Environmental Policy Act Reviews,'' 81 FR 51866
(Aug. 8, 2016).
---------------------------------------------------------------------------

    Towards that end, PHMSA is adding a new special provision 439 that
prohibits LNG transportation in rail tank cars until issuance of a
final rule concluding the rulemaking proceeding under a companion
rulemaking under RIN 2137-AF54, or June 30, 2025, whichever is earlier.
Rail transport of LNG may still be permitted as authorized by the
conditions of a PHMSA special permit (SP) under Sec.  107.105, or in a
portable International Organization for Standardization (ISO) tank
secured to a rail car pursuant to the conditions of an FRA approval
under Sec.  174.63. PHMSA is also adopting a modest extension (until
June 30, 2025, at the latest) of the sunset for the temporary
suspension period identified in its November 2021 notice of proposed
rulemaking in this proceeding,\3\ consistent with comments received on
the NPRM and information obtained after its publication evincing
greater uncertainty regarding the near-term commercial viability and
potential environmental and safety risks associated with rail tank car
transportation of LNG as authorized by the July 2020 Final Rule.
---------------------------------------------------------------------------

    \3\ PHMSA, ``Notice of Proposed Rulemaking--Hazardous Materials:
Suspension of HMR Amendments Authorizing Transportation of Liquefied
Natural Gas by Rail'' 86 FR 61731 (Nov. 8, 2021) (NPRM).
---------------------------------------------------------------------------

II. Background

A. Historical Regulation of LNG by Rail

    LNG is a natural gas that has been cooled and converted to a liquid
form for easier and more efficient transportation. In the United
States, pipelines have historically delivered most natural gas,
although other modes of transportation--such as rail and highway--have
accounted for a relatively minor portion of natural gas transportation,
typically in the form of LNG. Before PHMSA published the July 2020
Final Rule, rail transportation of LNG would have been limited to UN
portable tank shipments (commonly referred to as ISO tank shipments)
under an FRA approval and shipments made under SPs issued by PHMSA.
This approach reflected the unique safety risks presented by rail
transportation of large volumes of LNG and the historically low demand
to transport LNG by rail.

B. A New Regulatory Approach and Enabling Research

    Executive Order 13868 (``Promoting Energy Infrastructure and
Economic Growth'') \4\ was signed in April 2019 and required PHMSA to
treat LNG the same as other cryogenic liquids, authorize LNG to be
transported in approved rail tank cars, and to finalize that rulemaking
within 13 months.\5\ In response, PHMSA published a notice of proposed
rulemaking titled ``Hazardous Materials: Liquefied Natural Gas by
Rail'' \6\ in which it proposed to authorize the transportation of LNG
in existing DOT-113C120W specification tank cars. The initial comment
period for the NPRM closed on December 23, 2019, and was subsequently
extended until January 13, 2020, following PHMSA's issuance to Energy
Transport Solutions, LLC (ETS) in early December 2019 of

DOT-SP 20534 for the transportation of LNG by rail tank car.\7\
---------------------------------------------------------------------------

    \4\ 84 FR 15495 (Apr. 15, 2019).
    \5\ The Secretary has delegated such rulemaking duties to the
PHMSA Administrator. See 49 CFR 1.97.
    \6\ 84 FR 56977 (Oct. 24, 2019).
    \7\ 84 FR 70492 (Dec. 23, 2019) (DOT-SP 20534).
---------------------------------------------------------------------------

    DOT-SP 20534 allowed the transportation of LNG in existing DOT-113
tank cars from Wyalusing, PA, to Gibbstown, NJ, with no intermediate
stops. This SP contained safety controls including a requirement to
conduct remote sensing for detecting and reporting internal pressure,
location, leakage, and (prior to the initial shipment of a tank car
under the SP) a requirement to provide training to emergency response
agencies that could be affected on the route. DOT-SP 20534 expired by
its terms on November 30, 2021, after ETS had not filed an application
for renewal until November 29, 2021. After careful consideration, PHMSA
denied ETS' application for renewal on March 31, 2023.\8\
---------------------------------------------------------------------------

    \8\ 88 FR 24844, 2846 (Apr. 24, 2023). PHMSA formally informed
ETS of the denial of its renewal application by email on March 31,
2023, noting that (1) ETS's renewal application had made no attempt
to address the concerns raised in the NPRM in this proceeding, (2)
nearly three and a half years after issuance of DOT-SP 20534, ETS
had yet to provide evidence that it had procured either new DOT-
113C120W9 tank cars or existing DOT-113C120W tank cars, and (3) the
origin and destination facilities specified in DOT-SP 20534 had not
been built and would need additional authorizations before
construction could begin. ETS did not seek judicial review of the
denial.
---------------------------------------------------------------------------

    In January 2020, PHMSA established a joint LNG Task Force with FRA
to undertake testing and evaluation activity on the transportation of
LNG that could inform potential future regulatory actions, as
appropriate. In order to identify tasks within that effort, the LNG
Task Force utilized a risk-based framework focused on knowing the risk,
predicting the risk, reducing the risk, and preparing for the risk.
Using that framework, the LNG Task Force identified and undertook 15
tasks to synthesize ongoing research and outreach activities. Those
tasks included empirical review of international LNG transportation,
safety and security route risk assessments, a re-evaluation of the
costs and benefits of electronically controlled pneumatic (ECP) brakes,
and the validation of emergency responders' opinions and needs.
Although the LNG Task Force initially projected completion of its tasks
by late 2021, much of its work was interrupted or delayed because of
the coronavirus disease 2019 (COVID-19) public health emergency and
because of subsequent modification of the scope of its activities. The
ongoing efforts of the LNG Task Force are discussed further below.
    In parallel with its work under the LNG Task Force, and pursuant to
a mandate in the ``Further Consolidated Appropriations Act, 2020''
(Pub. L. 116-94), PHMSA and FRA partnered with NASEM to conduct a study
on the transportation of LNG in rail tank cars through a committee of
the Transportation Research Board (TRB).\9\ The TRB commenced work in
mid-July 2020. Roughly contemporaneous with the TRB beginning its work,
PHMSA published the July 2020 Final Rule authorizing the shipment of
LNG in new DOT-113C120W9 specification rail tank cars with enhanced
outer tank requirements, subject to all applicable requirements and
certain new operational controls. The July 2020 Final Rule became
effective on August 24, 2020 and was swiftly followed by several
petitions for judicial review. Specifically, six environmental groups,
a coalition of attorneys general for 14 States and the District of
Columbia, and the Puyallup Tribe of Indians filed separate petitions
for review challenging the July 2020 Final Rule. All the petitioners
asked the court to vacate the July 2020 Final Rule, alleging violations
of the Hazardous Materials Transportation Act (HMTA; 49 U.S.C. 510
2012;5127), the Administrative Procedure Act (APA; 5 U.S.C. 553 et
seq.), and the National Environmental Policy Act (NEPA; 42 U.S.C. 4321
et seq.). The Puyallup Tribe also alleged violations of the Tribal
consultation protocols under the National Historic Preservation Act (54
U.S.C. 300101 et seq.) and Executive Order 13175 (``Consultation and
Coordination with Indian Tribal Governments''),\10\ as well as
disparate impacts on the Tribe in violation of Executive Order 12898
(``Federal Actions to Address Environmental Justice in Minority
Populations and Low-Income Populations'') \11\ and Title VI of the
Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.). The petitions were
subsequently consolidated within a single proceeding in the U.S. Court
of Appeals for the District of Columbia Circuit \12\ with the court
granting PHMSA's motion to place the petitions in abeyance while PHMSA
reviewed the July 2020 Final Rule. PHMSA submitted the latest status
report in that proceeding in early June 2023. The Court lifted the
abeyance on July 18, 2023.\13\
---------------------------------------------------------------------------

    \9\ In that legislation, Congress earmarked funds for the NASEM
study for the express purpose of ``inform[ing] rulemaking.'' NASEM
maintains a website dedicated to the TRB committee's work that
contains the TRB committee's charter, work product, meeting agendas,
and other supporting material. See NASEM, ``Safe Transportation of
Liquefied Natural Gas by Railroad Tank Car,'' https://www.nationalacademies.org/our-work/safe-transportation-of-liquefied-natural-gas-by-railroad-tank-car (last visited May 15, 2023).
    \10\ 65 FR 67249 (Nov. 9, 2000).
    \11\ 59 FR 7629 (Feb. 16, 1994).
    \12\ Under docket no. 20-1317 (consolidated with docket nos. 20-
1318, 20-1431, & 21-1009).
    \13\ On May 17, 2023, Petitioners filed a Joint Motion to Lift
Abeyance and requested the D.C. Circuit Court to direct the parties
to submit a proposed briefing schedule. PHMSA, through the
Department of Justice, filed a response opposing the motion to lift
the abeyance on June 6, 2023. The Petitioners filed a reply on June
13, 2023.
---------------------------------------------------------------------------

C. Another Hard Look Incorporating NASEM Recommendations and Ongoing
Research Efforts

    Immediately after taking office, the Biden-Harris Administration
issued Executive Order 13990 (``Protecting Public Health and the
Environment and Restoring Science To Tackle the Climate Crisis'') \14\
on January 20, 2021. Executive Order 13990 required the review of
agency regulations and other actions promulgated or adopted between
January 20, 2017, and January 20, 2021, that are candidates for
suspension, modification, or rescission because of inconsistency with
Biden-Harris Administration policies to improve public health, protect
the environment, prioritize environmental justice, and reduce GHG
emissions. The Biden-Harris Administration identified the July 2020
Final Rule in a non-exclusive list \15\ of agency actions that would be
reviewed in accordance with Executive Order 13990. Additionally,
section 7 of Executive Order 13990 revoked Executive Order 13868, along
with several other executive orders and executive actions, and directed
agencies to promptly take steps, consistent with applicable law, to
rescind any rules or regulations that had been issued ``implementing or
enforcing'' those executive orders and executive actions.
---------------------------------------------------------------------------

    \14\ 86 FR 7037 (Jan. 25, 2021).
    \15\ U.S. White House, ``Fact Sheet: List of Agency Actions for
Review,'' https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/fact-sheet-list-of-agency-actions-for-review/
(last visited May 16, 2023).
---------------------------------------------------------------------------

    In response to Executive Order 13990, DOT published a notice on May
5, 2021, soliciting comment on potential candidates for review under
Executive Order 13990 from among existing rules and other DOT
actions.\16\ DOT received one comment pertaining to the July 2020 Final
Rule from the Transportation Trades Department of the American
Federation of Labor and Congress of Industrial Organizations (AFL-CIO).
The commenter requested a reexamination of the July 2020 Final Rule as
it believed that rulemaking ``neglected to include meaningful safety
measures to adequately address the

inherent risks to this type of operation.'' \17\
---------------------------------------------------------------------------

    \16\ 85 FR 23876 (May 5, 2021).
    \17\ Docket No. DOT-OST-2021-0036-0025.
---------------------------------------------------------------------------

    The TRB issued its Phase I Report on June 15, 2021,\18\ which
reviewed the plans and progress of the LNG Task Force and evaluated the
relevance, completeness, and quality of those efforts. The Phase I
Report generally praised the LNG Task Force's ``comprehensive as
planned'' program for making effective use of a ``number of long
standing and high-quality research and testing programs.'' However, the
TRB noted that the COVID-19 public health emergency resulted in delays
in initiation and completion of several tasks. The TRB also noted that
the interdependency of many of those outstanding tasks complicated its
and the LNG Task Force's work in developing a complete understanding of
the risks associated with the transportation of LNG in rail tank cars.
Specifically, it expressed concern on the incomplete status of tasks
pertaining to full-scale impact testing, portable tank pool fire
testing, worst-case scenario analysis, and quantitative risk
assessment. The Phase I Report made several recommendations including
proposing that PHMSA and FRA make changes to the planned portable fire
tank testing, assess the potential for cryogenic damage cascading to
adjacent tanks, enhance the modeling for worst-case scenarios, evaluate
explosion hazards from a spill of LNG resulting in vapor dispersion in
an environment with confined or congested spaces, and add loading and
unloading operations to the risk assessment. PHMSA subsequently
modified its LNG Task Force testing activity in response to the Phase I
Report recommendations by, among other things, undertaking each of the
following: enhanced impact testing directed toward evaluating post-
weld, heat-treated seams from a DOT-113C120W9-specification tank car;
enhanced worst-case scenario modeling; performing an enhanced
quantitative risk assessment; modification of ISO tank pool fire
testing protocols to better simulate release conditions; and enhanced
train dynamic simulations to better capture effects from use of
distributed power and buffer car placement within a train consist
transporting LNG.
---------------------------------------------------------------------------

