Preparing for LNG by Rail Tank Car: A Readiness Review (2022)

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89 The committee reviewed the safety assurance contexts, methods, and prac- tices for liquefied natural gas (LNG) moved by truck and maritime trans- port, and for transportation access and cargo transfer at LNG facilities in response to its Statement of Task.1 This appendix reviews the most salient areas to the committee’s study of moving LNG by tank car. SAFETY ASSURANCE FOR LNG FACILITIES The transfer of LNG to or from a tank car, truck, or vessel takes place in LNG facilities that are regulated at the federal level. This section provides an overview of the federal agencies with jurisdiction over LNG facilities, including cargo transfer. It then provides additional details about safety as- surance during design and construction and during operations. The Federal Energy Regulatory Commission (FERC) has the primary responsibility for facilities used to import and export LNG as well as other LNG facilities that are used for interstate commerce. Because FERC has sit- ing authority, which means an LNG facility under their jurisdiction cannot be built without FERC’s approval, FERC is the lead agency for conduct- ing the required environmental review under the National Environmental Policy Act. The Occupational Safety and Health Administration (OSHA), 1 “The experience transporting LNG in bulk shipments by other modes, including by water and truck, to identify basic principles applied for safety assurance that can inform measures taken by government and industry to ensure the safe movement of LNG by rail.” The full Statement of Task is in Chapter 1. Appendix A Liquefied Natural Gas Safety Assurance for Trucking and Maritime Transport

90 PREPARING FOR LNG BY RAIL TANK CAR the U.S. Environmental Protection Agency (EPA), the Pipeline and Hazard- ous Materials Safety Administration (PHMSA), and other relevant agencies, such as the U.S. Coast Guard, also participate. FERC also provides continu- ing oversight during the facility’s operation. Pipeline safety regulations, administered by PHMSA, apply to LNG storage and transfer facilities used in the transfer of natural gas by pipe- line, as described in 49 CFR § 193. The regulations cover siting, design, construction, equipment, operations, maintenance, personnel qualifications and training, fire protection, and security. Cargo transfer systems for tank car, tank truck, and marine vessel are included in the regulations. PHMSA does not have siting authority.2 The U.S. Coast Guard also has jurisdiction over the marine cargo transfer system (see section on Maritime Safety As- surance below). Facilities and businesses handling LNG rely on “Standard for the Pro- duction, Storage, and Handling of Liquefied Natural Gas (LNG)” (NFPA 59A), produced by the National Fire Protection Association (NFPA). Up- dates to the NFPA codes and standards reflect industry needs, evolving technologies, and practical experience.3 NFPA 59A applies to the “siting, design, construction, maintenance, and operation of facilities that produce, store, and handle liquefied natural gas (LNG)” and the “training of person- nel involved with LNG.”4 LNG facilities falling outside of the jurisdiction of FERC or PHMSA may still be required to meet EPA and OSHA regulations for hazardous substances.5 OSHA’s Process Safety Management of Highly Hazardous Chemicals regulations (29 CFR § 1910.119) are likely to apply to LNG facilities that fall outside of FERC’s, PHMSA’s, or the U.S. Coast Guard’s jurisdictions. OSHA consults with the U.S. Department of Transportation on questions of jurisdiction.6,7 2 Pipeline and Hazardous Materials Safety Administration, “LNG Regulatory Documents,” accessed February 17, 2022, https://www.phmsa.dot.gov/pipeline/liquified-natural-gas/lng- regulatory-documents. 3 National Fire Protection Association, “Codes and Standards,” accessed February 15, 2022, https://www.nfpa.org/Codes-and-Standards. 4 National Fire Protection Association, “NFPA 59A: Scope,” accessed February 15, 2022, https:// www.nfpa.org/codes-and-standards/all-codes-and-standards/list-of-codes-and-standards/ detail?code=59A. 5 Pipeline and Hazardous Materials Safety Administration, “Jurisdiction of LNG Plants,” accessed February 22, 2022, https://www.phmsa.dot.gov/pipeline/liquified-natural-gas/ jurisdiction-lng-plants. 6 Occupational Safety and Health Administration, “Process Safety Management,” accessed February 24, 2022, https://www.osha.gov/process-safety-management/hazards. 7 Occupational Safety and Health Administration, “Standard Interpretations: PSM Coverage of LNG Facilities,” April 27, 2021, https://www.osha.gov/laws-regs/standardinterpretations/ 2021-04-27.

