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ATLP Association Highlights: HazMat Blog

On May 7, 2021, the Colonial Pipeline Company learned it was the victim of a cybersecurity ransomware attack allegedly carried out by the criminal group known as “DarkSide.” DarkSide is a “ransomware-as-a-service” business believed to be headquartered in Russia, which loans out its malware to criminal affiliates who conduct cyberattacks on its behalf. DarkSide’s ransomware uses an encryption program to hold files and IT systems hostage in exchange for payment. The attack required Colonial Pipeline to take certain IT systems offline and temporarily halt all pipeline operations to ensure that the threat was contained.  The Colonial Pipeline is the largest pipeline system for refined oil products in the United States, spanning between Houston, Texas and Linden, New Jersey, and carries up to 100 million gallons per day of diesel, gasoline, home heating oil, and jet fuel.

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HazMat Regulatory Updates from the US and Canada

FRA Plans to Complete Impact Testing of Cryogenic Tank Cars in 2022

            The past decade has seen a marked increase in natural gas production in the United States.  This, in turn, has led to greater demand to transport products such as liquified natural gas (LNG) by rail and pipeline.  In 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA) granted the first special permit to transport LNG using a DOT-113C120W (DOT-113) tank car, which was issued to Energy Transport Solutions for service between Pennsylvania and New Jersey.  In 2020, PHMSA issued a Final Rule permitting the transportation of LNG by rail in the DOT-113 specification tank car.  The DOT-113 is a double-walled tank car (“tank-within-a-tank”) that is designed to transport cryogenic liquids such as LNG.

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ATLP Highlights – Hazmat

In a year like no other, 2020 saw the advancement of numerous pipeline safety initiatives at the Pipeline and Hazardous Materials Safety Administration (PHMSA).  In early 2020, PHMSA issued a Final Rule adopting safety standards applicable to underground natural gas storage facilities, which was required by the PIPES Act of 2016.  Among other things, the Final Rule requires operators to apply integrity and risk management principles to storage facilities, narrows certain reporting requirements, and clarifies compliance with respect to non-mandatory industry practices.  In 2020, PHMSA also published four major Notices of Proposed Rulemaking (NPRM): Liquid Pipeline Regulatory Reform, which would modify the agency’s enforcement and regulatory procedures, regulations governing facility response plans for oil pipelines, and safety regulations applicable to hazardous liquid pipelines; Gas Pipeline Regulatory Reform, which would modify a number of reporting and safety regulations applicable to gas pipelines; Requirements for Valves and Rupture Identification and Mitigation, which proposes new requirements to install remote-control valves, automatic shutoff valves, or equivalent technology on newly-constructed or entirely-replaced onshore gas transmission and certain hazardous liquid pipelines, and would impose new rupture and mitigation standards; and Class Location Requirements, which would permit an alternative approach to managing the safety of certain gas transmission pipelines whose class locations change from Class 1 to Class 3.  The comment deadline has closed for each proposed rule.  

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DOT Publishes Guidance on Revised Federal Drug Testing Custody and Control Form

The U.S. Department of Transportation (DOT) requires drug and alcohol testing for personnel performing safety-sensitive functions in the transportation industry, such as truck drivers holding a Commercial Driver’s License who operate a truck that requires a hazardous materials placard (49 C.F.R. Part 382) and operators of natural gas and other hazardous liquids pipelines (49 C.F.R. Part 199).

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PHMSA Commits Over $100 Million to Improving Pipeline and Hazardous Materials Safety

On October 5, 2020, the DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) announced an award package totaling $7,810,213 to fund 10 pipeline safety research and development (R&D) projects. The projects will support pipeline safety priorities including Damage/Threat Prevention, Leak Detection, Anomaly Detection/Characterization, Liquefied Natural Gas (LNG), and Improved Materials. The projects were selected by the Merit Review Panel, which consists of 28 members from PHMSA, the Federal Energy Regulatory Commission, and members of the pipeline and LNG industry.

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Department of Energy Study Finds Bakken Crude No More Volatile than Crude from Other Regions

On April 20, the U.S. Department of Energy (DOE) issued a report to Congress entitled “Crude Oil Characterization Research Study.”  The impetus for this study dates back to the 2013 Lac Megantic tragedy and other derailments of trains carrying Bakken crude oil.  In 2015, the Pipeline and Hazardous Materials Safety Administration (PHMSA) and the Federal Railroad Administration adopted the Tank Car Standards and Operational Controls for High-Hazard Flammable Trains Final Rule.  That rule was grounded in the assumption that crude oil produced in the Bakken region is more flammable than crude produced in other areas, and it imposed additional requirements and restrictions on trains carrying Bakken crude.  Section 7309 of the Fixing America’s Surface Transportation Act, enacted later in 2015, provided for a study to determine the accuracy of this controversial assumption. 