    \18\ NASEM, ``Preparing for LNG by Rail Tank Car: A Review of a
U.S. DOT Safety Research, Testing, and Analysis Initiative'' (Jun.
2021) (Phase I Report), https://www.nap.edu/read/26221/chapter/1.
---------------------------------------------------------------------------

    On November 8, 2021, PHMSA published the NPRM in this rulemaking
proceeding. In that NPRM, PHMSA reviewed pertinent economic data, TRB's
Phase I Report recommendations, and the status of ongoing work of the
LNG Task Force en route to proposing a temporary suspension of the
transportation of LNG by rail tank car until the earlier of either June
30, 2024, or the publication of a companion rulemaking under RIN 2137-
AF54. PHMSA's proposal reflected its understanding that uncertainties
acknowledged in the July 2020 Final Rule--e.g., regarding the near-term
commercial viability of rail tank car transportation of LNG, as well as
potential safety and environmental benefits and risks of rail tank car
transportation--had only increased since issuance, thereby ``casti[ng]
doubt on the continued validity of the balance between potential
benefits and public safety and environmental risks underpinning the
[July 2020 Final Rule].'' \19\ PHMSA therefore proposed a temporary
suspension of the July 2020 Final Rule to allow time for PHMSA to
review the results of the (then-forthcoming) TRB Phase II Report,
complete ongoing LNG Task Force testing and evaluation activities, and
(based on the results of those efforts) modify HMR requirements as
appropriate within the companion rulemaking under RIN2137-AF54. The
comment period closed on December 23, 2021. PHMSA received over 10,500
comments from private individuals, environmental groups, government
officials, the rail industry, and other stakeholders. See Section III
for further details.
---------------------------------------------------------------------------

    \19\ 86 FR at 61735-36.
---------------------------------------------------------------------------

    The TRB issued its Phase II Report on September 9, 2022.\20\ The
Phase II Report involved a more comprehensive assessment than that
undertaken in connection with the Phase I Report regarding topics
relevant to the safe movement of LNG by rail tank car pursuant to both
SPs and the HMR following issuance of the July 2020 Final Rule.
Specifically, it examined bulk shipments of LNG by other modes of
transportation (including vessel and highway) to identify the basic
principles used in those modes for safety assurance. It also examined
the effectiveness of regulatory requirements and industry practices
(e.g., pertaining to speed and routing, as well as other operational
controls applicable to high-hazard flammable trains) intended to assure
the safe transportation of bulk rail shipments of other hazardous
materials.
---------------------------------------------------------------------------

    \20\ NASEM, ``Preparing for LNG by Rail Tank Car: A Readiness
Review'' (Sep. 2022) (Phase II Report), https://www.nap.edu/read/26719/chapter/1.
---------------------------------------------------------------------------

    The Phase II Report also made recommendations on necessary near-
and long-term actions to improve the understanding of the risks
associated with transporting LNG by rail tank car, mitigate those
risks, and prevent and prepare for potential incidents. The first
recommendation suggested launching an LNG safety assurance initiative
before LNG tank cars are put in service. The safety assurance
initiative would actively monitor initial plans for and early patterns
of LNG traffic activity, including the locations and routes of
shipments, the number and configuration of tank cars in trains, and
reports of incidents involving a tank car or train carrying LNG. The
second and final recommendation suggested that PHMSA and FRA should
review the DOT-113C120W9 tank car specification to ensure that it
adequately accounts for the cryogenic and thermal properties of LNG
that could contribute to a tank release in the event of a rail incident
and potential cascading impacts therefrom. The TRB's elaboration on its
second recommendation emphasized the value in assessing each of the
following: the capacity of the pressure relief devices on the new DOT-
113C120W9-specification tank cars to vent a sufficient amount of LNG
when the tank car is engulfed in an LNG fire in derailment conditions,
including a rollover event; the effects of adding more and different
types of insulation in the annular space to ensure sufficient
performance of the multilayer insulation system when the tank car is
exposed to heat flux and direct flame impingement from an LNG fire; and
the potential for the outer tank of the DOT-113C120W9 tank car to
experience cryogenic brittle failure and loss of vacuum insulation when
exposed to an LNG pool fire. PHMSA subsequently adjusted its LNG Task
Force testing activity in response to the Phase II Report
recommendations by modifying its ongoing worst-case analysis modeling
and quantitative risk assessment efforts to address the DOT-113C120W9-
specification design element concerns raised by the TRB. In light of
the new information received from the TRB reports and PHMSA's completed
research and ongoing tests, PHMSA suspends the regulations adopted in
the July 2020 Final Rule to allow PHMSA sufficient time to complete its
analysis to reconsider the determinations made in the July 2020 Final
Rule.
    The LNG Task Force has completed most of its testing and evaluation
activities (as modified in response to the TRB Phases I and II
Reports). Of those remaining activities, PHMSA expects to

complete its enhanced quantitative risk analysis and worse case
analysis modeling no later than Q3-2023. This analysis has taken longer
than expected because it was modified first to address concerns in the
TRB Phase I Report in June 2021 and then again in response to the TRB
Phase II Report issued in September 2022. PHMSA is in the process of
contracting for performance of each of the following remaining tasks:
(1) enhanced impact testing directed toward evaluating post-weld, heat-
treated seams from a DOT-113C120W9-specification tank car in response
to the TRB Phase I Report; and (2) enhanced train dynamic simulations
to better capture effects from use of distributed power and buffer car
placement within a train consist transporting LNG in response to the
TRB Phase I Report.

D. East Palestine, OH Derailment

    On February 3, 2023, a mixed-consist freight train operated by
Norfolk Southern Railway--comprised of two head-end locomotives, 149
railcars, and 1 distributed power locomotive--derailed in East
Palestine, Ohio. Thirty-eight railcars derailed, including 11 tank cars
carrying combustible liquid and flammable gas hazardous materials,
though none of the railcars were carrying LNG. The derailment resulted
in a fire impacting the derailed tank cars and damaging 12 additional
railcars that had not derailed. Included in the derailment and fire
were five DOT-105 specification tank cars containing vinyl chloride--a
hazardous material classified as a Division 2.1 flammable gas. These
DOT-105 specification tank cars were not punctured in the derailment.
PHMSA is working with the National Transportation Safety Board to learn
all it can from this incident and determine whether the lessons learned
should inform rail transportation of other hazardous commodities such
as LNG.

III. Discussion of Comments to the NPRM and Adoption of a Temporary
Suspension of the July 2020 Final Rule

    The comment period for the NPRM in this proceeding closed on
December 23, 2021. PHMSA received over 10,500 sets of comments to the
rulemaking docket through and after the formal comment period;
consistent with Sec.  106.70, PHMSA considers late-filed comments to
the extent possible. PHMSA considered all comments received in the
development of this Final Rule. The comments submitted to this docket
may be accessed via http://www.regulations.gov. The following table
categorizes the commenters. Please note that some commentors submitted
multiple comments.

------------------------------------------------------------------------
                                               Description and examples
             Commenter                Count           of category
------------------------------------------------------------------------
Non-Government Organizations.......       18  Environmental Groups;
                                               Emergency Response
                                               Organizations; Other.
Government Officials...............        8  Local; State; Federal;
                                               Tribal.
Private Individuals................   10,126  ..........................
Industry Stakeholders..............        3  Trade Associations;
                                               Shippers.
------------------------------------------------------------------------
                     Table of Commenters to the NPRM
------------------------------------------------------------------------

    Comments received could generally be summarized as advancing one or
more of the following positions:
     Comments requesting an immediate, permanent ban of LNG by
rail;
     Comments requesting the removal of the June 30, 2024,
sunset date;
     Comments of general support for the NPRM;
     Comments alleging chilling of near-term demand for LNG
transportation by rail tank car pursuant to the July 2020 Final Rule;
     Comments alleging that LNG by rail improves safety;
     Comments alleging environmental benefits from LNG by rail;
     Comments alleging PHMSA is overstepping its authority by
attempting to regulate oil and gas production;
     Comments alleging PHMSA did not meet its evidentiary
burden under the APA for temporary suspension of the July 2020 Final
Rule;
     Comments alleging that PHMSA's proposal will have
miscellaneous adverse consequences for regulated entities, the U.S.
economy, and national security; and
     Comments beyond the scope of this rulemaking.
    Based on the comments received in response to the NPRM, the
recommendations in the TRB Phases I and II Reports, the ongoing LNG
Task Force testing and evaluation activities, and pertinent information
regarding the near-term commercial prospects for rail tank car
transportation of LNG, PHMSA has concluded that a temporary suspension
of the July 2020 Final Rule's authorization for rail tank car
transportation of LNG in new DOT-113C120W9-specification tank cars is
appropriate. PHMSA finds that, consistent with the analysis in the
NPRM, these resources indicate that the uncertainties described in the
July 2020 Final Rule (e.g., regarding whether, when and how LNG by rail
tank car transportation will occur, and the safety and environmental
risks and benefits of such transportation) have only increased since
its issuance, calling into question the balance between potential
benefits and public safety and environmental risks PHMSA understood
itself to be striking in that rulemaking. In contrast (and as explained
at greater length below in this Section III responding to comments
received on the NPRM) a temporary suspension will ensure each of the
following: (1) avoidance of potential safety risks to public and worker
safety and the environment while PHMSA completes its companion
rulemaking under RIN 2137-AF54; (2) HMR authorization of rail tank car
transportation of LNG pursuant to that companion rulemaking reflects
the best science by accounting for ongoing LNG Task Force testing and
evaluation activities as informed by the TRB Phases I and II Report
recommendations; (3) consideration of additional public comment from
diverse stakeholders in that companion proceeding; and (4) minimizing
the potential for economic burdens by ensuring that entities avoid
ordering rail tank cars for LNG service compliant with the requirements
of the July 2020 Final Rule when the companion rulemaking may alter
those requirements.\21\ See 86 FR at 61732, 67135-36. As noted in the
NPRM, stakeholders seeking to transport LNG by rail during the
suspension period may seek (on an ad hoc basis) either SPs from PHMSA
or approvals from FRA.
---------------------------------------------------------------------------

    \21\ The temporary suspension provided for in this Final Rule
applies only to rail transportation of LNG tank cars--it does not
prohibit use of the new DOT-113C120W9 tank car in connection with
other hazardous, cryogenic liquids.
---------------------------------------------------------------------------

    Lastly, the Final Rule extends the duration of the temporary
suspension an

additional year (until June 30, 2025, at the latest) beyond the sunset
date (June 30, 2024) proposed in the NPRM. This extension--which is
consistent with comments received from stakeholders \22\ on the NPRM
discussed in section III.B below--is warranted due to delays in
completion of the LNG Task Force activity (discussed in section III.C
below) that will inform the companion rulemaking under RIN 2137-AF54.
Also, economic information discussed in section III.D below shows that
the commercial prospects for rail tank car transportation pursuant to
the July 2020 Final Rule have become even more uncertain than they were
when the NPRM issued in November 2021.
---------------------------------------------------------------------------

    \22\ PHMSA received no comments that specifically requested the
June 2024 sunset date for the suspension; commenters either sought
no suspension or a permanent suspension.
---------------------------------------------------------------------------