APPENDIX A 91 Under the Clean Air Act, EPA enforces safety regulations designed to prevent the release of hazardous substances from stationary sources through Risk Management Plans. EPA considers that rail cars sitting on private sid- ings and storing a covered hazardous substance should be counted toward the threshold amounts that trigger the regulations.8 A Risk Management Plan is to contain a hazard assessment, including analysis of a worst-case scenario, a prevention program, and an emergency response program. The required prevention and emergency response programs include employee training. The emergency response program also includes procedures for alerting the public and local response agencies. A Risk Management Plan must be reviewed, revised, and submitted to EPA every 5 years.9 Federal Safety Assurance for Access and Cargo Transfer The siting, design, and construction of LNG facilities, including how they are accessed by transport modes carrying LNG and cargo transfer, are likely to come under FERC and/or PHMSA regulations. FERC uses a risk assessment and management approach in its approval process for new or expanded LNG facilities, while the PHMSA regulations are prescriptive. For waterfront facilities, the U.S. Coast Guard also gets involved, which is discussed in detail in the section on maritime transport of LNG. FERC Authority and Guidance FERC’s environmental review process requires the applicant to prepare a set of “Resource Reports” (18 CFR § 380.12). Particularly relevant to the transport of LNG to and from the facility are Resource Report 10, Alterna- tives Analysis; Resource Report 11, Reliability and Safety; and Resource Report 13, Engineering and Design Material. FERC guidance for Resource Report 10 includes analyzing alterna- tives for the facility site, routes connecting to the facility, and facility layout. Current guidance focuses on alternatives for access by pipeline and roads. Presumably, the alternatives analysis would include rail access, when the delivery or distribution of LNG by rail becomes relevant.10 Resource 8 U.S. Environmental Protection Agency, “General RMP Guidance—Chapter 1: General Applicability,” accessed February 24, 2022, https://www.epa.gov/rmp/general-rmp-guidance- chapter-1-general-applicability. 9 U.S. Environmental Protection Agency, “Risk Management Plan (RMP) Rule Over- view,” accessed February 24, 2022, https://www.epa.gov/rmp/risk-management-plan-rmp-rule- overview. 10 Federal Energy Regulatory Commission, “4.10 Resource Report 10 – Alternatives,” Guidance Manual for Environmental Report Preparation for Applications Filed Under the Natural Gas Act, vol. 1, February 2017.

92 PREPARING FOR LNG BY RAIL TANK CAR Report 11 is dedicated to safety and advises the applicant to use a hazard identification and risk management approach for the required analysis. Marine transportation hazards and other transportation hazards within the facility boundaries, alongside the facility, are to be identified. Resource Report 13 contains additional guidance on safety analyses and specifies the information, drawings, plans, procedures, or other engineering documents that should be submitted. Hazards include those related to accidents and natural catastrophes. To identify transportation hazards, FERC guidance requires safety and reliability impact studies for waterway, road, rail, and air transportation. Hazards include intentional acts. For a waterway, the U.S. Coast Guard’s Waterway Suitability Assessment (see below) may suffice. For roads, the study is to document hazards from tanker trucks and other vehicle traffic and includes periods during cargo transfer. The rail study covers similar hazards. The security threats and vulnerabilities analysis also requires that the applicant identify and analyze potential physical and cyber security vulnerabilities related to transportation.11 PHMSA Regulations and Authority PHMSA’s pipeline safety regulations extend to the design and construc- tion of LNG facilities, including their cargo transfer systems, and are prescriptive (49 CFR § 193). Cargo transfer systems are included in the facilities requiring thermal and vapor-dispersion exclusion zones (49 CFR § 193.2057–2059). The regulations also require considering transporta- tion-related accidents or intentional events. The structural design of the impoundment system must take into account the collision or explosion of a train, tank car, or tank truck, if applicable (49 CFR § 193.2155(a)(5)(ii)). Federal Safety Assurance for Operations and Emergency Response Operations, including emergency response, come under the purview of FERC and PHMSA’s pipeline safety regulations for LNG facilities. FERC requires the documentation of procedures for operations during its review of proposed new and expanded LNG facilities, including cargo transfer. PHMSA’s regulations prescriptively govern the operation of facilities, al- though its emergency response regulations also use a hazard management approach. 11 Federal Energy Regulatory Commission, Resource Report 13, Guidance Manual for Environmental Report Preparation for Applications Filed Under the Natural Gas Act, vol. 2, February 2017.

APPENDIX A 93 FERC Regulations and Activities During FERC’s review of proposed new or expanded LNG facilities, the applicant must submit information on safety assurance during the facil- ity’s operation. Operating, maintenance, safety, and security plans and procedures are to be submitted in adequate detail “to demonstrate that the facilities would be operated and maintained to meet the federal regula- tions and the level of safety is consistent with the design of the facilities.” Operating and maintenance plans are to include descriptions of personnel training and facility training procedures. The security plans cover physical and cyber security. Emergency response plans and procedures must show how the applicant proposes to develop and maintain the capabilities of on- site personnel and off-site emergency responders.12 Before construction can begin, the owner/operator must submit to FERC a formal Emergency Response Plan, which includes a Cost-Sharing Plan. Costs may be shared among federal, state, and local governmental agencies, in addition to the private sector. The Emergency Response Plan must show how they plan to coordinate with off-site emergency responders and local emergency planning groups. The plan should also include notifi- cation and evacuation procedures for residents and others present in areas needing to be evacuated.13 PHMSA Regulations and Activities PHMSA pipeline safety regulations cover their operations, maintenance, personnel qualifications and training, fire protection, and security of LNG facilities. The main safety assurance tool required by the regulations is manuals or other written procedures. PHMSA enforces its safety regula- tions through requirements for operators to submit annual reports, incident reports, and safety-related conditions reports and through periodic inspec- tions. For violations, PHMSA can issue orders requiring compliance and assess civil penalties.14 For cargo transfer, the regulations require that transfers must be done in accordance with a manual or written procedure (49 CFR § 193.2513). Most of the regulatory requirements for cargo transfer do not specify mode, 12 Federal Energy Regulatory Commission, Resource Report 11, Guidance Manual for Environmental Report Preparation for Applications Filed Under the Natural Gas Act, vol. 2, February 2017. 13 Ibid. See also Federal Energy Regulatory Commission, “Alaska Gasline Development Corporation: Order Granting Authorization Under Section 3 of the Natural Gas Act,” May 21, 2020, https://www.ferc.gov/sites/default/files/2020-06/CP17-178-000.pdf. 14 Pipeline and Hazardous Materials Safety Administration, “LNG Regulatory Documents,” accessed February 25, 2022, https://www.phmsa.dot.gov/pipeline/liquified-natural-gas/lng- regulatory-documents.

