[Federal Register Volume 85, Number 98 (Wednesday, May 20, 2020)]
[Proposed Rules]
[Pages 30673-30680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10377]



Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 171, 172, 173, 174, 177, 178, 179, 180

[Docket No. PHMSA-2016-0077 (HM-251D)]
RIN 2137-AF24

Hazardous Materials: Vapor Pressure of Unrefined Petroleum 
Products and Class 3 Materials

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 
Department of Transportation (DOT).

ACTION: Advance notice of proposed rulemaking (ANPRM); withdrawal.


SUMMARY: PHMSA is withdrawing the January 18, 2017, ANPRM concerning 
vapor pressure for crude oil transported by rail. PHMSA's decision is 
based on comments received to the ANPRM, as well as an extensive study 
conducted by the Sandia National Laboratories which found that the 
vapor pressure of crude oil is not a significant factor in the severity 
of pool fire or fireball scenarios, and concluded that results of the 
study do not support creating a regulatory distinction for crude oils 
based on vapor pressure. In withdrawing the ANPRM, PHMSA is providing 
notice of its determination that the establishment of vapor pressure 
limits would not improve the safety of rail transportation of crude 
oil. Therefore, PHMSA is no longer considering vapor pressure limits 
for the transportation of crude oil by rail or any other mode. 
Furthermore, PHMSA is also providing notice that, after considering 
comments received to the ANPRM, it is no longer considering imposing 
vapor pressure standards for other unrefined petroleum-based products 
and Class 3 flammable liquid hazardous materials by any mode.

DATES: As of May 20, 2020, the ANPRM published on January 18, 2017 (82 
FR 5499), is withdrawn.

FOR FURTHER INFORMATION CONTACT: Lad Falat, Sciences, Engineering, and 
Research (PHH-20), Telephone (202)

[[Page 30674]]

366-4545, or Ryan Larson, Standards and Rulemaking Division (PHH-10), 
Telephone (202) 366-8553. U.S. Department of Transportation, Pipeline 
and Hazardous Materials Safety Administration, 1200 New Jersey Avenue 
SE, East Building, 2nd Floor, Washington, DC 20590-0001.


Table of Contents

I. Background
    A. PHMSA Regulation of High-Hazard Flammable Trains
    B. North Dakota Order
    C. New York Petition
    D. Advance Notice of Proposed Rulemaking
    i. Overview of ANPRM Comments
    ii. Comments in Support of the Vapor Pressure Standard
    iii. Comments Opposed to Vapor Pressure Standards
II. Crude Oil Characterization Research Study (Sandia Study)
    A. Congressional Mandate
    B. Phases of the Sandia Study
    i. Initial Phase
    ii. Task 1
    iii. Task 2
    iv. Task 3
    v. Sandia Study Completion
III. PHMSA's Decision
IV. Preemption of all Non-Federal Laws

I. Background

A. PHMSA Regulation of High-Hazard Flammable Trains

    On May 8, 2015, PHMSA published a final rule titled ``Hazardous 
Materials: Enhanced Tank Car Standards and Operational Controls for 
High-Hazard Flammable Trains'' [HM-251; 80 FR 26643]. The final rule 
addressed safety concerns that arose following high-profile rail 
incidents involving crude oil produced in the Bakken region of the 
United States.\1\ The HM-251 rulemaking targeted the hazards associated 
with the shipment of flammable liquids by rail by establishing enhanced 
standards for the tank cars used to transport Class 3 flammable 
liquids, operational controls in the form of reduced operating speeds 
and enhanced braking requirements, rail routing risk assessment and 
notification, and requirements for more accurate classification of 
unrefined petroleum-based products. In the HM-251 notice of proposed 
rulemaking (NPRM) [79 FR 45015], that preceded the May 8, 2015 final 
rule, PHMSA sought comments from the public on the appropriate role of 
vapor pressure in classifying flammable liquids and selecting 
packagings, including the threshold question regarding whether vapor 
pressure limits should be established. After reviewing the comments to 
the NPRM, PHMSA determined that additional research was necessary, and 
accordingly, PHMSA decided not to establish new vapor pressure 
requirements in the final rule. However, PHMSA expressed its intent to 
consider the issues raised by the commenters in a future regulatory 
action depending upon the outcome of extensive research efforts being 
undertaken by the Department.

    \1\ The Bakken shale formation, a subsurface formation within 
the Williston Basin (spanning eastern Montana, western North Dakota, 
South Dakota, and southern Saskatchewan), is one of the top oil-
producing regions in the country and in the world. The Bakken shale 
formation's low permeability (i.e., it is a ``tight'' formation) 
requires hydraulic fracturing to produce oil (so-called ``tight 
oil'') at commercial rates.

B. North Dakota Order

    In December 2014, as PHMSA was in the process of developing the HM-
251 final rule, the North Dakota Industrial Commission (NDIC) issued 
Oil Conditioning Order No. 25417 (NDIC Order), which requires operators 
in the State of North Dakota to separate the gaseous and light 
hydrocarbons from all Bakken crude oil produced in North Dakota. The 
NDIC Order requires the use of a gas-liquid separator and/or an 
emulsion heater-treater capable of separating the gaseous and liquid 
hydrocarbons; prohibits blending of Bakken crude oil with specific 
materials; and requires crude oil produced to have a vapor pressure 
(determined using ASTM D6377 \2\) no greater than 13.7 pounds per 
square inch (psi), or 1 psi less than the vapor pressure of stabilized 
crude oil as defined in the latest version of ANSI/API RP3000.

