[Federal Register Volume 80, Number 250 (Wednesday, December 30, 2015)]
[Proposed Rules]
[Pages 81501-81503]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32681]

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Pipeline and Hazardous Materials Safety Administration

49 CFR Part 173

[Docket Number PHMSA-2009-0303 (HM-213D)]
RIN 2137-AE53

Hazardous Materials: Safety Requirements for External Product 
Piping on Cargo Tanks Transporting Flammable Liquids

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 

ACTION: Withdrawal of notice of proposed rulemaking.


SUMMARY: PHMSA is withdrawing the notice proposing to stop the 
transportation of flammable liquid material in unprotected external 
product piping on DOT specification cargo tank motor vehicles as 
mandated by the ``Fixing America's Surface Transportation Act'' or the 
``FAST Act''. Although PHMSA is withdrawing its rulemaking proposal, 
the agency will continue to consider methods to improve the safety of 
transporting flammable liquid by cargo tank motor vehicle. PHMSA will 
also continue to analyze current incident data and improve the 
collection of future incident data to assist in making an informed 
decision on methods to address this issue further, if warranted.

DATES: The notice of proposed rulemaking published January 27, 2011 (76 
FR 4847) is withdrawn as of December 30, 2015.

FOR FURTHER INFORMATION CONTACT: Dirk Der Kinderen, Office of Hazardous 
Materials Standards, Pipeline and Hazardous Materials Safety 
Administration, telephone (202) 366-8553; or Leonard Majors, Office of 
Hazardous Materials Technology, Pipeline and Hazardous Materials Safety 
Administration, telephone (202) 366-4545.

I. What action is PHMSA taking?
II. What did PHMSA propose and why?
III. Why is PHMSA taking this action?
IV. Background on Development of the Rulemaking
    A. Regulatory Assessment
    B. Government Accountability Office (GAO) Report and the Moving 
Ahead for Progress in the 21st Century Act (MAP-21)
    C. Post-GAO Report Analysis
    D. Commenter Concerns
    1. Incident Analysis
    2. Cost and Benefit Estimation
    E. Findings
V. Conclusion

I. What action is PHMSA taking?

    PHMSA is withdrawing notice of proposed rulemaking (NPRM) 
``Hazardous Materials: Safety Requirements for External Product Piping 
on Cargo Tanks Transporting Flammable Liquids'' (HM-213D) published 
January 27, 2011 (76 FR 4847) under Docket No. PHMSA-2009-0303. This 
rulemaking proposed to stop flammable liquids from being transported in 
unprotected product piping (generally referred to as the ``wetlines'') 
on the cargo tank of existing and newly manufactured DOT specification 
cargo tank motor vehicles.

II. What did PHMSA propose and why?

    PHMSA proposed to stop the transportation of flammable liquids in 
unprotected external product piping on DOT specification cargo tank 
motor vehicles (CTMVs) unless the piping was protected from accident or 
bottom damages or the piping was designed or emptied in a way to remove 
the hazard of containing flammable liquid. PHMSA proposed this change 
because exposed piping containing flammable liquid can contribute to 
the severity of accidents involving a CTMV and an automobile, and 
because we currently do not require external piping containing 
flammable liquid to be protected like other hazardous material. Except 
for flammable liquid, Sec.  173.33(e) of the Hazardous Materials 
Regulations (HMR: Parts 171-180) does not allow the transport of liquid 
hazardous material in piping of a DOT specification cargo tank motor 
vehicle unless it is equipped with accident damage or bottom damage 
protection devices.\1\ PHMSA also issued this proposed requirement to 
fully address the National Transportation Safety Board (NTSB) Safety 
Recommendation H-98-27. This recommendation reads:

    \1\ The HMR currently prohibits liquid hazardous materials in 
Divisions 5.1 (oxidizer), 5.2 (organic peroxide), 6.1 (toxic), and 
Class 8 (corrosive to skin only) to remain in wetlines after loading 
or unloading. Due to complications associated with the loading 
practices and economics of transporting Class 3 flammable liquids, 
the provision does not apply to flammable liquids.

    Prohibit the carrying of hazardous materials in external piping 
of cargo tanks, such as loading lines that may be vulnerable to 
failure in an accident.

III. Why is PHMSA withdrawing the rulemaking?

    PHMSA is withdrawing the rulemaking in accordance with a 
congressional mandate. On December 4, 2015, President Obama signed into 
law the Fixing America's Surface Transportation Act, or ``FAST 
Act''.\2\ The Act outlines legislation to improve the Nation's surface 
transportation infrastructure, including roads, bridges, transit 
systems, and the rail transportation network. Among its many provisions 
is a mandate for PHMSA to withdraw this rulemaking no later than thirty 
days from the date of enactment of the FAST Act (see section 7206 of 
the Fast Act).

