[Federal Register Volume 77, Number 93 (Monday, May 14, 2012)]
[Rules and Regulations]
[Pages 28285-28305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-11706]
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DEPARTMENT OF TRANSPORTATION
Federal Railroad Administration
49 CFR Part 236
[Docket No. FRA-2011-0028, Notice No. 3]
RIN 2130-AC27
Positive Train Control Systems (RRR)
AGENCY: Federal Railroad Administration (FRA), Department of
Transportation (DOT).
ACTION: Final rule.
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SUMMARY: FRA amends the regulations implementing a provision of the
Rail Safety Improvement Act of 2008 that requires certain passenger and
freight railroads to install positive train control (PTC) systems. This
final rule removes regulatory provisions that require railroads to
either conduct further analyses or meet certain risk-based criteria in
order to avoid PTC system implementation on track segments that do not
transport poison- or toxic-by-inhalation hazardous (PIH) materials
traffic and are not used for intercity or commuter rail passenger
transportation as of December 31, 2015.
DATES: This final rule is effective July 13, 2012. Petitions for
reconsideration must be received on or before July 13, 2012. Petitions
for reconsideration will be posted in the docket for this proceeding.
Comments on any submitted petition for reconsideration must be received
on or before August 27, 2012.
ADDRESSES: Petitions for reconsideration and comments on petitions for
reconsideration: Any petitions for reconsideration or comments on
petitions for reconsideration related to Docket No. FRA-2011-0028, may
be submitted by any of the following methods:
Web site: The Federal eRulemaking Portal,
www.regulations.gov. Follow the Web site's online instructions for
submitting comments.
Fax: 202-493-2251.
Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue SE., W12-140, Washington, DC
20590.
Hand Delivery: Room W12-140 on the Ground level of the
West Building, 1200 New Jersey Avenue SE., Washington, DC between 9
a.m. and 5 p.m. Monday through Friday, except Federal holidays.
Instructions: All submissions must include the agency name and
docket number or Regulatory Identification Number (RIN) for this
rulemaking. Note that all petitions received will be posted without
change to www.regulations.gov including any personal information.
Please see the Privacy Act heading in the SUPPLEMENTARY INFORMATION
section of this document for Privacy Act information related to any
submitted petitions, comments, or materials.
Docket: For access to the docket to read background documents or
comments received, go to www.regulations.gov or to Room W12-140 on the
Ground level of the West Building, 1200 New Jersey Avenue SE.,
Washington, DC between 9 a.m. and 5 p.m. Monday through Friday, except
Federal holidays.
FOR FURTHER INFORMATION CONTACT: Thomas McFarlin, Office of Safety
Assurance and Compliance, Staff Director, Signal & Train Control
Division, Federal Railroad Administration, Mail Stop 25, West Building
3rd Floor West, Room W35-332, 1200 New Jersey Avenue SE., Washington,
DC 20590 (telephone: 202-493-6203); or Jason Schlosberg, Trial
Attorney, Office of Chief Counsel, RCC-10, Mail Stop 10, West Building
3rd Floor, Room W31-207, 1200 New Jersey Avenue SE., Washington, DC
20590 (telephone: 202-493-6032).
SUPPLEMENTARY INFORMATION: FRA is issuing this final rule to amend the
regulatory requirements contained in 49 CFR part 236, subpart I,
related to a railroad's ability to remove track segments from the
necessity of implementing PTC systems as mandated by Section 104 of the
Railroad Safety Improvement Act of 2008, Public Law 110-432, 122 Stat.
4854 (Oct. 16, 2008) (codified at 49 U.S.C. 20157) (hereinafter
``RSIA'') based on the track segments not carrying PIH traffic as of
December 31, 2015.
Table of Contents for Supplementary Information
I. Executive Summary
II. Background
A. Regulatory History
B. Litigation and Congressional Hearings
III. Public Hearing, Comments, and FRA Response
A. Routing Concerns and Shipper Participation
B. Common Carrier Obligations
C. Passenger Rail Impact
D. Cost-Benefit Analysis
1. Trade Associations
2. AAR
IV. Section-by-Section Analysis
V. Regulatory Impact and Notices
A. Executive Orders 12866 and 13563 and DOT Regulatory Policies
and Procedures
B. Regulatory Flexibility Act and Executive Order 13272
C. Paperwork Reduction Act
D. Federalism Implications
E. Environmental Impact
F. Unfunded Mandates Reform Act of 1995
G. Energy Impact
H. Privacy Act
I. Executive Summary
For years, FRA has supported the implementation of positive train
control (PTC) systems, forecasting substantial benefits of advanced
train control technology in supporting a variety of business and safety
purposes. However, FRA repetitively noted that an immediate regulatory
mandate for PTC system implementation could not be justified based upon
normal cost-benefit principals relying on direct safety benefits. In
2005, FRA promulgated regulations providing for the voluntary
implementation of processor-based signal and train control systems. See
70 FR 11,052 (Mar. 7, 2005) (codified at 49 CFR part 236, subpart H).
As a consequence of the number and severity of certain very public
accidents, coupled with a series of other less publicized accidents,
Congress passed RSIA mandating the implementation of PTC systems on
lines meeting certain thresholds. RSIA requires PTC system
implementation on all Class I railroad lines that carry PIH materials
and 5 million gross tons or more of annual traffic, and on any
railroad's main line tracks over which intercity or commuter rail
passenger train service is regularly provided. In addition, RSIA
provided FRA with the authority to require PTC system implementation on
any other line.
In accordance with its statutory authority, FRA's subsequent final
rule, issued January 15, 2010, and amended on September 27, 2010,
potentially required PTC system implementation on certain track
segments that carried PIH traffic and 5 million gross tons or more of
annual traffic in 2008 but that will not, as of December 31, 2015,
carry PIH traffic, and will not be used for intercity or commuter rail
passenger transportation that otherwise requires PTC installation under
the rule. Per the regulation, the determination would be based upon
whether the subject track segment would pass what has been called the
alternative route analysis and the residual risk analysis (the ``two
qualifying tests''), which are described below.
[[Page 28286]]
Upon issuance of the PTC final rule, the Association of American
Railroads (AAR) filed suit in the U.S. Court of Appeals for the
District of Columbia Circuit challenging the two qualifying tests
provisions of the final rule. After the parties filed their briefs,
they executed a settlement agreement (Settlement Agreement). In the
Settlement Agreement, FRA agreed to issue a notice of proposed
rulemaking (NPRM) proposing to amend the PTC rule to eliminate the two
qualifying tests and to also issue a separate NPRM that will address
the issues of how to handle en route failures of PTC-equipped trains,
circumstances under which a signal system may be removed after PTC
system installation, and whether yard movements and certain other train
movements should qualify for a de minimis exception to the PTC rule.
The Settlement Agreement further provided that FRA would consider
public comments on the NPRMs in determining whether to amend the PTC
rule. The Settlement Agreement also provides that upon conclusion of
the current rulemaking, the parties will determine whether to file a
joint motion to dismiss with prejudice or advise the Court that they
are unable to resolve all issues involved in the court suit.
Consistent with the Settlement Agreement, FRA issued an NPRM in
this proceeding on August 24, 2011, proposing to eliminate the two
qualifying tests. Having considered the public comments on the NPRM,
FRA is promulgating this final rule eliminating the two qualifying
tests. FRA is in the process of developing the second NPRM which will
address other possible amendments to the PTC rule.
For the first 20-years of this final rule, the estimated quantified
benefits to the rail industry due to the regulatory relief total
approximately $620 million discounted at 7 percent and $818 million
discounted at 3 percent. Substantial cost savings will accrue largely
from not installing PTC system wayside components along approximately
10,000 miles of track. Although these rail lines would forego some risk
reduction, the reductions will likely be relatively small since these
lines pose a much lower risk of accidents because they generally do not
carry passenger trains or PIH materials, and generally have lower
accident exposure. The analysis shows that if the assumptions are
correct, the savings of the proposed action far outweigh the cost. The
following table presents the expected quantified benefits:
Benefits (20-Year, Discounted)
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Costs avoided 7% Discount 3% Discount
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Reduced Mitigation Costs, Including $91,793,822 $121,119,324
Maintenance............................
Reduced Wayside Costs, Including 515,695,631 680,445,643
Maintenance............................
Reduced Locomotive Costs, Including 12,479,834 16,466,785
Maintenance............................
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Total Benefits...................... 619,969,287 818,031,752
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For the same 20-year period, the estimated quantified cost totals
$26.7 million discounted at 7 percent and $39.3 million discounted at 3
percent. The costs associated with the regulatory relief result from
accidents that will not be prevented due to the affected track segments
not being equipped with a PTC system. A substantial part of the
accident reduction that FRA expects from PTC systems required under
prior rules comes from reducing high-consequence accidents involving
passenger trains or the release of PIH materials. FRA believes that the
lines impacted by this final rule pose significantly less risk because
they generally do not carry passenger trains or PIH materials and
generally have lower accident exposure. The following tables present
the expected total costs of the final rule as well as the breakdown of
the costs by element:
Costs (20-Year, Discounted)
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Foregone reductions in 7% Discount 3% Discount
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Fatality Prevention..................... $11,453,106 $16,860,327
Injury Prevention....................... 4,254,484 6,263,104
Train Delay............................. 117,793 173,406
Property Damage......................... 10,163,835 14,962,367
Equipment Cleanup....................... 143,273 210,915
Environmental Cleanup................... 430,995 634,475
Evacuations............................. 138,780 204,301
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Total Costs......................... 26,702,267 39,308,896
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FRA has also performed a sensitivity analysis for a high case
(14,000 miles), expected case (10,000 miles), and low case (7,000
miles).
The net amounts for each case, subtracting the costs from the
benefits, provide the following results:
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Net societal benefits 7% Discount 3% Discount
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Expected Case (10,000 miles).......... $593,267,020 $778,722,856
High Case (14,000 miles).............. 793,856,299 1,041,764,269
Low Case (7,000 miles)................ 442,825,061 581,441,797
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[[Page 28287]]
Further, the benefit-cost ratios under the scenarios analyzed range
between 20:1 and 25:1.
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Benefit-cost ratio 7% Discount 3% Discount
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Expected Case........................... 23.22 20.81
High Case............................... 22.24 19.93
Low Case................................ 24.69 22.13
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II. Background
A. Regulatory History
As a consequence of the number and severity of certain widely
publicized accidents, coupled with a series of other accidents
receiving less media attention, Congress passed RSIA, mandating
implementation of PTC systems by December 31, 2015, on lines meeting
certain specified criteria, and giving FRA authority to require the PTC
system implementation on other lines. 75 FR 2598 (Jan. 15, 2010). Under
RSIA, such PTC system implementation must be completed by each Class I
railroad carrier and each entity providing regularly scheduled
intercity or commuter rail passenger transportation on:
(A) Its main line over which intercity rail passenger
transportation or commuter rail passenger transportation, as defined
in section 24102, is regularly provided;
(B) its main line over which PIH hazardous materials, as defined
in parts 171.8, 173.115, and 173.132 of title 49, Code of Federal
Regulations, are transported; and
(C) such other tracks as the Secretary may prescribe by
regulation or order.
49 U.S.C. 20157(a)(1). The statute further defined ``main line'' to
mean:
A segment or route of railroad tracks over which 5,000,000 or
more gross tons of railroad traffic is transported annually, except
that--
(A) the Secretary may, through regulations under subsection (g),
designate additional tracks as main line as appropriate for this
section; and
(B) for intercity rail passenger transportation or commuter rail
passenger transportation routes or segments over which limited or no
freight railroad operations occur, the Secretary shall define the
term ``main line'' by regulation.
49 U.S.C. 20157(i)(2). To effectuate this goal, RSIA required the
railroads to submit for FRA approval a PTC Implementation Plan (PTCIP)
within 18 months (i.e., by April 16, 2010).
The Secretary has delegated his authority under Sec. 20157 to the
FRA Administrator. See 49 CFR 1.49(oo). Consistent with the statutory
mandate of Sec. 20157, FRA published a final rule with a request for
further comments on January 15, 2010, which established new regulations
codified primarily in subpart I to 49 CFR part 236 (the ``PTC rule'').
Subsequently, FRA received a number of petitions for reconsideration to
the final rule and a number of comments responding to the request for
further comments. In a letter dated July 8, 2010, FRA denied all of the
petitions for reconsideration. On September 27, 2010, FRA issued a new
final rule with clarifying amendments to the PTC rule.
Under the current regulations applicable to the existing railroads,
each PTCIP must have included the sequence and schedule in which track
segments required to be equipped with a PTC system will be so equipped
and the basis for those decisions. See 49 CFR 236.1011. This list of
track segments must have included all track segments that fit the
statutory criteria in calendar year 2008. See 49 CFR 236.1005(b)(1) and
(b)(2).
While the statutory PTC system implementation deadline is December
31, 2015, FRA recognized a need for a starting point in time to
determine where such implementation must occur. The final rule
indicates that such a starting baseline should be based on the facts
and data known in calendar year (CY) 2008 (the ``2008 baseline''). FRA
determined, and continues to believe, that using CY 2009 data would
have been difficult given the proximity to the PTCIP submission
deadline and the notably atypical traffic levels caused by the down
turn in the economy.
Although each railroad's initial PTCIP includes a future PTC system
implementation route map reflecting 2008 data, FRA recognized that PIH
materials traffic levels and routings could change in the period
between the end of 2008 and the start of 2016. Accordingly, in the
event of changed circumstances, the PTC rule provides railroads with
the option to file a request for amendment (RFA) of its PTCIP to not
equip a track segment where the railroad was initially, but may no
longer be, required to implement a PTC system. If a particular track
segment included in a PTCIP no longer carries PIH materials traffic and
applicable passenger traffic by the statutory implementation deadline,
and its PTC system implementation is scheduled, but not yet
effectuated, then the host railroad might avoid actual PTC system
implementation by filing a supported RFA for FRA approval. Each such
RFA must be supported with the data defined under Sec. 236.1005(b)(2)
and (b)(4)(i), and satisfy the two qualifying tests that were
promulgated under FRA's statutory authority to require PTC system
implementation to be installed on lines in addition to those required
to be equipped by RSIA. If a track segment fails either of these tests,
FRA would deny the request, thus requiring PTC system implementation on
the track segment.
The first test, proverbially known as the ``alternative route
analysis test,'' was initially codified at Sec. 236.1005(b)(4)(i)(A)
and subsequently moved to a new Sec. 236.1020. See 75 FR 59,108 (Sept.
27, 2010). Under this test, the railroad must establish that current or
prospective rerouting of PIH materials traffic to one or more
alternative track segments is justified. If a railroad reroutes all PIH
materials off of a track segment requiring PTC system implementation
under the 2008 baseline, and onto a new line, PTC system implementation
on the initial line may not be required if the new line would have
substantially the same overall safety and security risk as the initial
line, assuming PTC system implementation on both lines. If the initial
track segment, despite the elimination of all PIH materials traffic, is
determined to pose higher overall safety and security risks under this
analysis, then a PTC system must still be installed on that initial
track segment. PTC system implementation may also be required on the
new line if it meets the 5 million gross ton of annual traffic
threshold and does not qualify under the de minimis exception of the
rule.