    \2\ ASTM D6377 refers to ``ASTM D6377--Standard Test Method for 
Determination of Vapor Pressure of Crude Oil: VPCRx (Expansion 

C. New York Petition

    On December 1, 2015, the New York State Office of the Attorney 
General (NYSOAG) submitted a petition for rulemaking (P-1669) 
requesting PHMSA establish a vapor pressure standard for crude oil 
shipped by rail [PHMSA-2015-0253-0001 (Dec. 3, 2015)]. Although PHMSA 
codified several additional safety requirements in the HM-251 final 
rule, the NYSOAG petition asserted that the measures implemented by the 
final rule were insufficient to reduce significantly the risk of high 
impact fires or explosions because they did not specifically address 
vapor pressure limits. The NYSOAG petition requested that PHMSA revise 
Sec.  174.310 to establish a Reid Vapor Pressure (RVP) limit that is 
less than 9.0 psi for crude oil transported by rail. The NYSOAG 
petition asserted that limiting the product's vapor pressure would 
reduce the risk of death or damage from fire or explosion in the event 
of an accident. While the NYSOAG petition did not provide any specific 
cost data, the petitioner cited increasing numbers of shipments of 
Bakken crude oil by rail, past train explosions involving shipments of 
Bakken crude oil, Bakken crude oil volatility and flammability, and the 
presence of existing technology to reduce the volatility of crude oil 
as justification for the requested revisions to the Hazardous Material 
Regulations (HMR; Parts 171-180).

D. Advance Notice of Proposed Rulemaking

    On January 18, 2017, PHMSA published an ANPRM [HM-251D; 82 FR 5499] 
in response to the NYSOAG petition. The ANPRM solicited public comments 
on the merits of the petition based on the perceived safety benefits of 
establishing vapor pressure limits for unrefined petroleum-based 
products and potentially all Class 3 flammable liquid hazardous 
materials. PHMSA posed 39 questions requesting specific information 
regarding the options for, as well as the benefits of, limiting vapor 
pressure in transportation. PHMSA sought public comment to obtain the 
views of entities impacted by the NDIC Order, as well as those who were 
likely to be impacted by the changes requested in the NYSOAG petition, 
including those likely to benefit from, be adversely affected by, or 
potentially be subject to additional regulation.
i. Overview of ANPRM Comments
    In response to the HM-251D ANPRM, PHMSA received comments from 
approximately 80 individuals and organizations. The following table 
categorizes the comments received according to commenters' background.

[[Page 30675]]

                         Commenters to the ANPRM
                                    Number of   Description and examples
      Commenters' background         comments          of category
Non-Government Organizations.....           10  Environmental groups
                                                 (2), Advocacy/lobby
                                                 groups (5), and other
                                                 organizations (3).
Governments......................            6  Local (2), State (4).
Individuals......................           54
Carrier Industry Stakeholders....            4  Carrier related trade
Shipper Industry Stakeholders....            9  Shippers and petroleum
                                                 related trade

    PHMSA asked specific questions regarding the general benefits, 
limitations, and impacts of establishing a maximum vapor pressure for 
crude oil or flammable liquids; the safety implications at play when 
considering the proposed vapor pressure standard; the merit and methods 
of measuring vapor pressure for transportation purposes; and general 
packaging questions. While the NYSOAG petition specifically requested 
that PHMSA set a vapor pressure standard for crude oil by rail, PHMSA 
solicited comment in the ANPRM about whether the scope of the safety 
standard should be broadened to include other Class 3 flammable liquids 
by different modes of transportation, such as highway. The ANPRM also 
asked whether risk factors other than vapor pressure should be 
considered in PHMSA's effort to increase the safety of transporting 
flammable liquids.
    Most comments fit within one of three categories: (1) Generalized 
support for a maximum vapor pressure limit with expressed concerns 
about the associated risks of transporting unrefined petroleum-based 
products in highly populated areas and sensitive environments; (2) not 
supportive of maximum vapor pressure limits citing to a lack of 
evidence demonstrating that limiting vapor pressure would reduce risks 
associated with the transport of unrefined petroleum-based products or 