    \2\ See Public Law 114-94, 129; Stat. 1312, December 4, 2015.

IV. Background on Development of this Rulemaking

    Although PHMSA is congressionally mandated to withdraw this 
rulemaking, below we discuss past and recent actions in development of 
this rulemaking.

A. Regulatory Assessment

    PHMSA developed the assessment to evaluate regulatory action using 
data from hazardous materials incident reports over a 12.25-year time 
period (January 1999 to March 2011). PHMSA used a manual purging system 
\3\ as the workable option to address the safety hazard of flammable 
liquid in unprotected wetlines. Under previous rulemaking efforts, 
PHMSA identified several technologies and design considerations that 
could allow operators of CTMVs to address this safety hazard and asked 
for public input on the practicality of using these options to protect 
against or prevent the safety hazard.\4\ PHMSA's conclusions regarding 
the practicality of alternatives remain valid. PHMSA believes a manual 
purging system is the only workable option based on our understanding 
of currently available and implemented technologies for addressing this 
safety hazard.

    \3\ The manual purging system is a pneumatic system consisting 
of tubes, check valves, and a control box installed on a CTMV that 
uses compressed air to clear the wetlines by forcing the liquid 
material out of the piping and into the cargo tank body.
    \4\ On December 30, 2004, the agency published an NPRM (69 FR 
78375) that discussed a number of possible alternative actions.

    In developing an analysis of the benefits of the rulemaking, PHMSA 
considered avoided injuries, property damage, traffic delays, 
evacuations, emergency response, and environmental damage; in 
developing an analysis of the costs, we considered the installation, 
maintenance, and associated impacts of a equipping a CTMV with a manual 
purging system. PHMSA evaluated various implementation timelines 
ranging from a 5-year period to a 20-year period as the alternative 
actions. The

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best-case scenario benefit-cost ratio (BCR) was estimated to be 0.78, 
based on a 20-year period (which would result in a de facto 
applicability to new construction only, based on PHMSA's assumption of 
a 20-year useful service life for a CTMV), and a 7 percent discount 
rate.\5\ The assessment used the DOT's Value of Statistical Life (VSL) 
of $6.1 million at the time, which now has been revised to $9.2 
million. Based on PHMSA's additional review of data following the 
publication of the NPRM and the outcome of the Government 
Accountability Office (GAO) audit (discussed below), the number of 
fatal incidents was reduced from four to three. These two changes were 
not accounted for in the assessment, but the net effect on the BCR is 
minor because the increase in benefits from the revised VSL is similar 
in magnitude to the decrease in benefits associated with the decrease 
in fatal incidents.

    \5\ A BCR is an indicator of the relative benefits of a project 
to its cost. A BCR of 1.0 indicates the benefits equal the cost. 
Thus, for the best-case scenario the BCR of 0.78 indicates that the 
estimated costs of complying with the rulemaking are greater than 
the estimated safety benefits.

B. Government Accountability Office (GAO) Report and the Moving Ahead 
for Progress in the 21st Century Act (MAP-21) \6\

    \6\ See Public Law 112-141, 126; Stat. 405, July 6, 2012.

    The MAP-21, enacted in July 2012, temporarily stopped PHMSA from 
issuing a final rule and required the GAO to examine the risks of, and 
alternatives to, transporting flammable liquids in wetlines. The GAO 
examined PHMSA's process for identifying wetlines incidents among its 
reported hazardous materials incidents, analyzed how useful PHMSA's 
incident data from January 1999 through March 2011 are for identifying 
such incidents, and examined whether the data accurately captured 
information about the incidents' consequences.
    In its final report, the GAO concluded that because PHMSA does not 
specifically provide an option to indicate a wetlines incident on its 
incident reporting form, it is difficult to identify the number of 
wetlines incidents from PHMSA's incident data.\7\ Additionally, due to 
inaccuracy of the damages associated with incidents, GAO believes the 
magnitude of the risks wetlines pose to safety is also unclear. It also 
noted that, although PHMSA has made changes to improve the quality of 
its incident data, the concerns that GAO identified call into question 
the usefulness of PHMSA's data for evaluating the benefits of avoiding 
these incidents--particularly the extent to which a wetlines rule would 
prevent fatalities. Finally, the GAO stated that PHMSA's economic 
analysis used to support the NPRM does not account for these 
limitations and therefore, the analysis does not adequately convey the 
uncertainty of PHMSA's calculated benefit of the rule. Moreover, GAO 
concluded that PHMSA's analysis has not adequately addressed the market 
uncertainty with regard to the technology used as the basis for 
addressing the safety hazard. See the GAO report for the complete 
discussion of the GAO audit and summary of conclusions and 

    \7\ CARGO TANK TRUCKS: Improved Incident Data and Regulatory 
Analysis Would Better Inform Decisions about Safety Risks, Report to 
Congressional Committees, GAO-13-721, September 2013, http://www.gao.gov/assets/660/657755.pdf.

