US Appeals court blocks rule allowing movement of LNG by rail

WASHINGTON — A federal court has struck down a Department of Transportation rule on transportation of liquefied natural gas enacted in 2020, saying the Pipeline and Hazardous Materials Safety Administration did not sufficiently consider the safety risks involved.

Specifically, the decision by a three-judge panel of the Court of Appeals for the District of Columbia agreed with a group of state attorneys general, environmental groups, and the Puyallup Tribe of Indians, who challenged the rule on the grounds that the PHMSA was, “arbitrary and capricious,” in its decision not to require an environmental impact statement as part of the rulemaking process. The court therefore vacated the rule and sent it back to the agency for further proceedings.

Judge Florence Pan, author of the decision, noted that the rule set no limit on the number of LNG tank cars that could be included in a single train and set no speed limit for such trains, and that the PHMSA had said one company was considering LNG trains of up to 80 cars. She cited comments during the rulemaking process that, “expressed alarm about the potentially catastrophic consequences,” of a train of LNG tank cars, citing an assertion from the environmental groups that “the amount of energy contained in 22 tank cars of LNG would be equal to that of the atomic bomb that was dropped on Hiroshima, Japan, during World War II.”

No LNG has ever been transported under the rule because of a Biden administration order for federal agencies to reconsider actions under the Trump administration that were inconsistent with Biden climate policy. That led the PHMSA to suspend the rule until either the agency issued a modified version or June 30, 2025, whichever comes first. The PHMSA told the court it does not anticipate having a new rule prior to June 20, 2025, and has not yet decided whether to extend the suspension.