The second test that the railroad must satisfy in order to avoid
having to install a PTC system on a track segment requiring
implementation under the 2008 baseline is the so-called ``residual risk
test.'' Under this test, the railroad must show that, without a PTC
system, the remaining risk on the track segment--pertaining to events
that can be prevented or mitigated in severity by a PTC system--is less
than the national
[[Page 28288]]
average equivalent risk per route mile on track segments required to be
equipped with PTC systems due to statutory reasons other than the
presence of passenger traffic. Even lines that cease carrying PIH
materials traffic can still pose significant safety risks associated
with other traffic on the lines. When FRA issued its PTC rule
amendments on September 27, 2010, FRA indicated that it was delaying
the effective date of 49 CFR 236.1005(b)(4)(i)(A)(2)(iii), as revised
under Sec. 236.1020, pending the completion of a separate rulemaking
to establish how residual risk is to be determined. While FRA has
attempted to determine a suitable methodology to determine such
residual risk, no rulemaking proceeding on this test has yet occurred.
B. Litigation and Congressional Hearings
After FRA issued its PTC final rule on January 15, 2010, and denied
reconsideration on July 8, 2010, AAR filed a petition for review of the
rule with the U.S. Court of Appeals for the District of Columbia
Circuit. Once FRA issued its PTC final rule amendments, AAR filed
another petition for review of those amendments on October 5, 2010. The
court consolidated those two petitions on October 22, 2010
(collectively, ``Petition for Review''). In its brief, AAR challenged
FRA's determination to use 2008 as the baseline year, arguing that it
rests on a fundamental legal error and was arbitrary and capricious.
FRA and AAR entered into the Settlement Agreement on March 2, 2011.
The terms and conditions of the Settlement Agreement included the joint
filing of a motion to hold the Petition for Review in abeyance pending
the completion of this rulemaking. That motion was filed on March 2,
2011, and was granted by the court on March 3, 2011. The Settlement
Agreement provides that FRA will issue two NPRMs. The first NPRM,
published in the Federal Register on August 24, 2011, and culminating
with this final rule, addresses the elimination of the two qualifying
tests. The Settlement Agreement provides that upon the completion of
this rulemaking proceeding, the parties will determine whether to file
a joint motion to dismiss the lawsuit in its entirety. As previously
noted, the Settlement Agreement also provides that FRA will issue a
separate NPRM that will address other possible changes to the PTC rule;
that NPRM is under development.
On March 17, 2011, FRA and AAR testified before the Subcommittee on
Railroads, Pipelines, and Hazardous Materials, Committee on
Transportation and Infrastructure, U.S. House of Representatives. In
addition to reporting on the Settlement Agreement, FRA's testimony
discussed PTC system implementation planning and progress made thus far
and highlighted the various ways that FRA has assisted the industry in
meeting the statutory and regulatory goals. In particular, FRA has
supported PTC system implementation by developing and approving certain
implementation exceptions, providing technical assistance, and granting
financial assistance.
During its congressional testimony, made jointly with Norfolk
Southern Railway (NS), AAR asserted that, ``If unchanged, the 2008
base-year provision means railroads would have to spend more than $500
million in the next few years to deploy PTC systems on more than 10,000
miles of rail lines on which neither passenger nor TIH materials will
be moving in 2015.'' \1\ FRA continues to understand AAR to assume that
these 10,000 miles would still require PTC system implementation
because they would not be able to pass the alternative route analysis
and residual risk analysis tests. However, upon its own analysis, FRA
assumes that 50 percent of the 10,000 miles would be able to pass both
tests with the implementation of mitigation measures. In the NPRM to
this proceeding, FRA sought comment on this assumption.
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\1\ Hearing Before the Subcommittee on Railroads, Pipelines, and
Hazardous Materials of the Transportation and Infrastructure
Committee, U.S. House of Representatives, 112th Cong. (2011) (Joint
statement of Edward R. Hamberger, President and Chief Executive
Officer of the AAR, and Mark D. Manion, Executive Vice President and
Chief Operating Officer of the Norfolk Southern Railway, on behalf
of the AAR's member railroads) [hereinafter AAR Congressional
Testimony].
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Under the regulatory impact analysis (RIA) that accompanied the
original PTC final rule, FRA estimated that the railroads would need to
implement PTC systems on approximately 70,000 miles of track. FRA
estimated that PTC system implementation could be avoided on 3,204
miles of those 70,000 miles of track because PIH materials traffic will
have ceased by 2015 and the subject track segments would pass the
alternative route analysis and residual risk analysis tests. During the
earlier rulemakings, no entity, including AAR or NS, challenged or
otherwise commented on these conclusions.
FRA also estimated that PTC system implementation could be avoided
on 304 miles of track because gross tonnage will fall below 5 million
gross tons per year, or passenger service would end so that neither of
the two tests above would apply. Between the two categories, FRA
estimated that railroads could exclude more than 3,500 miles. Assuming
that the 3,500 miles represents about 50% of those tracks where PIH
materials traffic will have ceased, FRA was implicitly estimating that
there would be about 7,000 miles of track where PIH materials traffic
will have ceased. The AAR and its members appear to have been more
effective in the future reduction of PIH materials traffic than FRA had
initially estimated based on AAR's congressional testimony and
subsequent submissions to FRA. In its RIA associated with the NPRM in
this proceeding, FRA estimated that PIH materials traffic would cease
on 10,000 miles of track on which the installation of PTC systems would
have been required had the traffic not ceased. FRA considered cases
where 7,000 miles, 10,000 miles and, for sensitivity, 14,000 miles of
track might be excluded from PTC requirements because of changes in PIH
materials traffic. As FRA was completing its analysis of the proposal,
AAR submitted data that indicated its member railroads believe that
they can cease PIH materials traffic on 11,128 miles of track prior to
December 31, 2015, of which 9,566 miles have no passenger traffic. In
analyzing the final rule, FRA continues to use the cases where 7,000
miles, 10,000 miles, and 14,000 miles of track might be excluded from
PTC implementation requirements due to PIH traffic changes, because
those values encompass the ranges submitted by AAR. Some of the
passenger traffic miles identified by AAR may later qualify for a
separate exclusion from the requirement to install a PTC system. For
more discussion of those miles from which PIH traffic is removed, but
on which passenger traffic remains, see FRA's Regulatory Impact
Assessment, in this rulemaking docket.
III. Public Hearing, Comments, and FRA Response
After publication of the NPRM to this proceeding on August 24,
2011, which initially provided a 60-day comment period to end on
October 24, 2011, the Chlorine Institute filed a request for a hearing
``to allow for a complete discussion and understanding of the many
issues and concerns that would result from adoption of the Proposed
Rule that would have the effect of reducing the rail routes available
to shippers and receivers of chlorine and the other Toxic-by-Inhalation
products that are so necessary to the health, safety and economy of the
Nation.'' On October 14, 2011, FRA published in the Federal Register a
notice of public
[[Page 28289]]
hearing and extension of the comment period to November 25, 2011. See
76 FR 63,899 (Oct. 14, 2011).
In accordance with that notice, FRA held a public hearing on
November 10, 2011, in Washington, DC. The following individuals
representing the identified entities testified at the hearing: Frank
Chirumbole, President of Olin Chlor Alkali Products, Olin Corporation
(``Olin''); Frank Reiner, President, The Chlorine Institute (CI);
Thomas Schick, American Chemistry Council (ACC); Dr. Howard Kaplan,
U.S. Magnesium, LLC (``U.S. Magnesium''); and Michael J. Rush, AAR. By
November 25, 2011, FRA received comments from AAR; ACC, CI, and the
Fertilizer Institute (TFI) (collectively, the ``Trade Associations'');
the National Railroad Passenger Corporation (Amtrak); the Brotherhood
of Maintenance of Way Employees Division (BMWED/IBT) and Brotherhood of
Railroad Signalmen (BRS) (collectively, the ``Labor Organizations'');
E. I. du Pont de Nemours and Company (``DuPont''); and PPG Industries,
Inc. (``PPG'').
The Trade Associations' testimony and comments rely primarily on
reports developed by L.E. Peabody & Associates, Inc. (``Peabody''), a
firm specializing in solving economic, financial, marketing and
transportation problems. Peabody developed its reports (``Peabody
Reports'') on behalf of CI, which also invited Peabody to testify at
the hearing regarding its own evaluation of the costs and benefits
associated with PTC system implementation and on the instant proposal's
potential economic harm to the PIH materials shippers.
At the hearing, the ACC supported FRA's effort to minimize
unnecessary regulatory burdens and recognized that certain operational
factors may affect some rail lines by no longer requiring PTC system
installation. ACC asserts that these implementation changes must not
prevent chemical manufacturers from shipping their products.
CI--a 200 member trade association comprised primarily of
producers, repackagers and users of chlorine, and suppliers to the
chlor-alkali industry--testified at the hearing that, ``Since many of
the most significant rail accidents have been the result of operational
errors,'' it has long advocated the adoption of new technologies,
including PTC, to improve rail operational safety. According to the
CI's testimony, ``While the statute only requires positive train
control on TIH and passenger mainlines, all traffic on the equipped
lines will derive the benefits of safer operation and improved
operational efficiency.'' In their jointly filed comments, the Trade
Associations representing shippers and receivers of PIH materials
strongly support FRA's efforts to enhance rail safety, including the
deployment of new technologies like PTC.
The remainder of this section will discuss the various commenters'
concerns with FRA's proposal.
A. Routing Concerns and Shipper Participation
The Labor Organizations assert that by removing the two qualifying
tests from the PTC rule, railroads may consequently be allowed to avoid
PTC system implementation, hampering FRA's ability to identify routes
that could be of higher risk. If the alternative route analysis test is
eliminated, the Labor Organizations believe that PIH materials traffic
may be rerouted to Class II railroad lines, which may have poorer track
conditions, older rolling stock, and a less robust or no signal system,
thus increasing the total public risk. The Labor Organizations believe
that FRA should establish a mechanism to assess the risks related to
the rerouting of PIH materials traffic onto lines that will not require
PTC system implementation, and that such rerouting should be subject to
FRA approval.
The routes railroads use to provide PIH materials transportation is
governed by the routing regulations of the Pipeline and Hazardous
Materials Safety Administration (PHMSA) at 49 CFR 172.820. Under the
PHMSA regulations, a railroad carrier is required to: compile annual
data on shipments of PIH materials and other security sensitive
materials; use the data to analyze safety and security risks along rail
routes used by the carrier to transport those materials and practicable
alternative routes over which the carrier has authority to operate;
seek information from state, local and tribal officials regarding
security risks to high-consequence targets along or in proximity to the
routes; consider mitigation measures to reduce safety and security
risk; and select and use the practicable routes that pose the least
overall safety and security risk. FRA enforces PHMSA's regulation (49
CFR part 209, subpart F). The routing of PIH materials is also impacted
by the security regulations of the Transportation Security
Administration at 49 CFR part 1580, which requires chain of custody
requirements to ensure a positive and secure exchange of PIH materials
transported by rail.
FRA does not agree with the Labor Organizations' contention that
PIH materials traffic will be rerouted from Class I railroads to Class
II railroads. FRA is not aware of Class I railroads attempting such
rerouting; rather, consistent with the PHMSA regulations, the removal
of PIH materials from certain routes is the result of Class I railroads
rerouting the traffic to other lines that they operate because those
other lines pose the least overall safety and security risk for the
movement of this traffic.
In its filed comments, the Labor Organizations also request
clarification of some of FRA's statements. For instance, in the NPRM,
FRA states, ``AAR submitted data that indicates its member railroads
believe that they can cease PIH materials traffic on 11,128 miles of
track of which 9,566 miles have no passenger traffic. Some of the
passenger traffic miles may later qualify for exclusion from the system
on which PTC is required.'' 76 FR 52,922 (Aug. 24, 2011). The Labor
Organizations assume, but are not completely confident, that the
reference to ``exclusion from the system'' relates to the possibility
that some of the passenger train operations over the remaining 1,562
miles of track might be eligible for a de minimis exception. The Labor
Organizations request that FRA clarify whether passenger train
operations exceeding the de minimis exclusion will require PTC system
installation regardless of the absence of PIH material on the line.
With respect to the Labor Organizations' request for clarification,
the existing PTC rule provides for exceptions to the requirement to
install PTC systems for certain passenger train operations, as provided
for in 49 CFR 236.1019. In the NPRM, FRA explained that AAR member
railroads believe they can cease PIH materials traffic on 11,128 miles
of track, over which 9,566 miles have no passenger traffic. The
statement highlighted by the Labor Organizations means only that, of
the remaining 1,562 miles of track that would now only require PTC
systems as a result of passenger traffic, some of those miles of track
might qualify for one of the passenger-specific exceptions and
therefore be excluded from the PTC requirement entirely. The de minimis
exception would not apply here, since there is passenger traffic on the
line.
CI expressed concerns with the lack of shipper participation in PTC
system implementation and proposes that a system such as the STB line
abandonment process be implemented if a line is proposed to be dropped
from the coverage plan. The Trade Associations echoed this in their
comments, indicating that they would like shippers to be part of the
process in determining where PTC systems should be implemented. They
note that there
[[Page 28290]]
are no express provisions allowing PIH materials shippers or receivers
to file PTCIP requests for amendments or requiring notification that a
railroad seeks to add or remove lines from its PTCIP. The Trade
Associations believe that, without shipper input, FRA may inadvertently
create PIH materials transport restrictions or infeasibility. The Trade
Associations suggest that FRA should establish a process that would
provide PIH materials shippers and consignees an opportunity to
petition the agency to require additional PTC lines to accommodate new
or expanded PIH materials-related business ventures.
RSIA requires that only certain railroads submit a PTCIP. Since
each railroad is legally responsible for implementing PTC systems on
its own lines, FRA believes this makes sense. While FRA also requires a
joint PTCIP filing where a tenant railroad would have been required to
install a PTC system if the host railroad had not otherwise been
required to do so, this exception exists primarily to ensure PTC system
interoperability. Otherwise, FRA has not provided opportunities for
parties other than the host railroad to file a PTCIP. For the same
reason, FRA will not provide opportunities for third parties to file
requests for amendments. To do so would create confusion and
potentially impose additional burdens on the railroad. In any event,
third parties do have an opportunity to express their views on the
plans submitted pursuant to the PTC rule. 49 CFR 236.1011(e) continues
to provide that, upon receipt of a PTCIP, NPI, PTCDP, or PTCSP, FRA
will post on its public Web site a notice of receipt and reference to
the public docket in which a copy of the filing has been placed. By
extension, FRA also considers this paragraph applicable to any RFA that
seeks to modify either of those plans and has endeavored to ensure that
all plans and their RFAs are placed in their respective public dockets.
FRA will consider any public comment on these documents to the extent
practicable within the time allowed by law and without delaying PTC
system implementation.
PPG--an international diversified chemical manufacturer that
receives chlorine by rail in the U.S.--expressed concern over the lack
of transparency regarding the rail lines that would be implicated by
the proposed rule, denying it the opportunity to effectively evaluate
the impact of the proposal on its existing and future business plans.