94 PREPARING FOR LNG BY RAIL TANK CAR but instead refer generically to a “container,” although some required ac- tivities apply specifically to tank cars or tank trucks. PHMSA maintenance regulations also require written procedures for the maintenance of each component, including inspections and tests, including for cargo transfer components (49 CFR § 193.2621). For emergencies, the operator is to identify hazards connected to “op- erating malfunctions, structural collapse, personnel error, forces of nature, and activities adjacent to the plant” and create written procedures for the identified hazards as well as for fire (49 CFR § 193.2509). The operator is to coordinate and cooperate with local officials, including in the prepara- tion of an evacuation plan to protect the public. PHMSA LNG facility regu- lations on security also require written procedures (49 CFR § 193.2903) and include notification and communication with local law enforcement. Training Training is a part of all the regulatory structures for safety assurance and security at LNG facilities. FERC requires, as part of its environmental review and oversight pro- cesses, that training be part of operations and maintenance plans, physical security and cyber security plans, and emergency response plans developed by facility operators. Emergency response plans require training for on-site personnel and emergency responders. Training costs are also part of the cost-sharing plans prepared as part of the required emergency response plans. Finally, the project schedule for launching new or expanded facilities is to include adequate time for personnel training arranged by operators.15 PHMSA regulations require appropriate training as part of personnel qualification standards for those employed in construction, installation, inspection and testing, operations and maintenance, and security (49 CFR § 193.2705, 193.2707, and 193.2709). In addition, operators must regularly assess whether personnel are satisfactorily performing these regulated duties (49 CFR § 193.2705). The regulations also outline the required content of training for operations and maintenance, security, and fire protection (49 CFR § 193.2713, 193.2715, and 193.2717). Personnel must participate in the required training at least every 2 years to keep their knowledge and skills current. Operators must maintain records documenting that person- nel have participated in and satisfactorily completed the required training (49 CFR § 193.2719). 15 Federal Energy Regulatory Commission, Resource Report 13, Guidance Manual for Environmental Report Preparation for Applications Filed Under the Natural Gas Act, vol. 2, February 2017.

APPENDIX A 95 TRUCKING SAFETY ASSURANCE Moving LNG by tank truck comes under federal regulations for hazardous materials and motor carrier safety, with enforcement implemented through federal and state governments. The regulatory approach to safety assur- ance for operations reflects the large size and the dispersed structure of the commercial motor vehicle industry as well as the industry’s utilization of public roads and highways. Routes LNG tank trucks must travel on routes designated for hazardous materi- als, if so designated by state or tribal governments according to federal standards (49 CFR § 397.61–77). The federal standards, which apply to a specific group of non-radioactive hazardous materials including LNG, balance the benefits of efficient travel without delay with the public safety consequences of an incident along a route. The standards include reason- able access to terminals, locations for pickup and delivery, and necessary facilities (food, fuel, etc.). The 13 factors to be considered in designating routes are summarized in Box A-1. The federal standards also set risk ver- sus added distance thresholds that control whether a state or tribal govern- ment may substitute a longer, but less risky, route for a current route (49 CFR § 397.71(b)(4)). BOX A-1 Factors to Be Considered for the Designation of Highway Routes for Non-Radioactive Hazardous Materials (49 CFR § 397.71(b)(9)) 1. Population • Within a potential impact zone along route • Density of and amount of time with residents, employees, motorists, and other persons • Special populations such as schools, hospitals, prisons, and senior citizen homes 2. Highway type and characteristics 3. Types and quantities of hazardous materials • Normally transported along route • Relationship to impact zone and risks continued

96 PREPARING FOR LNG BY RAIL TANK CAR BOX A-1 Continued 4. Emergency response capabilities • In consultation with fire, law enforcement, and highway safety agencies • Proximity of emergency medical services • Capabilities to contain and suppress releases 5. Results of consultation with affected persons 6. Exposure and other risk factors, including distance to sensitive areas • Homes and commercial buildings • Special populations in hospitals, schools, handicapped facilities, prisons, and stadiums • Water sources and natural areas 7. Terrain and topography and its impact on • Severity of crash • Dispersion of hazardous material release • Control and cleanup 8. Continuity of routes • Consultation with adjacent jurisdictions • Most direct route preferred 9. Alternative routes resulting from a route designation 10. Effects on commerce 11. Delays in transport • No unnecessary delays 12. Climactic or weather conditions 13. Traffic congestion or accident history on route that could impact • Potential for an accident • Exposure of the public to any release • Emergency response • Temporary closure for cleanup Operations LNG safety assurance for transport operations by truck are administered by the Federal Motor Carrier Safety Administration (FMCSA) in partnership with state governments and law enforcement agencies. The main tools for safety assurance are permits for carriers, licenses for drivers, and a large database that tracks safety violations and incidents, including violations

