The Trump administration’s recent executive order, Promoting Energy Infrastructure and Economic Growth (April 10, 2019), signals potentially significant changes to the regulatory landscape for domestic energy infrastructure generally and LNG in particular. Among the notable features of the order (in addition to directives to EPA regarding Clean Water Act water quality certifications) are the provisions directing US DOT to (1) update its 49 C.F.R. Part 193 regulations for LNG facility safety and (2) issue regulations allowing LNG to be transported in approved rail tank cars. The order sets an ambitious deadline for these actions, requiring both to be completed by May 10, 2020.
Updates to LNG Safety Regulations
Part 193 LNG safety regulations govern the siting, design, installation or construction of LNG facilities, and they are largely based upon National Fire Protection Association Standard 59A (NFPA 59A), a consensus industry standard that is incorporated into Part 193 by reference. The order notes that current Part 193 regulations for LNG facilities “apply uniformly to small-scale peakshaving, satellite, temporary, and mobile facilities, as well as to large-scale import and export terminals.” Indeed, the Part 193 regulations were originally issued nearly 40 years ago—and have not been revised significantly since then to respond to the market shifts and innovations that have led to increasing interest in the development of large-scale LNG facilities.
In updating Part 193, the order directs DOT to use risk-based standards “to the maximum extent practicable.” This is consistent with DOT’s regulatory approach in other areas of transportation safety, such as its pipeline regulations in 49 C.F.R. Parts 190-195. While it is generally expected that DOT’s Part 193 efforts will focus on the incorporation of more a recent edition of NFPA 59A and potentially refine the exclusion zone approach in the Part 193 siting regulations, it remains to be seen whether DOT will take the opportunity to address a rulemaking mandate for small-scale LNG facilities that Congress included in the 2016 reauthorization of the Pipeline Safety Act. See S. 2276 (114th), PIPES Act of 2016 at Sec. 27(b) (requiring the Secretary of Transportation to “review and update the minimum safety standards prescribed pursuant to [49 U.S.C. 60103] for permanent, “small-scale liquefied natural gas pipeline facilities,” a term that is undefined in the statute or PHMSA regulations).
LNG Transport in Rail Tank Cars
The order also directs DOT to propose and finalize a rule permitting LNG to be transported in approved rail tank cars. This directive likely derived from a petition for rulemaking submitted to DOT in January 2017 by the Association of American Railroads (AAR) requesting a rule authorizing the transport of LNG by rail in DOT-113 tank cars. As AAR noted in its 2017 petition, “LNG is similar in all relevant properties to other hazardous materials that are currently authorized to be transported by rail.” The omission of LNG from DOT’s hazardous materials transportation regulations is thus likely a product of the fact that there has not previously been significant interest in LNG rail transport. DOT has apparently undertaken preliminary safety and economic reviews but has not yet published an ANPRM or any other documents in furtherance of the rulemaking. DOT’s most recent significant rulemakings report projects July 29, 2019, as the proposed rule publication date and September 27, 2019, as the end of the comment period on the proposed rule.