Moreover, PPG states that the existing PTC rule does not provide any
audit or review process by which FRA may verify a railroad's traffic
assertions or any appeals process by which a shipper can contest a
railroad's decision not to install a PTC system on a particular rail
line. PPG also states that if a PTC system is not installed on a
particular line before 2016, then a railroad could attempt to condition
any future service for PIH commodities at very high rates, stifling the
shipper's business and impeding the national economy.
The Trade Associations are also concerned with the availability of
routes. According to CI, the lack of shipper participation could either
restrict chlorine transportation by rail or render it unfeasible
between some origins and destinations, ultimately restricting chlorine
commerce and availability. If FRA were to eliminate the two qualifying
tests, Peabody believes that FRA would allow the railroads to determine
which track segments will be equipped with PTC systems without
regulatory oversight regarding the determination of the level of safety
and security on the subject segment. Peabody also expresses concerns
that FRA, when making the proposal, considered the impact on the
railroads, but not the shippers or the public.
The Trade Associations believe that elimination of the two
qualifying tests would, produce an opportunity for the railroads to
unilaterally, arbitrarily, and without regulatory oversight, determine
where PTC systems must be installed and reduce the transportation of
PIH materials by rail. According to the Trade Associations, ``The
opportunity cannot be examined in a vacuum but must be evaluated
through the prism of the railroads' other actions to greatly reduce the
common carrier obligation.'' Although FRA will continue to approve any
requests to modify a railroad's PTCIP, the Trade Associations perceive
that such approval will be automatic and based solely on the railroad's
own traffic projections and without consideration of the shippers' PIH
market projections.
Dupont, a member of CI and ACC, provided additional comments.
DuPont is concerned that, by removing the two qualifying tests, rail
carriers would be granted the unlimited right and an incentive to
refuse to provide service just by choosing routes without PTC systems
despite any STB action. According to DuPont, it has experienced rail
carriers moving PIH materials traffic onto inefficient routes and
shifting the resulting costs elsewhere. DuPont states that by allowing
the railroads to unilaterally deny the most direct route, the railroads
will be allowed to violate their fundamental common carrier
obligations.
Accordingly, DuPont asserts that FRA should maintain the two
qualifying tests, which allow each railroad to amend its PTCIP when the
railroad is able to meet certain analyses and risk assessments. DuPont
also suggests that FRA expand the existing PTC rule by promulgating a
self-implementation regulation providing each shipper with the power to
direct its rail carrier to transport its goods on lines where PTC
systems would otherwise be required and which are not so equipped and
providing each railroad the ability to self-certify a risk assessment
for each such line.
Olin also provided hearing testimony in favor of not eliminating
the two qualifying tests. In particular, Olin is concerned that the
proposed amendments will allow railroads to significantly restrict PIH
shipments without shipper input or adequate FRA oversight. Olin states
that the elimination of the two qualifying tests would effectively
grant rail carriers carte blanche to determine PTC system
implementation locations, which could ultimately allow rail carriers to
dictate and limit efficient PIH shipments and would potentially result
in increased transit times, longer shipping distances, limited customer
access, and restriction to overall commerce and additional shipping
costs. According to Olin, ``Allowing rail carriers to potentially limit
the shipment of TIH without the protections of the `alternative route
analysis test' and the `residual risk test,' or another appropriate
process, would not only pose risks to shippers, it would also likely
contradict the federal common carrier obligation which has been a
keystone of U.S. rail policy for more than a century'' by opening ``a
back door around the common carrier obligations for rail carriers.''
Olin also expressed concerns that the overall cost of PTC system
implementation will be disproportionately placed on PIH shippers and
that there are no provisions to examine shipper impact or address
timely action for future PIH required rail lines.
PPG also provided comments directly relating to the purposes of the
two qualifying tests. According to PPG, FRA took a crucial and
important step in the original PTC rule when it required use of 2008 as
the baseline traffic year to determine which rail lines would require
PTC system implementation. PPG states that, ``By using a historical
year as the baseline, FRA largely eliminated the possibility for
railroads to manipulate their traffic statistics in light of the
looming PTC requirement.''
[[Page 28291]]
By removing the two qualifying tests, PPG is concerned that this
possibility remains. More specifically, without the two qualifying
tests, PPG fears that railroads could dissuade PIH materials shipments
by providing substandard service or by charging excessive
transportation rates.
As an initial matter, questions relating to the quality of service
provided PIH shippers and rates charged by railroad carriers for the
movement of PIH materials are outside the scope of FRA's authority and
properly lie with the STB.
Each of the arguments made by the Trade Associations and the other
railroad shippers rest on the premise that, by rerouting PIH materials
traffic to avoid the installation of PTC systems, railroad carriers
will somehow be able to ``lock in'' certain routes as the only routes
available to carry PIH materials after the 2015 deadline. Ultimately,
however, this premise is incorrect. As discussed in more detail below,
FRA does not view the PTC mandate as limiting the common carrier
obligation of railroad carriers as enforced by STB, and consequently
does not view a smaller map of PTC-equipped line segments as
restricting the availability of rail transportation for PIH materials
in the future. FRA recognizes that equipping fewer line segments with
PTC systems before 2016 will increase the probability that a future PIH
materials shipment would eventually require access to an unequipped
line in order to reach its destination; however, such concerns will
exist with any requirement to install a PTC system that does not cover
all line segments. The arguments of the Trade Associations and other
railroad shippers are over-inclusive, insofar as they lead to the
conclusion that FRA should simply require PTC systems to be installed
on as many line segments as possible. However, reducing the probability
of future controversies over future installation of PTC systems is
insufficient justification for potentially using the two qualifying
tests as a means to require additional PTC systems implementation prior
to the 2015 deadline.
FRA also rejects the premise that railroads will have an
uninhibited means of rerouting PIH material traffic without meaningful
oversight. As previously discussed, the rail routing of PIH materials
is governed by the PHMSA routing rule. In their comments, the Trade
Associations view the rail routing rule as satisfying the needs from a
shipper perspective in three ways:
``1. Routing changes are to be based on 27 different risk-based
factors and not solely on any one factor, such as cost, distance or
time;
2. No matter what routing changes are made, existing origin-
destination pairs are still accommodated and TIH traffic is not
eliminated;
3. There is nothing in the rule that indicates that future needs
for TIH traffic would be limited or avoided.
Despite potential increases in shipment cost or time, the
shippers' need to transport TIH materials is essentially met.''
AAR generally supports elimination of the two qualifying tests,
asserting that the two tests would require PTC systems to be installed
on an estimated 10,000 miles more than that required by the RSIA, at
costs which substantially outweigh the safety benefits. The AAR did,
however, suggest that FRA adopt slightly different regulatory language
than that proposed in the NPRM; these suggested changes are discussed
in the section-by-section analysis. The AAR responded to the shippers'
concerns by noting that the routing of PIH materials is governed by the
PHMSA rail routing rule, and that nothing in FRA's proposed rule
changes, prevents, or in any manner affects, the transportation by rail
of PIH materials from origin to destination.
FRA agrees with AAR that the rerouting of PIH materials traffic is
properly constrained by the PHMSA rail routing rule. FRA also agrees
with AAR that PIH materials traffic will continue to move on rail lines
that do not have PTC systems consistent with the requirements of 49 CFR
236.1005(b)(3), and that the elimination of the two qualifying tests
does not affect the railroads' common carrier obligation with respect
to the transportation of PIH materials. Finally, removal of the two
qualifying tests will not preclude FRA's ability or discretion under 49
U.S.C. 20502 to require PTC system implementation on additional lines
in the future based on risk or other relevant factors.
B. Common Carrier Obligations
According to the Trade Associations, although FRA has made it clear
in the past that it does not intend for matters within its jurisdiction
to trump the railroads' common carrier obligation, FRA's determinations
affect the location of PTC system implementation and, thus, where,
when, how, and if PIH materials are to be moved.
Accordingly, the Trade Associations are concerned that the
railroads will use PTC system implementation as a means to limit their
common carrier obligations with respect to PIH materials. More
specifically, at the hearing, CI expressed that, ``We're concerned that
FRA's [PTC] rule will be used to attempt to alter that common carrier
obligation, which we fully understand is under the STB jurisdiction.''
While the Trade Associations recognize that it is not FRA's
responsibility to enforce the railroads' common carrier obligation to
transport PIH materials, they assert that PTC system implementation
must not erode that obligation. The Trade Associations provide examples
where FRA has considered the common carrier obligation in the past. For
instance, in 2008, the Department testified before the STB, stating:
[R]ailroads have a common carrier obligation to transport
hazardous materials and cannot refuse to provide service merely
because to do so would be inconvenient or unprofitable. While the
railroads have expressed concern over this obligation, particularly
with respect to their potential liability exposure arising from
train accidents involving the release of poisonous by inhalation
hazard or toxic inhalation hazard (referred to as PIH or TIH)
materials, DOT believes that there is no reason to change this
common carrier obligation.''
Testimony of Clifford Eby, Deputy Federal Railroad Administrator,
Common Carrier Obligation of Railroads, STB Ex Parte No. 677 (Sub-No.
1) (July 22, 2008).
The Trade Associations also state that the Department is on record
as saying that railroads would be violating the common carrier
obligation if they attempted, through their interchange rules, to
prevent the movement of hazardous materials through the application of
tank car specifications different from those duly considered and
approved by the Department.\2\
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\2\ But see 73 FR 17818, 17824-25 (April 1, 2008). In its
comments, the Trade Associations misunderstand FRA's statements. In
this and the referenced proceeding, FRA has not asserted any
authority to determine a railroad's common carrier obligation. In
the rulemaking cited by the Trade Associations, FRA discussed the
test used by STB to determine the reasonableness of interchange
requirements in assessing if those requirements violate the common
carrier obligation before ultimately concluding that FRA did not
view the particular interchange requirement at issue as reasonable.
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Moreover, the Trade Associations request that FRA confirm its
interpretation of 49 CFR 236.1005(b)(3)(ii), which states: ``If PIH
traffic is carried on a track segment as a result of a request for rail
service or rerouting warranted under part 172 of this title, and if the
line carries in excess of 5 million gross tons of rail traffic as
determined under this paragraph, a PTCIP or its amendment is
required.'' The Trade Associations believe that this language,
consistent with the common carrier obligation, implies that a rail
carrier may not deny a shipper's request to transport PIH materials
solely on the
[[Page 28292]]
grounds that a PTC system is not installed on any line segment
necessary to complete the requested transportation. The Trade
Associations believe that this regulation requires the railroad to
accept the PIH materials traffic for transportation consistent with its
common carrier obligation, amend its PTCIP, and equip the necessary
track with a PTC system within 24 months, pursuant to 49 CFR
236.1005(b)(3)(iii).
PPG also believes that FRA must be mindful of the interplay between
the PTC regulations and the railroads' common carrier obligation, which
requires the carriers to provide service on reasonable request. PPG
expresses similar concerns with the regulatory provision cited by the
Trade Association and complains that seeking STB enforcement of the
railroads' common carrier obligation could take months, if not longer,
to resolve. Accordingly, PPG urges FRA to clarify that 49 CFR
236.1005(b)(3)(ii) does not permit a railroad to refuse PIH materials
service because a rail line does not have a PTC system installed, and
that rail movement of PIH commodities may be provided over a non-PTC-
equipped line pending approval of FRA and the actual construction to
add a PTC system to such line.
US Magnesium also testified at the hearing. While extracting
magnesium from the Great Salt Lake brines, US Magnesium produces
chlorine as a co-product. Since chlorine cannot be vented or stored, US
Magnesium must ship or sell it. However, according to US Magnesium, the
chlorine market is seasonable and dynamic, with customers and demand
levels always changing, requiring the company to change chlorine
shipping routes to meet market conditions. US Magnesium believes that
PTC technology will contribute greatly to continuing incident free
performance and it claims that it has been affected by the railroads'
interest in limiting or ceasing PIH shipments. While it recognizes the
STB's resistance to railroad attempts to unilaterally restrict PIH
routings, US Magnesium believes that removal of the two qualifying
tests would allow elimination of lines from a PTCIP, thus facilitating
the railroads' efforts to limit their common carrier obligation. US
Magnesium expects the railroads to argue to the STB that they should
not be ordered to provide PIH service over routes where they have
informed FRA that no PTC system will be installed.
These comments indicate some confusion over the jurisdiction of the
various federal agencies governing the rail transportation of hazardous
materials. Specifically, these commenters suggest that the PTC rule
might be construed by FRA or STB to limit what line segments PIH
materials may travel over. The structure of 49 CFR part 236, subpart I,
requires that PTC systems be installed on many line segments over which
PIH materials are transported; it does not in any way govern the
movements of PIH materials.
While both FRA and STB are vested with authority to ensure safety
in the railroad industry, each agency recognizes the other agency's
expertise in regulating the industry.\3\ FRA has expertise in the
safety of all facets of railroad operations, and is authorized to
promote safety in every area of railroad operations and reduce
railroad-related accidents and injuries. 49 U.S.C. 20101 and 20102.
Concurrently, the STB has expertise in economic regulation and
assessment of environmental impacts in the railroad industry, as an
economic regulatory agency charged by Congress with resolving railroad
rate and service disputes and reviewing proposed railroad mergers and
acquisitions. See 49 U.S.C. 10701(a), 10702. Further, there is no
limitation over the STB's authority to address the reasonableness of a
railroad's practices. See STB Ex Parte No. 661, Rail Fuel Surcharges
(Aug. 3, 2006). Together, the agencies appreciate that their unique
experience and oversight of railroads complement each other's interest
in promoting a safe and viable industry.
---------------------------------------------------------------------------
\3\ The rail transportation policy, 49 U.S.C. 10101, establishes
the basic policy directive against which all of the statutory
provisions the Board administers must be evaluated. The RTP
provides, in relevant part, that ``[i]n regulating the railroad
industry, it is the policy of the United States Government * * * to
promote a safe and efficient rail transportation'' by allowing rail
carriers to ``operate transportation facilities and equipment
without detriment to the public health and safety.'' See, e.g., 49
CFR part 244; 67 FR 11582 (Mar. 15, 2002).
---------------------------------------------------------------------------
Accordingly, FRA recognizes that conflicts between railroad
carriers and railroad shippers relating to common carrier obligations
are best resolved by STB. The STB has previously ruled on railroad
obligations to quote common carrier rates and provide service for the
transportation of PIH materials such as chlorine. Union Pacific
Railroad Company, STB Finance Docket No. 35219 (2009); see also Akron,
Canton & Youngstown Railroad Company v. Interstate Commerce Commission,
611 P.2d 1162 (6th Cir. 1979). FRA does not seek to interfere with
STB's role in providing economic oversight of the railroad industry.
Rather, just as the STB has previously declined to substitute its
safety and security judgments for those of FRA, FRA presently declines
to substitute its economic judgments for those of STB. In establishing
and modifying rules governing PTC system implementation, FRA does not
regulate what route over which PIH materials must move, as
responsibility for such regulations lies with PHMSA. See 73 FR 72182
(Nov. 26, 2008). FRA's PTC regulations expressly allow for new PIH
material traffic over a line segment that previously lacked such
traffic, and as such does not preempt the oversight and regulatory
functions of either PHMSA or STB.