APPENDIX A 97 specific to hazardous materials, that the FMCSA uses to design appropriate interventions to prevent future incidents. Carriers Motor carriers transporting LNG in a cargo tank must maintain a hazard- ous materials safety permit. The FMCSA’s safety permit program (49 CFR § 385.401–423) applies to a set of higher-risk hazardous materials and to intrastate and interstate carriers. The permit indicates that the carrier meets safety performance standards and follows a security program. The safety permit must be renewed every 2 years. To be issued a hazardous materials safety permit, a carrier must have a “satisfactory” rating in its Safety Fitness Determination, meaning that the carrier must not have a crash rate or an out-of-service (after inspection) rate for drivers, vehicles, hazardous materials, or in total in the top 30 per- cent of the national average (i.e., above the 70th percentile), as calculated with data collected in the Motor Carrier Management Information System (MCMIS).16 The motor carrier must also certify that they are in compliance with the hazardous materials regulations for a security program. For motor carriers, the security program consists of a security plan, a communications plan, and documentation that hazardous materials staff are adequately trained, as well as record-keeping requirements. The communications plan covers provisions for contact between carrier and driver (see the section Trip below). Federal regulations also cover cargo tank maintenance and qualification for entering or returning a cargo tank to service (49 CFR § 180.401–417). Drivers In addition to a commercial driver’s license, federal regulations require a driver of a cargo tank truck carrying LNG to have a tank vehicles en- dorsement and a hazardous materials endorsement. Both endorsements require passing written tests administered by state governments that cover material outlined in federal regulations (49 CFR § 383.119 and 383.121). The hazardous materials endorsement also requires a “threat assessment” check, which is similar to a background check and conducted by the 16 Federal Motor Carrier Safety Administration, “How Is the ‘Top 30%’ OOS, Hazmat Violations, and Crash Ratings Calculated?,” updated April 15, 2014, https://www.fmcsa.dot. gov/faq/how-are-top-30-oos-hazmat-violations-and-crash-ratings-calculated; for more detailed information on calculating rates: Federal Motor Carrier Safety Administration, “Hazardous Materials Safety Permits,” accessed March 7, 2022, https://safer.fmcsa.dot.gov/HazMatRates Post.pdf.

98 PREPARING FOR LNG BY RAIL TANK CAR Transportation Security Administration.17 FMCSA tracks drivers’ safety performance in the MCMIS. For pre-employment screening only and with the driver’s consent, a carrier can access a driver’s crash information for the most recent 5 years and inspection information for the most recent 3 years. Drivers can also access safety information about carriers.18 Trip Federal safety regulations for transporting hazardous materials like LNG make it the shipper’s responsibility to make sure the cargo is safely pack- aged. Even when the cargo tank is provided by the carrier, the shipper is still responsible for making sure that the cargo tank meets federal regulations, such as for proper labeling, marking, and placarding, and that the carrier has a valid safety permit (49 CFR § 173.22(a–b)). Similarly, the carrier and driver are forbidden from accepting for transport or transporting a shipment that was not prepared in compliance with federal regulations (49 CFR § 177.801). Regulations specific to the preparation and packaging of cryogenic liquids in cargo tanks, found in 49 CFR § 173.318, cover equip- ment specifications and liquid transfer procedures. For cargo transfer of hazardous materials such as LNG, general re- quirements are found in 49 CFR § 177.834 and requirements specific to gases found in 49 CFR § 177.840. The regulations pay significant atten- tion to the presence and duties of a “qualified person” during loading and unloading operations. Under most circumstances, if the cargo tank belongs to the carrier, the carrier is responsible for ensuring the presence of a quali- fied person during unloading. In addition to regulations designed to prevent the product from being exposed to fire during loading or unloading, the regulations include procedures for safety checks of discharge equipment and procedures for emergency discharge control and emergency shutdown. LNG transfer procedures differ by location. The shipper or destination customer provides the driver written instructions to be followed for the specific facility.19 Regulations on travel time for shippers and carriers/drivers are designed to ensure that the trip is completed before the pressure in the tank exceeds the pressure relief valve settings and LNG vapor is vented. The jacket must 17 Transportation Security Administration, “HAZMAT endorsement,” accessed March 7, 2022, https://www.tsa.gov/for-industry/hazmat-endorsement. 18 Federal Motor Carrier Safety Administration, “CSA: Measuring and Improving Commer- cial Motor Vehicle Safety,” Spring 2017, https://csa.fmcsa.dot.gov/Documents/CSA-Industry- Briefing.pptx. 19 Kenan Advantage, “LNG: Merchant Gas Group Safety and Training,” October 2013, slides accompanying presentation to the committee by Dan Wright, September 20, 2021, http:// onlinepubs.trb.org/onlinepubs/C4rail/WrightKenanAdvantageSafetyTraining092021.pdf.

