
[Federal Register Volume 80, Number 222 (Wednesday, November 18, 2015)]
[Rules and Regulations]
[Pages 71952-71973]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28774]


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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 171, 172, 173, 174, and 179

[Docket No. PHMSA-2012-0082 (HM-251)]
RIN 2137-AE91


Hazardous Materials: Enhanced Tank Car Standards and Operational 
Controls for High-Hazard Flammable Trains

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

ACTION: Response to appeals.

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SUMMARY: On May 8, 2015, the Pipeline and Hazardous Materials Safety 
Administration, in coordination with the Federal Railroad 
Administration (FRA), published a final rule entitled ``Hazardous 
Materials: Enhanced Tank Car Standards and Operational Controls for 
High-Hazard Flammable Trains,'' which adopted requirements designed to 
reduce the consequences and, in some instances, reduce the probability 
of accidents involving trains transporting large quantities of Class 3 
flammable liquids. The Hazardous Materials Regulations provide a person 
the opportunity to appeal a PHMSA action, including a final rule. PHMSA 
received six appeals regarding the final rule, one of which was 
withdrawn. This document responds to the five remaining appeals 
submitted by the Dangerous Goods Advisory Council (DGAC), American 
Chemistry Council (ACC), Association of American Railroads (AAR), 
American Fuel & Petrochemical Manufacturers (AFPM), and jointly the 
Umatilla, Yakama, Warm Springs, and Nez Perce tribes (Columbia River 
Treaty Tribes) and the Quinault Indian Nation (Northwest Treaty 
Tribes).

DATES: November 18, 2015.

ADDRESSES: You may find information on this rulemaking and the 
associated appeals (Docket No. PHMSA-2012-0082) at the Federal 
eRulemaking Portal: http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Ben Supko, (202) 366-8553, Standards 
and Rulemaking Division, Pipeline and Hazardous Materials Safety 
Administration or Karl Alexy, (202) 493-6245, Office of Safety 
Assurance and Compliance, Federal Railroad Administration, 1200 New 
Jersey Ave. SE., Washington, DC 20590.

SUPPLEMENTARY INFORMATION: 

Table of Contents of Supplementary Information

I. Background
II. Response to Appeals
    A. Scope of Rulemaking
    Dangerous Goods Advisory Council
    American Chemistry Council
    Association of American Railroads
    PHMSA and FRA Response
    B. Tribal Impacts and Consultation
    Columbia River Treaty Tribes and Northwest Treaty Tribes
    PHMSA and FRA Response
    C. Information Sharing/Notification
    Columbia River Treaty Tribes and Northwest Treaty Tribes
    PHMSA and FRA Response
    D. Testing and Sampling Program
    Dangerous Goods Advisory Council
    PHMSA and FRA Response
    E. Retrofit Timeline and Tank Car Reporting Requirements
    American Fuel & Petrochemical Manufacturers
    PHMSA and FRA Response
    F. Thermal Protection for Tank Cars
    Association of American Railroads
    PHMSA and FRA Response
    G. Advanced Brake Signal Propagation Systems
    Dangerous Goods Advisory Council
    PHMSA and FRA Response
    Association of American Railroads
    PHMSA and FRA Response
III. Summary

I. Background

    Under 49 CFR 106.110-106.130,\1\ a person may appeal a PHMSA 
action, including a final rule. Appeals must reach PHMSA no later than 
30 days after the date PHMSA published the regulation. On May 8, 2015, 
PHMSA, in coordination with FRA, published a final rule entitled 
``Hazardous Materials: Enhanced Tank Car Standards and Operational 
Controls for High-Hazard Flammable Trains'' (HM-251, 80 FR 26644) (the 
final rule). The final rule adopted requirements designed to reduce the 
consequences and, in some instances, reduce the probability of, 
accidents involving trains transporting large quantities of flammable 
liquids. The final rule defines certain trains transporting large 
volumes of flammable liquids as ``high-hazard flammable trains'' (HHFT) 
\2\ and regulates their operation in terms of enhanced tank car 
designs, speed restrictions, braking systems, and routing. In response 
to the final rule, PHMSA received six appeals, one of which was 
withdrawn. The five active appeals were submitted by the DGAC, ACC, 
AAR, AFPM, and jointly the Columbia River Treaty Tribes and the 
Northwest Treaty Tribes.
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    \1\ All references to sections of the regulations in this 
document refer to title 49 CFR.
    \2\ HHFT ``means a single train transporting 20 or more loaded 
tank cars of a Class 3 flammable liquid in a continuous block or a 
single train carrying 35 or more loaded tank cars of a Class 3 
flammable liquid throughout the train consist.'' Sec.  171.8.
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    Section 106.130 requires PHMSA to notify those who appeal, in 
writing, of the action on the appeal, within 90 days after the date 
that PHMSA published the action being appealed. Based on the final 
rule's publication date of May 8, 2015, PHMSA was required to provide a 
response or notice of delay by August 6, 2015. On August 6, 2015, PHMSA 
posted a notice of delay on its Web site and subsequently published 
that notice in the Federal Register on August 10, 2015 (Notice 15-14; 
80 FR 47987).\3\
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    \3\ http://www.phmsa.dot.gov/pv_obj_cache/pv_obj_id_79961459E55D0ADB8FF510CF4A93EC93E3A00000/filename/Notice_No_15_14_Delay_in_Appeals.pdf
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    This document summarizes and responds to the appeals of the DGAC,

[[Page 71953]]

ACC, AAR, AFPM, and jointly the Columbia River Treaty Tribes and the 
Northwest Treaty Tribes. PHMSA has consolidated the appeals and 
structured this document to address the content of the appeals by topic 
area. The topic areas include (1) Scope of Rulemaking; (2) Tribal 
Impacts and Consultation; (3) Information Sharing/Notification; (4) 
Testing and Sampling Programs; (5) Retrofit Timeline and Tank Car 
Reporting Requirements; (6) Thermal Protection for Tank Cars; and (7) 
Advanced Brake Signal Propagation Systems. In each section, PHMSA 
summarizes the pertinent appeals on the topic area, by appellant, and 
then provides PHMSA and FRA's response to the appeals on that topic 
area. The document concludes with a summary of further actions in 
response to the appeals.

