The Pipeline and Hazardous Material Safety Administration (PHMSA) recently issued a proposed rule that aims to expand oil spill response plan (OSRP) requirements for railroads transporting oil.^[1] Stakeholders have already provided input through comments on an advanced notice of proposed rulemaking issued by PHMSA in 2014.^[2] However, the new proposal offers a more targeted, and potentially more effective, opportunity to address important open issues.

The Proposal

The proposed rule continues PHMSA’s response to a series of high-profile derailments of trains carrying crude oil and is a companion to the “crude-by-rail” rule issued in May 2015.^[3] It also tracks an emergency order issued by PHMSA in 2014, in which the Secretary found that “a pattern of releases and fires involving petroleum crude oil shipments originating from the Bakken and being transported by rail” constituted “an imminent hazard to the safe transportation of hazardous materials.”^[4] Key elements of the proposed rule include: (a) requiring comprehensive OSRPs for high hazard flammable trains (HHFTs), i.e., any train transporting either 20 or more loaded tank cars of liquid petroleum oil in a continuous block or 35 such cars anywhere in the train; (b) articulating in more detail and enhancing the requirements for comprehensive OSRPs; (c) requiring more extensive notification and reporting on HHFTs to state and tribal emergency response commissions (SERCs/TERCs); and (d) aligning approved flammable liquid test methods with industry practice.

The Opportunity – Open Issues

The preamble to the proposed rule contains lengthy descriptions of the new requirements and how they were guided by input from the public, first responders, railroads, the National Transportation Safety Board, and other stakeholders. Yet there remain substantial open questions in key areas that stakeholders should review with interest:

• Protecting security-sensitive and confidential information^[5] – The proposed rule will require railroads to share more extensive transportation-planning information with SERCs/TERCs, and it places the responsibility for identifying security-sensitive and confidential information on the railroads so that SERCs/TERCs are “on notice” of such concerns. PHMSA “particularly invite[s]” input on whether this system will be effective at protecting sensitive information, including comments on whether SERCs/TERCs are the most effective points of contact for such information.
• Defining “high volume areas” – The proposed rule would impose more stringent requirements, including required response times shorter than 12 hours, for such areas, particularly those close to navigable waters. Input on whether the proposed scope of “high volume areas” is overly broad could reduce the burden on affected railroads and, by extension, the offerors whose transportation costs will likely share that burden.
• Setting response times – PHMSA seeks input on whether mandating a shorter (6 hours) response time for high volume areas will indeed reduce the consequences of incidents. Stakeholders are also invited to discuss whether PHMSA should offset the burden of high volume area requirements by reducing the required response time for all other areas.
• Availability of Response Resources – The proposed rule assumes that railroads will rely on U.S. Coast Guard certified oil spill response organizations (OSROs) and that the capacity of OSROs is sufficient to provide the expanded coverage that the rule will require. Stakeholder feedback on these assumptions will be important in ensuring whether the final rule reflects reality or merely wishful thinking.
• Establishing the compliance date – PHMSA proposes that railroads must be in compliance with the final rule 60 days after it is published in the Federal Register. The rule would prohibit HHFT movement until a railroad has either obtained approval of its OSRP or submitted its plan for approval accompanied by a certification that it has established or contracted for worst-case discharge response resources, suggesting that 60 days may not provide sufficient time to adjust to changes issued in the final rule.
• Cost-effectiveness – PHMSA acknowledges that it had difficulty quantifying certain benefits of the proposed rule, ultimately determining that the rule will be cost-effective if it “reduces the consequences of oil spills by 4.9%.”^[6] The energy and transportation sectors have already taken steps to improve crude-by-rail safety, which begs the question – is an additional 4.9% reduction in consequences realistic?

Additional requests for input are sprinkled throughout the proposed rule, but the issues outlined above highlight the extent to which PHMSA may consider additional refinements as it prepares the final rule. Stakeholders who will feel the impacts of the rule should consider whether to “double down” on their engagement efforts with PHMSA and other stakeholders, particularly to offer their recent experiences in improving oil transportation safety.

^[1] 81 Fed. Reg. 50,068 (July 29, 2016) (pre-publication version issued on July 13, 2016).

^[2] 79 Fed. Reg. 45,079 (Aug. 1, 2014).

^[3] 80 Fed. Reg. 26,643 (May 8, 2015).

^[4] Emergency Order (May 7, 2014), available at www.transportation.gov/briefing-room/emergency-order.

^[5] PHMSA notes that provision and protection of such information is mandated under the FAST Act. 81 Fed. Reg. at 50,108.

^[6] 81 Fed. Reg. at 50,070.