APPENDIX A 99 be marked with the relevant information to ascertain and mark a rated holding time and also marked with a one-way travel time calculated accord- ing to specifications in 49 CFR § 173.318(g)(2). Carriers/drivers may not transport LNG unless the pressure is less than or equal to the pressure used to calculate the marked rated holding time and the one-way travel time is greater than or equal to the expected travel time to destination (49 CFR § 177.840(i)). The driver also must avoid unnecessary delays and maintain a record of the cargo tank pressure periodically throughout the trip. To meet the security conditions of the carrier’s safety permit, the driver and carrier must be in contact at the start and end of each duty shift and at shipment pickup and delivery. Records of this communication must be kept (49 CFR § 385.415(c)). Incidents and Crashes Carriers are required to report incidents related to motor vehicles carrying hazardous materials to PHMSA. For a disabled vehicle, regulations specific to motor vehicles carrying hazardous materials require that “special care be taken to guard the vehicle and its load or to take such steps as may be necessary to provide against hazard” (49 CFR § 177.854(a)). Inspections and Enforcement FMCSA has a comprehensive, data-based system for tracking safety in the commercial motor vehicle carrier industry and authority to use an escalat- ing set of interventions targeting unsafe behavior and practices, up to and including shutting down a carrier. FMCSA calls the system as a whole its Compliance, Safety, Accountability (CSA) program. Carriers and drivers of LNG are part of the general CSA program and also responsible for addi- tional compliance, safety, and accountability activities specific to hazardous materials. Data for the general CSA and the hazardous materials CSA come from required record keeping by carriers, periodic and targeted inspections, crash reports, violations, and investigations. CSA has three core compo- nents: a Safety Measurement System, a Safety Interventions Process, and a Safety Fitness Determination (described above).20 The Safety Measurement System (SMS) aggregates millions of data points collected each year from roadside inspections and crash reports to flag carriers at higher risk for future safety problems. SMS data are updated once per month. FMCSA uses the SMS to prioritize deploying its resources 20 Federal Motor Carrier Safety Administration, “CSA: Measuring and Improving Com- mercial Motor Vehicle Safety,” Spring 2017, https://csa.fmcsa.dot.gov/HelpCenter/Resources. aspx?type=topic&vID=44546.

100 PREPARING FOR LNG BY RAIL TANK CAR for interventions and enforcement actions. Carriers can also access the system to track their own safety performance. Hazardous materials compliance is one of the SMS’s seven Behavior Analysis and Safety Improvement Categories (BASICs). The hazardous ma- terial BASIC is calculated using data on violations of hazardous materials regulations found during roadside vehicle inspections. Carriers are flagged for enhanced oversight if their percentile rank among similar carriers is above a set threshold. An investigation of a carrier turning up an “acute or critical violation” in the past 12 months can also trigger an enhanced inter- vention. These violation types include operational and training deficiencies. LNG carriers can also trigger enhanced oversight if they equal or exceed the threshold in two or more of the other BASICs: unsafe driving, crashes, hours of service compliance, vehicle maintenance, controlled substances and alcohol, driver fitness, and insurance and other indicators.21 FMCSA has the authority to use an escalating set of investigatory and intervention tools. Interventions start with a letter of warning and, in order of increasing scrutiny, include targeted roadside inspections, off-site inspec- tion of carrier records, on-site inspection of specific safety problems, and comprehensive on-site inspection. Remedies start with a voluntary coop- erative safety plan, and then escalate to a notice of violation requiring the carrier to provide evidence of remedy, a notice of claim which can result in civil penalties, and, finally, an operation level out-of-service order requiring that the carrier immediately cease operations.22 MARITIME SAFETY ASSURANCE Safety assurance for the maritime transport of LNG is built on a centuries- old safety culture based on international treaties and third-party oversight. The role of the U.S. Coast Guard is pivotal for translating international norms to the U.S. context and for enforcing compliance to laws and regula- tions on navigable waters, including their ports. Vessels plying international waters come under the International Mari- time Organization (IMO). The IMO administers the International Conven- tion for the Safety of Life at Sea, which requires that ships carrying LNG and other liquefied gases in bulk comply with the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (IGC Code). First issued in 1976, the most recent set of comprehensive 21 Paul Bomgardner, “Transportation of Liquefied Natural Gas (Cryogenic liquid) by Highway Introduction and Federal Motor Carrier Safety Administration Responsibilities,” committee presentation, September 20, 2021, http://onlinepubs.trb.org/onlinepubs/C4rail/ BomgardnerFCMCR092021.pdf. 22 Federal Motor Carrier Safety Administration, “CSA Interventions,” accessed March 14, 2022, https://csa.fmcsa.dot.gov/About/Intervene.