A. Comments Requesting an Immediate, Permanent Ban of LNG by Rail

    PHMSA received numerous comments requesting the immediate,
permanent ban of all LNG by rail in lieu of the temporary suspension as
proposed in the NPRM. Many of these comments were part of write-in
campaigns comprising approximately 6,650 comments in an initial
campaign during the formal comment period, and an additional 3,500
comments in a second campaign coordinated by the National Resource
Defense Council (NRDC) after the East Palestine derailment in early
2023 (NRDC Coordinated Write-in Campaign Comments). Other comments were
stand-alone comments submitted by non-governmental organizations (e.g.,
environmental advocacy organizations); Federal, State, and local
government officials; and private citizens.
    Many of these comments attributed the need for an immediate,
permanent ban on the risk to public safety and the environment from
LNG's material properties--specifically, pointing to its flammability,
explosive potential, and GHG contributions--in the event of a release.
Of particular concern for many commenters were the risks of a boiling
liquid expanding vapor explosions (BLEVEs) or asphyxiation in the event
of a release of LNG during an accident or incident. Some commenters
elaborated on their safety concerns by highlighting the potential
limitations (e.g., of personnel and equipment resources and training)
of emergency response personnel to respond to an incident involving
rail transportation of LNG in their jurisdictions. Other commenters
alleged that the new DOT-113C120W9 tank car specification was
inadequate or untested for rail transportation of LNG and that a more
robust safety history--coupled with more robust, mandatory operational
controls (such as limits on train length, tank car weight, and maximum
allowable speed) than required in the July 2020 Final Rule--would be
necessary to ensure safety. Other commenters cited safety and
environmental justice concerns for those who live along rail lines that
would carry LNG, stating that ``bomb trains'' would threaten the safety
of those who live in these communities--many of which communities may
be densely-populated or historically disadvantaged. Other commenters
called for an immediate ban of LNG transportation by rail given
methane's status as a potent GHG and the Biden-Harris Administration's
commitments to reducing GHG emissions. And commenters from the NRDC
campaign called for a ban on LNG by rail in the ``in the wake of the
devastating train derailment in East Palestine, Ohio.'' \23\ Lastly,
some commenters contended that if the ``. . . rule was already bad
enough to reconsider, it should be repealed outright.'' \24\
---------------------------------------------------------------------------

    \23\ NRDC Coordinated Write-in Campaign Comments.
    \24\ Beyond Extreme Energy with 198 methods Comment at 1.
---------------------------------------------------------------------------

PHMSA Response
    PHMSA acknowledges the concerns raised by these stakeholders and
agrees that any risks related to the transportation of LNG by rail
should be examined closely and properly mitigated to ensure safety for
the public and the environment. Accordingly PHMSA is suspending LNG
transportation by rail tank car pursuant to the July 2020 Final Rule
until the conclusion of the companion rulemaking under RIN 2137-AF54 or
June 30, 2025, whichever is earlier. This will provide PHMSA an
opportunity to conduct a thorough evaluation of the HMR's regulatory
framework for rail transportation of LNG based on the information
received from the LNG Task Force testing and evaluation efforts, TRB
Phases I and II Reports, and stakeholders' written comments. PHMSA also
encourages those stakeholders to consider submitting comments in
response to any future notice of proposed rulemaking issued by PHMSA in
the companion rulemaking under RIN 2137-AF54.

B. Comments Requesting the Removal of the June 30, 2024, Sunset Date

    PHMSA received comments requesting removal of the sunset date of
June 30, 2024, proposed in the NPRM so that the proposed suspension
would be in effect until the companion rulemaking under RIN 2137-AF54
has concluded. Delaware Riverkeeper Network (DRN) commented that in the
NPRM, PHMSA justified the sunset date by indicating that the TRB Phase
II Report was expected in mid-2022 and that PHMSA needed time to
incorporate those results and publish a rule. DRN argued that ``this
rationale begs the question--why not wait until PHMSA actually
incorporates the results of the Phase II Report and concludes the
rulemaking process?'' They further stated that ``the unpredictability
of the COVID-19 pandemic indicates that timelines are not as
predictable as they were pre-2019.'' \25\
---------------------------------------------------------------------------

    \25\ DRN Comment at 2.
---------------------------------------------------------------------------

    The International Association of Fire Fighters (IAFF) suggested an
objective-based approach whereby the suspension would only be lifted if
certain criteria have been met. IAFF further urged ``. . . the FRA to
establish specific criteria to be attained prior to the lifting of the
proposed suspension.'' \26\ Similarly, comments from the AFL-CIO and
others supported suspending LNG by rail tank car until LNG Task Force
testing and evaluation efforts are complete, stating they ``. . .
support PHMSA's suspension of the implementation of the rule until a
time when the agencies have completed a more thorough safety review.''
\27\ Other commenters proposed longer suspension periods than had been
proposed in the NPRM.
---------------------------------------------------------------------------

    \26\ IAFF Comment at 2.
    \27\ TDD Comment at 1.
---------------------------------------------------------------------------

PHMSA Response
    PHMSA in the NPRM specifically sought comments on the proposed
suspension date, including the sunset date, and whether PHMSA should
modify the proposed expiration of the suspension period.\28\ PHMSA
appreciates and acknowledges the points made by commenters and,
consistent with the discussion in the introduction to section III
above, is extending the sunset date for the suspension period an
additional year such that rail tank car transportation of LNG pursuant
to the July 2020 Final Rule will be suspended until the earlier of
either (1) a final rule concluding the companion rulemaking under RIN
2137-AF54, or (2) June 30, 2025. This one-year extension beyond the
sunset date (June 30, 2024) proposed in the NPRM will give PHMSA
adequate time to complete LNG Task Force testing and evaluation
activities (and delays in

receipt of the TRB Phases I and II Reports) that had been delayed
because of the COVID-19 public health emergency and additional scoping
and contracting issues, and thereafter integrate those results into
each of a notice of proposed rulemaking and final rulemaking in the
companion rulemaking under RIN 2137-AF54.
---------------------------------------------------------------------------

    \28\ 86 FR at 61737.
---------------------------------------------------------------------------

C. Comments of General Support for the NPRM

    PHMSA received numerous comments in support of the NPRM's proposed
suspension, including comments from Governor Jay Inslee of Washington
State; the Attorneys General of Maryland, New York, Connecticut,
Delaware, Illinois, Massachusetts, Michigan, Minnesota, New Jersey,
Oregon, Pennsylvania, Rhode Island, Vermont, Washington, and the
District of Columbia; and the Puyallup Tribe of Indians. Many
commenters who supported the temporary suspension proposed in the NPRM
also urged PHMSA to subsequently ban LNG in the companion rulemaking
under RIN 2137-AF54. Commenters supporting the NPRM's proposed
suspension of the July 2020 Final Rule generally articulated the same
safety and environmental concerns as those calling for an immediate,
permanent bans of rail tank car transportation of LNG discussed in
section III.A above.
PHMSA Response
    PHMSA acknowledges the thousands of comments submitted in support
of the NPRM. Although some of those commenters also urged PHMSA to
permanently ban rail tank car transportation of LNG in the companion
rulemaking under RIN 2137-AF54, PHMSA submits that it will need to
complete (and review the results of) the LNG Task Force testing and
evaluation efforts before it will be in a position to speak to the
contents of a forthcoming notice of proposed rulemaking in that
companion rulemaking. PHMSA encourages stakeholders to consider
submitting comments in response to any future notice of proposed
rulemaking issued by PHMSA in the companion rulemaking under RIN 2137-
AF54.

D. Comments Alleging Chilling of Near-Term Demand for LNG
Transportation by Rail Tank Car Pursuant to the July 2020 Final Rule

    PHMSA received several comments \29\ on the NPRM's observations of
increased uncertainty regarding whether there will be near-term demand
for rail tank car transportation of LNG pursuant to the July 2020 Final
Rule. Specifically, CSX noted in its comments that it had several
projects in development to transport LNG by rail in or before 2024, and
that ``[t]he continued investment in and pursuit of those projects,
which require design, permitting, and construction with long lead
times, would be impaired if the July 2020 Final Rule were suspended
indefinitely, delaying them potentially for years and harming CSX's
reliance interests and imposing costs and lost business opportunities
on CSX and its partners'' (emphasis added). CSX subsequently met with
PHMSA on February 17, 2022, and elaborated on their written comments by
noting that those projects had been shelved and that the issuance of
the NPRM was the occasion for those decisions. The Attorney General for
the State of Louisiana, Jeff Landry, joined by State Attorneys General
from Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho,
Indiana, Kentucky, Mississippi, Missouri, Montana, Nebraska, New
Hampshire, Ohio, South Carolina, South Dakota, Texas, Utah, Virginia,
West Virginia, and Wyoming (Landry, et. al.) similarly contend that
``the proposed rule itself is the cause of the regulatory uncertainty
of which it complains'' (emphasis in original) in that it ``discourages
companies from making any capital investment in LNG by rail,
specifically the DOT-113C120W9 specification tank cars that the 2020
Rule authorized.''
---------------------------------------------------------------------------

    \29\ CSX Comments at 1; PHMSA, Doc. No. PHMSA-2021-0058-7064,
``Summary of CSX Listening Session'' (Feb. 17, 2022); Landry, et al.
Comments at 1, 4.
---------------------------------------------------------------------------

PHMSA Response
    PHMSA finds these comments unconvincing statements of the near-term
commercial viability of rail tank car transportation of LNG pursuant to
the July 2020 Final Rule. The suspension proposed in the NPRM and
adopted in this Final Rule is not ``indefinite'' as characterized by
CSX; rather, it is time-limited to the earlier of a date certain (June
2025) or to the completion of the milestone of issuing a final rule in
the companion rulemaking under RIN 2137-AF54. Even if the NPRM affected
one or more of CSX's nascent projects exploring rail tank car
transportation of LNG, CSX or other entities could have applied for,
and may still apply for, an alternative regulatory vehicle (e.g., an SP
under Sec.  107.105,\30\ or an FRA approval for rail transportation via
portable tank) to allow work to proceed on those projects during the
suspension period. PHMSA is unaware of CSX, its collaborators in those
projects, or any other entities having pursued alternatives. Indeed, in
its written comments and again during its February 17, 2022, meeting
with PHMSA, CSX personnel acknowledged that the choice of package
(i.e., the particular DOT-specification rail tank car or ISO tank)
employed in rail transportation of LNG is merely one decision within a
multi-step, multi-year project development and execution chain
involving, among other things, the construction of origin facilities
and off-loading facilities, and the acquisition of one or more enabling
Federal and State permits. The projects CSX and others may have been
pursuing were prolonged, highly contingent processes in which there are
multiple potential bases for material delay or cessation of a project
throughout the development cycle. That said, PHMSA understands the
shelving of CSX's or any other entities' projects following the
proposal of a time-limited, temporary suspension for which there could
be alternative rail transportation methods evinces less an alleged
``chilling'' of investment than the significant uncertainty discussed
in the NPRM regarding whether there would be any commercially viable
projects for rail transportation of LNG in the near-term.
---------------------------------------------------------------------------

    \30\ Applications for a Special Permit submitted under Sec.
107.105 must demonstrate that such Special Permit will achieve at
least an equivalent level of safety as to what is provided under the
HMR, and in particular, should address any outstanding safety
questions or concerns including those raised in this rulemaking.
---------------------------------------------------------------------------

    And PHMSA understands that a variety of forces have created--and
will continue to create throughout the suspension period--headwinds for
the near-term commercial viability of any project for rail
transportation of LNG. The NPRM explained that the near-term commercial
prospects for LNG by rail (which the July 2020 Final Rule had
acknowledged were uncertain at its issuance) had grown even more
uncertain due to near-term structural changes in international markets
including (1) massive investment in greatly increased export capacity
by competing providers such as Qatar, and (2) reduced demand for LNG
customers seeking to reduce their GHG emissions.\31\ The comments
submitted by CSX, other industry stakeholders, and Landry, et. al. did
not attempt to rebut this evidence, or PHMSA's finding that the near-
term commercial uncertainty for rail transportation of LNG had
increased. Further, the structural headwinds for rail transportation of
LNG are likely to accelerate in the near future, as the U.S. Energy
Information Administration (EIA) predicts that the capacity of

pipeline-supplied U.S. LNG export terminals are expected to increase
significantly beginning around 2025 which some analysts note could
depress the offtake prices for LNG in the international export market--
which could divert demand for LNG exports that could have been serviced
by LNG by rail.\32\ Further, the supply shocks of the conflict in
Ukraine have highlighted both in the United States and abroad the
volatility of natural gas prices and fragility of international LNG
market supply, accelerating movement among historical consumers of
natural gas toward renewable energy and reduced reliance on LNG
exports.\33\ Meanwhile, domestic consumption of natural gas in the
United States is expected to fall in the next decade due to increasing
electrification driven by consumer preferences and Federal and State
policy initiatives to reduce GHG emissions.\34\ Durably high commodity
(e.g., steel) prices and interest rates \35\ would also tend to
discourage capital investment in the manufacture of a new fleet of DOT-
113C120W9-specification tank cars for dedicated commercial LNG service.
---------------------------------------------------------------------------