II. Response to Appeals

A. Scope of Rulemaking

Dangerous Goods Advisory Council
    DGAC expresses concern that the definition of ``HHFT'' as adopted 
in the final rule would subject manifest trains \4\ to the applicable 
additional requirements for HHFTs. DGAC contends that shippers cannot 
know if tank cars they offer to a carrier will be assembled into a 
manifest train that meets the definition of HHFT, triggering 
requirements for those tank cars to meet the enhanced standards the 
final rule establishes. Additionally, DGAC states that at the time of 
pick-up, railroads cannot make this determination either. DGAC expects 
that the inability of both shippers and carriers to determine if a 
future manifest train will be an HHFT will necessitate approximately 
40,000 additional DOT Specification 111 (DOT-111) tank cars to be 
retrofitted to the DOT Specification 117R (DOT-117R) requirements or 
replaced with the new DOT Specification 117 (DOT-117) tank cars under 
the final rule. DGAC believes that the definition of HHFT in the final 
rule is harmfully broad and should be revised to limit its 
applicability to railroad operations only and not to determine a tank 
car specification.
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    \4\ A ``manifest train'' means a freight train with a mixture of 
car types and cargoes.
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    DGAC also states that both the term and definition for a ``high-
hazard flammable unit train'' (HHFUT) \5\ were not proposed in the 
NPRM. DGAC believes the addition of a new definition for HHFUT is 
unnecessary and requests that the definition be eliminated.
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    \5\ HHFUT ``means a single train transporting 70 or more loaded 
tank cars containing Class 3 flammable liquid.'' Sec.  171.8.
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    DGAC also believes that speed restrictions in the final rule should 
apply only to crude oil and ethanol trains. It states speed 
restrictions on all flammable liquids may cause delays in rail service 
for other rail operations, which could cause significant safety 
impacts. DGAC opines that more time in transit, more or longer trains, 
and more overall congestion could cause more incidents.
    DGAC also states that the scope of the final rule is not harmonized 
with applicable Canadian regulations. While it believes Canada has 
taken a ``commodity-based approach'' to the phase-out of legacy DOT-111 
tank cars and corresponding retrofit timeline, it states that the U.S. 
approach is based on classification and packing group. DGAC believes 
that a commodity-based approach, addressing crude oil and ethanol, 
makes the most sense because it would address the material being 
transported in unit trains from a reasonable risk approach. DGAC also 
continues to encourage PHMSA, FRA, and Transport Canada (TC) to better 
identify the root causes of crashes and derailments involving these 
flammable liquids.
    In summary, DGAC contends that the applicability of the final rule 
should be limited to the transportation of crude oil and ethanol 
trains, which, it says, was the stated intention of the rule. DGAC 
argues that, if the Department wishes to pursue enhanced tank car 
standards and operational requirements for other Class 3 (flammable 
liquid) materials, it should do so in a separate rulemaking.
American Chemistry Council
    ACC requests that PHMSA revise the final rule to ensure that the 
requirement to retrofit existing tank cars applies only to cars 
carrying crude oil and ethanol. Other than tank cars transporting crude 
oil or ethanol, ACC states that the preamble and the Regulatory Impact 
Analysis (RIA) show that PHMSA's final rule did not intend to require 
retrofits of most tank cars transporting other flammable liquids.
    ACC requests ``that the HHFT definition be reserved for regulations 
that apply to railroad train operations, not to tank car design.'' They 
assert that the HHFT definition should not trigger design standards 
that would apply to most tank cars intended to contain Class 3 
flammable liquids. ACC does not contest the application of the HHFT 
concept to operational controls, such as establishing speed limits or 
braking requirements.
    Furthermore, like DGAC, ACC contends that the final rule will 
necessitate that approximately 40,000 \6\ additional DOT-111 tank cars 
either be retrofitted to meet the DOT-117R requirements or be replaced 
with the new DOT-117 tank cars. ACC suggests that this is in contrast 
to the stated focus on crude oil and ethanol. ACC echoes DGAC, stating 
that the shipper has no control over how railroads pick up cars and 
assemble manifest trains. While chemical shippers can, and often do, 
tender fewer than 20 tank cars loaded with flammable liquids at a time, 
there is no certainty that those chemicals will always be on a manifest 
train with fewer than 35 tank cars loaded with a flammable liquid. ACC 
asserts that the final rule does not align with the increased risk of 
derailment associated with unit trains and notes that flammable liquid 
chemicals are not shipped in unit trains. For that reason, ACC 
considers the HHFT definition to be overly broad and not aligned with 
the increased risk of derailment associated with unit trains. ACC urges 
that the scope be clarified so that the final rule will apply to crude 
oil unit trains, citing the relevant discussion in the Notice of 
Proposed Rulemaking. See 79 FR 45040. ACC indicates that because even a 
single tank car loaded with a Class 3 (flammable liquid) material 
tendered by one of its members may be placed in an HHFT, all tank cars 
intended to contain Class 3 (flammable liquid) materials will have to 
meet the design criteria set forth in the final rule. Furthermore, ACC 
explains that after publication of the final rule, railroads explicitly 
told ACC members that they will not manage manifest train operations to 
avoid triggering the regulatory requirements of the HHFT definition.
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    \6\ The members of ``the [Railway Supply Institute] RSI 
Committee on Tank Cars . . . collectively build more than ninety-
five percent (95%) of all new railroad tank cars and own and provide 
for lease over seventy percent (70%) of railroad tank cars operating 
in North America.'' On page 56 of those comments, in Table C-3, RSI 
estimated that at the end of 2015 tank car fleets will contain the 
following:
     87,507 tank cars (of all types) used for the movement 
of crude oil;
     27,899 tank cars (of all types) in ethanol service; and
     39,122 tank cars that carry flammable liquids other 
than crude oil or ethanol.
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    ACC contends that removing the retrofitting requirements for Class 
3 flammable liquids that are not crude oil or ethanol would alleviate 
shop capacity problems and provide greater harmonization with TC's 
analogous retrofit schedule. ACC contends that PHMSA's adherence to 
using packing group, rather than to using risk, severely