other Class 3 materials and suggesting that PHMSA should wait until the 
completion of a study on crude oil characteristics recently undertaken 
by Sandia National Laboratories (Sandia) before undertaking any 
rulemaking; or (3) not supportive of vapor pressure requirements being 
applied to shipments by highway.
ii. Comments in Support of the Vapor Pressure Standard
    Approximately 60 commenters generally supported setting additional 
safety standards for the transportation of crude oil that would be 
based on specific measurable metrics, such as vapor pressure. Most 
commenters who expressed their support for the proposed RVP standard 
stated that a lower vapor pressure would minimize the severity of fires 
in the event of a train crash or derailment. Several commenters 
asserted that there is ample evidence demonstrating that a higher RVP 
corresponds to more detrimental explosions. However, the comments in 
support of this claim were ultimately anecdotal, providing little to no 
data to substantiate any such correlation. Most of the comments 
supporting the implementation of a vapor pressure standard were 
submitted by members of the public who were concerned about the effects 
that an accident in their community would have on the surrounding 
environment and personal property.
    Most of the commenters in favor of vapor pressure limits expressed 
support for a vapor pressure limitation for crude oil by rail 
specifically. Many of these commenters referenced the conditioning 
requirements in the NDIC Order as evidence of the feasibility and 
necessity of implementing an RVP standard and encouraged PHMSA to 
follow suit. While many supporters of a vapor pressure standard were in 
favor of the standard proposed in the NYSOAG petition, some suggested 
that the standard should be as low as 4.0 psi. These commenters alluded 
to certain practices and requirements currently in place in the oil 
production industry that require reducing the volatility of crude, such 
as pipeline operational standards and degasification requirements in 
place in Texas. One such commenter recommended setting a standard 
between 4-8 psi.
    Similarly, commenters from David & Associates and the Natural 
Resources Defense Council (NRDC) pointed to certain national and State 
vapor pressure limitations that are in place for gasoline as evidence 
of the merit and feasibility of nationwide vapor pressure 
restrictions--stating that the restrictions would reduce the 
consequences of a potential incident by reducing the release of evolved 
gases from the transported product. However, David & Associates 
conceded that those restrictions were implemented with the intent of 
minimizing the pollution associated with volatile organic emissions 
rather than with the intention of mitigating safety risks during 
transportation. NRDC further urged PHMSA to set an interim standard 
until all necessary data is collected, rather than setting a permanent 
standard without sufficient evidence.
    A small number of commenters stated that if a vapor pressure 
standard is implemented, it should not apply to transportation by 
highway. One commenter from the Scenic Hudson Group noted that the 
safety hazards by rail outlined in the NYSOAG petition are also 
concerns for shipments carried out on waterways, such as the Hudson 
River. One member of the public was in favor of setting the vapor 
pressure limit for all modes of transportation.
    A commenter from the Department of Environmental Conservation of 
New York was in support of additional safety measures other than a 
vapor pressure limit for shipments of crude oil and suggested that 
direct limits on C1-C4 hydrocarbons would be more effective than 
restricting vapor pressure.
    A comment jointly submitted by the Attorneys General of New York, 
California, Illinois, Maine, Maryland, and Washington (State AGs) 
supported a nationwide limit on the vapor pressure of crude oil 
transported by rail in the United States, noting that PHMSA is not 
required to determine that vapor pressure is the ``best metric'' to use 
in decreasing fire and explosion risks before developing a vapor 
pressure regulation.
iii. Comments Opposed to Vapor Pressure Standards
    Twenty-one commenters strongly opposed the proposed vapor pressure 
limitations on either crude oil or other Class 3 flammable liquids by 
highway or rail. Some commenters completely rejected the use of vapor 
pressure as a basis for classification, while others suggested that 
PHMSA wait until the completion of the Sandia Study after which data 
regarding the volatility of crude oil would be available. Several 
commenters noted the lack of empirical data to support the claims in 