C. Post-GAO Report Analysis

    Following the GAO report, PHMSA examined the regulatory assessment, 
taking into account the GAO findings as well as industry comments to 
help make a determination on whether to withdraw the rulemaking. This 
analysis also took into account the updated VSL. The analysis 
considered five scenarios for calculating the estimated societal 
benefits and four scenarios for the estimated costs. This additional 
analysis served as a sensitivity analysis of the regulatory assessment 
for the NPRM. The different scenarios for estimated benefits were based 
     The incident analysis data used in the regulatory 
assessment--i.e., ``incident data'';
     the incident data, including only those incidents 
involving a fire;
     the incident data plus the Yonkers, NY fatal incident 
     the incident data, adjusted to account for the GAO 
recommendations; and
     the incident data, adjusted to account for the GAO 
recommendations plus the Yonkers, NY fatal incident data.
    PHMSA calculated a range of potential BCR outcomes, based on the 
five scenarios for estimated benefits and the two scenarios for 
estimated average costs. It is reasonable to assume that the BCR lies 
somewhere between the highest and lowest BCR outcomes from this 
analysis. Under the low average cost estimate, in four of the five 
estimated benefit scenarios the BCR at a 7 percent discount rate was 
not net beneficial. The BCRs ranged from 0.77 to 1.1 for the low 
average cost scenario. In comparison, under the high average cost 
estimate, in all five estimated benefit scenarios the BCR at a 7 
percent discount rate was not net beneficial. The BCRs ranged from 0.47 
to 0.67 for the high average cost scenario.

D. Commenter Concerns

    In general, most commenters to the NPRM opposed the proposed ban 
and indicated that they do not believe wetlines containing flammable 
liquid are a safety risk, citing PHMSA's own statistics that the 
frequency of wetlines incidents is low and the frequency of incidents 
that lead to injury or death is extremely low. They also expressed 
concerns regarding PHMSA's incident analyses, regulatory assessment, 
implementation of the rule, and safety impacts of the rule. The 
remaining commenters either supported the rulemaking on the basis of 
improved safety for the public or offered suggestions to strengthen or 
make clearer PHMSA's efforts to address the safety hazard. The 
opposition comments mainly address PHMSA's incident analysis and 
development of the costs and benefits of the regulatory assessment. 
PHMSA summarizes these concerns in greater detail below. This summary 
of comments is for the benefit of the reader for understanding of 
stakeholder information presented during the notice and comment portion 
of this rulemaking. The complete body of comments both in opposition to 
and support of the rule is available for review at the docket to the 
rulemaking (www.regulations.gov).
1. Incident Analysis
    Commenters questioned whether all incidents and their associated 
data used in PHMSA's preliminary analyses should be included in the 
assessment with respect to: (1) The criteria used to decide whether an 
incident qualified as a wetlines incident; (2) whether deaths, 
injuries, or any other costs were actually the result of the material 
contained in the wetlines; and (3) relevance of proposed requirements. 
For example, they asserted that any incident involving the release of 
more than fifty gallons \8\ without a fire resulting from a wetlines 
release should be excluded based on the assumption that a spill of more 
than fifty gallons indicates that there was a breach of the cargo tank 
itself (e.g., tank shell rupture, damage to an internal valve) such 
that any action to comply with the proposed performance standard--like 
purging the wetlines--would not have prevented the larger release of 
material. Additionally,

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they argued that data indicating damages not directly linked to 
wetlines damage or release should not be included. For example, costs 
associated with damage to the CTMV from a motor vehicle collision 
should not be included in the total for purposes of the analysis.