APPENDIX A 101 amendments to the IGC Code came into force in 2016. The IGC Code cov- ers vessel design, construction, and operations.23,24,25 LNG carriers for in- ternational trade are also required to comply with the IMO’s International Convention for the Prevention of Pollution from Ships and the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW). Safety Assurance for Vessels Under U.S. law, all foreign-flagged tank vessels must have an IMO Certifi- cate of Fitness and undergo a compliance verification exam (i.e., inspection) at its initial U.S. port of call prior to conducting operations in U.S. navi- gable waters. The compliance exam verifies that the vessel meets the IGC Code and the American version of the IGC Code, as found in 46 CFR § 154. A Certificate of Compliance (COC), issued by the U.S. Coast Guard, is valid for 2 years and requires an annual exam. The equivalent to a COC for U.S.-flagged vessels, such as the LNG bunker barges, is called a Certifi- cate of Inspection. For quality assurance during the compliance verification exam, U.S. Coast Guard staff work in two-member teams.26 Classification Societies In addition to IMO and U.S. Coast Guard regulations, classification societ- ies such as the American Bureau of Shipping (ABS) also help ensure that gas carriers meet standards for safety. Classification societies are independent third-party, nongovernmental organizations that certify that a ship meets the society’s standards for its designated purpose and, on an ongoing basis, “classes” its condition through periodic surveys or inspections. A society’s determinations are typically used for insurance and for quality assurance during purchasing. ABS is a member of the International Association of Classification Societies (IACS), formed to provide some uniformity among 23 International Maritime Organization, “IGC Code,” https://www.imo.org/en/OurWork/ Safety/Pages/IGC-Code.aspx, accessed December 21, 2021. 24 International Maritime Organization, “International Convention for the Safety of Life at Sea (SOLAS), 1974,” https://www.imo.org/en/About/Conventions/Pages/International- Convention-for-the-Safety-of-Life-at-Sea-(SOLAS),-1974.aspx, accessed December 21, 2021. 25 International Maritime Organization, “Brief History of IMO,” https://www.imo.org/en/ About/HistoryOfIMO/Pages/Default.aspx, accessed December 21, 2021. 26 Because the American version, 46 CFR § 154, is under Subchapter O: Certain Bulk Dan- gerous Cargoes, a fully compliant foreign-flagged LNG carrier is often described as having a COC with a Subchapter O endorsement. U.S. Coast Guard, “Maritime Transport of LNG: U.S. Coast Guard Compliance and Enforcement,” committee presentation, September 21, 2021, http://onlinepubs.trb.org/onlinepubs/C4rail/USCGCompliance092121.pdf.

102 PREPARING FOR LNG BY RAIL TANK CAR the different societies. IACS estimates that 90 percent of all commercial tonnage traded internationally is classed through a member society.27 Design and Construction of Waterfront LNG Facilities The U.S. Coast Guard administers a set of regulations specific to waterfront LNG facilities found in 33 CFR § 172, which cover facility design, con- struction, and operations including firefighting and security. The U.S. Coast Guard’s jurisdiction over waterfront facilities for LNG extends through the “marine transfer area of LNG,” defined in 33 CFR § 127.005 as “that part of a waterfront facility handling LNG between the vessel, or where the vessel moors, and the last manifold or valve immediately before the receiving tanks.” For new or expanded facilities, the U.S. Coast Guard participates in the required environmental review led by FERC through the preparation of a Waterway Suitability Assessment (see below). The FERC-required Emergency Response Plan and Cost-Sharing Plan is applied to the port environment. The Cost-Sharing Plan typically encompasses personnel and equipment costs for activities such as video surveillance, bridge security, pier security sweeps, training for pilots or tug operators, communication plans and interoperability, law enforcement vessel escorts, and shoreline surveillance and monitoring.28 Waterway Suitability Assessment A waterway suitability assessment (WSA) informs the U.S. Coast Guard’s recommendation to FERC on the appropriateness of the port and coastal area for a proposed LNG waterfront facility. In comparison to LNG by rail, the WSA process includes analysis that would be similar to studying a proposed LNG rail route. A WSA also includes analysis related to port and vessel operations. WSA analysis is in the form of risk assessment and management and includes identifying adequate resources to implement risk management strategies and measures. The regulations guiding the produc- tion of a WSA are found in 33 CFR § 127.007 and 127.009, with addi- tional guidance in the U.S. Coast Guard’s “Guidance Related to Waterfront Liquefied Natural Gas (LNG) Facilities,” Navigation and Vessel Inspection Circular (NVIC) No. 01-2011, 2011. 27 International Association of Classification Societies, “Classification Societies—What, Why and How?,” 2020, https://www.iacs.org.uk/media/7425/classification-what-why-how.pdf. 28 U.S. Coast Guard, Enclosure 1, “Guidance Related to Waterfront Liquefied Natural Gas (LNG) Facilities,” Navigation and Vessel Inspection Circular (NVIC) No. 01-2011, 2011.