[[Page 71954]]

complicates the implementation of the rules in the two countries. ACC 
states that some of the Class 3 flammable liquid materials that will be 
affected by the final rule are classified in Packing Group (PG) I, so 
those tank cars will reach PHMSA's deadlines for retrofit or 
replacement before the tank cars that carry either ethanol or PG II 
crude oil. ACC states that the different prioritizations chosen by TC 
and by PHMSA will exacerbate conflicts over tank car shop space.
    In sum, ACC believes that the scope of the final rule will 
inadvertently affect nearly 40,000 legacy DOT-111 tank cars that 
transport Class 3 flammable liquids that were not accounted for in the 
accompanying RIA. ACC states that because a shipper cannot know how a 
carrier will assemble a train, the possibility that a shipper's tank 
car will be placed into an HHFT will force all shippers of Class 3 
materials to retrofit or purchase tank cars to meet the DOT-117R or 
DOT-117 specification. ACC believes that, coupled with a retrofit 
timeline that does not match the Canadian timeline, the final rule will 
fail to properly address the risks associated with hazardous materials 
offered and transported in unit trains.
Association of American Railroads
    AAR contests the scope of the final rule because it permits 
shippers to continue to package Class 3 flammable liquid materials in 
tank cars that do not meet the new DOT-117 tank car standard. AAR 
states that PHMSA has created two pools of tank cars, those that meet 
the heightened standard for HHFTs and those that do not. As a result, 
AAR asserts, shippers may continue to offer Class 3 flammable liquid 
materials in DOT-111 tank cars as long as the DOT-111 is not placed in 
an HHFT. According to AAR, this places an unjustified burden on the 
railroads to continuously analyze the composition of each train 
transporting Class 3 flammable liquid materials in DOT-111 tank cars. 
AAR claims that PHMSA's argument, that through fleet management the 
railroads can avoid this issue, is baseless. AAR believes that PHMSA 
should harmonize with Canada by banning the use of DOT-111 tank cars 
for transporting any Class 3 flammable liquid materials. By failing to 
harmonize with Canada in this respect, AAR contends that the U.S. 
market will become flooded with legacy DOT-111 tank cars, which will 
further exacerbate the fleet management challenges U.S. railroads will 
face to construct trains to avoid meeting the definition of an HHFT.
    To support its appeal, AAR submitted waybill data from its 
subsidiary Railinc showing numbers of flammable liquid shipments 
tendered in smaller groups of cars that do not by themselves meet the 
definition of an HHFT. Data from the first quarter of 2015 illustrate 
that 37,000 cars of flammable liquids (other than crude oil and 
ethanol) were tendered in blocks of 20 cars or fewer. During the same 
period, 37,576 tank cars of other flammable liquids (other than the 
25,009 tank cars of crude oil or 39,956 tank cars of ethanol) were 
tendered in groups of fewer than 35 cars. According to AAR, had the 
final rule been in effect, a total of 102,541 cars of flammable liquids 
could have moved in existing DOT-111s.\7\ AAR contends that PHMSA 
should specify a sunset date for discontinuing the use of DOT-111 tank 
cars for hazardous materials not in an HHFT.
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    \7\ The detailed figures AAR provided can be found in its appeal 
under Docket No. PHMSA-2012-0082.
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PHMSA and FRA Response
    In regards to DGAC's, ACC's, and AAR's appeals on the scope of the 
final rule, we disagree with those appellants' assertions and maintain 
that the method we determined to apply the new regulatory requirements 
and the regulatory analysis to support those decisions were conducted 
through careful consideration of the risks flammable liquids pose and 
the comments received during the rulemaking process. The position these 
appellants are taking in the appeals is based on anecdotal evidence and 
an interpretation of tank car fleet numbers that exaggerates the scope 
of the rulemaking. While we respect the argument that both shippers and 
carriers of Class 3 flammable liquids by rail will face new challenges 
in the wake of these regulations, we maintain that they are capable of 
working together to comply with the requirements established by the 
final rule.
    DGAC, AAR, and ACC contend that both shippers and carriers cannot 
predict whether tank cars offered for transportation will be placed in 
a train set meeting the definition of an HHFT. By relying on this 
rationale, DGAC and ACC contend that the final rule will require nearly 
40,000 tank cars to be replaced with the new DOT-117 tank car or be 
retrofitted to the DOT-117R requirements because a tank car possibly 
placed in an HHFT. These numbers are based on the 2015 Railway Supply 
Institute (RSI) fleet forecast predicting the number of DOT-111 tank 
cars transporting Class 3 flammable liquids (other than crude oil and 
ethanol). The solution they urge is limiting the scope of the rule to 
crude oil and ethanol.
    We disagree. We believe that limiting the scope of the rulemaking 
to crude oil and ethanol would not align with the intent and 
applicability of the Hazardous Materials Regulations (HMR; 49 CFR parts 
171-180). The HMR are risk based and focus on the hazards presented 
during transportation. Focusing only on a subset of flammable liquids 
is a short-sighted regulatory approach and has the potential to lead to 
inconsistencies and safety concerns in the future. PHMSA's goal is to 
provide regulatory certainty that addresses the risks posed by all 
HHFTs.
    In the NPRM, PHMSA proposed a definition of an HHFT with a 
threshold of 20 cars in a train. This aligned with AAR's ``Key Train'' 
definition in its circular OT-55-N, indicating the railroads currently 
recognize that trains of this make-up represent a high risk.\8\ 
Additionally, the NPRM tied the applicability of the new tank car 
specification to the HHFT definition. In response to the NPRM, PHMSA 
received numerous comments suggesting that both shippers and carriers 
would be placed in an untenable position because it is impossible to 
determine when tank cars would be in an HHFT. To address commenters' 
concerns, we revised the definition of HHFT to 20 cars in a block or 35 
throughout the train. The risk-based equivalency of 20 cars in a block 
and 35 cars throughout the train is calculated in the RIA on page 
323.\9\ PHMSA based this change on calculations finding that 20 cars in 
a block is roughly equivalent to 35 cars placed throughout a train, as 
well as AAR's comments noting that such a change would alleviate 
concerns about manifest trains operating in High Threat Urban Areas 
(HTUAs).
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    \8\ http://www.boe.aar.com/CPC-1258%20OT-55-N%208-5-13.pdf. Note 
that the current circular is OT-55-O: http://www.boe.aar.com/CPC-1312%20OT-55-O%201.27.2015.pdf.
    \9\ PHMSA-2012-0082-3442
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    Similarly, PHMSA denies DGAC's request to remove the definition of 
HHFUT. Again, PHMSA developed the definition based on an analysis of 
comments received on the NPRM and careful cost analysis. While the 
definition of HHFUT was not expressly proposed in the NPRM, the NPRM 
did propose requirements for enhanced brake signal propagation systems 
for all trains meeting the definition of HHFT. PHMSA believes that the 
HHFUT definition captures the subset of HHFTs that represent the 
highest risk and where the most benefits from ECP