    \31\ 86 FR at 61735-36.
    \32\ EIA, ``U.S. LNG Export Capacity to Grow as Three Additional
Projects Begin Construction,'' (Sept. 6, 2022), https://www.eia.gov/todayinenergy/detail.php?id=53719 (last visited May 12, 2023). See
also A. Shiryaevskaya et al., Bloomberg, ``World Gas Supply Shifts
from Shortage to Glut with Demand Muted'' (Apr. 16, 2023); L.
Hampton, Reuters, ``Wave of New LNG Export Plants Threatens to Knock
Gas Prices'' (Mar. 14, 2023).
    \33\ See Intl. Energy Agency (IEA), World Energy Outlook: 2022
at 3, 25-26 (Oct. 2022); The Economist ``War and Subsidies Have
Turbocharged the Green Transition'' (Feb. 13, 2023); Inst. for
Energy Economics and Financial Analysis, Global LNG Outlook: 2023-
2027 at 4-5 (Feb. 15, 2023).
    \34\ See EIA, Annual Energy Outlook 2023 at 25 (Mar. 2023).
    \35\ N. Ruggiero, S&P Global Commodity Insights, U.S. Steel
Sentiments Hit New High for 2023 As Mills Increase Finished Prices''
(Mar. 13, 2023); R. Druzin, Argus Media, ``U.S. Steel Price Driven
Up by Multiple Factors'' (Mar. 14, 2023); M. Derby, Reuters,
``Premature for Fed to Call End to Rate Hikes with Inflation Still
High, Williams Says (May 9, 2023).
---------------------------------------------------------------------------

    PHMSA finds this recent evidence, coupled with the evidence
discussed in the NPRM, augurs uncertainty regarding the commercial
prospects for rail transportation of LNG that will continue beyond the
originally proposed suspension period and into the longer suspension
period adopted in this final rule.\36\ Following the conclusion of the
(temporary) suspension period, stakeholders would be able to evaluate
whether the commercial prospects for rail tank car transportation of
LNG pursuant to the July 2020 Final Rule merit pursuing.
---------------------------------------------------------------------------

    \36\ Amidst the limited domestic and international commercial
prospects discussed here, it is hardly surprising that rail
transportation of LNG has occurred by neither (1) existing DOT-
113C120W tank cars pursuant to DOT-SP 20534 issued by PHMSA to ETS
in 2019, nor (2) ISO tanks pursuant to an FRA approval issued to the
Alaska Railroad Company in 2015.
---------------------------------------------------------------------------

E. Comments Contending That the LNG by Rail Improves Safety

    PHMSA received several comments arguing temporary suspension of the
July 2020 Final Rule would forfeit safety benefits.\37\ Some of those
comments pointed to the physical properties (e.g., auto-ignition
temperatures) of LNG they assert make its rail transportation
inherently safer than transportation of natural gas in other physical
states. Others contended that, absent the July 2020 Final Rule,
industry would be forced to utilize other modes of transportation of
natural gas--in particular, highway transportation via MC-338 cargo
tanks--which would entail more frequent accidents and incidents than
rail transportation. Some comments generally praised the DOT-113C120W9-
specification tank car approved for use in transporting LNG in the July
2020 Final Rule because it was an improvement on the proven, existing
DOT-113C120W-specification tank cars that PHMSA had approved for use in
rail tank car transportation of LNG via SP. Lastly, RSI asserted that
by discouraging investment in DOT-113C120W9 tank cars for LNG service,
PHMSA was discouraging construction of those enhanced tank cars for use
in transporting other cryogenic liquid hazardous materials.
---------------------------------------------------------------------------

    \37\ CSX Comments at 1; Landry, et al. Comments at 1, 4, 5; RSI
Comments at 2, 4; ``Comments of U.S. House of Representatives
Committee on Transportation and Infrastructure--Republican Minority
Members'' at 2-3 (Dec. 22, 2021) (House T&I Minority Comments).
---------------------------------------------------------------------------

PHMSA Response
    PHMSA finds these contentions unconvincing. As presented, each of
those arguments suggest that any potential benefits of rail tank car
transportation of LNG will be lost if PHMSA suspends the July 2020
Final Rule as proposed in the NPRM. But that binary understanding
confuses the temporary, time-limited suspension proposed in the NPRM
and adopted in this final rule with a permanent or indefinite ban on
rail tank car transportation of LNG. A temporary suspension would mean
that any safety benefits would only be unavailable for the suspension
period--i.e., until the end of June 2025 (at the latest). See 86 FR at
61737-38. Further, any such potential, time-limited comparative
advantage turns on whether any rail transportation of LNG pursuant to
the July 2020 Final Rule would in fact have occurred during the
suspension period, but, as explained above, market conditions now and
in the near future do not support demand to transport LNG in rail tank
cars. That demand, which was uncertain at issuance of the July 2020
Final Rule has become only more uncertain since given the commercial
headwinds facing the development of that market.\38\ Further, any time-
limited comparative advantage from leaving the July 2020 Final Rule
undisturbed would also be mitigated by the availability of other
regulatory vehicles (FRA approvals and PHMSA SPs) that entities can
pursue during the suspension period.
---------------------------------------------------------------------------

    \38\ The NPRM also explains there is also significant
uncertainty regarding the commercial prospects of mode-switching
(from rail tank car to MC-338 cargo tanks carried by truck) given
that such mode-switching would sacrifice (potentially significant)
economies of scale offered by rail tank car transportation of LNG.
See 86 FR at 61737. This observation was not addressed by any of the
comments submitted by the House T&I Minority, Landry, et al., RSI,
or CSX.
---------------------------------------------------------------------------

    Uncertainty regarding whether the July 2020 Final Rule's
authorization of rail transportation in DOT-113C120W9-specification
tank cars ensures adequate protection of public safety has only
increased since the time of issuance of each of the July 2020 Final
Rule and the NPRM proposing its suspension. The July 2020 Final Rule
itself acknowledged that its authorization of rail transportation of
LNG in the new DOT-113C120W9 tank car did not turn only on the tank car
itself; rather, a number of other factors (including, but not limited
to, the material properties of LNG and natural gas, the quantity of LNG
that will be moved by rail, the routes involved, the availability of
emergency response planning resources, etc.) affected the risks
involved in rail tank car transportation of LNG. See 86 FR at
61734.\39\ Subsequently, the TRB Phase I Report highlighted gaps
(discussed in section II.C above) within the LNG Task Force testing
efforts undertaken to improve confidence in

the safety benefits of rail transportation of LNG. TRB's subsequent
Phase II Report identified additional areas warranting additional
research and evaluation to ensure the safety of rail transportation of
LNG in the DOT-113C120W9-specification tank car. Although PHMSA has
revised the LNG Task Force's testing and evaluation activities in
response to the TRB Phases I and II Report recommendations, that work
continues; and even after completing the activities PHMSA must evaluate
the results and determine whether and how to make permanent
modifications to the HMR governing rail transportation of LNG. Further,
the comments submitted in response to the NPRM proposing suspension of
the July 2020 Final Rule show a lack of consensus among stakeholders
regarding whether some of the critical safety challenges known when
PHMSA issued the July 2020 Final Rule have been addressed. For example,
a comment submitted by IAFF on the NPRM noted that ``the capabilities
of fire fighters and emergency medical responders to safely and
effectively respond to hazmat incidents involving LNG rail cars has not
improved since our 2019 comments'' notwithstanding any PHMSA and FRA
outreach and engagement efforts in the interim.\40\
---------------------------------------------------------------------------

    \39\ PHMSA disagrees with Landry, et al. that PHMSA's
authorization of rail transportation of LNG in existing, less robust
DOT-113C120W tank cars pursuant to DOT-SP 20534 reveals PHMSA's
concerns regarding safety of the DOT-113C120W9 tank car as
pretextual. Landry, et al. Comments at 4. The conditions it
imposed--a defined, limited duration, a single route, and various
operational controls--facilitate understanding and bounding of
safety and environmental risks notwithstanding transportation within
a legacy DOT-113C120W tank car. In contrast, the July 2020 Final
Rule's nationwide, perpetual authorization of rail tank car
transportation of LNG in a new tank car specification could entail a
fundamentally different risk profile than DOT-SP 20534 or any other
special permits that PHMSA may issue authorizing (on an ad hoc
basis) rail tank car transportation of LNG. In addition, no LNG was
ever shipped under DOT-SP 20534, which has now expired and which
PHMSA has declined to renew.
    \40\ IAFF, Doc. No. PHMSA-2021-0058-6442, ``Comments Regarding
Suspension of Hazardous Materials Regulations Amendments Authorizing
Transportation of Liquefied Natural Gas (LNG) by Rail'' at 1-2 (Dec.
23, 2021).
---------------------------------------------------------------------------

    Additionally, comments touting the inherent safety advantages of
rail tank car transportation of liquefied natural gas miss the larger
safety issue toward which much of the LNG Task Force testing evaluation
activity is directed. Natural gas in liquid form, undisturbed within a
DOT-113C120W9 tank car is a very stable material that will not combust
unless it vaporizes which only happens if the material warms. Further,
any vapor present in the outage of the tank car will be of a
concentration that is too high to combust. Rather, the principal safety
concern--highlighted by PHMSA in the July 2020 Final Rule, in the NPRM
and comments thereon, and in TRB's evaluation of safety risks
associated with rail transportation of LNG--pertains to consequences
should either there be a release of LNG to atmosphere, or a tank car be
exposed to harsh conditions during an incident or accident. LNG
releases can expose personnel and materials to extreme cold (as low as
-120 [deg]C or -260 [deg]F) and can be an asphyxiant within a confined
space. When released to the atmosphere (as a result of a puncture of
the inner and outer tanks during an accident or incident), liquid
methane will convert to a gas that has a relatively low auto-ignition
point (about 540 [deg]C or 1000 [deg]F) in addition to being highly
combustible when exposed to an ignition source such as fire or
electrical sparking. When methane ignites, it burns at very high
temperatures (about 1330 [deg]C, or 2426 [deg]F), potentially resulting
in exposure of personnel and materials--including (potentially)
undisturbed DOT-113C120W9 tank cars adjacent to an LNG pool fire to
significant radiant heat hazards. Although PHMSA had undertaken (via
the LNG Task Force) a robust testing regime to develop a fulsome
understanding of those potential, significant hazards of LNG when
transported by rail tank car in parallel with the development and
issuance of the July 2020 Final Rule, the subject matter expert
recommendations within each of the TRB's Phases I and II Reports
underscore the value in obtaining that understanding from completing
enhanced testing and evaluation activities before LNG begins moving in
DOT-113C120W9 rail tank cars pursuant to the July 2020 Final Rule. A
temporary suspension gives the LNG Task Force and PHMSA an opportunity
to complete that critical work.
    PHMSA also disagrees that suspension of the July 2020 Final Rule
would discourage investment in enhanced, DOT-113C120W9-specification
tank cars for use in rail transportation of any cryogenic liquid
hazardous materials--not just LNG. PHMSA acknowledges that the HMR (at
49 CFR part 179 Subpart F) contemplates use of DOT-113C120W9-
specification tank cars for transportation of other materials
authorized for transportation in the DOT-113 series tank cars in that
DOT-113C120W9 tank cars will also meet and exceed the minimum DOT-
113C120W standard. However, factors influencing whether to invest in
new DOT-113C120W9-specification tank cars for use in transporting those
other cryogenic liquids are very different from the factors driving
decision making on investing in those tank cars for LNG service. For
example, those other cryogenic liquid hazardous materials would likely
be destined for more mature domestic and international markets than the
(currently) speculative domestic and international market for LNG
transported by rail tank car. Perhaps for this reason, PHMSA is aware
of at least one entity having submitted an order for construction of
new DOT-113C120W9-specification tank cars for cryogenic ethylene
service--even as, over three years after the July 2020 Final Rule
issued, PHMSA is unaware of a single order from a commercial entity for
a new DOT-113C120W9 specification tank car for LNG service.\41\
---------------------------------------------------------------------------

    \41\ In addition, DOT-113C120W9-specification tank cars
constructed for cryogenic ethylene (or other cryogenic liquid)
service could not be converted for LNG service easily or
immediately: each tank car would have to be cleaned and purged; the
physical configuration of critical, installed components of each
tank car (e.g., pressure relief valve piping, valves, and other
service equipment) would have to be changed; and the re-configured
tank car would have to obtain a design certification from the
American Association of Railroads Tank Car Committee. Mechanically
converting one car--separate from the approval process for the Tank
Car Committee--could take several months to over a year.
---------------------------------------------------------------------------

    For the reasons discussed above and in section III.D, PHMSA
concludes that uncertainty on critical issues regarding the safety
profile of rail tank car transportation of LNG pursuant to the July
2020 Final Rule has increased since its issuance--and will persist
through the suspension period adopted in this final rule until PHMSA
and FRA have had an opportunity to complete and review the results of
the LNG Task Force's testing and evaluation activities and implement
any necessary regulatory amendments in the companion rulemaking under
RIN2137-AF54.