FRA is aware that the impact of the present rulemaking will be to
reduce the number of line segments included within the overall map of
PTC system installations. The Trade Associations argue that the result
of this reduction will be an ability of railroad carriers to
unilaterally restrict PIH materials shipments by reducing the number of
PTC-equipped line segments and subsequently refusing to carry PIH
materials that would require straying from these line segments.
However, because neither the prior or instant PTC rulemakings limit or
restrict the common carrier obligation, enforced by STB, FRA does not
view a reduction in PTC-equipped line segments as causing a reduction
in available service for future PIH materials shipments. Additionally,
there are substantial checks on a railroad's ability to modify its
routes in such a manner. Oversight by the STB and FRA (in enforcing the
PHMSA rail routing regulation) may preclude or even require certain
routing and rerouting decisions. Furthermore, because railroads will
likely seek to maximize the return on their investment in PTC system
installation, railroads can be reasonably expected to maximize the
connectivity of PTC-equipped segments to limit where additional PTC
systems may ultimately be required. As discussed above, even where a
railroad is able to reroute its PIH materials traffic in accordance
with the PHMSA regulations, resulting in future PIH materials traffic
needing to traverse a line segment that does not have a PTC system in
order to travel from its source to its destination, FRA does not view
such rerouting as a barrier to future PIH materials traffic. While STB
is the agency ultimately responsible for the enforcement of the common
carrier obligation, and FRA recognizes that PTC system implementation
may affect STB's review of rates, FRA does not view the requirement to
install PTC systems on certain rail lines as affecting the common
carrier obligation in any way.
With respect to the application of 49 CFR 236.1005(b)(3), FRA views
the provision as neutral with respect to the
[[Page 28293]]
common carrier obligation. Where new PIH materials traffic exists on a
line that meets the tonnage threshold, whether by the railroad's
acceptance of the PIH material for transportation or by STB action to
require such transportation, the rule requires the railroad carrier to
file a PTCIP or RFA as soon as possible and to implement a PTC system
on that line segment within 24 months. FRA expects that PTCIP or RFA to
include risk mitigation and other measures necessary to effectively and
efficiently implement the new PTC system so that PIH materials may
safely traverse the line segment during those intervening two years. If
the filings do not sufficiently address these issues, FRA may approve
the PTCIP or grant the RFA with conditions intended to ensure as much.
C. Passenger Rail Impact
In its filed comments, Amtrak reiterates its support of PTC system
implementation and expects that it will complete installation on its
lines in advance of the statutory deadline. Amtrak's comments are
otherwise limited to concerns relating to the impact of this rulemaking
on passenger railroads, and on federal and state funding requirements
for passenger rail service. Amtrak states that if the proposed rule is
adopted, railroads will not be required to install PTC systems on rail
lines that were used to transport PIH shipments in 2008, but are no
longer being utilized for PIH materials traffic as of December 31,
2015. Amtrak expresses concern that passenger rail operators--whose
presence may now be the sole reason for mandatory PTC system
implementation on those lines--may be asked to bear some or all of the
costs of PTC system installation that would have been borne by freight
railroads under the original rule. Amtrak believes that this rule may
pose a risk to the continued operation of affected passenger rail
services since they do not generate profits, rely on constrained
taxpayer funding, and Amtrak is already burdened by the need to fund
PTC system installations on lines it owns.
Amtrak states that the impact of the proposed rule on passenger
railroads cannot be determined from the record in this proceeding.
While the RIA invited comments on the accuracy of the data submitted by
AAR--indicating that its member railroads have 1,562 route miles used
for passenger rail service on which PIH materials traffic was handled
in 2008, but on which PIH materials traffic is expected to cease by
2015--Amtrak argues that the data is insufficient to determine the
affected route segments that have passenger rail service. Amtrak
asserts that additional federal funding is limited.
FRA understands that, upon cessation of PIH materials traffic, a
line segment may still require PTC system implementation due to the
existence of passenger traffic. In some situations not under the
control of FRA, this may result in the distribution of costs between
the freight and passenger railroads. However, as was the case with
respect to similar concerns expressed by the Trade Associations and
shippers, this distributional concern alone does not provide adequate
justification for maintaining the two qualifying tests. Moreover, it is
within the jurisdiction of the STB to settle disputes and determine
appropriate rate structures between freight railroads, shippers, and
passenger operators in these circumstances. In response to Amtrak's
concerns relating to insufficient funding, the availability of funds to
support passenger railroads in the installation of PTC systems is
outside the scope of this rulemaking. In regards to Amtrak's concerns
regarding insufficient data to determine the affected route segments,
it is FRA's understanding that the host and tenant railroads, through
their discussions, would be able to communicate this information. To
provide that information in this proceeding risks exposing certain
sensitive security information.
D. Cost-Benefit Analysis
1. Trade Associations
The Trade Associations also take issue with FRA's cost-benefit
analysis, asserting that it is flawed. The Trade Associations support
the Peabody Reports' assertion that FRA relied upon a cost-benefit
analysis that substantially and erroneously excluded business benefits
accruing to railroads, shippers and the public. According to the Trade
Associations, this exclusion of business benefits violates Office of
Management and Budget (``OMB'') Circular A-4, which governs cost-
benefit analyses conducted by federal agencies and resulted in an
erroneous cost-benefit ratio of 20:1 in the PTC final rule published on
January 15, 2010. The Trade Associations assert that the flaws in the
January 2010 cost-benefit analysis accompanying the original final rule
are continued and more extensive in the instant rulemaking.
Ultimately, the Trade Associations and Peabody contend that FRA's
cost-benefit analysis should have considered business benefits that
they contend would significantly reduce the gap between the required
PTC system implementation's costs and benefits. These parties discuss a
2004 report produced by Zeta-Tech Associates, commissioned by FRA,
quantifying the business benefits of positive train control, with
direct and indirect business benefits ranging between $2.2 and $3.8
billion annually, in 2001 dollars.\4\ According to the Trade
Associations, these benefits include increased line capacity; fuel
savings; improved rail dispatching operations; and societal benefits
from reduced highway crashes and reduced pollution emissions. Using
these findings, in conjunction with other sources, FRA in 2004
submitted a report to Congress offering differing opinions as to
whether or not PTC technologies could generate business benefits. One
point of view was that PTC technologies could create net societal
benefits that ranged from $2.1 to $3.9 billion annually, including
significant accident-avoidance benefits as a result of modal diversion
from highway to rail transportation.
---------------------------------------------------------------------------
\4\ Zeta-Tech Associates, Quantification of the Business
Benefits of Positive Train Control (Mar. 15, 2004) at 10-11. The
Zeta-Tech analysis' estimate of benefits ranged as low as $0.9
billion annually, including $0.4 billion in benefits accruing to
shippers. See also Federal Railroad Administration, Benefits and
Costs of Positive Train Control (Aug. 2004) (noting the numerous
assumptions made by the Zeta-Tech analysis and also noting that some
of these benefits may already be realized or may be realized without
PTC system implementation).
---------------------------------------------------------------------------
Peabody posits that Congress passed RSIA in 2008 based in part on
FRA's report. Peabody also indicates that as part of the rulemaking
developing the 2010 PTC rule, FRA updated each element of the 2004
report, but did not include them in the RIA for that rule, which
considered only direct railroad safety benefits and total direct
implementation costs in its cost-benefit analysis. If FRA had included
the business benefits as part of its economic analysis associated with
the initial PTC rulemaking published on January 15, 2010, Peabody
contends that the cost-benefit ratio would have been restated as
1.1:1.0. Peabody's own May 2010 report asserts that a 0.86:1.00 cost-
benefit ratio is more realistic. However, by not including those
benefits, FRA's RIA reflected a cost-benefit ratio of 21.7:1.0.
In its report, Peabody asserts that FRA's cost-benefit analysis in
this rulemaking should be based on the ``no action scenario'' (i.e.,
where PTC systems are not required), which would result in a much lower
cost-benefit ratio than the 1:20 ratio contemplated by this rulemaking.
In other words, Peabody believes that FRA should determine the change
in costs and benefits where PTC
[[Page 28294]]
systems have not yet been installed, not where PTC systems will be
installed in the future. According to Peabody, FRA's cost-benefit
analyses support a perceived effort by the railroads to limit routes,
forcing more PIH onto the roads or increasing shipper costs.
FRA disagrees with Peabody. The ``no action scenario'' would leave
the final rule in place and PTC system implementation would be required
without the relief of this rulemaking. Peabody misstates what result
occurs in a ``no action scenario'' for this rulemaking. Contrary to
Peabody's assumptions, if FRA were not to publish this final rule, the
result would be a continuation of the requirement to install PTC
systems on certain line segments. In Circular A-4, Regulatory Analysis,
the Office of Management and Budget, says ``[i]t may be reasonable to
forecast that the world absent the regulation will resemble the
present. If this is the case, however, your baseline should reflect the
future effect of current government programs and policies.'' The future
effect of the prior final rules is that PTC systems will be installed
on a number of line segments. Accordingly, the no-action alternative
includes the cost of PTC systems on those line segments and the
commensurate costs and benefits. Peabody, as well as the Trade
Associations generally, also relies on the Zeta-Tech Report to claim
that FRA has failed to account for some business benefits that result
from PTC system implementation. However, as FRA stated in its
contemporaneous report to Congress, many of these benefits were
speculative or achievable through other means. The intervening years
have validated FRA's concerns with the report. The PTC systems that
presently exist lack some of the features that Zeta-Tech used to
justify its benefit assumptions, and railroads have already achieved
some of the operational benefits without PTC system implementation.
Accordingly, FRA cannot treat these benefits as attributable to PTC
system implementation.
Peabody asserts that FRA does not consider the costs or benefits to
shippers or the public in its analysis. Peabody comes to this
conclusion based on the exclusion of business and other societal
benefits. Peabody also claims that FRA includes only railroad safety
benefits in its economic analyses and continues to exclude business and
other societal benefits that FRA had itself identified, quantified, and
championed for much of the previous decade. FRA specifically did
account for safety benefits accruing to society at large, such as
evacuations. The costs of removing these benefits are accounted for in
this final rule.
In analyzing the PTC rule, FRA included a sensitivity analysis with
business benefits when it appeared there was a possibility that a
railroad would adopt a PTC system capable of generating business
benefits. According to the railroads' PTCIPs submitted to FRA, there
are no PTC systems that would generate business benefits, other than
from train pacing, in the 20-year analysis period. The only business
benefit that FRA had included in its base analysis of the PTC final
rule was fuel savings that would result from train pacing. Only one
railroad has adopted train pacing systems integrated with its PTC
system, and that railroad is not likely to change the number of
locomotives equipped for train pacing, and thus is not likely to see
any change in its business benefits. In other words, issuance of this
final rule is not expected to impact fuel saving benefit levels. To the
extent that PTC systems planned for implementation would not include
aspects to facilitate business benefit realization, there is no impact
on business benefits from reducing the mileage over which wayside
components will be installed. FRA does not anticipate the other forms
of business benefits identified in the Zeta-Tech Report--improved work
order reporting and precision dispatch systems--to be present in the
PTC systems implemented by railroads. No such systems have been
described in the PTCIP of any railroad; furthermore, while some
railroads are implementing work order reporting and precision dispatch
systems, these railroads are not integrating the systems into their PTC
system due to technological infeasibility.
FRA does not have any evidence that railroads installing PTC
systems have found a way to make a profit by integrating additional
equipment that would generate the kinds of business benefits described
in the Peabody analysis. The railroads have long argued that there was
no way for them to make a profit from PTC systems, and their behavior
is consistent with that assertion. In FRA's 2004 letter report to
Congress, the suggested business benefits would have been relatively
large, but very little of that business benefit would have accrued to
railroads. The business benefits would have gone in large measure
(roughly 80 percent) to shippers, who in turn would have created even
larger societal benefits. There is no market mechanism for railroads to
share in most of those benefits. FRA therefore has no reason to believe
that railroads will perform technological integrations that will create
large business benefits.
According to Peabody, FRA relies on several unsupported assumptions
and estimates to derive its cost and benefit calculations. This appears
to be a criticism of two assumptions that FRA relied upon in order to
estimate this rule's impact: that 50 percent of segments submitted for
exclusion from the system would have passed the ``two tests'' and that,
under the prior rule mitigation costs, the costs of risk mitigating
technologies currently referenced under Sec. 236.1020, would have
averaged $10,000 per mile. While AAR also questioned the assumption
that 50 percent of segments would pass the two tests, AAR did not
comment on the estimate for mitigation costs.
To perform a cost-benefit analysis in this proceeding, FRA required
an estimated number of miles in the PTC network that would be affected
by the final rule, and therefore estimated the number of miles in the
PTC network that would fail one or both of the two qualifying tests and
would have been required to be PTC-equipped. The two qualifying tests
were intended to ensure that PTC systems were installed on certain
risk-sensitive line segments. The tests would have no impact had all
segments or no segments met the requirements of both tests. In order to
estimate the affected mileage, FRA needed an estimate of how many miles
the railroads could justify and likely remove from their systems--a
figure provided by AAR (estimated at 10,000 miles in the base case)--
and an estimated probability of how likely those segments meet the
minimum requirements of the two qualifying tests had the prior final
rule remained unchanged.
As noted, the two qualifying tests were never fully implemented and
applied to track segments, so it is impossible to make inferences about
the test results. Since the residual risk test was not developed, FRA
cannot make an informed estimate of the proportion of segments likely
to fail one or both of the two qualifying tests. FRA chose 50 percent
as an estimate of the proportion of segments the railroads want to
remove from PIH materials service that would pass both tests, because
it provides the lowest expected difference from a percentage chosen at
random in the possible range of 0 percent to 100 percent. No party has
offered an alternative estimate, and no party has provided a means of
deriving an alternative estimate, despite FRA's request for comments
and information on this issue. See 76 FR 52,918, 52,921, 52,924. If FRA
were to conduct a
[[Page 28295]]
sensitivity analysis on this range, it would be difficult to choose a
range of passing percentages for the undeveloped test. For the purposes
of argument, FRA uses a range of 25 percent to 75 percent, representing
a broad range of possible percentages covering half of the possible
range from 0 percent to 100 percent.
Given this reasonable range, an additional sensitivity analysis is
unnecessary, as such an analysis would yield similar results as the
analysis already present. In the sensitivity analysis of the NPRM,
which estimated the range of miles of line segments over which PIH
materials would be removed, FRA calculated benefits with the number of
miles equaling 7,000 miles, 10,000 miles, and 14,000 miles. As
discussed above, some of these miles would have no longer been required
to have an implemented PTC system under the prior rules; FRA estimated
that only half of these miles would be required to install PTC systems
under the prior rules. As such, FRA calculated the benefits of removing
PTC systems from 3,500, 5,000, and 7,000 miles--50 percent respectively
of 7,000, 10,000, and 14,000 miles. Were FRA to perform a new
sensitivity analysis on the percentage of miles that would have no
longer been required to have a PTC system implemented, the estimates of
25 percent, 50 percent, and 75 percent of miles passing the two
qualifying tests and not requiring PTC systems would result in 7,500,
5,000, and 2,500 miles--75 percent, 50 percent, and 25 percent of
10,000, respectively--that would have nonetheless required PTC systems.