[[Page 71955]]

braking will be gained and that the definition is within the scope of 
the NPRM proposals.
    Regarding the appellants' concerns that the tank car specification 
is linked to the number of cars in the train, PHMSA understands that 
railroads have significant fleet management programs in place. On page 
221 of the RIA, PHMSA details the agency's understanding of railroads' 
capability to conduct fleet management. We are aware that both shippers 
and carriers have fleet managers to predict or control whether a given 
tank car will be used in manifest train service or unit train service. 
Despite these fleet management capabilities and programs, the 
appellants indicate they have little control over the number of cars 
loaded with Class 3 (flammable liquid) materials in a train. To argue 
that neither party can predict a train's composition--particularly when 
transporting hazardous materials--implies an alarming lack of awareness 
in appellants' own operations. Indeed, train crews are actually 
required to maintain a document that reflects the current position in 
the train of each rail car containing a hazardous material. See Sec.  
174.26.
    AAR contends that all cars transporting flammable liquids should be 
retrofitted to the DOT-117R requirements. On the other hand, the 
shippers contend no cars, other than those transporting crude oil and 
ethanol, should be retrofitted. PHMSA believes the final rule strikes 
the correct balance by requiring retrofits of all tank cars in crude 
oil and ethanol service plus the 354 tank cars in PG III service by 
estimating roughly 10 percent of trains transporting PG III commodities 
might meet the HHFT definition, and thus, that 10 percent of the cars 
would require retrofitting.\10\ Further, PHMSA expects that the 
railroads will manage the assembly of loaded tank cars and manage the 
classification of trains to exclude tank cars from HHFTs that do not 
meet the new DOT-117 and DOT-117R tank car specifications.
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    \10\ PHMSA-2012-0082-3442 at p. 15.
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    Therefore, as previously stated, the estimated number of tank cars 
in PG III flammable liquid service that would be used to make up HHFTs, 
and hence have to meet the new requirements, is 354 tank cars, not the 
nearly 40,000 DGAC and ACC allege. The costs presented in the RIA were 
based on an analysis of public waybill data and include the costs of 
retrofitting the 354 tank cars mentioned above. The analysis showed 
that no other flammable liquid commodities of any packing group--other 
than crude oil or ethanol--were shipped in quantities that would 
trigger the HHFT requirements.
    Further, our analysis of the waybill data indicated that far fewer 
than 10 percent of PG III cars would be affected by the HHFT 
definition. Nevertheless, to be conservative, we assumed roughly 10 
percent of trains transporting PG III commodities might meet the HHFT 
definition, therefore 10 percent of the cars would require 
retrofitting. After adjusting for retirement of some cars and 
accounting for Canada's fleet share, we calculated that 10 percent of 
the remaining cars equaled the 354 cars that we incorporated into the 
cost analysis.
    ACC's assertion that nearly 40,000 tank cars would have to be 
retrofitted or replaced to meet the enhanced tank car standards due to 
their possible placement in an HHFT is grossly exacerbated by the 
railroads advising ACC that they will not manage fleets to avoid their 
shipments becoming subject to the new regulations. PHMSA does not agree 
that this is a valid basis for revising the scope of the final rule's 
requirements. We explicitly limited the reach of the final rule to 
trains transporting large quantities of flammable liquids, and defined 
HHFT to exclude typical manifest trains that do not transport the large 
quantities of flammable liquids. For railroads to state that they will 
not manage train sets undermines the risk-based goal of the final rule 
to exclude commodities not typically shipped in large quantities.
    DGAC, ACC, and AAR also contend that the U.S. packing group 
approach is not harmonized with Canada's commodity-based approach to 
the phase out of DOT-111 tank cars and corresponding retrofit timeline. 
Again, we disagree. By designating DOT-111 tank cars for phase out by 
packing group, we are aligned with Canada. While the Canadian approach 
expressly states crude oil and ethanol, we chose to use PG I, which 
encapsulates crude oil, and PG II, which encapsulates ethanol. DOT and 
TC were in constant communication while developing the respective 
rulemaking actions.
    AAR also appealed the rule for not specifying a sunset date for the 
continued use of DOT-111 tank cars for all Class 3 flammable liquids. 
AAR contends that this will cause the non-retrofitted Canadian fleet to 
flood the U.S. market, making it increasingly difficult to manage the 
operational complexities of two pools of tank cars. Even if AAR's 
contention is true, we chose to authorize the continued use of DOT-111 
tank cars for the transportation of hazardous materials not in an HHFT 
because it would have been cost prohibitive to prohibit all Class 3 
flammable liquids in DOT-111 tank cars. As stated in the RIA and final 
rule preamble, we believe that we appropriately addressed the risk of 
continued use of such cars by prohibiting the use of legacy DOT-111 
tank cars for HHFT service. For these reasons, the DGAC, ACC, and AAR 
appeals on the scope of the final rule are denied.

B. Tribal Impacts and Consultation

Columbia River Treaty Tribes and Northwest Treaty Tribes
    The Columbia River Treaty Tribes and the Northwest Treaty Tribes 
(``Treaty Tribes'') submitted an appeal to the Secretary on June 5, 
2015. The Treaty Tribes' arguments suggest that by omitting formal 
tribal consultation, DOT did not follow Executive Order (E.O.) 13175 
and DOT guidance. By way of remedy, the Treaty Tribes urge PHMSA to 
``reopen a notice and comment period for the Tank Car Rule [and] carry 
out tribal consultations on all aspects of the Tank Car Rule.''
    The Treaty Tribes' appeal lays out various arguments for tribal 
consultation under E.O. 13175 and DOT guidance. First, the appeal 
argues that PHMSA erred in concluding that the rulemaking ``does not 
significantly or uniquely affect tribes.'' Second, the Treaty Tribes' 
appeal argues that the final rule ``impose[s] substantial direct 
effects or compliance costs'' on Indian tribal governments. Third, the 
Treaty Tribes' appeal finds fault with PHMSA's discussion of its 
``superseding preemption'' authority for hazardous materials 
regulations in the final rule's discussion of tribal consultation.
PHMSA and FRA Response
    We appreciate the comments the Treaty Tribes and other Tribes 
provided to the NPRM, which are addressed in the final rule. However, 
PHMSA respectfully disagrees with the Treaty Tribes appellants and 
maintains that the appellants' concerns were addressed during the 
rulemaking process. Overall, the comments from Indian tribal 
governments to the NPRM expressed concerns about the potential 
environmental, economic, and safety impacts of crude oil train 
derailments on tribal lands. PHMSA responded to those concerns by 
adopting a final rule designed to reduce the severity of and/or prevent 
derailments in an effort to improve public safety and protection of the 
environment. PHMSA and FRA conducted an extensive and thorough review 
of all comments received, and considered the concerns of all

[[Page 71956]]

stakeholders, including Indian tribal governments. In the final rule, 
PHMSA summarized and discussed the comments of our stakeholders, 
including in-depth discussions of the comments of Indian tribal 
governments, and provided justifications for our adopted proposals and 
for those proposals we did not adopt.