APPENDIX A 103 Responsibilities of Applicant and the U.S. Coast Guard The owner or operator of the proposed facility is responsible for submitting the information and studies that make up the three stages of the WSA. The letter of intent, the preliminary WSA, and the follow-on WSA each require more in-depth studies. The role of the U.S. Coast Guard is to validate the WSA and submit its conclusions to FERC in the form of a Letter of Recommendation. The local Captain of the Port (COTP) takes the lead in the process, with re- view by appropriate District and Area offices. Validation activities include consulting appropriate stakeholders, such as state governments, local governments, Area Maritime Security Committees, and Harbor Safety Committees. Geographic Extent and Types of Impacts The U.S. Coast Guard’s WSA procedures require that the applicant examine infrastructure and public impacts within a set of concentric distances or “zones of concern.” The applicant’s initial letter of intent must include “charts showing waterway channels and identifying com- mercial, industrial, environmentally sensitive, and residential areas in and adjacent to the waterway used by the LNG or LHG vessels en route to the facility, within at least 25 kilometers (15.5 miles) of the facility” (33 CFR § 127.007(c)(7)). For the subsequent WSA, the U.S. Coast Guard emphasizes three zones of concern of decreasing consequences from a potential breach of an LNG tanker, based on studies by the Sandia Na- tional Laboratories.29 Zone 1 extends 500 meters (0.3 miles); Zone 2 extends from 500 m (0.3 miles) to 1,600 m (1 mile); and Zone 3 goes from 1,600 meters (1 mile) to a “conservative maximum” of 3,500 meters (2.2 miles). If the zone analysis indicates that the consequences of a breach could interact with structures or shore terrain or “potential impacts on public safety and property could be high,” additional modeling and analysis may be done to deepen understanding of site-specific hazards. For Zones 1 and 2, the WSA considers impacts associated with vapor cloud dispersion and fire hazards, but for Zone 3, vapor dispersion suffices.30 29 Anay Luketa-Hanlin, M. Michael Hightower, and Stephen Attaway, “Breach and Safety Analysis of Spills over Water from Large Liquefied Natural Gas Carriers,” Sandia National Laboratories, SAND2008-3153, May 2008. 30 U.S. Coast Guard, Enclosure 9, “Guidance Related to Waterfront Liquefied Natural Gas (LNG) Facilities,” Navigation and Vessel Inspection Circular (NVIC) No. 01-2011, 2011.

104 PREPARING FOR LNG BY RAIL TANK CAR Within the zones of concern, the WSA is to analyze critical infrastruc- ture and key assets, shoreside uses and important community structures, and high- and medium-population-density areas. The list of waterway, facility, infrastructure, security, and community factors to be taken into account are listed in Box A-2. BOX A-2 Waterway Suitability Assessments: Topics Included in the Characterization of the LNG Facility and LNG Tanker Route 1. Transit route in adequate detail 2. Waterway • Locks, bridges, or other human-made obstructions • Natural features and hazards • Points or areas that pose security concerns or problems • Density, character, and type of marine traffic • Regular and non-routine marine events and seasonal considerations 3. LNG tankers’ characteristics and the frequency of LNG shipments 4. Physical location and description of the facility 5. Adjacent to or near the facility • Depths of the water • Tidal range • Protection from high seas • Natural hazards, including reefs, rocks, and sandbars • Underwater pipelines and cables • Distance of berthed vessel from channel and width of channel 6. “Zones of concern” overlaid on the transit route • Critical infrastructure and key assets • Populated areas, shoreside uses and important community structures • High density population areas (>9,000 persons per square mile) and medium density population areas (1,000 to 9,000 persons per square mile) SOURCE: U.S. Coast Guard, Enclosure 4, “Guidance Related to Waterfront Liquefied Natural Gas (LNG) Facilities,” Navigation and Vessel Inspection Circular (NVIC) No. 01-2011, 2011.

APPENDIX A 105 Operations of Vessels and LNG Facilities The U.S. Coast Guard has oversight authority over LNG carrier operations, and FERC and the U.S. Coast Guard have oversight responsibilities for facility operations. The regulations typically stipulate who is responsible for ensuring that the regulations are met or followed. For example, certain responsibilities fall to a vessel’s master, while other activities belong to the “person in charge” of transfer, who in turn is to be designated by the ves- sel’s owner or operator. U.S. Coast Guard oversight over operations comes in two broad forms: review of operations-related plans and manuals and in-person, on-site inter- actions and inspections, including spot inspections. These methods are not unique to LNG operations but represent the U.S. Coast Guard’s traditional methods of oversight. The IMO’s IGC Code also includes cargo operations, with stipulations for the vessel and the terminal operators. For example, the code requires pretransfer meetings between responsible personnel from the vessel and the terminal before loading or unloading can take place.31 Plans and Manuals For an LNG facility, its owner/operator must submit for examination by the U.S. Coast Guard a Facility Security Plan, an Operations Manual, and an Emergency Manual before operations can begin. The Facility Security Plan is to be based on facility-specific security assessments and is considered Sensitive Security Information (33 CFR § 105). Although the U.S. Coast Guard’s regulations for the Facility Security Plan are general in nature, the regulations covering the Operations Manual (33 CFR § 127.305) and the Emergency Manual (33 CFR § 127.307) are specific to waterfront facili- ties handling LNG. Plans and manuals required for vessels carrying LNG include a loading and stability manual, a cargo manual, and cargo location plan. The cargo manual covers safety and emergency response measures. The U.S. Coast Guard also recommends, but does not require, that the facility operator take the lead in developing a Transit Management Plan (TMP). The TMP covers the roles and responsibilities of everyone involved from prearrival of the vessel through the transfer of the LNG and includes the U.S. Coast Guard’s inspections and monitoring activities. The U.S. Coast Guard likens the plan to a “memorandum of understanding” for activities that require “communication and cooperation between multiple 31 U.S. Coast Guard, “Maritime Transport of LNG: History, Design, and Operations,” Presentation to the National Academies LNG-by-Rail Committee, September 21, 2021, http:// onlinepubs.trb.org/onlinepubs/C4rail/USCGLNGHistory0921213.pdf.