Accordingly, FRA would calculate the benefits of removing PTC systems
from 2,500, 5,000, and 7,500 miles. The analysis of mileage estimates
so similar to those used by FRA in its existing sensitivity analysis
would not yield meaningful new data, and therefore additional
sensitivity analysis on the percentage of segments passing both tests
would be redundant.
Peabody also objects to the estimates of mitigation costs avoided.
Under the PTC final rule issued in January 2010, in order to remove
some segments from the PTC system network, and to compensate for the
resulting safety reductions, the railroads would have had to propose
mitigations of the additional risk created by that removal. FRA
purposefully avoided defining such mitigations, providing the railroads
the flexibility to propose their own solutions, which would then be
subject to FRA approval. Even if FRA had fully developed the
methodologies for the two qualifying tests, FRA still would not have
prescribed particular mitigations, and therefore would not require
mitigation that would be more costly than the estimates provided and
where less costly solutions are available. To estimate these mitigation
costs, FRA made the reasonable assumption that mitigation costs could
only rise to a certain percentage of the total wayside costs of
implementing PTC technologies; as the cost of mitigations rises, the
likelihood rises of a railroad deciding to install a PTC system rather
than incur the mitigation costs. The mitigation cost estimate also
includes resources that might have been expended to pass the tests.
Despite FRA's request for comments on its calculation of costs, no
commenter provided alternative estimates or methodologies for the
agency to use in lieu of the present estimates.
Peabody also states that FRA ought to include business benefits
because FRA included some uncertain figures without including other
uncertain figures. More specifically, according to Peabody, FRA is
uncertain about the correct values of the two figures it included in
its business economic estimates (i.e., the proportion passing both
qualifying tests and the cost per mile for mitigations) and FRA was
also uncertain (in analyzing the PTC rule) about whether business
benefits would be generated, which FRA did not include. FRA is certain
that a percentage of track segments would have passed the two
qualifying tests, and is using the best estimate available to calculate
the impacts. FRA is also certain that some segments would have required
mitigation, and is using the best information available regarding the
expected cost of the mitigations. FRA was required to estimate these
values, and FRA has pointed out that within reasonable ranges the exact
value of these estimates will not affect FRA's conclusions. The final
rule still provides net societal benefits regardless of the range of
impact. In other words, since the costs exceed the benefits for any
given mile of PTC system implementation, removing the requirement to
install a PTC system for any number of miles in the scope proposed will
result in a net benefit. At this time, FRA is less uncertain about
whether the PTC systems being adopted under the PTC rule will create
business benefits of the type and magnitude explored in the sensitivity
analysis of the prior final rule, for the reasons described above. It
is clear that with minor exceptions, unaffected by this final rule, the
railroads have adopted PTC systems that will not likely create the
kinds of business and societal benefits suggested in the sensitivity
analysis of the prior final rule.
Peabody asserts that in many cases FRA accepts, without question,
AAR's estimates and assumptions. Peabody also claims that FRA
improperly focuses on the net costs and benefits associated with PTC
system implementation based on the AAR's estimated 10,000 track miles
that would be PTC-equipped but for the proposed rules changes. Peabody
says that, in doing so, FRA fails to account for 3,500 track miles it
had originally determined would not be equipped with PTC systems.
FRA did not accept or adopt any of AAR's estimates without first
analyzing them. Peabody refers to estimates of how many miles of PTC
system wayside equipment would be affected by this rule. FRA includes
AAR's estimate as the base case, because railroads are the parties most
likely to know how much wayside would be affected. The railroads'
actions will determine how much of their systems may be excludable
under the final rule, and they do not seem to have an incentive to
misstate that amount.
As previously noted, FRA assumes that 50 percent of the segments
that the railroads plan to remove from the PTC network could pass both
tests. When analyzing the PTC rule published in January 2010, FRA had
estimated that the railroads could exclude roughly 3,500 miles due to
the cessation of PIH materials traffic. If those segments represent the
50 percent of those track segments that would have passed the two
tests, this would imply that the railroads would have been interested
in removing roughly 7,000 miles from their PTC networks, a figure that
has become the low benefit case.
In its analysis for the NPRM in the instant proceeding, FRA assumed
that the 3,500 miles are a subset of those 10,000 miles that would not
be equipped with PTC systems, and are therefore accounted for. When
analyzing the PTC rule published in January 2010, FRA needed to
estimate the number of miles that might have been eligible to avoid PTC
system implementation in the event that PIH materials traffic would be
removed. FRA reviewed traffic patterns for segments from which FRA
believed the railroads could remove PIH materials traffic with little
or no difficulty. For that rulemaking, this information supported the
conservative estimate used in the analysis of the NPRM. FRA did not
receive any dissenting comments.
In analyzing the NPRM issued in the instant proceeding, FRA
attempted to remain consistent with the aforementioned prior analysis,
as it had
[[Page 28296]]
subsequently become the subject of much discussion. From the railroads'
submissions, it does not appear that the 10,000 miles are in addition
to the 3,500 miles; rather, the 3,500 miles are a subset of the 10,000
miles. In its comments, AAR did not challenge or correct FRA's
impression that the 10,000 miles included the 3,500 miles. FRA
therefore continues to assume that the 3,500 miles are a subset of the
mileage AAR intends to remove from PIH service. In reviewing AAR's
data, FRA found that the 10,000 miles included many track segments that
FRA, in previously arriving at the 3,500 mile figure, did not think it
would have been practical to select for removal of PIH materials
traffic when compared to the 3,500 miles for which there appeared to be
several logical mitigation treatments. FRA was presented with several
options for estimating the impact of this rule in light of the new data
provided by AAR. While FRA could have analyzed a low case that
consisted of removing the two tests from the 3,500 miles, yielding an
estimate where the savings were the avoided costs of undergoing the two
tests and undertaking mitigations, this does not seem to be a
reasonable alternative to analyze as the railroads are already claiming
that they intend to remove many more segments from PIH service.
Alternatively, FRA could have treated the 3,500 miles as the only
subset of the 10,000 miles that would pass the two tests. As a result,
the percentage passing both tests would be 35 percent with a base
mileage of 10,000 miles. As noted in the sensitivity analysis, the
14,000 mile case with 50 percent proportion passing both tests provides
very similar results as considering a 10,000 mile case with only 30
percent passing both tests. A case using 35 percent is not very
different from a case using 30 percent, and presenting it would not add
any value to a decision maker. Finally, FRA could continue to use the
3,500 mile figure as representative of what would happen in a low case,
with 7,000 miles and 50 percent of segments passing both tests. This
adds value as a low case in sensitivity analysis. FRA has adopted this
latter approach, and continues to believe the approach is sound.
Peabody also claims that, if FRA were to reconduct its economic
analysis of the prior final rules, the outcome would be a reduced
estimate of the total cost of PTC wayside implementation. However, FRA
is not updating its analysis of the prior final rule; the agency is
only estimating the impacts of the changes induced by this final rule.
This estimate relies upon PTC system implementation plan submissions to
arrive at total PTC system mileage, though total mileage has relatively
little impact on the analysis, and on AAR representations as to the
affected mileage. Peabody also uses its mileage estimates to argue that
fewer locomotives than FRA estimates will no longer need to be equipped
with PTC onboard apparatuses. In making this comment, Peabody appears
to rely on its mileage estimates that differ with FRA's. FRA's
estimates are based on actual railroad PTC implementation plans, and on
its estimates of affected mileage. The primary use of this calculation
is for FRA to estimate the impact on locomotive costs on small
entities. In doing so, FRA also estimated impact of this final rule on
Class II railroads. Reduced locomotive costs account for roughly 2
percent of the benefits. Even if FRA were to reduce that by 30 percent,
as Peabody requests, the total societal benefits accruing from this
rulemaking would be decreased by 0.6 percent. Use of the Peabody
estimate would not impact the RIA's conclusion.
Peabody also asserts that FRA erred in assuming an annual PTC
system maintenance cost of 15 percent of the total installation costs,
substituting a 12.5 percent factor. However, FRA continues to believe
maintenance costs will be relatively high compared to electronic
equipment that does not need to pass strict qualification procedures.
Railroads and their suppliers will use components developed for the
general market, including microprocessors. The railroad segment is not
sufficiently large to provide an incentive for chipmakers to develop or
manufacture microprocessors exclusively for railroad use. Thus, when
microprocessors become obsolete, the railroads and their suppliers will
have to buy different microprocessors, and re-qualify their PTC systems
using the newer microprocessors. This will increase the maintenance
costs relative to the value of the installed base. FRA will continue to
use its estimate that maintenance costs will be 15%, and will adjust
only if future empirical evidence indicates otherwise. Maintenance cost
savings were 59 percent of the total benefit using a 7 percent discount
factor and 65 percent of the total benefit using a 3 percent discount
factor. Reducing maintenance costs by one-sixth (12.5 percent instead
of 15 percent) would reduce the total benefit estimate by 10-11
percent. Even assuming the lower number of locomotives estimated by
Peabody and the lower maintenance savings estimated by Peabody would
not have any impact on the conclusions of the analysis, that benefits
far exceed costs.
Peabody also argues that FRA improperly shifted the analysis period
from 2009-2028 to 2012-2031. However, as was the case in several of
Peabody's other arguments, here Peabody fails to take heed of the fact
that the instant rulemaking is a new proceeding. Accordingly, FRA has
adopted a current starting point and 20 year time period for analysis.
Decisions made prior to this rulemaking were not impacted by this
rulemaking, and this analysis is appropriately forward-looking only.
Peabody claims that the exclusion of so-called headline accidents
is unverified. FRA pointed out in its analysis that all of the headline
accidents involved either passenger trains or release of chlorine, a
PIH material. Relief under this rulemaking will only apply to segments
from which PIH is removed (except for de minimis quantities) and do not
have passenger traffic except on other than main lines as defined in
the regulation. The conditions under which the headline accidents
generally occur would not allow for line segments to get relief from
PTC requirements. Thus, headline accidents are not relevant to the
costs or benefits of this rule, as there is not a substantial risk of
such accidents occurring on the line segments no longer required to be
equipped with PTC systems as a result of this rule. Peabody also
objects to applying a percentage to the risk of other PTC-preventable
accidents on the segments. FRA reviewed data submitted by railroads for
segments likely to be those from which PIH materials traffic would be
removed, and made two observations. First, FRA observed that the
railroads claimed that only 21 PTC-preventable accidents had occurred
over a 7 year period, an average of 3 per year. This contrasts with the
PTC-preventable accident data on which FRA based the PTC final rule,
which showed an average of 52 PTC-preventable accidents per year,
excluding headline accidents. FRA also observed that in general the
segments appeared to have below-average tonnage volumes, although FRA
does not have directly comparable volume data for the entire PTC
network. It seemed improbable to FRA that roughly 16 percent of the PTC
network had only 5.8 percent of the PTC-preventable accidents, but
clearly the average risk per mile would be lower. The calculated
probability of an accident on the miles to be removed was 36.2 percent
of the likelihood on the
[[Page 28297]]
entire PTC network.\5\ It also seemed unlikely that the risk per mile
was identical between the entire PTC network and the miles to be
removed from PIH materials service. As a conservative estimate, FRA
used a value of 60% to estimate the accident benefits that would no
longer occur on segments removed from the PTC network, a value that
leads to a higher estimate of costs than a value of 36% would have. In
other words, 60% constitutes a risk estimate within a range of 36% and
100% of the risk for the segments not subject to this rule, and the 60%
estimate falls toward the lower end as a result of adjustments for
density and regulatory changes implemented since the publication of the
previous final rule. Peabody argues that the removal of the headline
accidents was a sufficient reduction in estimated risk. FRA disagrees.
In addition to the reduction of risk from the absence of PIH and
passenger traffic, the available evidence indicates that the segments
eligible for exclusion are less likely to have non-headline PTC-
preventable accidents, and FRA has estimated the costs and benefits of
excluding such segments accordingly.
---------------------------------------------------------------------------
\5\ Calculation: ((3 accidents per year)/(52 accidents per
year))/((11,248.43 miles)/(70,000 miles)) = 36.2 percent.
---------------------------------------------------------------------------
Finally, Peabody objects to FRA's approach to annualization of
costs. This approach is based on OMB guidance and used by DOT for all
significant regulations.\6\ Accordingly, FRA will retain the annualized
estimates.
---------------------------------------------------------------------------
\6\ OMB Circular A-4 at 45 (``You should present annualized
benefits and costs using real discount rates of 3 and 7 percent.'').
---------------------------------------------------------------------------
2. AAR
AAR recognizes the RSIA mandate that PTC systems must be
implemented by December 31, 2015, on main lines used to transport
passengers or PIH materials and that FRA maintains the statutory
discretion to require additional PTC system implementation. However,
AAR asserts that FRA's discretion must be exercised reasonably. With a
cost-benefit ratio of 20:1, AAR believes that it is patently
unreasonable for FRA to exercise any discretion beyond the statute's
minimum implementation requirements. For the same reason, AAR states
that the two qualifying tests are inconsistent with RSIA, because, ``No
additional prerequisites are appropriate unless FRA can justify
additional PTC requirements beyond the statutory mandate. There is no
justification for going beyond the statutory mandate in any event, but
especially with such a disparate cost-benefit ratio.''
AAR believes that removal of the two qualifying tests could result
in avoiding PTC system implementation on 10,000 track miles. AAR
determined this amount based upon the difference between PIH materials
route maps as they looked in 2008 and what they expect them to look
like by the end of 2015. AAR expects a reduction in track miles upon
which PIH materials will be transported due to a change of customer
demands, regulatory compliance, and pro rata changes to become more
efficient. AAR estimates PTC system installation-related savings of
$50,000 per mile, totaling $500 million. AAR expects further savings
from avoiding the associated maintenance costs.
With the removal of the two qualifying tests, AAR believes that a
railroad should still be able to file an RFA to remove a track segment
from the PTCIP's implementation schedule if there is passenger service
on the line that qualifies for a main line track exclusion under 49 CFR
Sec. 236.1019. According to AAR, the statement in the first sentence
of proposed Sec. 236.1005(b)(4)(i)--that a line qualifies only if
there is a ``cessation of passenger service''--could be interpreted as
stating that a PTC system will be required for a line over which no PIH
materials will be transported after 2015 if there is any passenger
service, even if the passenger service qualifies for a main line track
exclusion. While FRA viewed the prior language as sufficient to allow
for the exclusion of such lines, the rule text has nonetheless been
further clarified to explicitly reference main line track exclusions.
In the preamble to the proposed amendments, FRA asks about the
accuracy of its cost-benefit analysis. While there are some differences
between AAR's and FRA's assessment of costs, the differences would not
materially affect FRA's conclusion that the costs to the industry that
would be avoided far outweigh any benefits that would be lost. In
general FRA assumes the base cost of $50,000 per mile has not changed
as a result of technological advancements. Further, FRA assumes this
$50,000 per mile estimate represents a variable cost estimate that is
relatively constant across different segments of track.