[[Page 30676]]

petition. PHMSA further categorized the comments received under the 
following topic areas.
Vapor Pressure
    Several commenters rejected the premise of the NYSOAG petition and 
the concept that the volatility of crude oil is the primary cause of 
large explosions and uncontrollable fires in train accidents. In their 
comments, American Fuel & Petrochemical Manufacturers (AFPM), American 
Petroleum Institute (API), and NDIC similarly assert that vapor 
pressure is not the primary cause of ignition in crude oil by rail 
accidents. Instead, these commenters attributed the fires associated 
with the rail incidents cited in petition P-1669 to the presence of a 
flammable substance and source of ignition during the accidents. 
Commenters--such as the International Liquid Terminals Association 
(ILTA) and API--echoed that reducing the volatility of crude oil prior 
to shipment would not decrease the expected degree, consequence, or 
magnitude of a release or the likelihood of a fire during an accident 
since the magnitude of a combustion event correlates to the 
flammability, rather than the vapor pressure, of the hazardous liquid 
released. To further the point, AFPM noted that there are several Class 
3 flammable liquids that have low vapor pressures that present similar 
ignition risks to Bakken or Permian Basin crude oil and other unrefined 
petroleum-based products. API also expressed its belief that focusing 
on vapor pressure to mitigate or reduce severity would not achieve the 
desired results and, that if implemented, the rule would not 
significantly reduce the primary hazard of crude oil, since it would 
still be a flammable liquid regardless of the vapor pressure. API 
further stated that the more volatile compounds would have to be 
removed from crude oil and transported in pressurized tank cars or 
pipelines as a separate stream of flammable liquids or gases if a vapor 
pressure limit is set below current levels.
    Several commenters cited the petition's lack of evidence or other 
scientific basis for its claim that reducing vapor pressure will 
improve safety. ILTA stated that there was no basis for the assertion 
that limiting the vapor pressure of crude oil prior to shipment would 
decrease the expected degree, consequence, or magnitude of a release or 
the likelihood of a fire during an accident. Similarly, the North 
Dakota Petroleum Council (NDPC) noted that there are currently no peer 
reviewed scientific studies supporting the belief that an appropriate 
level for vapor pressure is already known. API further recommended 
investing in and improving the methods for transporting crude safely, 
rather than imposing new unilateral RVP limits that are not based on 
any scientific evidence.
    Other commenters stated that applying a vapor pressure limit to all 
modes would materially alter the products being transported and could 
have many unintentional consequences that could potentially disrupt the 
oil and natural gas supply chain, which would require both the industry 
and PHMSA to reevaluate the current system to determine whether the 
packaging specifications were still appropriate for a materially 
altered product.
All Class 3 Flammable Liquids
    Certain commenters specifically opposed the proposal to extend 
vapor pressure limits to all Class 3 flammable liquids. Dow Chemical 
stated that establishing a vapor pressure limit to encompass all 
flammable liquids by any mode of transportation would not improve the 
safe transportation of chemical products. Their comment reiterated the 
point made by several other commenters that the HMR already address the 
risk of flammability based on the material's flashpoint and boiling 
point. Currently the HMR designate a liquid as ``flammable'' if it has 
a flash point of not more than 60 [deg]C, regardless of vapor pressure.
    API cautioned that imposing a vapor pressure limit for all Class 3 
flammable liquids has potential to change fundamentally how all these 
products are classified and packaged. The American Coatings 
Associations (ACA) and Railway Supply Institute (RSI) added that crude 
oil presents unique risks because of its variable chemical properties 
that do not extend to [are not exhibited with] other Class 3 flammable 
liquids, such as manufactured goods which undergo strict quality 
assurance processes to ensure properties and characteristics are within 
defined parameters.
    The Council on Safe Transportation of Hazardous Articles (COSTHA) 
opposed applying a vapor pressure standard to other Class 3 materials 
based on investigation and studies regarding crude oil. The ILTA and 
COSTHA noted that extending this classification criterion to other 
flammable liquids would have a significant impact on fuels, raw 
chemical products, consumer products, and even health services. RSI 
further added that without sound scientific information and data, an 
expansion of vapor pressure limits to all Class 3 flammable liquids 
would be an arbitrary change that would impose additional costs. ILTA 
added that limiting the vapor pressure of Class 3 flammable liquids 
would also cause conflicts between regulatory agencies and industry. 
For example, the Environmental Protection Agency (EPA) regulates fuel 
properties to ensure proper emissions performance, and ASTM 
International (ASTM) maintains standards for vehicle fuel that include 
specified limits on the RVP of gasoline, which exceed 9 psi. ILTA and 
RSI similarly warned that setting a limit conflicts with the vapor 
pressure limits mandated by one of these other entities would cause 
numerous commercial and regulatory burdens.
Not by Highway
    While the NYSOAG petition requested a vapor pressure limit for 
shipments made by rail, PHMSA asked in the ANPRM whether the proposed 
limit should also apply to transportation by highway. Three of the four 
commenters that responded to this specific question were opposed to a 
vapor pressure limit by highway.
    National Tank Truck Carriers (NTTC) stated that while trucks are 
the main method for transporting refined petrochemicals from the fuel 
rack to gas stations, refined fuel risks are inherently different than 
those associated with transporting crude oil. PHMSA already considered 
the risks inherent in transporting refined fuels in its combustible 
fuel rulemaking and found them to be effectively managed under the 
current HMR. Accordingly, NTTC recommended Federal Motor Carrier Safety 
Administration (FMCSA) involvement as the agency tasked with regulating 
all highway transportation of goods in interstate commerce.
    NDPC stated that imposing a vapor pressure reduction requirement on 
highway transportation will force oil and gas producers to conduct 
unnecessary and extremely burdensome additional sampling at the well 
site to ensure compliance with the new standard. NDPC expressed that 
imposing vapor pressure limitations by highway may make oil leases 
    NDIC further opposed a vapor pressure limit by highway because 
there have not been any crude oil truck transport Boiling Liquid 
Expanding Vapor Explosion (BLEVE) events in North Dakota.
Regulatory Authority
    Several commenters in opposition to the proposed vapor pressure 
standard specifically stated that PHMSA did not have the authority to 
proceed with