Executive Order 13175

    E.O. 13175 establishes processes for when a Federal agency is 
``formulating and implementing policies that have tribal 
implications.'' \11\ This E.O., re-affirmed by President Obama in a 
November 5, 2009, ``Tribal Consultation'' memorandum, \12\ states that 
``[p]olicies that have tribal implications'' refers to ``regulations, 
legislative comments or proposed legislation, and other policy 
statements or actions that have substantial direct effects on one or 
more Indian tribes, on the relationship between the Federal Government 
and Indian tribes, or on the distribution of power and responsibilities 
between the Federal Government and Indian tribes.'' In addition, under 
DOT Order 5301.1 and other DOT tribal policies, components of DOT must 
consult with Indian tribal governments before taking any actions that 
``significantly or uniquely'' affect them.\13\ In the final rule, PHMSA 
discussed E.O. 13175, and reasonably concluded that the rulemaking did 
not: (1) Have tribal implications; (2) significantly or uniquely affect 
tribes; or (3) impose substantial direct effects or compliance costs on 
tribal governments.\14\
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    \11\ ``Consultation and Coordination with Indian Tribal 
Governments,'' 65 FR 67249 (Nov. 9, 2000).
    \12\ ``Memorandum on Tribal Consultation,'' 74 FR 57881.
    \13\ ``U.S. Dept. of Transportation, Office of the Secretary of 
Transportation, Department of Transportation Programs, Policies, and 
Procedures Affecting American Indians, Alaska Natives, and Tribes,'' 
Order No. DOT 5303.1 (Nov. 16, 1999).
    \14\ Although PHMSA did not explicitly invoke DOT Order 5303.1, 
PHMSA analyzed the applicability of tribal consultation using the 
Order's applicability to actions that ``significantly or uniquely'' 
affect Indian tribal governments.
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Significant or Unique Tribal Effects

    The Treaty Tribes argue that consultation was required because of 
alleged unique and substantial effects of the final rule on the Treaty 
Tribes and their interests. Specifically, the Treaty Tribes' appeal 
discusses the unique history of their fishing rights and states, 
``[h]ad PHMSA consulted with the Northwest treaty tribes, it would have 
learned of the tribal and federal interests in their collective usual 
and accustomed fishing areas and potential impacts resulting from the 
proposed Tank Car Rule.'' The Treaty Tribes discussed their concerns 
with the rail routing analysis discussion of environmentally sensitive 
areas. Though the Treaty Tribes' fishing rights may be unique, the 
trigger for the consultation requirement is a federal action that has a 
significant or unique effect upon tribes. Here, no such federal action 
exists. The enhanced safety provisions in the final rule, are designed 
to decrease the likelihood and severity of derailments and resulting 
spills, in an effort to improve public safety and protect the 
environment. The requirements adopted in the final rule do not apply 
directly to tribes. They apply to railroads and hazardous materials 
shippers. Any potential effect on tribes would take place several 
stages removed from the federal action of the final rule.
    PHMSA believes that these regulations work to the benefit of all 
communities and areas affected by the rail transportation of flammable 
liquids. For this reason, PHMSA affirms that the impact of the final 
rule is not ``significant'' or ``unique'' to communities or resources 
under the jurisdiction of tribal governments.

Relationship Between Tribes and United States

    The Treaty Tribes argue that the rule affects the relationship 
between tribes and the U.S., triggering the consultation provisions of 
E.O. 13175. The NPRM requested comments on whether the railroad's 
notification requirements should proceed through tribal emergency 
response commissions. This proposal was not adopted in the final rule. 
The tribes argue that this impacted the relationship between the tribes 
and the federal government. However, the information-sharing provisions 
would have directed the railroads to share information with the tribes. 
Although this may or may not affect the tribes' relationships with the 
railroads, it would not affect the relationship between tribes and the 
federal government.
    As further discussed in the Notification Section of this document, 
the Treaty Tribes asked that PHMSA reinstitute the notice provisions of 
the Secretary's May 7, 2014 Emergency Order. DOT has kept in place the 
May 2014 Emergency Order that requires railroads to provide Bakken 
crude oil information directly to State Emergency Response Commissions 
(SERCs). PHMSA plans to revisit these provisions in an upcoming 
rulemaking and has pledged to maintain the Emergency Order until such a 
rulemaking codifying these provisions is published. Accordingly, for 
the reasons previously stated, this rulemaking has not affected the 
relationship between tribes and the federal government.

Preemption/Distribution of Power and Responsibilities

    Finally, the Treaty Tribes argue that ``PHMSA asserts the 
preemption provisions of 49 U.S.C. 5126 and 20106 supersede'' the need 
for tribal consultation. This is an inaccurate characterization of 
PHMSA's position. In the final rule, we state that ``PHMSA has 
determined that this rulemaking does not significantly or uniquely 
affect tribes, and does not impose substantial direct effects or 
compliance costs on such governments.'' Although the rule referenced 
the preemption authorities of PHMSA and FRA, the basis for the decision 
to forgo tribal consultation was the lack of direct tribal impacts. In 
this case, PHMSA reasonably determined that a consultation with tribal 
officials was not necessary under the guidelines of E.O. 13175 and DOT 
policies.

Remedy

    Moreover, the Treaty Tribes' appeal asked that PHMSA ``reopen a 
notice and comment period for the Tank Car Rule [and] carry out tribal 
consultations on all aspects of the Tank Car Rule.'' Independent of the 
arguments discussed above, PHMSA and FRA suggest that granting this 
aspect of the Treaty Tribes' appeal would result in further rulemaking 
proceedings that would frustrate implementation of the final rule's 
safety advancements and potentially delay safety improvements due to 
regulatory uncertainty.

Outreach

    While PHMSA does not believe E.O. 13175 required a consultation for 
the HHFT rulemaking, PHMSA recognizes the importance of government-to-
government relationships with tribes. To this end, PHMSA has expanded 
its tribal outreach efforts. For example, in March 2015, DOT 
representatives met with representatives from the Prairie Island Tribe 
to discuss tribal concerns with the movement of Bakken crude oil 
through their community. In August 2015, PHMSA representatives attended 
the Northwest Tribal Emergency Management Council's annual meeting in 
Spokane, Washington. This provided an opportunity to speak directly 
with tribal emergency management leaders and emphasize the importance 
of effective tribal and federal cooperation. In addition, PHMSA 
provides hazardous materials emergency preparedness grant funding to 
tribes to carry out planning and training activities to ensure that

[[Page 71957]]

State, local, and tribal emergency responders are properly prepared and 
trained to respond to hazardous materials transportation incidents. For 
these reasons, the Treaty Tribes appeal to reopen a notice and comment 
period for the final rule and carry out tribal consultations on all 
aspects of the rule is denied.