While AAR indicated that removal of the two qualifying tests could
potentially avoid PTC system implementation on 10,000 track miles, FRA
also performed a sensitivity analysis in its proposed RIA, using 7,000
miles as a conservative low-number threshold. AAR believes that FRA
underestimates the route miles at stake, because it presumably does not
account for track miles potentially affected by the currently
undeveloped residual risk analysis. Thus, AAR states that it does not
know the basis for FRA's assumption that 50 percent of the lines in
question would have qualified under that criterion. FRA agrees that it
is difficult to estimate the percentage of segments that would have met
both tests, because both tests were not fully developed. As noted in
its response to the Peabody study, FRA's sensitivity analysis provides
a view of what the outcome might have been under the base case had the
percentage passing the two tests been higher or lower. Ultimately,
regardless of the exact number of miles no longer requiring PTC system
implementation, the societal benefits of the final rule are much
greater than the societal costs.
AAR also contests statements made at the hearing by those
representing some of the shippers, taking issue with the shippers'
reliance on the Peabody and Zeta-Tech studies, which AAR asserts was
already refuted by the Oliver Wyman study sent to FRA on April 27,
2010. In particular, while the Peabody and Zeta-Tech studies each
provide a cost-benefit analysis that included business benefits, Oliver
Wyman contends that with the advancements made since the writing of the
Zeta-Tech report, this benefit would be ``minimal.''
AAR believes that the shippers' reference to the Zeta-Tech analysis
is misplaced, because it analyzed hypothetical PTC systems and
hypothetical business benefits. AAR asserts that some of those business
benefits have already been achieved through implementation of other
systems and that the PTC systems being installed will not enhance the
capability to achieve those business benefits. Moreover, according to
AAR, the PTC systems currently being installed will lack those business
benefits and will likely face many operational inefficiencies,
particularly as they relate to braking algorithm changes and the
resultant effect on network velocity and capacity constraints. FRA did
not include those business benefits in either the analysis of the NPRM
or this analysis, and agrees with AAR that it would not have been
proper to include those hypothetical benefits in either analysis, as
described in more detail above. In addition, AAR contends that any
discussions on pricing or common carrier obligations are not
appropriate for this forum. FRA described these issues in more detail
in Sections III.A and III.B, above.
[[Page 28298]]
IV. Section-by-Section Analysis
Unless otherwise noted, all section references below refer to
sections in title 49 of the Code of Federal Regulations (CFR).
Proposed Amendments to 49 CFR Part 236
Section 236.1003 Definitions
FRA currently defines PIH materials within the rule text at Sec.
236.1005(b)(1)(i), which some may find difficult to locate.
Accordingly, for the purposes of clarity, FRA is adding the definition
for PIH materials to the definitions section of subpart I. The
inclusion of this definition in Sec. 236.1003 does not change the
meaning of the term as understood under Sec. 236.1005(b)(1)(i) or its
cross-reference to Sec. Sec. 171.8, 173.115, and 173.132.
Section 236.1005 Requirements for Positive Train Control Systems
In this final rule, FRA is eliminating the alternative route
analysis and the residual risk analysis tests. When initially published
in the PTC rule on January 15, 2010, these provisions were included in
Sec. 236.1005(b). On September 27, 2010, FRA issued amendments to the
PTC rule, moving the text to a new Sec. 236.1020, and providing more
clarifying language. However, to ensure continuity and understanding,
Sec. 236.1005 contained various cross-references to Sec. 236.1020. As
indicated below, FRA is eliminating Sec. 236.1020. Accordingly, FRA is
also removing the relevant cross-references in Sec. 236.1005.
AAR has concerns regarding the text of proposed (b)(4). AAR
believes that a railroad should still be able to file an RFA to remove
a track segment from the PTCIP's implementation schedule if there is
passenger service on the line that qualifies the railroad to submit a
main line track exclusion addendum (MTEA) under 49 CFR 236.1019.
According to AAR, the statement in the first sentence of proposed Sec.
236.1005(b)(4)(i)--that explicitly references the ``cessation of
passenger service'' but does not discuss MTEAs--could be interpreted as
stating that a PTC system will be required for a line over which no PIH
will be transported after 2015 if there is any passenger service, even
if the passenger service qualifies for an MTEA. AAR also argues that
this paragraph, if literally read, provides that FRA will approve a
request for excluding a line segment from the PTC mandate if there is a
cessation of passenger service or PIH materials service by December 31,
2015, or a decline in freight traffic below 5 million gross tons over a
2-year period. AAR states that, ``The first issue with proposed
(b)(4)(ii) is a repetition of the problem presented by the first
sentence of (b)(4)(i), a reference to a cessation of passenger service
rather than a reduction to an amount qualifying for a main track
exclusion. The second issue with proposed (b)(4)(ii) is the use of
`or.' Under a strict reading of the proposed language, a line with over
5 million gross tons of freight traffic used for TIH and passenger
service, for example, would qualify for an exclusion from the PTC
mandate if passenger service ceased even if there were no changes in
the freight volume and TIH traffic continued.''
In response to these concerns, FRA has clarified the language of
paragraph (b)(4) without changing its intended meaning. Paragraph
(b)(4)(i) now specifically mentions the approval of an MTEA as one
cause for a routing change to allow for approval of an exclusion.
Paragraph (b)(4)(ii) now more precisely states the set of conditions
necessary to approve an exclusion. Specifically, an exclusion may only
be granted where both of the following conditions are established by
the railroad to be true as of December 31, 2015: first, that there is
no passenger service, or any passenger service that exists is subject
to an MTEA; second, that there is no PIH materials traffic or less than
5 million gross tons of freight traffic.
Section 236.1020 Exclusion of track segments for implementation due to
cessation of PIH materials traffic
As previously noted, the current PTC rule requires that, for each
RFA seeking to exclude a track segment from PTC system implementation
due to the cessation of PIH materials traffic, a railroad must satisfy
both an alternative route analysis, and eventually a residual risk
analysis test, in order to secure FRA's approval. FRA's cost-benefit
analysis of the PTC rule indicates that the railroads will incur
approximately $20 in PTC costs for each $1 in PTC safety benefits. In
its congressional testimony, AAR testified that 2010 was the safest
year for America's railroads, that railroads have lower employee injury
rates than most other major industries, that only around 4 percent of
all train accidents on Class I main lines are likely to be prevented by
PTC systems, and that there are many far less costly ways to provide
greater improvements in rail safety than through the implementation of
PTC systems on lines not required by Congress to be equipped.\7\
According to the testimony, if the PTC rule remains unchanged,
railroads may be required to spend more than $500 million in the next
few years to deploy PTC systems on more than 10,000 miles of rail lines
on which neither passengers nor PIH materials will be transported as of
December 31, 2015.
---------------------------------------------------------------------------
\7\ See AAR Congressional Testimony, at 8-9.
---------------------------------------------------------------------------
FRA recognizes that the railroads have much work to do to have
interoperable PTC systems implemented in accordance with the
congressional mandate by the December 31, 2015, statutory deadline. FRA
also recognizes that the alternative route analysis and residual risk
tests could potentially require PTC system implementation at a great
cost to the railroads on lines that will not carry PIH materials
traffic as of December 31, 2015. Lines that no longer carry PIH
materials traffic can still pose significant safety risks associated
with other hazardous material traffic on the lines and these safety
risks may justify a requirement that the lines be equipped with PTC
systems. However, as FRA noted when it last amended the PTC rule (75 FR
59111-59113 (Sept. 27, 2010)), FRA will need to develop an appropriate
risk methodology through a separate rulemaking proceeding before it can
require PTC systems to be installed on any line that no longer carries
PIH materials. FRA has had discussion with members of the railroad
industry regarding an appropriate risk methodology but has yet to come
up with a reasonable and satisfactory methodology that could form the
basis of this further rulemaking. FRA is, therefore, eliminating the
two qualifying tests that would potentially require PTC system
implementation on lines not specifically mandated by Congress,
consistent with Executive Order 13563. To achieve this end, FRA is
eliminating Sec. 236.1020. While FRA has removed these analyses from
the PTC rule, FRA reserves its statutory and regulatory authority to
require PTC system implementation on additional track segments in the
future based on risk levels or other rational bases.
V. Regulatory Impact and Notices
A. Executive Orders 12866 and 13563 and DOT Regulatory Policies and
Procedures
This final rule has been evaluated in accordance with existing
policies and procedures, and determined to be significant under
Executive Order 12866, Executive Order 13563 and DOT policies and
procedures. 44 FR 11,034 (Feb. 26, 1979). We have prepared and placed
in the docket a regulatory impact analysis (RIA) addressing the
economic impact of this final rule. FRA is
[[Page 28299]]
removing regulatory provisions that require railroads to meet two tests
in order to avoid PTC system implementation on track segments that were
used to transport PIH materials traffic in 2008 and carried 5 million
gross tons of traffic, but that, as of December 31, 2015, do not
transport PIH materials traffic and are not used for intercity or
commuter rail passenger transportation that otherwise require PTC
system installation under the rule. Substantial cost savings will
accrue largely from not installing PTC system wayside components or
other mitigations along approximately 10,000 miles of track. Although
these rail lines will forgo some risk reduction, the reductions in risk
will likely be small since these lines pose a much lower risk of
accidents because they generally do not carry passenger trains or PIH
materials and generally have lower accident frequency and severity,
because the lines have relatively lower traffic volumes than the
average segment on which PTC systems will be required, based on FRA's
review of the data submitted by AAR. The analysis shows that if the
assumptions are correct, the savings to the industry in the form of
regulatory relief as proposed far outweigh the cost associated with
increased accident exposure.
The largest part of the cost savings benefit comes from reducing
the extent of wayside that must be equipped with PTC systems. Some of
these lines would have qualified for exemption by passing the two tests
contained in the 2010 PTC final rule, while others may not have. In
addition, benefits will come from reducing the number of locomotives
belonging to Class II and Class III (small) railroads that must be
equipped with PTC systems, because they run on Class I railroads' track
that will no longer need to be equipped with PTC systems. Although
these benefits will be small relative to the wayside equipment savings,
they would be large relative to the size of the railroads being
impacted. The tables below present the total estimated cost savings
benefits of the final rule, assuming installation or additional
mitigation measures would no longer be required along 10,000 miles of
track. The analysis assumes that 5,000 miles of track would have passed
both tests with some mitigation measures being taken, and the remaining
5,000 miles would not have passed both tests and would have required
PTC system implementation under the rules in effect before this
rulemaking.
Benefits (20-Year, Discounted)
------------------------------------------------------------------------
Costs avoided 7% Discount 3% Discount
------------------------------------------------------------------------
Reduced Mitigation Costs, Including $91,793,822 $121,119,324
Maintenance..........................
Reduced Wayside Costs, Including 515,695,631 680,445,643
Maintenance..........................
Reduced Locomotive Costs, Including 12,479,834 16,466,785
Maintenance..........................
---------------------------------
Total Benefits.................... 619,969,287 818,031,752
------------------------------------------------------------------------
Total costs may also be broken down into initial investment and
maintenance costs. Although railroads may already have spent money to
install and maintain PTC systems, FRA assumes here that those funds
have not been spent on the lines considered here, as they tend to be
lower volume, lower priority lines, and FRA assumes that the railroads
would not install PTC systems on those lines until 2014, at the
earliest, in the absence of this rulemaking. FRA estimates that
avoiding installation on 10,000 miles would let railroads avoid $300.5
million in initial installation costs (not discounted). Maintenance
cost savings would total $366.0 million (discounted at 7%) or $538.9
million (discounted at 3%). Maintenance includes all of the activities
and subsequent purchases needed to operate the PTC system over its
life-cycle, and to maintain its proper functioning, reliability, and
availability. Maintenance includes training, system inspection,
testing, adjustments, repair, and replacement of components.
Replacement components can be very expensive in processor-based systems
with relatively small installed bases, such as PTC. PTC systems are not
installed in great enough numbers to justify a processor manufacturer
making a processor just for PTC. PTC systems developers must use
standard processors, and over time those processors usually become
obsolete and are no longer supported or manufactured. Then the PTC
system developer must redesign and re-test the PTC system to ensure it
will continue to operate safely and reliably with the new processor.
The Trade Associations commented that they believe the estimated
savings from reduced maintenance costs are too high, and should have
been based on 12.5 percent of the value of installed PTC systems,
rather than the 15 percent of the value of installed PTC systems used
in analyzing both the NPRM and this final rule. For reasons described
above, in its response to comments FRA explains its rationale for
rejecting the lower estimate of maintenance costs.
Costs associated with the proposed regulatory relief will come from
reducing the potential for accident reduction. A substantial part of
the accident reduction that FRA expects from PTC systems comes from
reducing high-consequence accidents involving passenger trains or the
release of PIH materials. FRA believes that the track segments impacted
by this final rule pose significantly less risk because they generally
do not carry passenger trains or PIH materials and generally have lower
accident frequency and severity, as discussed above, because the lines
have relatively lower traffic volumes and track speeds than the average
segment on which PTC systems are required, based on FRA's review of the
data submitted by AAR. The following tables present the total costs of
the final rule as well as the breakdown of the costs by element.
Costs (20-Year, Discounted)
------------------------------------------------------------------------
Foregone reductions in 7% Discount 3% Discount
------------------------------------------------------------------------
Fatality Prevention................... $11,453,106 $16,860,327
Injury Prevention..................... 4,254,484 6,263,104
Train Delay........................... 117,793 173,406
Property Damage....................... 10,163,835 14,962,367
Equipment Cleanup..................... 143,273 210,915
[[Page 28300]]
Environmental Cleanup................. 430,995 634,475
Evacuations........................... 138,780 204,301
---------------------------------
Total Costs....................... 26,702,267 39,308,896
------------------------------------------------------------------------
The 20-year discounted net benefits (subtracting the costs from the
benefits) are expected to be $590 million over 20 years, discounted at
7 percent per year; and $780 million over 20 years, discounted at 3
percent per year. The timing of benefits and costs are such that a
large benefit in terms of capital investment is avoided in early years,
while the benefit of avoided maintenance and the disbenefit (costs) of
accidents not avoided would be realized annually in later years. FRA
also assessed the sensitivity of the analysis with respect to scenarios
in which railroads may only be able to get relief for 7,000 miles of
track and in which railroads may get relief on as many as 14,000 miles
of track. Each of these assumes that 50% of the track miles would have
passed both tests with some mitigation measures being taken, and that
the remaining 50% of the track miles would not have passed both tests
and would have required PTC system implementation under the current
rules. Such scenarios also show net benefits.
------------------------------------------------------------------------
Net societal benefits 7% Discount 3% Discount
------------------------------------------------------------------------
Expected Case (10,000 miles).......... $593,267,020 $778,722,856
High Case (14,000 miles).............. 793,856,299 1,041,764,269
Low Case (7,000 miles)................ 442,825,061 581,441,797
------------------------------------------------------------------------
Further, the benefit-cost ratios under the scenarios analyzed range
between 20:1 and 25:1.
------------------------------------------------------------------------
Benefit-cost ratio 7% Discount 3% Discount
------------------------------------------------------------------------
Expected Case......................... 23.22 20.81
High Case............................. 22.24 19.93
Low Case.............................. 24.69 22.13
------------------------------------------------------------------------
FRA also received comments from the Trade Associations saying that
FRA understated the costs of the proposed rule, especially by not
accounting for business benefits of PTC that would be lost on the
affected segments. FRA has reviewed PTCIPs, and at present the only
business benefits the railroads are seemingly likely to realize from
PTC would result from train pacing. Train pacing benefits are derived
from locomotive onboard equipment, and would not be affected by the
reduction in wayside component installations. Train pacing is likely to
result in fuel savings, but since train pacing will not be affected by
this rule, fuel savings will remain unchanged. This is discussed in
more detail in the response to comments above.