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PHMSA Issues Determination and Notice Regarding Vapor Pressure of Crude Oil Transported by Rail

On May 11, PHMSA issued (1) an administrative determination that federal law preempts Washington State’s vapor pressure limit for crude oil in rail tank cars and (2) a notice withdrawing the agency’s Advance Notice of Proposed Rulemaking (ANPRM) regarding vapor pressure for crude oil transported by rail.

PHMSA provided three arguments in support of its preemption determination.  First, it concluded that Washington State’s vapor pressure requirement effectively creates a new class of crude oil subject to special requirements that are not substantively the same as the federal Hazardous Materials Regulations (HMR).  Similarly, PHMSA found that the State’s vapor pressure law imposes requirements on the handling of a hazardous material that are not substantively the same as the requirements of the HMR.  Finally, PHMSA determined that the Washington State vapor pressure requirement is an obstacle to accomplishing and carrying out the federal Hazardous Materials Transportation Act.  Under PHMSA’s regulations, Washington State has until May 31, 2020, to file a petition for reconsideration.

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DOT OIG Issues Recommendations to PHMSA on Siting Evaluations for LNG Facilities and Monitoring State Pipeline Safety Programs

On April 28, the DOT’s Office of Inspector General (OIG) published the results of its audit which assessed various PHMSA activities related to liquefied natural gas (LNG) facilities.  Specifically, the audit examined PHMSA’s (1) inspection of existing interstate LNG facilities, (2) review of applications for proposed new interstate LNG facilities, and (3) evaluation of state gas programs’ oversight of LNG facilities.

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Texas Railroad Commission Issues Notice to Pipeline Operators

On April 15, the Texas Railroad Commission (RRC) issued a notice to pipeline operators that, when applying for a new or amended T-4 permit to operate a pipeline in Texas, they are required to submit digital mapping shapefiles, including abandoned pipelines, through the RRC Online System using the Pipeline Online Permitting System.  The notice reiterates that federal pipeline safety regulations define an abandoned pipeline as one that has been “permanently removed from service.”  The notice explains that this information is required as part of “other information requested by the Commission” under 16 Texas Administrative Code § 3.70.

Hazmat Practice Pointer: Access Recent Hazmat Enforcement Actions through the U.S. DOT Office of Inspector General’s Website

A valuable resource for hazmat transportation practitioners is the US Department of Transportation - Office of Inspector General’s (“DOT-OIG”) website, www.oig.dot.gov, which provides valuable up to date information on recent hazmat transportation civil and criminal enforcement actions. Practitioners can stay informed of these developments in real-time by signing up for the DOT-OIG’s email notification list. In addition to enforcement cases, the OIG reports on audits and oversight results.

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US DOT Proposes Rule Regarding the Safe Transportation of Liquefied Natural Gas by Rail; Comments Due December 23, 2019

On October 18, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA), together with the Federal Railroad Administration (FRA) (both agencies of the US Department of Transportation (DOT)), issued a Notice of Proposed Rulemaking (NPRM) regarding the transportation of liquefied natural gas (LNG). See 84 Fed. Reg. 56,964 (Oct. 24, 2019) and PHMSA Docket. No. PHMSA-2018-0025 (HM-264) (Hazardous Materials: Liquefied Natural Gas by Rail).

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Washington State Crude-by-Rail Law Raises Preemption Questions

The boom in Bakken crude oil production – and the infrequent but serious crude-by-rail accidents associated with it – have led to a corresponding effort by the State of Washington to prohibit the transportation of crude oil through the state. This effort cumulated in the passage of Washington’s Engrossed Substitute Senate Bill 5579 (“Crude Oil By Rail—Vapor Pressure”), which went into effect on July 28, 2019. Under this law, only crude oil with a maximum vapor pressure of 9 psi may be loaded in or unloaded from railroad tank cars within the State. The practical effect of this vapor pressure cap has been to significantly reduce the transportation of Bakken crude into Washington for refining.

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PHMSA Announces the Award of Pipeline Safety and Hazardous Materials Safety Grants

On September 20, 2019, DOT announced the award of over $34,300,000 in awards to enhance pipeline and hazardous materials safety. A PHMSA press release explained that the grants will support states, territories, local governments, tribal entities, emergency responders, universities, and non-profit organizations, to support various state and local safety programs.

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2019 May - June Highlights: HazMat

PHMSA Public Meeting Will Solicit Input for 2020 Emergency Response Guidebook

 

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