F. Comments Alleging Environmental Benefits From LNG by Rail

    PHMSA received several comments arguing temporary suspension of the
July 2020 Final Rule would forfeit important environmental benefits.
Comments describe several mechanisms for such environmental benefits
including potential reduction in flaring from oil and gas production
activities and reduced GHG emissions compared to highway transportation
of the same volume of LNG in MC-338 cargo tanks.\42\
---------------------------------------------------------------------------

    \42\ House T&I Minority Comments at 2-3; Landry, et al. Comments
at 5-7; CSX Comments at 1-2; RSI Comments at 2, 5.
---------------------------------------------------------------------------

PHMSA Response
    For largely the same reasons discussed in section III.E above,
PHMSA finds these arguments unconvincing. The statements in those
comments regarding the environmental benefits of the July 2020 Final
Rule were offered without any evidentiary support and little analysis,
frustrating evaluation against the comments submitted in response to
the NPRM attributing potential environmental harms (including those
pertaining to commodity releases and lifecycle and indirect GHG
emissions) to rail tank car

transportation of LNG. As explained in the NPRM, both environmental
benefits and risks of rail tank car transportation of LNG are a
function of whether, when, and where viable market opportunities for
such transportation develops. The July 2020 Final Rule acknowledged
considerable uncertainty regarding those questions--and as explained in
the section III.D above, the commercial prospects for rail tank car
transportation of LNG are more speculative now than in July 2020 or
even when the NPRM in this proceeding issued in November 2021.
    These considerations are particularly relevant to the mechanisms
for environmental benefits identified in those comments charactering
the environmental benefits of the July 2020 Final Rule. Whether a
market will emerge during the suspension period (or for that matter,
may ever emerge) for capture of methane that would be otherwise be
flared from oil and gas production operations and transported by rail
tank car is not a straightforward proposition. In addition to the non-
trivial capital investment for rail tank cars, such an approach would
require, among other things, liquefaction equipment at the production
site and gasification equipment at the destination and enabling Federal
or state regulatory authorizations--and each of those elements may need
to be procured sooner at break-even or lower cost than alternatives
such as capture and transportation via pipeline or MC-338 cargo tank
carried by truck (or, by extension, by rail tank car via FRA approval
or PHMSA SP). And even if such a market opportunity would have arisen,
meaningful evaluation of the GHG emissions benefits would inevitably
involve myriad assumptions (e.g., accident/incident rates for rail and
highway transportation; lifecycle emissions from construction and
operation of the tank cars and related equipment; potential indirect
effects such as emissions associated with upstream production induced
by newly-available takeaway capacity) that increase uncertainty
regarding GHG impacts. Similarly, modal shifting between highway
transportation of LNG via MC-338 cargo tank and rail tank car may not
be as easy or as desirable as those comments assume. As discussed above
in section III.D, highway transportation sacrifices economies of scale
that is among the principal advantages of rail tank car transportation
of LNG.
    For the reasons discussed above, PHMSA concludes that uncertainty
regarding the potential environmental benefits and harms from rail tank
car transportation of LNG pursuant to the July 2020 Final Rule will
continue throughout the suspension period adopted in this Final Rule.
This persistent uncertainty on a critical potential benefit identified
for the July 2020 Final Rule militates in favor of its temporary
suspension as the LNG Task Force completes its testing and evaluation
activity and PHMSA implements any necessary regulatory amendments in
the companion rulemaking under RIN 2137-AF54.

G. Comments Alleging PHMSA Is Overstepping Its Authority by Attempting
To Regulate Oil and Gas Production

    PHMSA received comments alleging that PHMSA's proposed suspension
of the July 2020 Final Rule overstepped its statutory authority under
the HMTA by attempting to discourage oil and gas production
activity.\43\
---------------------------------------------------------------------------

    \43\ Landry, et al. Comments at 1, 4.
---------------------------------------------------------------------------

PHMSA Response
    Those arguments mischaracterize PHMSA's intentions and misapprehend
pertinent law.\44\ Indeed, PHMSA nowhere in either the NPRM or in this
Final Rule identifies decreasing oil and gas production activity as an
explicit goal of its suspension of the July 2020 Final Rule. Instead,
Landry, et al. divines that intention from a reference to ``[induced]
natural gas extraction'' within a list of several considerations in the
NPRM that are probative to the safety and environmental risks attendant
to rail tank car transportation of LNG.\45\ But PHMSA's acknowledgement
in the NPRM of the common-sense proposition that new oil and gas
production activity--and any attendant environmental benefits as well
as risks (including release to atmosphere of methane lost during
extraction and transportation) associated with those activities--could
be a reasonably foreseeable consequence of authorizing new takeaway
capacity is consistent with its obligations under NEPA. See 86 FR
61735-36 & n. 35. It is also consistent with the reasoning supporting
the July 2020 Final Rule, which (along with its supporting
documentation) explicitly identified potential indirect effects on each
of upstream production activity and downstream fuel switching from coal
as justifications for that rulemaking.\46\
---------------------------------------------------------------------------

    \44\ This argument is also in tension with exhortations
elsewhere in the Landry, et al. comments for PHMSA to consider
policy issues (pertaining to U.S national security and consumers'
home heating bills) that are arguably more ``attenuated'' and less
``tethered'' to PHMSA's authority under the HMTA. See Landry, et al.
Comments at 1, 7-10. Indeed, Landry, et al. also urges PHMSA to
consider the indirect relationship between the rulemaking and
production activity by claiming that rail tank car transportation
could yield reductions in flaring from oil and gas production
activities. Id. at 7.
    \45\ Landry, et al. Comments at 4 (citing 86 FR at 61736).
    \46\ See 85 FR at 44995. See also Final Regulatory Impact
Assessment, Doc. No. PHMSA-2018-0025-0479, at 4, 32-33 & n. 48;
Final Environmental Assessment, Doc. No. PHMSA-2018-0025-0478 at 35-
36, 52.
---------------------------------------------------------------------------

    Nor, moreover, would any indirect effect on production activity
from PHMSA's exercise of its authority under the HMTA to regulate
interstate rail transportation of hazardous material implicate, as
suggested by Landry, et al., the ``major questions'' concerns
articulated in Utility Air Regulatory Group v. EPA (573 U.S. 302
(2014)), and in West Virginia v. EPA (597 U.S. (2022)). Neither case
disturbed the longstanding tolerance of minor, incidental, or
accidental effects when an agency takes actions within the core of its
statutory responsibilities. And here, PHMSA is doing just that:
imposing a temporary suspension of a recent (July 2020) exercise of its
authority under the HMTA to prescribe regulations governing interstate
transportation by rail of hazardous materials to temporarily restore
the status quo ex ante preceding the July 2020 Final Rule. Lastly,
given that (as explained in section III.D above) there is considerable
uncertainty regarding the commercial viability of rail tank car
transportation of LNG, the limited-duration suspension adopted in this
Final Rule hardly resembles the fact sets before the Supreme Court in
either of the above decisions in which EPA was said to have
``discover[ed] . . . an unheralded power to regulate `a significant
portion of the American economy.' ''

H. Comments Alleging PHMSA Did Not Meet Its Evidentiary Burden Under
the APA for Temporary Suspension of the July 2020 Final Rule

    PHMSA also received comments claiming that the NPRM did not make
the required showing under the APA for suspension of currently-
effective regulations.\47\ Landry, et al. in particular characterizes
controlling precedent as establishing a uniquely high burden for
temporary suspension of existing regulations. PHMSA must, in their
view, provide ``a detailed justification of new facts that contradict
facts underlying . . . prior policy'', as well as ``a more `reasoned
explanation' to justify suspension of a regulation'' than merely the
``inauguration of a new President.'' PHMSA must also demonstrate an

``awareness that it is changing position.'' Landry, et al. ultimately
concluded that PHMSA ``had not provided any . . . explanations''
demonstrating compliance with those purported requirements.
---------------------------------------------------------------------------

    \47\ House T&I Minority Comments at 2 & n.8; Landry, et al.
Comments at 3-4.
---------------------------------------------------------------------------

PHMSA Response
    These criticisms misapprehend controlling precedent. Indeed, PHMSA
does not understand the cited decisions to stand for the proposition
suggested in those comments that ``reasoned decision-making'' in the
context of suspension of currently effective regulations necessarily
entails a heightened evidentiary burden. Rather, the Supreme Court
explicitly stated that the evidentiary burden for agency action is not
heightened when that action is a change. F.C.C. v. Fox Studios, 556
U.S. at 502, 514-15 (2009). And although agencies suspending currently
effective regulations must acknowledge a change in their position,
address any tensions between conflicting factual findings, and confront
any serious reliance interests on the old policy, those common-sense
expectations do not constitute a different, uniquely higher evidentiary
standard for suspending a currently-effective regulation; rather, those
are the sort of issues an agency may need to address (as applicable)
when adopting any change in its regulations. See Motor Veh. Mfrs. Ass'n
v. State Farm Ins., 463 U.S. 29, 51-52 (1983).
    Nor did Landry, et al.'s comments provide any analysis explaining
how PHMSA had run afoul of judicial guardrails for suspending
currently-effective regulations. They simply asserted that PHMSA had
failed to ``explain[ ]'' its compliance with pertinent APA
requirements. But the NPRM acknowledged that it proposed a change in
position from the July 2020 Final Rule: it stated in multiple places
that rail tank car transportation of LNG authorized by the July 2020
Final Rule would be temporarily suspended. See, e.g., 86 FR at 61731-
32. Further, PHMSA described at length its rationale and the evidence
relied on in making that change. Specifically, information (including
the TRB Phase 1 Report, COVID-related delays in the execution of LNG
Task Force testing and evaluation efforts that had been expected to
corroborate the conclusions in the July 2020 Final Rule, and potential
fundamental shifts in the domestic and international market dynamics)
that had emerged following issuance of the July 2020 LNG Final Rule
cast doubt on the validity of PHMSA's understanding of the potential
benefits and risks on which that rulemaking's policy decisions rested.
See 86 FR at 61735-36. And (as explained in section III.D above)
because uncertainty on these considerations has only increased since
the NPRM's issuance in November 2021, PHMSA has now decided to impose
that suspension with a marginally longer (but still time-limited)
duration. Lastly, this decision does not rest, as Landry, et al.
suggests, on specious reasoning that ``no policy is better than the old
policy solely because a new policy might be put in place . . .'';
rather, temporary suspension ensures that no rail car transportation of
LNG pursuant to the July 2020 Final Rule will occur during the time
needed for PHMSA to develop confidence regarding its potential risks
and benefits within the companion rulemaking under RIN 2137-AF54.