B. Regulatory Flexibility Act and Executive Order 13272
To ensure that the impact of this rulemaking on small entities is
properly considered, FRA developed this final rule in accordance with
Executive Order 13272 (``Proper Consideration of Small Entities in
Agency Rulemaking'') and DOT's policies and procedures to promote
compliance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
The Regulatory Flexibility Act requires an agency to review
regulations to assess their impact on small entities. An agency must
conduct a regulatory flexibility analysis unless it determines and
certifies that a rule is not expected to have a significant economic
impact on a substantial number of small entities.
As discussed in earlier sections of this preamble, FRA is amending
the regulations implementing a provision of RSIA that requires certain
passenger and freight railroads to install PTC systems. Specifically,
FRA is removing two regulatory requirements that require railroads to
either conduct further analyses or meet certain risk-based criteria in
order to avoid PTC system implementation on track segments that carried
PIH traffic and 5 million or more gross tons of traffic in 2008 but
that will not carry PIH hazardous materials traffic as of December 31,
2015.
FRA is certifying that this final rule will result in ``no
significant economic impact on a substantial number of small
entities.'' The following section explains the reasons for this
certification.
1. Description of Regulated Entities and Impacts
The ``universe'' of the entities under consideration includes only
those small entities that can reasonably be expected to be directly
affected by the provisions of this rule. In this case, the ``universe''
would be Class III freight railroads that operate on rail lines that
are currently required to have PTC systems installed. Such lines are
owned by railroads not considered to be small.
The U.S. Small Business Administration (SBA) stipulates in its
``Size Standards'' that the largest a railroad business firm that is
``for-profit'' may be, and still be classified as a ``small entity,''
is 1,500 employees for ``Line Haul Operating Railroads'' and 500
employees for ``Switching and Terminal Establishments.'' ``Small
entity'' is defined in the Act as a small business that is
independently owned and operated, and is not dominant in its field of
operation. Additionally, section 601(5) defines ``small entities'' as
governments of cities, counties, towns, townships, villages, school
districts, or special districts with populations less than 50,000.
[[Page 28301]]
Federal agencies may adopt their own size standards for small
entities in consultation with SBA and in conjunction with public
comment. Pursuant to that authority, FRA has published a final policy
that formally establishes ``small entities'' as railroads which meet
the line haulage revenue requirements of a Class III railroad.\8\ The
revenue requirements are currently $20 million or less in annual
operating revenue. The $20 million limit (which is adjusted by applying
the railroad revenue deflator adjustment) \9\ is based on the Surface
Transportation Board's (STB) threshold for a Class III railroad
carrier. FRA is using the STB's threshold in its definition of ``small
entities'' for this rule.
---------------------------------------------------------------------------
\8\ See 68 FR 24891 (May 9, 2003); 49 CFR part 209, app. C.
\9\ For further information on the calculation of the specific
dollar limit, please see 49 CFR part 1201.
---------------------------------------------------------------------------
The final rule impacts Class III railroads that operate on lines of
other railroads currently required to have PTC systems installed. To
the extent that such host railroads receive relief from such a
requirement along certain lines, Class III railroads that operate over
those lines would not have to equip their locomotives with PTC system
components. FRA believes that elimination of the two tests for relief
from the requirement to install PTC systems will result in PTC systems
not being installed on track segments totaling over 10,000 miles in
length. Approximately five small railroads operate locomotives on lines
currently required to be equipped with PTC systems, but that would
receive relief under the final rule. In addition, two Class III
railroads operate over railroad crossings (diamonds) that intersect
tracks required to be equipped with PTC systems in the absence of
changes adopted in this final rule. The total of seven affected Class
III railroads is not a substantial number of small entities, given that
there are 674 small railroads. Under the final rule Class III railroads
will avoid equipping 28 locomotives with PTC onboard apparatuses at a
cost savings of $55,000 per locomotive initially plus maintenance of
the PTC equipment.
As a business model, most small railroads purchase old locomotives
being sold by larger railroads, because they have become functionally
obsolete for the larger railroads. In the RSAC PTC Working Group
discussions leading up to the PTC final rule published in the Federal
Register on January 15, 2010, the American Short Line & Regional
Railroad Association (ASLRRA) representatives asserted that some short
lines are operating locomotives with a market value of no more than
$75,000, and that it would be very difficult for those railroads to
equip their locomotives at a unit cost of $55,000 each. Further, even
if the average cost to equip a locomotive is $55,000, it may be more
expensive to equip an older locomotive. These railroads will have to
develop a new and unique installation for a small number of locomotives
that may also have space limitations and that may not be equipped with
the more modern mechanisms and design that make it easier to install
PTC systems. One or more of the seven affected small railroads may be
using such older locomotives. For such a railroad, the cost of
equipping a locomotive with an onboard PTC apparatus may be a
significant burden. Thus, the relief of that burden provided by the
final rule may be a significant benefit for such small entities.
The avoided installation cost will also have a significant
beneficial effect on small railroads' annual net income. For instance,
if a short line railroad avoids onboard PTC apparatus installation on
six locomotives, then the savings would be $330,000. When such a
railroad may have annual revenues of $10 million to $20 million, with
the profit of that amount ranging between $1 million and $2 million,
the avoided installation cost could be between 16.5 percent and 33
percent of that railroad's annual income. This savings could be a
significant benefit for an affected small railroad. However, even if
all seven of the affected Class III railroads were to receive a
significant benefit, seven railroads is not a substantial number of
small railroads.
In addition, a Class III railroad will avoid paying for PTC system
installation at one railroad-to-railroad crossing, at an initial cost
of $80,000 plus annual maintenance. Finally, Class III railroads will
avoid operational costs associated with having to reduce operating
speeds to cross over two railroad-to-railroad crossings at an annual
cost of $43,800. The unit costs presented above for installing PTC
systems on locomotives, and at railroad-to-railroad crossings, and the
operational costs of operating over a crossing at reduced speed are the
values used in the Regulatory Flexibility Analysis of the PTC final
rule issued January 15, 2010, and can be found in the docket for that
rulemaking. The changes FRA is adopting will benefit the small entities
impacted. FRA requested comment on whether the impacts on them would be
significant and whether the number of small railroads affected is
substantial. The Trade Associations commented that they believe the
mileage affected on Class I railroads would be less, and the impact on
Class II and Class III railroads also correspondingly less. FRA does
not concur with the comments and the information provided by commenters
does not provide any rationale against certification that the rule is
not expected to impact a substantial number of small entities
significantly. The Trade Associations comments actually support the
certification by suggesting that the impact on the affected small
entities would be less than FRA had estimated. The seven railroads
affected by this rule do not represent a substantial number of
railroads out of more than approximately 600 Class III railroads.
2. Certification
Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 605(b), the
FRA Administrator certifies that this final rule will not have a
significant economic impact on a substantial number of small entities.
C. Paperwork Reduction Act
The information collection requirements in this final rule are
being submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq.
The sections that contain the current information collection
requirements and the estimated time to fulfill each requirement are as
follows:
----------------------------------------------------------------------------------------------------------------
Total annual Average time per Total annual
CFR Section Respondent universe responses response burden hours
----------------------------------------------------------------------------------------------------------------
234.275--Processor-Based Systems-- 20 Railroads....... 25 letters......... 4 hours............ 100
Deviations from Product Safety
Plan (PSP)--Letters.
236.18--Software Mgmt Control 184 Railroads...... 184 plans.......... 2,150 hours........ 395,600
Plan.
--Updates to Software Mgmt. 90 Railroads....... 20 updates......... 1.50 hours......... 30
Control Plan.
236.905--Updates to RSPP......... 78 Railroads....... 6 plans............ 135 hours.......... 810
--Response to Request For 78 Railroads....... 1 updated doc...... 400 hours.......... 400
Additional Info.
[[Page 28302]]
--Request for FRA Approval of 78 Railroads....... 1 request/modified 400 hours.......... 400
RSPP Modification. RSPP.
236.907--Product Safety Plan 5 Railroads........ 5 plans............ 6,400 hours........ 32,000
(PSP)--Dev.
236.909--Minimum Performance 5 Railroads........ 2 petitions/PSP.... 19,200 hours....... 38,400
Standard--Petitions For Review
and Approval.
--Supporting Sensitivity 5 Railroads........ 5 analyses......... 160 hours.......... 800
Analysis.
236.913--Notification/Submission 6 Railroads........ 1 joint plan....... 25,600 hours....... 25,600
to FRA of Joint Product Safety
Plan (PSP).
--Petitions For Approval/ 6 Railroads........ 6 petitions........ 1,928 hours........ 11,568
Informational Filings.
--Responses to FRA Request 6 Railroads........ 2 documents........ 800 hours.......... 1,600
For Further Info. After
Informational Filing.
--Responses to FRA Request 6 Railroads........ 6 documents........ 16 hours........... 96
For Further Info. After
Agency Receipt of Notice of
Product Development.
--Consultations.............. 6 Railroads........ 6 consults......... 120 hours.......... 720
--Petitions for Final 6 Railroads........ 6 petitions........ 16 hours........... 96
Approval.
--Comments to FRA by Public/RRs......... 7 comments......... 240 hours.......... 1,680
Interested Parties.
--Third Party Assessments of 6 Railroads........ 1 assessment....... 104,000 hours...... 104,000
PSP.
--Amendments to PSP.......... 6 Railroads........ 15 amendments...... 160 hours.......... 2,400
--Field Testing of Product-- 6 Railroads........ 6 documents........ 3,200 hours........ 19,200
Info. Filings.
236.917--Retention of Records.... ................... ................... 160,000 hrs........ ..............
--Results of tests/ 6 Railroads........ 3 documents/records 160,000 hrs.; 360,000
inspections specified in PSP. 40,000 hrs.
--Report to FRA of 6 Railroads........ 1 report........... 104 hours.......... 104
Inconsistencies with
frequency of safety-relevant
hazards in PSP.
236.919--Operations & Maintenance
Man
--Updates to O & M Manual.... 6 Railroads........ 6 updated docs..... 40 hours........... 240
--Plans For Proper 6 Railroads........ 6 plans............ 53,335 hours....... 320,010
Maintenance, Repair,
Inspection of Safety-
Critical Products.
--Hardware/Software/Firmware 6 Railroads........ 6 revisions........ 6,440 hours........ 38,640
Revisions.
236.921--Training Programs: 6 Railroads........ 6 Tr. Programs..... 400 hours.......... 2,400
Development.
--Training of Signalmen & 6 Railroads........ 300 signalmen; 20 40 hours; 20 hours. 12,400
Dispatchers. dispatchers.
236.923--Task Analysis/Basic 6 Railroads........ 6 documents........ 720 hours.......... 4,320
Requirements: Necessary
Documents.
--Records.................... 6 Railroads........ 350 records........ 10 minutes......... 58
SUBPART I--NEW REQUIREMENTS
236.1001--RR Development of More 46 Railroads....... 3 rules............ 80 hours........... 240
Stringent Rules Re: PTC
Performance Stds.
236.1005--Requirements for PTC
Systems
--Temporary Rerouting: 46 Railroads....... 50 requests........ 8 hours............ 400
Emergency Requests.
--Written/Telephonic 46 Railroads....... 50 notifications... 2 hours............ 100
Notification to FRA Regional
Administrator.
--Temporary Rerouting 46 Railroads....... 760 requests....... 8 hours............ 6,080
Requests Due to Track
Maintenance.
--Temporary Rerouting 46 Railroads....... 380 requests....... 8 hours............ 3,040
Requests That Exceed 30 Days.
236.1006--Requirements for
Equipping Locomotives Operating
in PTC Territory
--Reports of Movements in 46 Railroads....... 45 reports + 45 8 hours + 170...... 8,010
Excess of 20 Miles/RR reports.
Progress on PTC Locomotives.
--PTC Progress Reports....... 46 Railroads....... 35 reports......... 16 hours........... 560
236.1007--Additional Requirements
for High Speed Service
--Required HSR-125 Documents 46 Railroads....... 2 documents........ 3,200 hours........ 6,400
with approved PTCSP.
--Requests to Use Foreign 46 Railroads....... 1 request.......... 8,000 hours........ 8,000
Service Data.
--PTC Railroads Conducting 46 Railroads....... 2 documents........ 3,200 hours........ 6,400
Operations at More than 150
MPH with HSR-125 Documents.
--Requests for PTC Waiver.... 46 Railroads....... 1 request.......... 1,000 hours........ 1,000
236.1009-Procedural Requirements
--Host Railroads Filing PTCIP 46 Railroads....... 1 PCTIP; 20 RFAs... 535 hours; 320 6,935
or Request for Amendment hours.
(RFAs).
--Jointly Submitted PTCIPs... 46 Railroads....... 7 PTCIPs........... 267 hours.......... 1,869
--Notification of Failure to 46 Railroads....... 1 notification..... 32 hours........... 32
File Joint PTCIP.
--Comprehensive List of 46 Railroads....... 1 list............. 80 hours........... 80
Issues Causing Non-Agreement.
--Conferences to Develop 46 Railroads....... 2 conf. calls...... 60 minutes......... 2
Mutually Acceptable PCTIP.
--Type Approval.............. 46 Railroads....... 2 Type Appr........ 8 hours............ 16
--PTC Development Plans 46 Railroads....... 20 Ltr. + 20 App; 2 8 hrs/1600 hrs; 44,960
Requesting Type Approval. Plans. 6,400 hours.
--Notice of Product Intent w/ 46 Railroads....... 1 NPI; 1 IP........ 1,070 + 535 hrs.... 1,605
PTCIPs (IPs).
--PTCDPs with PTCIPs (DPs + 46 Railroads....... 1 DP............... 2,135 hours........ 2,135
IPs).
--Updated PTCIPs w/PTCDPs 46 Railroads....... 1 IP; 1 DP......... 535 + 2,135 hrs.... 2,670
(IPs + DPs).
--Disapproved/Resubmitted 46 Railroads....... 1 IP + 1 NPI....... 135 + 270 hrs...... 405
PTCIPs/NPIs.
--Revoked Approvals-- 46 Railroads....... IP + 1 DP.......... 135 + 535 hrs...... 670
Provisional IPs/DP.
--PTC IPs/PTCDPs Still 46 Railroads....... 1 IP + 1 DP........ 135 + 535 hrs...... 670
Needing Rework.
--PTCIP/PTCDP/PTCSP Plan 46 Railroads....... 1 document......... 8,000 hours........ 8,000
Contents--Documents
Translated into English.
--Requests for 46 Railroads....... 46 ltrs; 46 docs... 8hrs.; 800 hrs..... 37,168
Confidentiality.
--Field Test Plans/ 46 Railroads....... 460 field tests; 2 800 hours.......... 369,600
Independent Assessments-- assessments.
Req. by FRA.
--FRA Access: Interviews with 46 Railroads....... 92 interviews...... 30 minutes......... 46
PTC Wrkrs..
--FRA Requests for Further 46 Railroads....... 8 documents........ 400 hours.......... 3,200
Information.
