A recent court ruling in North Carolina has underscored the need for companies that store flammable and toxic gases in railroad cars – even on a temporary basis – to make sure they’re complying with state and federal regulations.
According to the Environmental Protection Agency, parked railroad cars containing hazardous substances are considered “stationary sources” after a few days of sitting idle. At that point the “incident to transportation” exemption may no longer apply, so a Risk Management Plan would need to be developed for the railcars and submitted to the EPA. Failure to do so can lead to penalties and fines and make an entity more vulnerable to expensive litigation in the event of a disaster.
Last May the North Carolina Office of Administrative Hearings ruled that railcars filled with flammable gas that were staged on a siding were subject to the EPA’s Risk Management Program (Title 40 of the Code of Federal Regulations Part 68 [40CFR 68]) and similar state regulations.
The case involved the Aberdeen Carolina & Western Railway (ACW), a regional freight railroad that runs 150 miles across North Carolina. In recent years the railroad had been staging railcars filled with butane on a storage track near a residential area for extended periods – anywhere from 168 days in 2012 to 360 days in 2015.
The track was leased by the owner of the butane, and North Carolina environmental officials said this amounted to ACW running a “butane warehouse.” State officials took action against the railroad and were backed by the EPA.
“ACW’s storage of butane-filled railcars for extended periods of time while disconnected from locomotive power qualifies these railcars as a ‘stationary source’ under 40 CFR Part 68,” testified James Belke, EPA’s National Policy Coordinator for the Risk Management Program. “[And] whether or not the entity responsible for the storage of the containers is a railroad common carrier does not determine whether the railcars are considered a stationary source.”
The court agreed.
“The Court finds this to be a logical interpretation,” wrote Administrative Law Judge J. Randall May. “It would be odd indeed if EPA’s interpretation permitted facilities to circumvent RMP requirements by contracting with railroads to store their railcars on nearby tracks for months at a time.”
While the EPA hasn’t defined “extended periods,” the unofficial rule of thumb is more than 4-5 days – which the agency considers more than enough time for railroad operators to stage cars in a railyard, hook them up to a new locomotive and send them off to their next destination.
What Does This Mean?
In accordance with the Clean Air Act, the Risk Management Program applies to stationary sources (facilities including rail sidings, storage tracks and railyards) using one or more of the 254 regulated substances that may cause death, injury, or serious adverse effects to human health or the environment if released. By “using,” the EPA means “any activity involving a regulated substance including any use, storage, manufacturing, handling or on-site movement of such substances, or combination of these activities” (40 CFR 68.3).
The regulated substances include flammable gases (propane, ethane, butane, ethylene oxide, propylene oxide, etc.) and toxic gases (anhydrous ammonia, chlorine, methyl isocyanate, etc.) that typically meet or exceed the threshold quantity of 10,000 pounds, although some substances may have lower or higher thresholds.
Based on the location of a stationary source, it will be classified into one of three Program Levels:
Regardless of level, the facility must develop and implement a Risk Management Program that includes a Risk Management Plan (RMP) with the following:
The RMP must be submitted to the EPA and reviewed, revised as needed and resubmitted every five years. Failure to develop and implement an RMP may results in a Notice of Violation and civil penalties.
One More Thing
The 254 regulated substances are also subject to the Department of Homeland Security’s Chemical Facility Anti-Terrorism Standards (CFATS; 6 CFR 27), and EPA shares its database of regulated facilities with DHS.
Not only are the EPA and DHS chemical lists similar (DHS’s list includes additional substances not on the RMP list), but the threshold amounts are typically, but not always, the same. One notable exception is for propane, which has an RMP threshold of 10,000 pounds and a CFATS threshold of 60,000 pounds.
If a facility is subject to CFATS, at a minimum it will need to submit a Top Screen survey to DHS. Depending on the results of the DHS review of the Top Screen survey, the facility may need to prepare a Security Vulnerability Assessment and develop and implement a Site Security Plan that addresses up to 18 Risk Based Performance Standards to ensure that the security is adequate for the materials at the facility.
TRC will continue to monitor the applicability of these regulations to railroad operations and note any changes in the interpretations by the EPA or DHS. Although decisions from any future court rulings cannot be known, we do not expect that railroads will be exempt from the regulatory requirements of the RMP Program and CFATS. Therefore, railroads will need to perform the required assessments and develop and maintain the required plans, training and emergency readiness. Preparing now will ensure regulatory and operational success, and independent experts can help identify gaps in the current programs and areas for improvement to reduce potential liabilities.