[[Page 30677]]

setting a vapor pressure limitation due to restrictions from recent 
executive orders and the Fixing America's Surface Transportation (FAST) 
Act (FAST Act; Pub. L. 114-94). Similarly, two commenters stated that 
granting the NYSOAG's petition would conflict with PHMSA's obligation 
to harmonize the HMR with international regulations.
    Signed on January 30, 2017, Executive Order 13771, ``Reducing 
Regulation and Controlling Regulatory Costs,'' directs agencies to 
repeal two regulations for every new regulation they issue. Commenters 
such as API stated that given the financial burden that this rule would 
impose, it would be imprudent to move forward with a vapor pressure 
standard as it would severely limit PHMSA's ability to implement any 
other regulatory actions. In addition, on March 28, 2017, Executive 
Order 13783, ``Promoting Energy Independence and Economic Growth,'' 
obligated PHMSA to identify and revise any regulatory actions that 
potentially burden domestic energy production. Citing the 
implementation costs that would be associated with the proposed vapor 
pressure limits, several commenters alluded to the restrictions imposed 
on PHMSA by Executive Orders 13771 and 13783. In its comment, NDPC 
noted that any new regulation that requires ``stabilization'' or sets a 
vapor pressure threshold for crude oil prior to transportation would 
impose substantial cost impacts on the oil and gas production and 
transportation industries. According to AFPM, accepting the petition 
would force offerors and carriers to treat crude oil or other flammable 
liquids as Division 2.1 flammable gases, or incur unreasonable 
pretreatment costs.
    According to comments from AFPM, API, and NDPC, the foreseen 
economic burden would be due not only to the costs of the additional 
operational infrastructure and equipment that would be required to meet 
new vapor pressure limits, but also to economic losses caused by 
resulting conflicts with international standards. Similarly, NDPC 
further noted that crude oil is more valuable when it is allowed to be 
sold with all of its constituent hydrocarbons and that crude oils with 
greater concentrations of light ends can be more valuable because each 
of the constituents can be refined and sold at the most economically 
efficient location in the supply chain. NDPC explained that separating 
the oil prematurely into its individual hydrocarbon constituents 
earlier in the supply chain to comply with a regulatory vapor pressure 
standard can reduce the overall value of a given barrel of oil as 
produced at the wellhead and removing light ends prior to 
transportation reduces the volume of crude oil that producers are 
ultimately able to sell to refiners and others in the marketplace.
    Several commenters--including Independent Petroleum Association of 
America (IPAA) and the American Exploration and Production Council 
(AXPC)--urged PHMSA to reconsider the ANPRM and suggested that setting 
a vapor pressure standard prior to the completion of the Sandia Study 
would be premature and incongruous with congressional mandates outlined 
in the FAST Act. AFPM noted that the FAST Act reflects Congress's 
judgment that the completion of the Sandia Study should be a condition 
precedent to any further regulation of the transportation of crude oil. 
NDIC, NDPC, AFPM, and several other commenters stated that PHMSA should 
delay any decision regarding a vapor pressure standard for crude oil 
until the results of the Sandia Study studies are available. To this 
point, AFPM added that Task 4 (of the Sandia Study) was specifically 
intended to examine whether tight oils might have an elevated risk of 
ignition in the event of a rail accident as compared to other crude 
    Two others commented that implementing a vapor pressure standard 
would undermine international harmonization efforts and impact trans-
border shipments. API stated that, per international agreement, PHMSA 
is obligated to ensure harmonization with the United Nations (UN) 
Recommendations on the Transport of Dangerous Goods Model Regulations, 
which are designed to enhance global trade, economic development, 
improve safety and compliance-enforcement capability while simplifying 
training requirements for multi-modal cross regional transport of 
dangerous goods. API noted that unilateral or arbitrary changes to the 
HMR domestically that do not align with UN Model Regulations 
requirements would severely impact trans-border shipments and create 
significant regulatory uncertainty for shippers and carriers.
HMR Is Sufficient Based on Known Risks
    Several commenters stated that the existing regulatory framework of 
the HMR, which includes the system of hazard classification and 
packaging requirements, adequately addresses the risks associated with 
the transportation of hazardous materials. A commenter from Dow 
Chemical stated that the HMR provides a comprehensive framework to 
address the risks associated with the transportation of flammable 
liquids that includes defined criteria for the classification of 
flammable liquids and specification of appropriate packaging 
requirements. The commenter further stated that as defined in the HMR, 
a flammable liquid has a flash point of not more than 60 [deg]C, 
regardless of vapor pressure. As such, a flammable liquid can ignite 
and burn regardless of vapor pressure.
    In addition to the HMR's basic framework, several commenters 
opposed the establishment of a vapor pressure limit in consideration of 
the already completed HM-251 rulemaking. The HM-251 rulemaking adopted 
the DOT-117 tank car specification and other safety provisions that 
were found to be protective of human health and the environment, 
further strengthening the protections provided by the HMR. Commenters 
such as RSI suggested that given recently adopted measures from the HM-
251 final rule, setting additional requirements at this time would be 
premature and economically burdensome. Specifically, RSI noted that 
PHMSA does not yet know the full effect of these regulatory efforts, 
many of which have only been implemented within the last few years or 
are still in the process of being implemented (i.e., the transition 
from DOT-111 specification tank cars to DOT-117s and DOT-117Rs). As 
such, RSI noted it would be premature to implement additional 
regulations impacting the transportation of crude oil and other 
flammable liquids by rail prior to full implementation of these 
regulatory initiatives and before PHMSA can analyze and understand 
their collective safety impact.
    API stated that safety measures like the ones set forth in the HM-
251 rulemaking were simply a better option for minimizing safety risks 
as compared to limiting vapor pressure to minimize safety risks. It 
further stated that PHMSA should invest in and improve the methods to 
transport crude oil safely, rather than impose new unilateral RVP 
limits that may not reduce accidents or casualties and are not based on 
any scientific evidence. A commenter from AWM Associates noted that the 
issue appears to be related to shippers failing to properly classify 
the Bakken crude oil and suggests that PHMSA should increase criminal 
prosecution of shippers that fail to properly classify their hazardous 
materials and those who ship the hazardous materials in unauthorized 

[[Page 30678]]

II. Crude Oil Characterization Research Study (Sandia Study)

    In addition to the ANPRM, DOT, the U.S. Department of Energy (DOE), 
and Transport Canada (TC) have conducted a collaborative research 
program designed to better understand the risks associated with large 
volume rail transport of crude oil in general, particularly 
unconventional (tight) oil. The research was carried out by Sandia, a 
DOE Federally Funded Research and Development Center. As a Federally 
Funded Research and Development Center, Sandia draws upon its deep 
science and engineering experience and serves as an independent, 
objective advisor to DOE and conducts research to inform the policy 
debate for decision makers. To carry out the objectives of the Sandia 
Study, DOE called upon a multidisciplinary team with world-class 
experts and state-of-the-art facilities, instrumentation, and 
diagnostic capabilities to perform complex large-scale combustion 
testing and analysis.

A. Congressional Mandate

    Section 7309 of the FAST Act requires the Secretaries of DOE and 
DOT to submit a report to Congress on the results of the ongoing Sandia 
study of crude oil characteristics within 180 days of its completion. 
Now completed, the results of the Sandia Study are summarized in 
Section B below.