I. Comments Alleging That PHMSA's Proposal Will Have Miscellaneous
Adverse Consequences for Regulated Entities, the U.S. Economy, and
National Security

    PHMSA also received a handful of comments warning of miscellaneous
adverse effects from the NPRM's proposed suspension of the July 2020
Final Rule.\48\ Certain members of the U.S. House Transportation and
Infrastructure Committee and Landry, et al. caution suspension of the
July 2020 Final Rule could increase household energy expenses and
compromise U.S. energy independence and geopolitical influence.
Meanwhile RSI warns that the NPRM's invocation of economic uncertainty
and ``hypothetical concerns'' as considerations when tailoring HMR
requirements could portend shifting regulatory requirements for the
transportation of other hazardous materials. RSI also contends that a
more appropriate tool for addressing PHMSA's concerns with the July
2020 Final Rule would be to exercise its authority under Sec.  107.339
to obtain emergency orders from a U.S. District Court to address
``imminent hazards.''
---------------------------------------------------------------------------

    \48\ House T&I Minority Comments at 1, 3; Landry, et al.
Comments at 7-8; RSI Comments at 3.
---------------------------------------------------------------------------

PHMSA Response

    PHMSA finds these comments unconvincing. The claim that temporary
suspension of the July 2020 Final Rule could affect U.S. household
energy prices or the geopolitical balance of power strains credulity
given that no DOT-113C120W9 tank cars intended for commercial LNG
service have been sold and the commercial viability of such rail tank
car transportation is increasingly uncertain. Additionally, RSI's
concern that PHMSA could invoke changing market dynamics to modify
longstanding HMR requirements for other hazardous materials is
misplaced. Unlike other hazardous materials, the rail tank car
transportation of LNG is not a mature market--in fact, as discussed
elsewhere in this Final Rule, no such market has emerged in over three
years since the July 2020 Final Rule issued and a market may not emerge
at all. Nor does PHMSA's decision to temporarily suspend the July 2020
Final Rule hardly address merely ``hypothetical concerns''; rather, (as
discussed in sections III.E and F above) the potential safety and
environmental hazards associated with LNG could be significant, and it
is PHMSA's responsibility under the HMTA to evaluate and adjust the HMR
to ensure its transportation by rail tank car is conducted in a manner
that protects public safety and the environment. Additionally, PHMSA's
decision in this Final Rule to adjust pertinent HMR requirements on a
time-limited basis and before any rail tank car transportation of LNG
commences (or is likely to commence), minimizes the risk of stranded
investments or lost business opportunities for regulated entities
should PHMSA's ongoing evaluation of the safety and environmental risks
and benefits merit imposing additional or conflicting safety
requirements in the companion rulemaking under RIN 2137-AF54.
    In addition, the final rule addresses any potential public safety
and environmental risks from rail tank car transportation of LNG via a
generic, nationwide, time-limited suspension following notice-and-
comment rulemaking is a more appropriate approach than utilizing the
emergency order authority recommended by RSI. The July 2020 Final Rule
was a legislative rule that itself was the product of notice-and-
comment rulemaking, and the APA establishes a presumption that a
subsequent legislative rule providing for its modification (to include
its temporary suspension) should similarly involve notice-and comment
rulemaking. See 5 U.S.C. 553. In addition, PHMSA's emergency order
authority may be difficult to assert on a time-limited, precautionary,
nationwide basis like the temporary suspension adopted in this Final
Rule. Each of PHMSA's Sec.  107.339 emergency order authority and the
Secretary`s authority to address imminent hazards under 49 U.S.C.
5122(b) are seldom exercised. A finding of ``imminent harm'' may make
it more difficult for any controls addressing that harm to be removed
later based on

PHMSA's evaluation of whether and how to amend pertinent HMR
requirements in a companion rulemaking under RIN 2137-AF54.

J. Comments Beyond the Scope of This Rulemaking

    PHMSA received miscellaneous comments beyond the scope of this
rulemaking. These comments pertained to concerns regarding PHMSA's
process in developing, and reasoning in adopting, the July 2020 Final
Rule; concerns with the adequacy of conditions imposed by PHMSA within
DOT-SP 20534 issued to ETS in 2019; a requested ban on fracking (the
process of hydraulic fracturing to extract oil or gas) and all fossil
fuels; and additional miscellaneous comments unrelated to this
rulemaking or rail tank car transportation of LNG. A number of
commentors requested repeal of any existing regulatory approvals or
regulatory provisions--whether by FRA or PHMSA--authorizing rail
transportation of LNG.

PHMSA Response

    Although PHMSA appreciates the concerns raised by the commenters
that the NPRM's proposal to suspend the transportation of LNG by rail
tank car authorized by the July 2020 Final Rule did not go far enough
to protect public safety and the environment, PHMSA declines to adopt
their far-reaching recommendations in this proceeding. However, PHMSA
encourages those stakeholders to consider submitting comments in
response to any future notice of proposed rulemaking in PHMSA's
companion rulemaking under RIN 2137-AF54, as well as to engage other
Federal and State regulatory authorities with jurisdictional
responsibilities for the issues they asked PHMSA to address.

IV. Regulatory Analyses and Notices

A. Statutory/Legal Authority

    Statutory authority for this final rule is provided by the HMTA.
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.'' The Secretary has delegated the authority granted in the
HMTA to the PHMSA Administrator at Sec.  1.97(b).

B. Executive Orders 12866 and 14094, and DOT Regulatory Policies and
Procedures

    Executive Order 12866 (``Regulatory Planning and Review''),\49\ as
amended by Executive Order 14094 (``Modernizing Regulatory
Review''),\50\ requires that agencies ``should assess all costs and
benefits of available regulatory alternatives, including the
alternative of not regulating.'' Agencies should consider quantifiable
measures and qualitative measures of costs and benefits that are
difficult to quantify. Further, Executive Order 12866 requires that
``agencies should select those [regulatory] approaches that maximize
net benefits (including potential economic, environmental, public
health and safety, and other advantages; distributive impacts; and
equity), unless a statute requires another regulatory approach.''
Similarly, DOT Order 2100.6A (``Rulemaking and Guidance Procedures'')
requires that regulations issued by PHMSA and other DOT Operating
Administrations should consider an assessment of the potential
benefits, costs, and other important impacts of the proposed action and
should quantify (to the extent practicable) the benefits, costs, and
any significant distributional impacts, including any environmental
impacts.
---------------------------------------------------------------------------

    \49\ 58 FR 51735 (Oct. 4, 1993).
    \50\ 88 FR 21879 (April 11, 2023).
---------------------------------------------------------------------------

    Executive Order 12866 and DOT Order 2100.6A require that PHMSA
submit ``significant regulatory actions'' to the Office of Management
and Budget (OMB) for review. Executive Order 14094 amended Executive
Order 12866, which defines significant regulatory actions. This
rulemaking is considered a significant regulatory action under section
3(f) of Executive Order 12866 as amended by Executive Order 14094. This
final rule has, therefore, been reviewed by OMB.
    PHMSA concludes that the temporary suspension of transporting LNG
by rail tank car is not expected to have an economic impact because LNG
transport by rail tank car is not expected to occur during the
suspension period. As explained in section III.D above, since issuance
of the July 2020 Final Rule, the commercial prospects for rail tank car
transportation of LNG have become increasingly unlikely. LNG has not
been transported in any rail tank cars (whether pursuant to the July
2020 Final Rule, SP issued by PHMSA, or FRA approval), and PHMSA is
unaware of any planned movements in the near future. Indeed, the
development of the necessary infrastructure--including construction of
DOT-113C120W9 tank cars, loading and unloading facilities, vessel
handling facilities if sea transport is required, liquification
facilities, and regasification facilities--to transport LNG by rail as
authorized by the July 2020 Final Rule demands significant financial
investment, long-term commitment, and considerable planning associated
with constructing a new LNG tank car fleet (which construction may
itself be subject to delays because of limited capacity in the rail car
manufacturing industry). PHMSA is unaware of any orders having been
placed for the manufacture of new DOT-113C120W9 tank cars for
commercial LNG service. This absence of commercial demand occurred
despite the highest prices for domestic U.S. natural gas markets and
LNG export markets in nearly a decade.\51\ Additionally, it appears LNG
export prices have risen faster than the domestic price which has
resulted in a substantial increase in US LNG exports over the last
decade. However, the increase in export capacity does not appear to
have translated into increased demand for tank cars, possibly due to
the majority of the increase in liquefication capacity occurring at
waterfront LNG facilities.\52\
---------------------------------------------------------------------------

    \51\ See EIA, ``Price of U.S. Liquefied Natural Gas Exports'',
https://www.eia.gov/dnav/ng/hist/n9133us3m.htm (last accessed May
24, 2023); EIA, ``Average Cost of Wholesale U.S. Natural Gas in 2022
Highest Since 2008'', https://www.eia.gov/todayinenergy/
detail.php?id=55119#:~:text=In%202022%2C%20the%20wholesale%20U.S.,on%
20data%20from%20Refinitiv%20Eikon (last accessed May 24, 2023).
    \52\ For approved and under construction U.S. LNG projects see
EIA, ``U.S. LNG export capacity to grow as three additional projects
begin construction'', https://www.eia.gov/todayinenergy/detail.php?id=53719 (last accessed June 28, 2023).
---------------------------------------------------------------------------

    PHMSA expects no economic impact due to the temporary suspension.
Indeed, PHMSA's temporary suspension may in fact reduce economic burden
by discouraging a shipper from ordering rail tank cars compliant with
the July 2020 Final Rule when the companion rulemaking (under RIN 2137-
AF54) may adopt different requirements. Additionally, should any
potential shippers need to transport LNG by rail tank car during the
suspension period, they could avail themselves of the PHMSA SP or FRA
approval processes for such transport.\53\ Further, temporary

suspension guarantees avoidance of potential adverse public safety and
environmental impacts (including, but not limited to, contribution of
direct and indirect GHG emissions) that could have arisen from rail
tank car transportation of LNG under the HMR. Lastly, the limited
duration of the suspension will also mitigate any potential adverse
economic, public safety, or environmental impacts that could arise in
the unlikely event that demand for rail tank car transportation under
the July 2020 Final Rule would have materialized during the suspension
period in the absence of this final rule.
---------------------------------------------------------------------------

    \53\ As noted earlier in this final rule, PHMSA previously
denied an application for renewal of a special permit, in part, on
the basis that the application for renewal did not discuss any of
the concerns raised in the NPRM in this proceeding. PHMSA will
consider all applications for a special permit that meet the
requirements set forth in 49 CFR 107, Subpart B and notes that each
special permit application is considered on its own merits.
---------------------------------------------------------------------------

    In addition to the PHMSA SP and FRA approval alternatives, shippers
could transport LNG by highway via MC-338 insulated cargo tanks. All of
these alternatives for LNG shippers would involve higher costs than
rail transportation, but they are available in the unlikely case that
market conditions evolve to warrant LNG transportation prior to June
30, 2025, or the completion of the companion rulemaking.\54\
---------------------------------------------------------------------------

    \54\ Id. at 33-34, 56 (discussing higher direct GHG emissions
from highway transportation) and 37-38 (discussing higher risk of
crashes from highway transportation).
---------------------------------------------------------------------------

C. Executive Order 13132

    PHMSA analyzed this rulemaking in accordance with the principles
and criteria contained in Executive Order 13132 (``Federalism'') \55\
and its implementing Presidential Memorandum (''Preemption'').\56\
Executive Order 13132 requires agencies to assure meaningful and timely
input by State and local officials in the development of regulatory
policies that may have ``substantial direct effects on the states, on
the relationship between the national government and the states, or on
the distribution of power and responsibilities among the various levels
of government.''
---------------------------------------------------------------------------

    \55\ 64 FR 43255 (Aug. 10, 1999).
    \56\ 74 FR 24693 (May 22, 2009).
---------------------------------------------------------------------------

    This rulemaking may preempt State, local, and Native American Tribe
requirements, but does not contain any regulation that has substantial
direct effects on the States, the relationship between the national
government and the States, or the distribution of power and
responsibilities among the various levels of government.
    The HMTA contains an express preemption provision at 49
U.S.C.5125(b) that preempts State, local, and Tribal requirements on
certain covered subjects, unless the non-Federal requirements are
``substantively the same'' as the Federal requirements, including the
following:
    (1) the designation, description, and classification of hazardous
material;
    (2) the packing, repacking, handling, labeling, marking, and
placarding of hazardous material;
    (3) the preparation, execution, and use of shipping documents
related to hazardous material and requirements related to the number,
contents, and placement of those documents;
    (4) the written notification, recording, and reporting of the
unintentional release in transportation of hazardous material; and
    (5) the design, manufacture, fabrication, inspection, marking,
maintenance, recondition, repair, or testing of a packaging or
container represented, marked, certified, or sold as qualified for use
in transporting hazardous material in commerce.
    This final rule addresses subject items (2) and (5) above, which
are covered subjects, and therefore, non-Federal requirements that fail
to meet the ``substantively the same'' standard are vulnerable to
preemption under the Federal hazmat law. Moreover, PHMSA will continue
to make preemption determinations applicable to specific non-Federal
requirements on a case-by-case basis, using the obstacle, dual
compliance, and covered subjects tests provided in Federal hazmat law.