C. Information Sharing/Notification

Columbia River Treaty Tribes and Northwest Treaty Tribes
    The Treaty Tribes also appealed the notification provisions of the 
final rule. They have stated, ``On its face, the Tank Car Rule could be 
read to abandon the Emergency Order and cut back on both emergency 
responder and tribal access to train route and emergency response 
information.'' According to the Treaty Tribes, the notification 
provisions adopted in the final Rule ``weaken the notification scheme 
in a number of ways'' since the information provided is ``far less 
informative'' and its dissemination is limited to ``those with a need-
to-know in an anti-terrorism context.'' For these reasons, the Treaty 
Tribes asked that PHMSA reinstitute the notice provisions of the 
Secretary's May 7, 2014 Emergency Order.
PHMSA and FRA Response
    We agree with the Treaty Tribes. As discussed in the Treaty Tribes' 
petition, on May 7, 2014, the Secretary issued an Emergency Order in 
Docket No. DOT-OST-2014-0067 (``May 2014 Emergency Order'' or 
``Order''). That Order requires each railroad transporting in commerce 
within the U.S. 1,000,000 gallons or more of Bakken crude oil in a 
single train to provide certain information in writing to the SERCs for 
each State in which it operates such a train. The Order requires 
railroads to provide: (1) The expected volume and frequency of affected 
trains transporting Bakken crude oil through each county in a State; 
(2) the routes over which the identified trains are expected to 
operate; (3) a description of the petroleum crude oil and applicable 
emergency response information; and (4) contact information for at 
least one responsible party at the railroad. In addition, the Order 
requires that railroads provide copies of notifications made to each 
SERC to FRA upon request and to provide SERCs updated notifications 
when there is a ``material change'' in the volume of affected trains. 
Subsequent to issuing the Order, in August 2014, PHMSA published the 
HHFT NPRM, which, in part, proposed to codify and clarify the 
requirements of the Order, and requested public comment on the 
proposal.
    Based on the comments received to the NPRM, along with PHMSA and 
FRA's analysis of the issues involved in the HHFT final rule, PHMSA did 
not adopt the notification requirements of the proposed rule. PHMSA 
determined expansion of the existing route analysis and consultation 
requirements of Sec.  172.820 to include HHFTs was the best approach to 
ensure emergency responders and others involved with emergency response 
planning and preparedness would have access to sufficient information 
regarding crude oil shipments moving through their jurisdictions to 
adequately plan and prepare from an emergency response perspective. 
Thus, the final rule expanded the applicability of Sec.  172.820 to 
HHFTs. As part of these additional safety and security planning 
requirements, the final rule requires rail carriers operating HHFTs to 
comply with Sec.  172.820(g), which requires that railroads ``identify 
a point of contact on routing issues and provide that contact's 
information (including his or her name, title, phone number and email 
address):

    (1) State and/or regional Fusion Centers that have been 
established to coordinate with state, local and tribal officials on 
security issues which are located within the area encompassed by the 
rail carrier's rail system; and (2) State, local, and tribal 
officials in jurisdictions that may be affected by a rail carrier's 
routing decisions and who directly contact the railroad to discuss 
routing decisions.

    Thus, these notification provisions require railroads to 
proactively provide this contact information to ``State and/or regional 
Fusion Centers'' and ensure that ``state, local, and tribal officials . 
. . who directly contact the railroad to discuss routing decisions'' 
are provided the same information. Tribal officials can also coordinate 
with Fusion Centers to obtain this information. At the time of the 
final rule's publication, the notification provisions discussed above 
were set to supersede the May 2014 Emergency Order, once codified 
notification provisions are fully implemented (i.e., March 31, 2016).
    Subsequent to publication of the final rule, PHMSA received 
feedback from stakeholders (including tribal authorities) expressing 
intense concern about the Department's decision to forgo the proactive 
notification requirements of the Order and in the NPRM. Generally, 
these stakeholders expressed the view that given the unique risks posed 
by the frequent rail transportation of large volumes of flammable 
liquids, including Bakken crude oil, PHMSA should not eliminate the 
proactive information sharing provisions of the Order and rely solely 
on the consultation and communication requirements in existing Sec.  
172.820. These stakeholders expressed concern that the final rule may 
limit the availability of emergency response information by superseding 
the May 2014 Emergency Order.
    In response to these concerns and after further evaluating the 
issue within the Department, in a May 28, 2015 notice (Notice), PHMSA 
announced that it would extend the Order indefinitely, while it 
considered options for codifying the disclosure requirement 
permanently.\15\ Furthermore, on July 22, 2015, FRA issued a public 
letter instructing railroads transporting crude oil that they must 
continue to notify SERCs of the expected movement of Bakken crude oil 
trains through individual states.\16\
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    \15\ http://www.phmsa.dot.gov/hazmat/phmsa-notice-regarding-emergency-response-notifications-for-shipments-of-petroleum-crude-oil-by-rail.
    \16\ http://hazmatship.com/images/stories/pdf2/2015_07_22_Notification+FINAL.pdf?mc_cid=f88dda2d67&mc_eid=1fbd28d3ea
.
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    The Treaty Tribes' appeal reiterates these concerns about the 
codified notification provisions, stating that they ``cut back on both 
emergency responder and tribal access to train route and emergency 
response information.'' In light of the May 28, 2015 PHMSA Notice and 
other DOT communications, PHMSA believes that we have adequately 
addressed the Treaty Tribes' concerns about the information sharing 
provisions of the final rule and the Treaty Tribes' explicit support 
for the notification procedures in the May 2014 Emergency Order. Since 
DOT has already re-examined the decision to allow the final rule to 
supersede the May 2014 Emergency Order and determined that the Order 
will remain in full force and effect until the agency considers options 
for codifying it on a permanent basis, PHMSA believes we have been 
responsive to this aspect of the Treaty Tribes' appeal. In accordance 
with the Notice, PHMSA continues to consider options for codifying the 
central aspects of the Order permanently in a future rulemaking action. 
The treaty tribes will have the opportunity to comment on these future 
regulatory proposals in the course of that rulemaking proceeding. In 
addition, PHMSA is seeking opportunities similar to attending the 
Northwest Tribal Emergency Management Council's meeting held in 
Spokane, Washington, to engage further with the tribal communities 
affected by our regulations. Continued opportunities to reach out 
directly to tribal emergency

[[Page 71958]]

management leaders will improve the cooperation between PHMSA and the 
tribes.