B. Phases of the Sandia Study

i. Initial Phase
    DOT and DOE began their effort by commissioning a review of 
available crude oil chemical and physical property data and literature. 
This review focused on crude oil's potential for ignition, combustion, 
and explosion. A partial list of properties surveyed included density 
(expressed as API gravity), vapor pressure, initial boiling point, 
boiling point distribution, flash point, gas-oil ratio, and ``light 
ends'' composition (dissolved gases--including nitrogen, carbon 
dioxide, hydrogen sulfide, methane, ethane, and propane--and butanes 
and other volatile liquids). Although the review yielded a large 
database encompassing a wide variety of crude oils and their 
properties, it also illustrated the difficulty in using available data 
as the basis for accurately defining and comparing crude oils due to 
the wide range in variability, specifically variability in the sample 
point, sampling methods, and analytical methods.
    An important outcome of the first phase of this research was formal 
recognition of the wide-ranging variability in crude oil sample types, 
sampling methods, and analytical methods and acknowledgement that these 
variabilities limit the adequacy of the available crude oil property 
data set for establishing effective and safe transport guidelines. To 
address this characterization and classification gap, DOT, DOE, and TC 
continued their research to improve the understanding of crude oil 
properties with a particular focus on ``tight'' crude oil. A Sampling, 
Analysis, and Experiment (SAE) plan was designed to characterize tight 
and conventional crude oils based on key chemical and physical 
properties, and identify properties that may contribute to increased 
likelihood and/or severity of combustion events that could arise during 
transport incidents. In addition to analytical procedures, this 
research program included experiment activity protocols such as: Use of 
acquired chemical and physical property data in the development of 
computational models for predicting crude oil behavior in rail 
transport accident scenarios; and execution of experimental activities, 
including actual pool fires and fireballs, to validate and/or improve 
predictive models. The Sandia Study, as initially proposed, comprised 
four separate tasks, with an option to conduct additional Tasks 5 and 6 
(proposing full scale combustion studies, and a comprehensive supply 
chain oil properties survey, respectively) based on the results of 
Tasks 1 through 4. Below, PHMSA describes Tasks 1 through 3 and the 
basis for the determination by Study sponsors DOE, DOT, and TC that 
Tasks 4-6 would no longer be necessary given the definitive results 
from the completion of the first three tasks, which are more fully 
described below.
ii. Task 1
    Task 1 (Project Administration and Outreach) covered the initial 
procurement of crude oil samples, testing materials, equipment, and 
analytical lab contracts. It also included coordination and outreach 
with sponsors, Steering Committees, technical associations, and subject 
matter experts. Task 1 was ongoing throughout the study.
iii. Task 2
    Task 2 (Sampling and Testing) investigated which commercially 
available crude oil sampling and analysis methods can accurately and 
reproducibly collect and analyze crude oils for vapor pressure and 
composition, including dissolved gases. Results of Task 2 were 
published on November 1, 2017 as SAND2017-12482. Revision 1--Winter 
Sampling, published on June 1, 2018 as SAND2018-5909, incorporated 
additional seasonal data and compositional analysis results that had 
become available since publication of the initial report. Both reports 
compared performance of commercially available methods to that of a 
well-established mobile laboratory system that currently serves as the 
baseline instrument system for the U.S. Strategic Petroleum Reserve 
Crude Oil Vapor Pressure Program. The experimental matrix evaluated the 
performance of selected methods for (i) capturing, transporting, and 
delivering hydrocarbon fluid samples from the field to the analysis 
laboratory, coupled with (ii) analyzing for properties related to 
composition and volatility of the oil, including vapor pressure, gas-
oil ratio, and dissolved gases and light hydrocarbons. Several 
combinations of sampling and testing were observed to perform well in 
both summer and winter sampling environments, though conditions apply 
that need to be considered carefully for given applications. Methods 
that performed well from Task 2 were utilized subsequently in Task 3.
iv. Task 3
    The purpose of Task 3 (Pool Fire and Fireball Experiments in 
Support of the US DOE/DOT/TC Crude Oil Characterization Research Study) 
was to compare combustion behavior of several crude oil types spanning 
a measurable range of vapor pressure and light ends content 
representative of U.S. domestic conventional and tight crude oils. 
Results of Task 3 were published on August 24, 2019 as SAND2019-

    \3\ Available at https://www.osti.gov/servlets/purl/1557808. 
Task 3 results and conclusions were peer-reviewed by independent 
fire experts and sampling and characterization subject matter 
experts. See id. at 4. In addition, Task 3 results and conclusions 
were reviewed by PHMSA, Federal Railroad Administration, DOE, and TC 
scientists and engineers.

    Task 3 consisted of an experimental observation of physical, 
chemical, and combustion characteristics of selected North American 
crude oils:
     The objective of the pool fire experiments was to measure 
parameters necessary for thermal hazard evaluation (namely, burn rate, 
surface emissive power, flame height, and heat flux to an engulfed 
object) by a series of 2-meter diameter indoor and 5-meter diameter 
outdoor experiments.
     The objective of the fireball experiments was to measure 
parameters required for thermal hazard evaluation (namely, fireball 
maximum diameter, height at maximum diameter, duration,

[[Page 30679]]