D. Executive Order 13175

    PHMSA analyzed this rulemaking in accordance with the principles
and criteria contained in Executive Order 13175 and DOT Order 5301.1
(``Department of Transportation Policies, Programs, and Procedures
Affecting American Indians, Alaska Natives, and Tribes''). Executive
Order 13175 and DOT Order 5301.1 require DOT Operating Administrations
to assure meaningful and timely input from Native American Tribal
government representatives in the development of rules that
significantly or uniquely affect Tribal communities by imposing
``substantial direct compliance costs'' or ``substantial direct
effects'' on such communities or the relationship and distribution of
power between the Federal government and Tribes.
    In addition to the petitions filed by the environmental groups and
State attorneys general mentioned above, the Puyallup Tribe also
challenged the July 2020 Final Rule and alleged violations of the
Tribal consultation protocols under the National Historic Preservation
Act and Executive Order 13175 and disparate impacts on the Tribe in
violation of Executive Order 12898 and Title VI of the Civil Rights Act
of 1964.
    PHMSA assessed the impact of this final rule and concluded that it
will not significantly or uniquely affect Tribal communities or Tribal
governments. This rulemaking does not impose substantial compliance
costs on Tribal governments or communities, nor does it mandate Tribal
action. Insofar as PHMSA expects the final rule will not adversely
affect the safe transportation of hazardous materials generally, PHMSA
does not expect it will entail disproportionately high adverse risks
for Tribal communities. This final rule could in fact reduce risks to
Tribal communities, as it could avoid the release of hazardous
materials (in particular, LNG) by railroad in the vicinity of Tribal
communities. For these reasons, PHMSA has concluded that the funding
and consultation requirements of Executive Order 13175 and DOT Order
5301.1 do not apply.

E. Regulatory Flexibility Act and Executive Order 13272

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
agencies to consider whether a rulemaking would have a ``significant
economic impact on a substantial number of small entities'' to include
small businesses, not-for-profit organizations that are independently
owned and operated and are not dominant in their fields, and
governmental jurisdictions with populations under 50,000. The
Regulatory Flexibility Act directs agencies to establish exceptions and
differing compliance standards for small businesses, where possible to
do so and still meet the objectives of applicable regulatory statutes.
Executive Order 13272 (``Proper Consideration of Small Entities in
Agency Rulemaking'') \57\ requires agencies to establish procedures and
policies to promote compliance with the Regulatory Flexibility Act and
to ``thoroughly review draft rules to assess and take appropriate
account of the potential impact'' of the rules on small businesses,
governmental jurisdictions, and small organizations. The DOT posts its
implementing guidance on a dedicated web page.\58\
---------------------------------------------------------------------------

    \57\ 67 FR 53461 (Aug. 16, 2002).
    \58\ DOT, ``Rulemaking Requirements Related to Small Entities,''
https://www.transportation.gov/regulations/rulemaking-requirements-concerning-small-entities (last visited Jun. 17, 2021).
---------------------------------------------------------------------------

    This rulemaking has been developed in accordance with Executive
Order 13272 and DOT's procedures and policies to promote compliance
with the Regulatory Flexibility Act and ensure that potential impacts
of draft rules on

small entities are properly considered. Consistent with the analysis
above, PHMSA certifies that the temporary suspension of the July 2020
Final Rule will not have a significant economic impact on a substantial
number of small entities.

F. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.),
no person is required to respond to any 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. PHMSA currently accounts for security plan burdens under
OMB Control Number 2137-0612, ``Hazardous Materials Security Plans.''
In the July 2020 Final Rule, PHMSA required any rail carrier
transporting a tank car quantity of UN1972 (Methane, refrigerated
liquid (cryogenic liquid) or Natural gas, refrigerated liquid
(cryogenic liquid)) to comply with the additional rail transportation
safety and security planning requirements. Following publication of the
July 2020 Final Rule, PHMSA published both a 60-day \59\ and 30-day
\60\ notice and comment period to provide an opportunity for public
comment on the estimated increase in burden. PHMSA did not receive
comments to either notice. Subsequently, PHMSA submitted the revision
to OMB and received approval for the increased burden. As PHMSA
implements a temporary suspension of the authorization to ship LNG by
rail tank car pursuant to July 2020 Final Rule, PHMSA estimates this
rulemaking would result in a decrease in the burden associated with
additional rail transportation safety and security planning
requirements imposed by the July 2020 Final Rule. Because this final
rule contains revisions to an information collection approved under OMB
control number 2137-0612 that are subject to review by OMB under the
PRA Act, PHMSA has submitted the revised information collection to OMB
and will publish a subsequent Federal Register notice to advise the
public when OMB has approved the revisions. The following reflects this
estimated decrease in burden:
---------------------------------------------------------------------------

    \59\ 85 FR 46220 (Jul. 31, 2020).
    \60\ 85 FR 73128 (Nov. 16, 2020).
    \61\ Occupation labor rates based on 2022 Occupational and
Employment Statistics Survey (OES) for ``Transportation, Storage,
and Distribution Managers (11-3071)'' in the Transportation and
Warehousing industry. See https://www.bls.gov/oes/current/oes113071.htm. The hourly mean wage for this occupation ($52.36) is
adjusted to reflect the total costs of employee compensation based
on the BLS Employer Costs for Employee Compensation Summary, which
indicates that wages for civilian workers are 69.0 percent of total
compensation (total wage = wage rate/wage % of total compensation).
    \62\ Ibid.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Decrease in               Decrease in  Decrease in
                                                                Change in   Decrease in     Burden        total       Salary        total        total
              Decrease in primary route analysis                number of     number of   hours per      burden      cost per      salary       burden
                                                                railroads      routes       route        hours      hour \61\       cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class I Railroads............................................            0          (2)           80        (160)       $75.88    ($12,141)           $0
Class II Railroads...........................................            0          (1)           80         (80)        75.88      (6,071)            0
Class III Railroads..........................................            0          (1)           40         (40)        75.88      (3,035)            0
                                                              ------------------------------------------------------------------------------------------
    Total....................................................            0          (4)  ...........        (280)  ...........     (21,248)            0
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                                Decrease in               Decrease in  Decrease in
                                                                Change in   Decrease in     Burden        total       Salary        total        total
             Decrease in alternate route analysis               number of     number of   hours per      burden      cost per      salary       burden
                                                                railroads      routes       route        hours      hour \62\       cost         cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Class I Railroads............................................            0          (2)          120        (240)       $75.88    ($18,212)           $0
Class II Railroads...........................................            0          (1)          120        (120)        75.88      (9,106)            0
Class III Railroads..........................................            0          (1)           40         (40)        75.88      (3,035)            0
                                                              ------------------------------------------------------------------------------------------
    Total....................................................            0          (4)  ...........        (400)  ...........     (30,354)            0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Total Annual Decrease in Number of Respondents: 0.
    Total Annual Decrease in Number of Response: 8.
    Total Annual Decrease in Burden Hours: 680.
    Total Annual Decrease in Salary Costs: $51,598.
    Total Annual Decrease in Burden Costs: $0.

G. Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (UMRA; 2 U.S.C. 1501 et
seq.) requires agencies to assess the effects of Federal regulatory
actions on State, local, and Tribal governments, and the private
sector. For any notice of proposed rulemaking or final rule that
includes a Federal mandate that may result in the expenditure by State,
local, and Tribal governments, or by the private sector of $100 million
or more in 1996 dollars in any given year, the agency must prepare,
amongst other things, a written statement that qualitatively and
quantitatively assesses the costs and benefits of the Federal mandate.
    This rulemaking does not impose unfunded mandates under the UMRA.
As explained above, it is not expected to result in costs of $100
million or more in 1996 dollars on either State, local, or Tribal
governments, in the aggregate, or to the private sector in any one
year, and is the least burdensome alternative that achieves the
objective of the rule.

H. Environmental Assessment

    The National Environmental Policy Act of 1969 (NEPA), as amended
(42 U.S.C. 4321 et seq.),\63\ requires federal agencies to consider the
environmental impacts of their actions in the decision-making process.
NEPA requires Federal agencies to assess the environmental effects of
proposed Federal actions prior to making decisions and involve the
public in the decision-making process. Agencies must prepare an
environmental assessment (EA) for an action for which a categorical
exclusion is not applicable and is either unlikely to have significant
effects or when significance of the action is unknown. In accordance
with these requirements, an EA must briefly discuss: (1) the need for
the action; (2) the alternatives considered; (3) the environmental
impacts of the action and alternatives; and (4) a listing of the
agencies and persons consulted. If, after reviewing the EA and public
comments if

applicable, in response to a draft EA (DEA), an agency determines that
a proposed action will not have a significant impact on the human or
natural environment, it can conclude the NEPA analysis with a finding
of no significant impact (FONSI).
---------------------------------------------------------------------------

    \63\ See also 40 CFR parts 1501 to 1508.
---------------------------------------------------------------------------

(1) The Need for the Action
    PHMSA has determined that the recommendations from the TRB, its
ongoing research, and recent events stemming from the COVID-19 public
health emergency predicate the need to re-evaluate the amendments
authorized in the July 2020 Final Rule. Research activity that PHMSA
had expected would enhance its understanding of the risks attendant in
rail transportation of LNG has been delayed, and uncertainties have
increased in whether there will be any potential benefits, and in the
underlying economic dynamics bounding those risks (e.g., the quantity
of LNG that will move by rail, and the routes involved). Therefore,
PHMSA is amending the HMR to suspend authorization of LNG
transportation in a rail tank car pending further analysis and
completion of a companion rulemaking that will consider changes to the
conditions under which LNG could be moved by rail, to potentially
include additional safety, environmental, and environmental justice
protections. This action will provide PHMSA an opportunity to review
recent actions that could be obstacles to Administration policies
promoting public health and safety, the environment, and climate change
mitigation; and to evaluate the results of ongoing and delayed research
efforts to ensure the safe transportation of LNG by rail tank car.
(2) Alternatives to the Action
    In this rulemaking, PHMSA considered the following alternatives:
No Action Alternative
    If PHMSA were to select the No Action Alternative, current
regulations authorizing the transport of LNG in rail tank cars would
remain in effect and no provisions would be amended or added.
Therefore, the HMR would continue to authorize the transportation of
LNG in DOT-113C120W9 tank cars with a 9/16-inch outer tank composed of
TC-128B normalized steel. The following operational controls and safety
measures would also remain in effect:
     Each tank car must be operated in accordance with Sec.
173.319, which includes:
    [cir] testing of relief valves every 5 years
    [cir] annual replacement of rupture discs
    [cir] thermal integrity tests following an average daily pressure
rise during any shipment exceeding 3 psig per day
    [cir] other requirements specific to liquids in cryogenic tank
cars.
     49 CFR part 179, subpart F contains detailed design,
construction, and operational requirements for DOT-113C120W tank cars
with the specification suffix ``9'' to be used in rail transportation
of LNG.
     Trains transporting 20 or more tank cars of LNG in a
block, or 35 such tank cars throughout the train, must be equipped and
operated with a two-way EOT device, pursuant to the requirements in 49
CFR part 232, subpart E, or a distributed-power (DP) locomotive as
defined in 49 CFR 229.5.
     The offeror must remotely monitor each tank car while in
transportation for pressure and location.
     The offeror must notify the carrier if the tank pressure
rise exceeds 3 psig over any 24-hour period.
     Trains transporting any quantity of LNG must comply with
the route planning requirements in Sec.  172.820, which requires rail
carriers transporting LNG by rail tank car to conduct an annual route
analysis considering, at a minimum, 27 risk factors listed in appendix
D to part 172.
     Each LNG tank car must have:
    [cir] a reclosing pressure relief device with a start-to-discharge
pressure of 75 psig;
    [cir] a non-reclosing pressure relief device set to discharge at
the tank test pressure;
    [cir] a maximum permitted filling density (percent by weight) of
37.3 percent;
    [cir] a design service temperature of -162 [deg]C (-260 [deg]F);
    [cir] a maximum pressure when offered for transportation not to
exceed 15 psig;
    [cir] a minimum steel thickness, after forming, on the outer tank
shell and tank heads of 9/16 inch, which is thicker than the
requirement for other DOT-113C120W tank cars; and
    [cir] an outer tank shell constructed of AAR TC-128, Grade B
normalized steel plate as specified in Sec.  179.100-7(a), which has a
higher tensile strength of 81,000 psi which makes it stronger than that
used for the existing DOT-113 outer shell.
    The final environmental analysis (FEA), which--except for the
finding of no significant impact therein--is incorporated by reference
into this final rule, examined how the above requirements were imposed
to reduce risks to human safety and the environment from the
transportation of LNG in rail tank cars and incidents occurring as a
result of this transportation.\64\ The No Action Alternative would
allow the shipment of LNG in rail tank cars, and PHMSA could continue
to consider whether additional mitigations are necessary based on the
expert recommendations from the TRB Phase I and Phase II Reports and
results from ongoing, delayed testing and evaluation activity by the
LNG Task Force.
---------------------------------------------------------------------------