D. Testing and Sampling Program

Dangerous Goods Advisory Council
    DGAC does not believe the sampling and testing program adopted in 
Sec.  173.41 is justified or warranted and requests that we eliminate 
this provision. DGAC asserts that the classification sampling and 
testing program would not change the tank car selection or emergency 
response guidebook responses. DGAC also expresses concern that sampling 
during transportation could create a safety risk as closed packages are 
re-opened.
    If PHMSA does not repeal the program, DGAC requests additional 
clarification. Specifically, DGAC requests that we revise the final 
rule to include a definition for ``unrefined petroleum-based 
products,'' consistent with the discussion in the preamble. See 80 FR 
26704. DGAC further requests additional guidance on the provision in 
Sec.  173.41(a)(2), which states ``and when changes that may affect the 
properties of the material may occur . . . ,'' and additional guidance 
on the recordkeeping requirements.
    Finally, DGAC requests that we provide a delayed compliance date of 
March 31, 2016 for implementation of the requirements in Sec.  173.41 
if the requirement is maintained. This date aligns with the delayed 
compliance date of March 31, 2016, provided for a rail carrier to 
complete the initial planning process required in Sec.  172.820. DGAC 
believes that a delayed compliance date is necessary because ``affected 
parties have certain testing procedures in place, the development, 
distribution and training of affected hazardous materials employees in 
a more `formal' program by July 7, 2015 is not reasonable.''
PHMSA and FRA Response
    In regards to DGAC's appeal on the sampling and testing program, 
PHMSA maintains that that sampling and testing program is justified and 
necessary. In its safety recommendation, R-14-6, the National 
Transportation Safety Board (NTSB) recognized the importance of 
requiring ``shippers to sufficiently test and document the physical and 
chemical characteristics of hazardous materials to ensure the proper 
classification, packaging, and record-keeping of products offered in 
transportation.'' The entire premise of the HMR is built around the 
shipper's responsibility to properly classify a hazardous material. 
Under Sec.  171.2(e), ``No person may offer or accept a hazardous 
material for transportation in commerce unless the hazardous material 
is properly classed, described, packaged, marked, labeled, and in 
condition for shipment as required or authorized by applicable 
requirements of this subchapter.'' Proper classification ensures the 
correct regulatory provisions are being followed both when the material 
is initially offered and during downstream shipments. The HMR requires 
correct classification and communication, even when the shipper has the 
option to use a more stringent packaging. Classification also includes 
ensuring that all correct hazard classes are identified. Many 
provisions in the HMR also require the shipper to have knowledge about 
the material that exceeds the information provided by the shipping 
papers or Emergency Response Guidebook (ERG). For example, it is 
forbidden to offer ``a material in the same packaging, freight 
container, or overpack with another material, the mixing of which is 
likely to cause a dangerous evolution of heat, or flammable or 
poisonous gases or vapors, or to produce corrosive materials'' under 
Sec.  173.21(e). For petroleum crude oil, the shipper may additionally 
need to identify properties such as corrosivity, vapor pressure, 
specific gravity at loading and reference temperatures, and the 
presence and concentration of specific compounds (e.g., sulfur), 
depending on the different packaging options selected and the 
conditions under which the material is being offered. Considering the 
challenges posed by materials with variable composition and potentially 
variable properties, such as crude oil, providing criteria for sampling 
and testing of unrefined petroleum-based products is a critical first 
step in safe transportation of these materials. Proper classification 
and the assignment of a packing group for a hazardous material 
determines what packaging is appropriate for that material.
    Industry also recognizes the importance and unique challenges of 
properly classifying petroleum crude oil. The American Petroleum 
Institute spearheaded efforts to develop an industry standard for the 
classification of petroleum crude oil, resulting in the development of 
American National Standards Institute (ANSI)/American Petroleum 
Institute (API) Recommend Practices (RP) 3000, ``Classifying and 
Loading of Crude Oil into Rail Tank Cars.'' This API standard went 
through a public comment period during its development in order to be 
designated as an American National Standard.
    We also disagree that providing more specificity or guidance to the 
program is necessary. The term ``unrefined petroleum-based products'' 
is clear as written. ``Petroleum'' is used throughout the HMR. The term 
``unrefined'' is sufficiently clear in the context of the petroleum 
industry. Therefore, the term ``unrefined petroleum-based products'' 
would be any material that is petroleum based, and has not undergone 
refinement. For example, heat treating to reduce vapor pressure or to 
remove the dissolved gases in crude oil so that it may be transported 
for refinement would not meet the American Fuel & Petrochemical 
Manufacturers (AFPM) or other industry definitions of ``refining.'' 
\17\
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    \17\ http://www.afpm.org/The-Refinery-Process/
---------------------------------------------------------------------------

    We disagree that additional guidance is necessary, as the 
requirement in Sec.  173.41(e) to document and maintain records of the 
sampling and testing program is clear. In both the NPRM and final rule, 
we stated respectively that we are not proposing or adopting a 
requirement for the retention of test results. Therefore, the 
documentation in paragraph (e) must describe the program itself.
    We also disagree that the requirements of when to sample are 
unclear or present a safety risk. The sampling and testing program is 
only required prior to the offering of the material for transportation. 
This is further clarified in Sec.  173.41(a) (2), which states, 
``Sampling prior to the initial offering of the material for 
transportation and when changes that may affect the properties of the 
material occur (i.e., mixing of the material from multiple sources, or 
further processing and then subsequent transportation).'' Therefore, 
sampling would be required before the initial offering for 
transportation, and in some situations when the material is re-offered 
for transportation. The examples in the description provide flexibility 
to accommodate changing industry practices, and should not be replaced 
with a prescriptive list. Overall, API RP 3000 provides a more specific 
example of how the sampling requirements of Sec.  173.41 may be met. As 
we stated in the final rule,

    Shippers must continue to use the testing methods for 
classification of flammable liquids outlined in Sec.  173.120 and 
flammable gases in Sec.  173.115. However, API RP 3000 is otherwise 
consistent with the sampling program requirements in Sec.  
173.41(a)(1)-(6) and may be used to satisfy these adopted sampling 
provisions. Furthermore, voluntary use of API RP 3000 provides 
guidance for compliance with these provisions, but still

[[Page 71959]]

allows flexibility for meeting requirements through other methods.