[[Page 28303]]
236.1011-PTCIP Requirements-- 7 Interested Groups 1 rev.; 40 com..... 143 + 8 hrs........ 463
Comment.
236.1015--PTCSP Content
Requirements & PTC System
Certification
--Non-Vital Overlay.......... 46 Railroads....... 3 PTCSPs........... 16,000 hours....... 48,000
--Vital Overlay.............. 46 Railroads....... 40 PTCSPs.......... 22,400 hours....... 896,000
--Stand Alone................ 46 Railroads....... 1 PTCSP............ 32,000 hours....... 32,000
--Mixed Systems--Conference 46 Railroads....... 3 conferences...... 32 hours........... 96
with FRA regarding Case/
Analysis.
--Mixed Sys. PTCSPs (incl. 46 Railroads....... 1 PTCSP............ 28,800 hours....... 28,800
safety case).
--FRA Request for Additional 46 Railroads....... 23 documents....... 3,200 hours........ 73,600
PTCSP Data.
--PTCSPs Applying to Replace 46 Railroads....... 40 PTCSPs.......... 3,200 hours........ 128,000
Existing Certified PTC
Systems.
--Non-Quantitative Risk 46 Railroads....... 40 assessments..... 3,200 hours........ 128,000
Assessments Supplied to FRA.
236.1017--PTCSP Supported by 46 Railroads....... 1 assessment....... 8,000 hours........ 8,000
Independent Third Party
Assessment.
--Written Requests to FRA to 46 Railroads....... 1 request.......... 8 hours............ 8
Confirm Entity Independence.
--Provision of Additional 46 Railroads....... 1 document......... 160 hours.......... 160
Information After FRA
Request.
--Independent Third Party 46 Railroads....... 1 request.......... 160 hours.......... 160
Assessment: Waiver Requests.
--RR Request for FRA to 46 Railroads....... 1 request.......... 32 hours........... 32
Accept Foreign Railroad
Regulator Certified Info.
236.1019--Main Line Track
Exceptions
--Submission of Main Line 46 Railroads....... 138 MTEAs.......... 160 hours.......... 22,080
Track Exclusion Addendums
(MTEAs).
--Passenger Terminal 46 Railroads....... 23 MTEAs........... 160 hours.......... 3,680
Exception--MTEAs.
--Limited Operation 46 Railroads....... 46 plans........... 160 hours.......... 7,360
Exception--Risk Mit.
--Ltd. Exception--Collision 46 Railroads....... 23 analyses........ 1,600 hours........ 36,800
Hazard Anal.
--Temporal Separation 46 Railroads....... 11 procedures...... 160 hours.......... 1,760
Procedures.
236.1021--Discontinuances, 46 Railroads....... 23 RFAs............ 160 hours.......... 3,680
Material Modifications,
Amendments--Requests to Amend
(RFA) PTCIP, PTCDP or PTCSP.
-- Review and Public Comment 7 Interested Groups 7 reviews + 20 3 hours; 16 hours.. 341
on RFA. comments.
236.1023--PTC Product Vendor 46 Railroads....... 46 lists........... 8 hours............ 368
Lists.
--RR Procedures Upon 46 Railroads....... 46 procedures...... 16 hours........... 736
Notification of PTC System
Safety-Critical Upgrades,
Rev., Etc.
--RR Notifications of PTC 46 Railroads....... 150 notifications.. 16 hours........... 2,400
Safety Hazards.
--RR Notification Updates.... 46 Railroads....... 150 updates........ 16 hours........... 2,400
--Manufacturer's Report of 5 System Suppliers. 5 reports.......... 400 hours.......... 2,000
Investigation of PTC Defect.
--PTC Supplier Reports of 5 System Suppliers. 150 reports + 150 16 hours + 8 hours. 3,600
Safety Relevant Failures or rpt. copies.
Defective Conditions.
236.1029--Report of On-Board Lead 46 Railroads....... 1,012 reports...... 96 hours........... 97,152
Locomotive PTC Device Failure.
236.1031--Previously Approved PTC
Systems
--Request for Expedited 46 Railroads....... 3 REC Letters...... 160 hours.......... 480
Certification (REC) for PTC
System.
--Requests for Grandfathering 46 Railroads....... 3 requests......... 1,600 hours........ 4,800
on PTCSPs.
236.1035--Field Testing 46 Railroads....... 230 field test 800 hours.......... 184,000
Requirements. plans.
--Relief Requests from 46 Railroads....... 46 requests........ 320 hours.......... 14,720
Regulations Necessary to
Support Field Testing.
236.1037--Records Retention
--Results of Tests in PTCSP 46 Railroads....... 1,012 records...... 4 hours............ 4,048
and PTCDP.
--PTC Service Contractors 46 Railroads....... 22,080 records..... 30 minutes......... 11,040
Training Records.
--Reports of Safety Relevant 46 Railroads....... 4 reports.......... 8 hours............ 32
Hazards Exceeding Those in
PTCSP and PTCDP.
--Final Report of Resolution 46 Railroads....... 4 final reports.... 160 hours.......... 640
of Inconsistency.
236.1039--Operations & 46 Railroads....... 46 manuals......... 250 hours.......... 11,500
Maintenance Manual (OMM):
Development.
--Positive Identification of 46 Railroads....... 120,000 i.d. 1 hour............. 120,000
Safety-critical components. components.
--Designated RR Officers in 46 Railroads....... 92 designations.... 2 hours............ 184
OMM. regarding PTC issues.
236.1041--PTC Training Programs.. 46 Railroads....... 46 programs........ 400 hours.......... 18,400
236.1043--Task Analysis/Basic 46 Railroads....... 46 evaluations..... 720 hours.......... 33,120
Requirements: Training
Evaluations.
--Training Records........... 46 Railroads....... 8,560 records...... 10 minutes......... 1,427
236.1045--Training Specific to 46 Railroads....... 64 trained 20 hours........... 1,280
Office Control Personnel. employees.
236.1047--Training Specific to
Loc. Engineers & Other Operating
Personnel
--PTC Conductor Training..... 30 Railroads....... 8,000 trained 3 hours............ 24,000
conductors.
----------------------------------------------------------------------------------------------------------------
All estimates include the time for reviewing instructions;
searching existing data sources; gathering or maintaining the needed
data; and reviewing the information. For information or a copy of the
paperwork package submitted to OMB, contact Mr. Robert Brogan at 202-
493-6292 or Ms. Kimberly Toone at 202-493-6132 or via email at the
following addresses: [email protected]; [email protected].
Organizations and individuals desiring to submit comments on the
collection of information requirements
[[Page 28304]]
should direct them to the Office of Management and Budget, Office of
Information and Regulatory Affairs, Washington, DC 20503, Attention:
FRA Desk Officer. Comments may also be sent via email to the Office of
Management and Budget at the following address: [email protected] mailto:[email protected].
OMB is required to make a decision concerning the collection of
information requirements contained in this direct final rule between 30
and 60 days after publication of this document in the Federal Register.
Therefore, a comment to OMB is best assured of having its full effect
if OMB receives it within 30 days of publication.
FRA cannot impose a penalty on persons for violating information
collection requirements which do not display a current OMB control
number, if required. FRA intends to obtain current OMB control numbers
for any new information collection requirements resulting from this
rulemaking action prior to the effective date of this final rule. The
OMB control number, when assigned, will be announced by separate notice
in the Federal Register.
D. Federalism Implications
This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13132, ``Federalism.'' See 64
FR 43,255 (Aug. 4, 1999). As discussed earlier in the preamble, this
final rule would provide regulatory relief from the mandated
implementation of PTC systems.
Executive Order 13132 requires FRA to develop a process to ensure
``meaningful and timely input by state and local officials in the
development of regulatory policies that have federalism implications.''
Policies that have ``federalism implications'' are defined in the
Executive Order to include regulations that 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.'' Under
Executive Order 13132, the agency may not issue a regulation with
federalism implications that imposes substantial direct compliance
costs and that is not required by statute, unless the federal
government provides the funds necessary to pay the direct compliance
costs incurred by State and local governments, or the agency consults
with State and local government officials early in the process of
developing the regulation. Where a regulation has federalism
implications and preempts state law, the agency seeks to consult with
State and local officials in the process of developing the regulation.
FRA has determined that this final rule would not have substantial
direct effects on the States, on the relationship between the national
government and the States, nor on the distribution of power and
responsibilities among the various levels of government. In addition,
FRA has determined that this final rule would not impose any direct
compliance costs on State and local governments. Therefore, the
consultation and funding requirements of Executive Order 13132 do not
apply.
However, this final rule will have preemptive effect. Section 20106
of Title 49 of the United States Code provides that States may not
adopt or continue in effect any law, regulation, or order related to
railroad safety or security that covers the subject matter of a
regulation prescribed or order issued by the Secretary of
Transportation (with respect to railroad safety matters) or the
Secretary of Homeland Security (with respect to railroad security
matters), except when the State law, regulation, or order qualifies
under the local safety or security exception to Sec. 20106.
Furthermore, the Locomotive Boiler Inspection Act (49 U.S.C. 20701-
20703) has been held by the U.S. Supreme Court to preempt the entire
field of locomotive safety.
In sum, FRA has analyzed this final rule in accordance with the
principles and criteria contained in Executive Order 13132. As
explained above, FRA has determined that this final rule has no
federalism implications, other than the possible preemption of State
laws. Accordingly, FRA has determined that preparation of a federalism
summary impact statement for this final rule is not required.
E. Environmental Impact
FRA has evaluated this final rule in accordance with its
``Procedures for Considering Environmental Impacts'' (``FRA's
Procedures'') (64 FR 28545, May 26, 1999) as required by the National
Environmental Policy Act (42 U.S.C. 4321 et seq.), other environmental
statutes, Executive Orders, and related regulatory requirements. FRA
has determined that this final rule is not a major FRA action
(requiring the preparation of an environmental impact statement or
environmental assessment) because it is categorically excluded from
detailed environmental review pursuant to section 4(c)(20) of FRA's
Procedures. In accordance with section 4(c) and (e) of FRA's
Procedures, the agency has further concluded that no extraordinary
circumstances exist with respect to this regulation that might trigger
the need for a more detailed environmental review. As a result, FRA
finds that this final rule is not a major Federal action significantly
affecting the quality of the human environment.
F. Unfunded Mandates Reform Act of 1995
The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C.
1531) (UMRA) requires agencies to prepare a written assessment of the
costs, benefits, and other effects of proposed or final rules that
include a federal mandate likely to result in the expenditures by
state, local or tribal governments, in the aggregate, or by the private
sector, of $100 million (adjusted annually for inflation with base year
of 1995) or more in any one year. The value equivalent of $100 million
in CY 1995, adjusted annual for inflation to CY 2008 levels by the
Consumer Price Index for All Urban Consumers (CPI-U) is $141.3 million.
The assessment may be included in conjunction with other assessments,
as it is in this rulemaking.
FRA is publishing this final rule to provide additional flexibility
in standards for the development, testing, implementation, and use of
PTC systems for railroads mandated by RSIA to implement PTC systems.
The RIA provides a detailed analysis of the costs and benefits of the
final rule. This analysis is the basis for determining that this rule
will not result in total expenditures by State, local or tribal
governments, in the aggregate, or by the private sector of $141.3
million or more in any one year. The costs associated with this final
rule are reduced accident reduction from an existing rule.
G. Energy Impact
Executive Order 13211 requires federal agencies to prepare a
Statement of Energy Effects for any ``significant energy action.'' 66
FR 28355 (May 22, 2001). Under the Executive Order, a ``significant
energy action'' is defined as any action by an agency (normally
published in the Federal Register) that promulgates or is expected to
lead to the promulgation of a final rule or regulation, including
notices of inquiry, advance notices of proposed rulemaking, and notices
of proposed rulemaking: (1)(i) That is a significant regulatory action
under Executive Order 12866 or any successor order, and (ii) is likely
to have a significant adverse effect on the supply, distribution, or
use of energy; or (2) that is designated by the Administrator of the
Office of
[[Page 28305]]
Information and Regulatory Affairs as a significant energy action. FRA
has evaluated this final rule in accordance with Executive Order 13211.
FRA has determined that this final rule is not likely to have a
significant adverse effect on the supply, distribution, or use of
energy. Consequently, FRA has determined that this regulatory action is
not a ``significant regulatory action'' within the meaning of Executive
Order 13211.
H. Privacy Act
FRA wishes to inform all interested parties that anyone is able to
search the electronic form of any written communications and comments
received into any of our dockets by the name of the individual
submitting the document (or signing the document), if submitted on
behalf of an association, business, labor union, etc.). Interested
parties may also review DOT's complete Privacy Act Statement in the
Federal Register published on April 11, 2000 (65 FR 19477) or visit
www.regulations.gov.
List of Subjects in 49 CFR Part 236
Penalties, Positive train control, Railroad safety, Reporting and
recordkeeping requirements.
The Final Rule
In consideration of the foregoing, FRA hereby amends chapter II,
subtitle B of title 49, Code of Federal Regulations as follows:
PART 236--[AMENDED]
0
1. The authority citation for part 236 continues to read as follows:
Authority: 49 U.S.C. 20102-20103, 20107, 20133, 20141, 20157,
20301-20303, 20306, 21301-21302, 21304; 28 U.S.C. 2461, note; and 49
CFR 1.49.
0
2. Amend Sec. 236.1003 by adding the definition ``PIH Materials'' to
paragraph (b) to read as follows:
Sec. 236.1003 Definitions.
* * * * *
(b) * * *
PIH Materials means materials poisonous by inhalation, as defined
in Sec. Sec. 171.8, 173.115, and 173.132 of this title.
* * * * *
0
3. Amend Sec. 236.1005 by redesignating paragraph (b)(4)(ii) as
paragraph (b)(4)(iii); revise paragraph (b)(4)(i) and add a new
paragraph (b)(4)(ii) to read as follows:
Sec. 236.1005 Requirements for Positive Train Control systems.
* * * * *
(b) * * *
(4) * * *
(i) Routing changes. In a PTCIP or an RFA, a railroad may request
review of the requirement to install PTC on a track segment where a PTC
system is otherwise required by this section, but has not yet been
installed, based upon changes in rail traffic such as reductions in
total traffic volume to a level below 5 million gross tons annually,
cessation of passenger service or the approval of an MTEA, or the
cessation of PIH materials traffic. Any such request shall be
accompanied by estimated traffic projections for the next 5 years
(e.g., as a result of planned rerouting, coordinations, or location of
new business on the line).
(ii) FRA will approve the exclusion requested pursuant to paragraph
(b)(4)(i) of this section if the railroad establishes that, as of
December 31, 2015:
(A) No passenger service will be present on the involved track
segment or the passenger service will be subject to an MTEA approved in
accordance with 49 CFR 236.1019; and
(B) No PIH traffic will be present on the involved track segment or
the gross tonnage on the involved track segment will decline to below 5
million gross tons annually as computed over a 2-year period.
* * * * *
Sec. 236.1020 [Removed and reserved]
0
4. Remove and reserve Sec. 236.1020.
Issued in Washington, DC, on May 9, 2012.
Joseph C. Szabo,
Administrator.
[FR Doc. 2012-11706 Filed 5-11-12; 8:45 am]
BILLING CODE 4910-06-P