and surface emissive power) using 400-gallons of crude oil per test.
    Observed results were then extrapolated in calculating thermal 
hazard distances resulting from full scale 30,000-gallon pool fires and 
fireballs. The Sandia Study noted that the methodology described above 
incorporated steady-state assumptions that would tend to overstate 
calculated hazard distances.
    The crude oil samples used for the experiments were obtained from 
several U.S. locations, including ``tight'' oils from the Bakken region 
of North Dakota and Permian region of Texas, and a conventionally 
produced oil from the U.S. Strategic Petroleum Reserve stockpile. These 
samples spanned a measurable range of vapor pressure (VPCRx(T)) and 
light ends content representative of U.S. domestic conventional and 
tight crude oils.
    Task 3 demonstrated that, even though the three crude oils studied 
had a wide range of vapor pressures, each had very similar calculated 
thermal hazard distances with respect to pool fire and fireball 
combustion. Furthermore, those crude oils evaluated in Task 3 were also 
found to have thermal hazard parameters (surface emissive power, etc.) 
consistent with the known thermal hazard parameters of a variety of 
other alkane-based hydrocarbon liquids--some with higher vapor 
pressures than any observed in the Sandia Study. Based on those data 
points, the Sandia Study concluded that vapor pressure is not a 
statistically significant factor in affecting the thermal hazard posed 
by pool fire and fireball events that might occur during crude oil 
train derailment scenarios. In sum, the Sandia Study demonstrated that 
lowering the vapor pressure of crude oil would not reduce the severity 
of pool fire or fireball scenarios, and concluded that results of the 
study do not support creating a regulatory distinction for crude oils 
based on vapor pressure.
v. Sandia Study Completion
    The 2015 version of the SAE Plan for the Sandia Study framed the 
project in terms of six tasks, the first four of which were authorized 
by its sponsors. Task 4 was conceived as an opportunity to generate a 
comprehensive data set of vapor pressures for multiple crude oil types 
to better understand the thermal hazards for pool fires and fireballs. 
The value of Task 4, therefore, was premised on the faulty assumption 
that vapor pressure would be a significant factor determining the 
magnitude of thermal hazards from pool fire and fireball hazards posed 
by different crude oil types.
    However, the relative independence of thermal hazards from vapor 
pressure observed in Task 3 eliminated the need for additional data 
that would have been collected in Task 4. Consequently, Sandia included 
within the Task 3 conclusions a recommendation against proceeding with 
Task 4.\4\ Subsequently, the Sandia Study sponsors (DOT, DOE, and TC) 
agreed neither to proceed with Task 4 nor optional Tasks 5 and 6.

    \4\ Id. at 77-78. The full-scale combustion testing and supply 
chain analysis contemplated in Tasks 5 and 6 were not pursued for 
the same reason.

III. PHMSA's Decision

    PHMSA, after examining the results and conclusions of the Sandia 
Study closely, and in consideration of the public comments to the ANPRM 
from industry, stakeholders, and other interested parties, has 
determined that issuing any regulation setting a vapor pressure limit 
for crude oil transportation by rail is not justified because such a 
regulation would not improve the safety of transporting crude oil by 
rail. PHMSA further notes that the Sandia Study's finding that there 
was no meaningful link between crude oil vapor pressures and thermal 
hazards militates against the imposition of vapor pressure limits for 
transportation of crude oil in modes other than rail.
    Furthermore, establishing a vapor pressure limit for crude oil by 
rail would unnecessarily impede rail transportation of crude oil 
without providing justifiable benefits. As explained by comments 
submitted in response to the ANPRM, vapor pressure limits on crude oil 
transported by rail would, inter alia, disrupt commodity markets for 
the dissolved gasses that drive crude oil vapor pressure, require 
conforming changes to contractual and equipment specifications 
throughout the value chain, and impose significant compliance costs on 
crude oil producers and rail transportation. None of those significant 
burdens, moreover, would be accompanied by a meaningful safety benefit. 
Thus, this notice of withdrawal provides PHMSA's determination that no 
regulation setting a vapor pressure limit for rail transportation of 
crude oil is necessary or appropriate.
    PHMSA also has decided, based on its review of comments to the 
ANPRM and its existing regulations, against imposing vapor pressure 
limits for other unrefined petroleum-based products and Class 3 
flammable liquid hazardous materials by any mode.
    The administrative record similarly did not evince a compelling 
technical basis for imposing vapor pressure limits with respect to 
transportation by any mode of other unrefined petroleum-based products 
and Class 3 flammable liquid hazardous materials. As noted above, those 
comments calling for broader vapor pressure limits were predicated 
largely on anecdotal correlations or by way of analogy to vapor 
pressure limits imposed on either chemically distinct hazardous 
materials (e.g., refined petroleum products such as gasoline), or for 
reasons not always related to transportation safety (e.g., pollution 
control). PHMSA is therefore unconvinced those comments demonstrate 
that regulation of unrefined petroleum-based products and Class 3 
hazardous flammable liquid materials on the basis of vapor pressure 
will result in meaningful safety improvements beyond those provided by 
existing HMR classification requirements predicated on flammability and 
initial boiling point. See 49 CFR 173.21(a). PHMSA further notes that 
the significant compliance and opportunity costs identified in comments 
submitted by diverse industry stakeholders also militate against 
imposing vapor pressure limits on modal transportation of unrefined 
petroleum-based products and Class 3 hazardous flammable liquid 
    Accordingly, PHMSA withdraws the January 18, 2017 ANPRM in its 

IV. Preemption of Non-Federal Laws

    PHMSA, in issuing this withdrawal, has affirmatively determined 
that a national vapor pressure limit for unrefined petroleum-based 
products is not necessary or appropriate. As explained further below, 
PHMSA believes that Federal law likely preempts any non-Federal law 
that attempts to set a vapor pressure limit for these materials. PHMSA 
is aware of two States that already have laws setting vapor pressure 
limits in place for crude oil: North Dakota and Washington. PHMSA is 
also aware of one State legislature that has introduced a similar bill 
that would regulate vapor pressure for oil or gas.\5\ Moreover, six 
additional States: California, Illinois, Maine, Maryland, New Jersey, 
and New York have advocated for a vapor pressure limit.\6\

    \5\ See House Bill 4105, 80th Oregon Legislative Assembly--2020 
Regular Session (February 3, 2020), https://olis.leg.state.or.us/liz/2020R1/Downloads/MeasureDocument/HB4105/Introduced (last visited 
Apr. 1, 2020).
    \6\ In this proceeding, the Attorneys General of California, 
Illinois, Maine, and Maryland filed joint comments with the 
Attorneys General of New York and Washington, supporting a national 
vapor pressure standard. See Comments by the Attorneys General of 
New York, California, Illinois, Maine, Maryland, & Washington, 
Document Id: PHMSA-2016-0077-0074. In addition, the Attorneys 
General of New York, California, Maryland, and New Jersey submitted 
comments against preemption in a proceeding involving Washington's 
law. See Docket No. PHMSA-2019-0149.