106 PREPARING FOR LNG BY RAIL TANK CAR agencies and industry” to ensure safe and secure operations. A TMP should be specific to the port and its operations.32 Inspections and Monitoring Because LNG is considered a “certain dangerous cargo,” LNG carriers must notify the U.S. Coast Guard of their pending arrival 96 hours in advance. The U.S. Coast Guard is empowered to periodically inspect foreign-flagged and U.S.-flagged vessels and LNG facilities. The U.S. Coast Guard may also conduct spot checks and may monitor the transfer of LNG in person. Inspections and monitoring are to be done to ensure that “the vessel and facility are in compliance with all applicable regulations and that they are safe and secure for the intended operations.”33 Training and Expertise As with the other areas of maritime transport, training is conducted accord- ing to international and national standards. This section focuses specifically on the training required for those on the vessel and at the LNG facility involved in LNG transfer operations. The IMO recognizes the importance of what it calls “the human ele- ment” in the safety of international shipping through the STCW. First adopted in 1978, it sets “minimum standards of competence” for person- nel. Subsequent revisions have updated standards and added enforcement mechanisms.34 U.S. Coast Guard regulations specific to gas carriers require that the designated person in charge of transferring cargo has “special training in the particular hazards associated with the cargo and in all special proce- dures for its handling” (46 CFR § 154.1831(a)(4)). The designated per- son must also meet an extensive list of qualifications, found in 33 CFR § 155.710, designed to prevent pollution. The operator must be able to produce documentation of the qualifications and training of the person in charge of transfer, upon request. Likewise for LNG facility personnel, U.S. Coast Guard regulations stipulate the required qualifications and certification process for the person in charge of shoreside transfer operations (33 CFR § 127.301). Knowledge required includes of the hazards of LNG, U.S. Coast Guard regulations for 32 U.S. Coast Guard, Enclosures 8, “Guidance Related to Waterfront Liquefied Natural Gas (LNG) Facilities,” Navigation and Vessel Inspection Circular (NVIC) No. 01-2011, 2011. 33 U.S. Coast Guard, Enclosures 1, “Guidance Related to Waterfront Liquefied Natural Gas (LNG) Facilities,” Navigation and Vessel Inspection Circular (NVIC) No. 01-2011, 2011. 34 International Maritime Organization, “Human Element,” https://www.imo.org/en/Our Work/HumanElement/Pages/Default.aspx, accessed February 8, 2022.

APPENDIX A 107 transfer, and the contents of the port’s Operations Manual and Emergency Manual. The facility operator must certify in writing that the person in charge of transfer has the specified qualifications. All full-time employees at LNG facilities are required to have training in LNG properties and hazards and basic firefighting procedures, according to 33 CFR § 127.503. In addition, employees working in transfer opera- tions must have more advanced training in firefighting, and training in the Operations Manual, the Emergency Manual, security violations, vessel design, transfer operations, LNG release responses, and first aid. Refresher training is to be provided at least once every 5 years. Training programs, to be provided by the owner/operator, are also part of the required Facility Security Plan and Operations Manual. U.S. Coast Guard personnel are also required to complete extensive training to fulfill their responsibilities to inspect vessels and facilities and to monitor transfer operations. Standard training to receive the advanced qualification as a Foreign Gas Carrier Examiner takes 4 to 6 months. The U.S. Coast Guard also provides accelerated training, which is an intense training schedule that strives to get trainees hands-on experience with as many gas carriers as possible within the 1-month timeframe. Supplement- ing training is the Foreign Gas Carrier Examiner Tactics, Techniques, and Procedures, a U.S. Coast Guard publication that steps an inspector through what is required for the foreign-gas carrier Certificate of Compliance pro- cess. To maintain their foreign gas carrier examiner qualification, staff must complete at least one Certificate of Compliance exam per year.35 In addition, the U.S. Coast Guard can draw on the subject-matter experts at the Liquefied Gas Carrier National Center of Expertise, created by the Commandant of the U.S. Coast Guard in 2009. The center also promotes and facilitates training. Located in Port Arthur, Texas, the cen- ter’s scope includes liquefied gas carriers, liquefied gas as fuel, liquefied gas bunkering, and liquefied gas facilities. To maintain their expertise and to stay abreast of developments in the industry, the center’s staff also partici- pate in Certificate of Compliance exams and other inspection activities and network with their international and industry counterparts.36 35 A list of educational opportunities and resources can be found under the “Liquefied Gas Carriers” menu, Liquefied Gas Carrier National Center of Expertise, https://www.dco.uscg. mil/lgcncoe/Inspector-Staff-CG-5P-TI/Liquefied-Gas-Carrier-National-Center-of-Expertise- Purpose, accessed February 9, 2022. 36 U.S. Coast Guard, “Liquefied Gas Carrier National Center of Expertise: Purpose,” accessed February 9, 2022, https://www.dco.uscg.mil/Our-Organization/Assistant-Commandant-for- Prevention-Policy-CG-5P/Traveling-Inspector-Staff-CG-5P-TI/Liquefied-Gas-Carrier-National- Center-of-Expertise-Purpose.