    \64\ See Docket No. PHMSA-2018-0025-0478.
---------------------------------------------------------------------------

Selected Action Alternative
    This Selected Action Alternative as it appears in this final rule,
adding a new special provision to the HMR that would suspend the
transportation of LNG in rail tank cars while PHMSA undergoes a
comprehensive review to ensure the safe transportation of LNG by rail
in accordance with ongoing research and incorporation of
recommendations from the TRB, as well as the best available economic
analysis and science. Rail transport of LNG would be permitted only as
authorized by the conditions of a PHMSA special permit (49 CFR 107.105)
that would apply only to the railroad(s) operating under such a permit
or in a portable tank secured to a rail car pursuant to the conditions
of an FRA approval (49 CFR 174.63). The amendments included in this
alternative are more fully discussed in the preamble and regulatory
text sections of this final rule.
(3) Probable Environmental Impacts of the Action and Alternatives
No Action Alternative
    If PHMSA selected the No Action Alternative, current regulations
would remain in place without suspension. As described in the FEA, the
No Action Alternative could pose risks to public safety and the
environment because the authorization under the HMR to offer shipments
of LNG by rail tank car would remain in place. LNG poses potential
hazards as a cryogenic liquefied flammable gas, including cryogenic
temperature exposure, fire, and asphyxiation hazards. Transportation of
any hazardous material introduces risk to safety and the environment,
and each additional tank car increases the overall risk of an incident
occurring and the quantity that could be released in the event of a
derailment. While this is true for all hazardous materials
transportation, PHMSA seeks to better understand the risks inherent to
LNG transportation in the DOT-113C120W9, especially given that the July
2020 Final Rule authorized large quantities to be transported in rail
cars. The July 2020 Final Rule FEA

explained that transporting LNG in rail tank cars is expected to be
safer than transporting LNG by truck on highways--however, it is
possible that allowing LNG to be transported in rail tank cars would
increase the amount of LNG transported, and therefore a direct
comparison of the risks by rail and highway may be misleading. PHMSA
will also consider, based on existing rail infrastructure locations and
anticipated routes, whether transportation of LNG in rail tank cars
could pose disproportionate harm or risk to communities of color or
low-income communities. As described in the preamble to this final
rule, various market and other uncertainties exist regarding specific
routes that may be used for the transport of LNG by rail tank car.
    No release of LNG vapor to the environment is allowed during the
normal transportation of LNG in tank cars whether by roadway or
railway. However, methane is odorless, and LNG contains no odorant,
making detection of a release resulting from an incident difficult
without a detection device. Releases of LNG due to venting or to
accidents/incidents, without immediate ignition, involving either an
MC-338 cargo tank, a portable tank, or a DOT-113C120W9 rail tank car
have the potential to create flammable vapor clouds of natural gas
because recently gasified LNG does not dissipate in the atmosphere as
quickly as ambient-temperature natural gas. Large releases of LNG due
to the breach of the inner tank of these transport vessels could result
in a pool fire, vapor fire, and explosion hazards if methane vapors
become confined. These flammability hazards pose a risk of higher
potential impacts than localized cryogenic hazards.
    Some commenters on the July 2020 Final Rule argued that the
authorization of LNG by rail would further incentivize the production
of natural gas, which is a fossil fuel. Methane has much greater heat
trapping potential in the atmosphere than carbon dioxide in the short
term. Thus, methane is considered a potent GHG, and comprises a
significant portion of the United States' GHG emissions. While methane
leaks are highly unlikely during transportation in the DOT-113C120W9
due to tank car design, increased natural gas production could lead to
indirect environmental impacts of increased methane emissions released
during production, loading and unloading, or at other times during its
life cycle. In considering whether the authorization could further
incentivize the production of natural gas, PHMSA will consider the
scope of existing natural gas production and transportation via natural
gas pipeline and other modes of transportation.
    The FEA for the July 2020 Final Rule discussed potential
environmental benefits that could be associated with the authorization
to transport LNG by rail tank car. First, PHMSA discussed that the
authorization could allow for the delivery of natural gas to locations
dependent on more polluting energy forms, such as coal, diesel, heating
oil, or firewood.\65\ Use of natural gas in such areas, whether foreign
or domestic, could allow for a reduction in polluting and climate-
warming emissions. Additionally, the authorization to transport LNG by
rail tank car could potentially replace some shipments of LNG by
highway. As discussed in the FEA for the July 2020 Final Rule, highway
transportation is less efficient in comparison to rail transportation
when considering fuel use, combustion emissions, and climate change
impacts. However, in order to supplement, reduce, or replace highway
transportation, rail infrastructure would need to exist between the
origin and destination locations or be developed. Finally, the FEA
explored industry claims that the authorization could incentivize the
capture, storage, and liquefaction of natural gas over venting and
flaring of natural gas during oil production and other industrial
activities, in areas where natural gas pipeline capacity is
unavailable. Facilitating the productive end use of by-product methane
could reduce the venting and flaring of natural gas, which causes
methane and carbon dioxide emissions. Similar to other above-described
benefits, it is difficult to predict the extent to which industries
would invest in the equipment, technology, and expertise necessary to
pursue natural gas capture, storage, and liquefaction necessary to
pursue LNG transportation by rail. A suspension of the authorization to
transport LNG by rail could curtail these potential benefits in the
near term.
---------------------------------------------------------------------------

    \65\ See, e.g., EPA, Press Release, ``State of Alaska and
Fairbanks North Star Borough receive $14.7 Million EPA grant to
improve air quality,'' (Nov. 2020), https://www.epa.gov/newsreleases/state-alaska-and-fairbanks-north-star-borough-receive-147-million-epa-grant-improve-air (``The Borough will use the grant
funds to continue a woodstove changeout and conversion program
focused on converting more wood burning appliances to cleaner
burning liquid or gas-fueled heating appliances, which have a very
low output of particulate pollution and higher fuel efficiency. Wood
smoke contributes up to 60 to 80 percent of fine particle pollution
levels measured in the Fairbanks North Star Borough.'').
---------------------------------------------------------------------------

Selected Action Alternative
    Under this Selected Action Alternative, PHMSA will amend the HMR to
suspend authorization of LNG transportation in rail tank cars pending
further analysis and completion of a companion rulemaking or June 30,
2025, whichever is earlier. Therefore, the HMR will not authorize
shippers to transport bulk quantities of LNG by rail tank car. Instead,
LNG by rail will only be permitted pursuant to a DOT SP or in portable
tanks subject to FRA approval. The Selected Action Alternative will
avoid the risks that transportation of LNG in rail tank cars, and
particularly potential derailments of rail cars transporting LNG, could
pose to public safety and the environment. PHMSA will be able to
further consider whether the transportation of LNG could pose
disproportionately high or adverse effects on minority and low income
communities, which have historically borne the brunt of deleterious
Federal policy decisions. PHMSA will also be able to further consider
whether shipping LNG in rail tank cars is consistent with public health
and safety, environmental protection, including climate change
mitigation; and to evaluate the results of ongoing and delayed research
efforts and collaboration as part of an accompanying rulemaking under
RIN 2137-AF54.
    However, as noted above and in the FEA for the July 2020 Final
Rule, the authorization to transport LNG in DOT-113C120W9 specification
tank cars could have yielded some environmental benefits or
improvements, which will not be realized during the suspension period.
The scope of potential environmental effects of suspending the July
2020 Final Rule depend on whether use of MC-338 for transportation of
LNG increases as a result of the suspension of the DOT-113C120W9 or
whether environmental benefits of the authorization have been realized
that would not occur during the suspension. PHMSA is unaware of any
order from a commercial entity for a new DOT-113C120W9-specification
tank car for LNG service. Thus, no increased use of MC-338 tank cars
for LNG service is expected as a result of this suspension.
    In the unlikely event that the use of MC-338 cargo tank cars for
LNG transportation increases due to the inability to transport LNG in
rail tank cars, a few environmental effects could result. First,
highway transportation of LNG requires more diesel engine vehicles and
would result in more emissions, including volatile organic compounds,
carbon dioxide, nitrogen

oxides, sulfur oxides, and particulate matter of 10 microns or less.
Next, increased highway congestion also increases the potential for a
highway incident involving LNG, depending on the extent of the
increase. In the event highway transportation increases as a result of
this rule, these environmental effects would be speculative and minor,
and PHMSA finds that they are warranted during the suspension period
while PHMSA undertakes a full analysis of risks inherent in
transporting LNG in rail tank cars.
    The July 2020 Final Rule FEA noted that the transportation of LNG
could allow natural gas to reach markets that lack this access and
could potentially reduce and replace the burning of more polluting and
carbon-intensive sources of energy such as coal, wood, and diesel. As
noted above, the July 2020 Final Rule has not resulted in these
replacements or emissions reductions, such that the suspension would
not reverse any such benefits. The July 2020 Final Rule FEA also
explained that authorization to transport LNG in rail tank cars had the
potential to reduce the wasteful and carbon-intensive practice of
natural gas flaring because it could provide a market for by-product
natural gas in areas where natural gas pipeline transportation is not
available. The July 2020 Final Rule has not resulted in this benefit,
and there is no indication that this benefit would have occurred
anytime in the foreseeable future in the event that it remained
available. Thus, PHMSA does not anticipate negative environmental
effects from the suspension of the July 2020 Final Rule.
(4) Agencies and Persons Consulted During the Consideration Process
    PHMSA has coordinated with FRA, the Federal Aviation
Administration, the Federal Motor Carrier Safety Administration, and
the U.S. Coast Guard in the development of this rule. The final rule
has also been made available to other Federal agencies within the
interagency review process contemplated under Executive Order 12866.
(5) Environmental Justice
    Executive Order 12898 (``Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations''),\66\
directs Federal agencies to take appropriate and necessary steps to
identify and address disproportionately high and adverse effects of
Federal actions on the health or environment of minority and low-income
populations to the greatest extent practicable and permitted by law.
DOT Order 5610.2C (``U.S. Department of Transportation Actions to
Address Environmental Justice in Minority Populations and Low-Income
Populations'') establishes departmental procedures for effectuating
Executive Order 12898 promoting the principles of environmental justice
through full consideration of environmental justice principles
throughout planning and decision-making processes in the development of
programs, policies, and activities--including PHMSA rulemaking.
---------------------------------------------------------------------------

    \66\ 59 FR 7629 (Feb. 11, 1994).
---------------------------------------------------------------------------

    PHMSA has evaluated this final rule under DOT Order 5610.2C and
Executive Order 12898 and has determined it will not cause
disproportionately high and adverse human health and environmental
effects on minority and low-income populations. The final rule is
national in scope; it is neither directed toward a particular
population, region, or community, nor is it expected to result in any
adverse environmental or health impact to any particular population,
region, or community.
    This final rule could reduce risks to minority populations, low-
income populations, or other underserved and disadvantaged communities.
Insofar as these HMR amendments could avoid the release of hazardous
materials, the final rule could reduce risks to populations and
communities--including any minority, low-income, underserved, and
disadvantaged populations and communities--in the vicinity of railroad
lines. However, as noted in the FEA for the July 2020 Final Rule,
access to LNG may result in potential economic benefits for underserved
communities because of the efficiencies of transporting LNG by rail,
and thereby domestic production, distribution, and consumption of
natural gas could increase. These potential economic benefits that
could result from the transportation of bulk quantities of LNG by rail
car would not be realized by underserved communities in the short term.
In addition, to the extent that suspending shipment of LNG by rail tank
car could increase demand for shipping LNG by truck on highways, these
HMR amendments could increase risks to environmental justice
communities in the vicinity of those highways.
    Further, this rule advances the policy goals of the most recent
environmental justice Executive Order 14096--Revitalizing Our Nation's
Commitment to Environmental Justice for All,\67\ which deepens the
Administration's whole-of-government approach to environmental justice
to better protect communities from pollution and other environmental
justice concerns.