[[Page 30680]]

    The Federal hazmat law contains express preemption provisions 
relevant to this proceeding. As amended by Section 1711(b) of the 
Homeland Security Act of 2002 (Pub. L. 107-296, 116 Stat. 2319), 49 
U.S.C. 5125(a) provides that a requirement of a State, political 
subdivision of a State, or Indian tribe is preempted--unless the non-
Federal requirement is authorized by another Federal law or DOT grants 
a waiver of preemption under section 5125(e)--if (1) complying with the 
non-Federal requirement and the Federal requirement is not possible; or 
(2) the non-Federal requirement, as applied and enforced, is an 
obstacle to accomplishing and carrying out the Federal requirement.
    Additionally, subsection (b)(1) of 49 U.S.C. 5125 provides that a 
non-Federal requirement concerning any of five subjects is preempted 
when the non-Federal requirement is not ``substantively the same as'' a 
provision of Federal hazardous material transportation law, a 
regulation prescribed under that law, or a hazardous materials security 
regulation or directive issued by the Department of Homeland 
Security.\7\ The ``designation, description, and classification of 
hazardous material'' is a subject area covered under this authority. 49 
U.S.C. 5125(b)(1)(A). To be ``substantively the same,'' the non-Federal 
requirement must conform ``in every significant respect to the Federal 
requirement. Editorial and other similar de minimis changes are 
permitted.'' 49 CFR 107.202(d).

    \7\ Unless the non-Federal requirement is authorized by another 
Federal law or DOT grants a waiver of preemption under section 

    The preemption provisions in 49 U.S.C. 5125 reflect Congress's 
long-standing view that a single body of uniform Federal regulations 
promotes safety (including security) in the transportation of hazardous 
materials. Some forty years ago, when considering the Hazardous 
Materials Transportation Act, the Senate Commerce Committee 
``endorse[d] the principle of preemption in order to preclude a 
multiplicity of State and local regulations and the potential for 
varying as well as conflicting regulations in the area of hazardous 
materials transportation.'' S. Rep. No. 1192, 93rd Cong. 2nd Sess. 37 
(1974). A United States Court of Appeals has found uniformity was the 
``linchpin'' in the design of the Federal laws governing the 
transportation of hazardous materials.\8\

    \8\ Colorado Pub. Util. Comm'n v. Harmon, 951 F.2d 1571, 1575 
(10th Cir. 1991).

    The current HMR requirements for the classification of unrefined 
petroleum-based products include proper classification, determination 
of an appropriate packing group, and selection of a proper shipping 
name. The HMR contain detailed rules that guide an offeror through each 
of these steps to ensure proper classification of hazardous materials. 
Moreover, for unrefined petroleum-based products, such as crude oil, 
additional requirements were implemented pursuant to a public notice 
and comment rulemaking proceeding.\9\ These Federal requirements for 
classification of these types of materials do not mandate specific 
sampling and testing of vapor pressure, nor do they classify hazardous 
liquids based on vapor pressure. Moreover, there is no current Federal 
requirement to pre-treat or condition crude oil to meet a vapor 
pressure standard before it is offered for transportation.

    \9\ Hazardous Materials: Enhanced Tank Car Standards and 
Operational Controls for High-Hazard Flammable Trains, 80 FR 26643 
(May 8, 2015).

    Because the HMR does not designate, describe, or classify unrefined 
petroleum-based products differently based on vapor pressure, any non-
Federal law setting a vapor pressure limit for such materials is likely 
preempted by 49 U.S.C. 5125(b)(1)(A). Indeed, PHMSA has affirmatively 
decided in this proceeding that a national vapor pressure limit is not 
necessary or appropriate, thereby confirming that non-Federal laws 
setting vapor pressure limits are likely not ``substantively the same'' 
as Federal law.\10\ Such non-Federal laws may also be ``handling'' 
regulations preempted by 49 U.S.C. 5125(b)(1)(B), and may also be 
preempted under 49 U.S.C. 5125(a)(2) as obstacles to accomplishing and 
carrying out Federal law.

    \10\ This notice of withdrawal also provides a basis for what 
courts have referred to as ``negative'' or ``null'' preemption. See 
Norfolk & W.R. Co. v. Pub. Utils. Comm., 926 F.2d 567, 570 (6th Cir. 
1991) (``the United States Supreme Court has recognized a form of 
negative preemption when a federal agency has determined that no 
regulation is appropriate.'') (citing Ray v. Atlantic Richfield Co., 
435 U.S. 151, 178 (1978)).

    A person directly affected by a non-Federal requirement may apply 
to PHMSA for a determination that the requirement is preempted by 49 
U.S.C. 5125. See 49 U.S.C. 5125(d); 49 CFR 107.203-107.213. PHMSA is 
currently considering a preemption application filed by North Dakota 
and Montana with respect to Washington's vapor pressure limit, and will 
consider any application filed with respect to other non-Federal vapor 
pressure limits.

    Issued in Washington, DC, on May 11, 2020, under authority 
delegated in 49 CFR part 1.97.
Howard R. Elliott,
Administrator, Pipeline and Hazardous Materials Safety Administration.
[FR Doc. 2020-10377 Filed 5-19-20; 8:45 am]