    \8\ A basic assumption used in wetlines incident determination 
is that depending on the number of cargo tank compartments and the 
size of the product piping, wetlines can contain up to 50 gallons of 

    PHMSA agrees that only those costs associated with damages to the 
wetline and release of material from the wetlines should be counted. 
Unfortunately, under the current format of incident report information 
it is difficult to parse out the costs of wetlines-related damages from 
the total body of damages where damages occur beyond those associated 
with wetlines, unless some assumptions are made. For instance, in the 
case of an incident involving a fire, PHMSA assumed the fire was 
started and was propagated by the wetlines release.
    Upon consideration of the comments, PHMSA conducted further review 
of the 172 incidents that were initially determined to be wetlines 
incidents in our preliminary analyses. Prior to this review, PHMSA 
became aware that some of the data in our original set of incidents was 
not accurate and likely led to the critical comments. This data had 
since been corrected and a revised list of incidents was placed in the 
docket (8/12/2011; PHMSA-2009-0303-0048). PHMSA also reviewed 
additional CTMV incidents that occurred from January 1, 2009 to March 
31, 2011 to capture more recent data. This review resulted in a final 
determination of 132 wetlines incidents. A total of 59 incidents where 
removed after a review of the original 172 incidents, and 19 incidents 
were added after a review of more recent data.
2. Benefit and Cost Estimation
    Manual Purging System. Most commenters took issue with PHMSA's 
estimation of the costs of installing a manual purging system.\9\ In 
general, they believe PHMSA underestimated the total cost presented 
through incorrect assumptions and inclusion of cost factors that do not 
reflect real-world applications. Commenters indicated that PHMSA 
underestimated the true costs of a manual purging system by, for 
example, not incorporating a markup cost. Commenters provide a range of 
cost estimates from $4,000 to $10,000. Some also think the regulatory 
assessment should have been developed using a mix of costs of the 
manual system and the more expensive automated purging system. 
Commenters suggest this because they believe that owners will invest in 
the automated system out of concern that drivers will forget to operate 
the manual system and because an automated system will provide the 
added benefit of discovery of a faulty emergency valve and would 
continue to purge the lines during transportation if such a faulty 
valve were present. Details of this pricing can be found in the 
regulatory assessment and other documents submitted to the docket for 
this rulemaking. PHMSA's post-GAO analysis took into consideration the 
cost of the automated system.

    \9\ PHMSA used a per-unit price of $2,300 based on the 
advertised price of the one manufacturer of purging systems 
currently designing and installing such systems.

    Operational delays. Many commenters argued that PHMSA has not 
accounted for delay costs to the shipper or carrier due to operation of 
a purging system at the loading rack of a terminal facility. The delay 
would be caused by the driver of the CTMV waiting anywhere from three 
to six minutes for the system to complete the purging process prior to 
moving the CTMV. Commenters based this on their understanding that the 
regulations would not allow the vehicle to move until it is essentially 
empty--only a residue remains in the piping. Completion of the purging 
process would be an indicator that it is empty.
    Weight penalty. PHMSA estimated that a manual purging system is 
expected to add about 48 pounds to a CTMV. To the extent that a shipper 
or carrier operates at Federal or State gross weight limits, the 
shipper or carrier would have to ship less product because of this 
additional weight. Commenters disagreed with the estimate that only 25% 
of vehicle trips are at the maximum allowable weight and therefore 
affected by the additional weight of a purging system. Informal surveys 
of carriers by the American Trucking Association and the National Tank 
Truck Carriers found that as much as 80% of trips are at the maximum 
allowable weight. Again, PHMSA's post-GAO analysis accounted for this.
    Yonkers, NY Incident. Commenters believe the Yonkers, NY incident 
that led to NTSB Safety Recommendation (H-98-27) should not be included 
in the regulatory assessment for several reasons, including:
    (1) The belief that the fire in the incident was not caused by a 
wetlines release because the original NTSB accident report concluded 
that the fire was fed by fuel from the cargo tank compartments, 
implying a breach of the cargo tank;
    (2) the incident predates the incident analysis period; and
    (3) the uncertainty that such an event will ever occur again--no 
data supports the PHMSA assumption that this is a 20-year event.

E. Findings

    Although a safety hazard exists, the regulatory assessment and 
further analysis indicate that prohibiting the transportation of 
flammable liquids in wetlines is unlikely to be cost beneficial. 
Additionally, the GAO report has pointed out a number of uncertainties 
with the data collection and analysis that would have a direct impact 
on PHMSA's ability to fully characterize the degree of risk that 
wetlines containing flammable liquids pose to the safety of 

V. Conclusion

    PHMSA is withdrawing this rulemaking in accordance with the FAST 
Act. PHMSA, however, will continue to examine this issue, particularly 
by monitoring flammable liquid wetlines incidents, in consideration of 
any future actions. Likely future actions include non-regulatory 
initiatives to improve the safety of transporting flammable liquid in 
unprotected external product piping on CTMVs.

    Issued in Washington, DC, on December 22, 2015, under authority 
delegated in 49 CFR Part 1.97.
William S. Schoonover,
Deputy Associate Administrator.
[FR Doc. 2015-32681 Filed 12-29-15; 8:45 am]