See 80 FR 26706.
    Finally, we disagree that a delayed compliance date of March 31, 
2016 should be provided for implementation of the requirements in Sec.  
173.41 to provide shippers adequate time to implement changes for 
training and documentation. The date established for rail routing 
requirements allows for the collection of six months of data and 
completion of a risk assessment. The sampling and testing requirements 
are simply a mechanism to document existing regulatory requirements for 
proper classification of energy products. In addition, the Department 
issued Emergency Order DOT-OST-2014-0025 on February 25, 2014 (EO 25), 
which was subsequently revised and amended on March 6, 2014.\18\ EO 25 
required those who offer crude oil for transportation by rail to ensure 
that the product is properly tested and classified in accordance with 
federal safety regulations. Further, EO 25 required that all rail 
shipments of crude oil that are properly classed as a flammable liquid 
in PG III material be treated as a PG I or II material. The Amended EO 
25 also authorized PG III materials to be described as PG III for the 
purposes of hazard communication. The Amended EO 25 differs from the 
original in that it prohibits persons who ordinarily offer petroleum 
crude oil for shipment as UN 1267, petroleum crude oil, Class 3, PG I, 
II, or III from reclassifying such crude oil with the intent to 
circumvent the requirements of this Amended Order. As discussed in the 
final rule, the sampling and testing program requirements superseded EO 
25 and made it no longer necessary. By extending the compliance date, 
PHMSA would create a safety gap which was previously covered under EO 
25 as amended. For these reasons, the appeal submitted by DGAC on the 
sampling and testing program is denied.
---------------------------------------------------------------------------

    \18\ The March 6, 2014 ``Amended and Restated Emergency 
Restriction and Prohibition Order (Amended Order)'' sought to 
clarify the original February 25, 2014 Order and superseded and 
replaced it in its entirety. See http://www.phmsa.dot.gov/pv_obj_cache/pv_obj_id_D03C7A1E859361738D791378144472BF368F0200/filename/Amended_Emergency_Order_030614.pdf.
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E. Retrofit Timeline and Tank Car Reporting Requirements

American Fuel and Petrochemical Manufacturers
    AFPM supports PHMSA and FRA's plan to establish a reporting 
obligation on retrofit progress and shop capacity. However, it asserts 
that the final rule's reporting requirement is insufficient to 
accomplish its intended purpose. In its appeal, AFPM recommends a 
substantial expansion of reporting timelines and requested data to 
ensure all types of tank car retrofits are evaluated and not just non-
jacketed DOT-111 legacy tank cars in Packing Group I service.
PHMSA and FRA Response
    In regards to AFPM's appeal, PHMSA believes that the final rule's 
established industry reporting obligation on retrofit progress and shop 
capacity will achieve the stated goals. The first phase of the retrofit 
timeline includes a January 1, 2017, deadline for retrofitting non-
jacketed DOT-111 tank cars in PG I service. Owners of non-jacketed DOT-
111 tank cars in PG I service for use in an HHFT who are unable to meet 
the January 1, 2017, retrofit deadline specified in Sec.  173.243 
(a)(1), are required to submit a report by March 1, 2017, to the 
Department. Groups representing tank car owners may submit a 
consolidated report to the Department in lieu of individual reports 
from each tank car owner. The report must include the following 
information regarding retrofitting progress:
     The total number of tank cars retrofitted to meet the DOT-
117R standard;
     The total number of tank cars built or retrofitted to meet 
the DOT-117P standard;
     The total number of DOT-111 tank cars (including those 
built to CPC-1232 industry standard) that have not been modified;
     The total number of tank cars built to meet the DOT-117 
standard; and
     The total number of tank cars built or retrofitted to a 
DOT-117, 117R or 117P that are electronically controlled pneumatic 
(ECP) brake ready or ECP brake equipped.
    In developing the retrofit schedule, PHMSA and FRA examined the 
available shop capacity, the comments received, historical performance 
of the rail industry dealing with retrofit requirements, and the 
potential impacts associated with the retrofit schedule. The final rule 
also stated the Department could request additional reports with 
reasonable notice if necessary to facilitate the timely retrofits of 
those tank cars posing the highest risk. PHMSA and FRA are confident 
that the adopted reporting requirements are sufficient in that they 
will achieve the Department's stated goals. In addition, the Department 
may request additional reports as needed to verify industry progress 
toward retrofitting requirements. For the reasons stated, the appeal 
submitted by AFPM on the retrofit and tank car reporting of the final 
rule is denied.

F. Thermal Protection for Tank Cars

Association of American Railroads
    In its appeal, AAR requests that we require enhanced thermal 
protection when new or retrofitted tank cars are built with jackets. 
That thermal protection would be beyond what is required in the final 
rule and allow further tank car survivability in a pool fire scenario. 
AAR asserts that PHMSA should require an enhanced thermal blanket with 
thermal conductivity no greater than 2.65 BTU per inch, per hour, per 
square foot, and per degree Fahrenheit at a temperature of 2000 F, 
 100F.
PHMSA and FRA Response
    In regards to AAR's appeal, PHMSA believes AAR has not presented a 
compelling basis for amending this aspect of the final rule. The final 
rule requires tank cars in HHFTs to have thermal protection that meets 
the requirements of Sec.  179.18, while also having a pressure relief 
device that complies with Sec.  173.31. Section 179.18 establishes a 
performance standard that requires a tank to be able to withstand a 
pool fire for at least 100 minutes and a torch fire for at least 30 
minutes. The 100-minute standard is intended to provide time for 
emergency response and accident assessment. Section 173.31 requires a 
reclosing pressure relief device for any tank car transporting a Class 
3 (flammable liquid). Further, the pressure relief device ``must be 
made of materials compatible with the lading, having sufficient flow 
capacity to prevent pressure build-up in the tank to no more than the 
flow rating pressure of the pressure relief device in fire conditions 
as defined in Appendix A of the AAR Specifications for Tank Cars.'' See 
Sec.  179.15. AAR contends that PHMSA should adopt a different 
standard. Specifically, AAR argues that PHMSA should require that all 
tank cars transporting flammable liquids be equipped with a thermal 
blanket that allows for thermal conductivity not to exceed 2.65 BTU per 
inch, per hour, per square foot, and per degree Fahrenheit at a 
temperature of 2,000[emsp14][deg]F,  100[emsp14][deg]F. 
Using the standard AAR proposes would potentially provide 800 minutes 
of protection in a pool fire. Further, it contends that PHMSA should 
require that all tank cars transporting flammable liquids be equipped 
with a pressure relief device that will allow the release of only 
enough quantity to prevent a thermal tear.

[[Page 71960]]

    AAR's suggestion that its thermal blanket proposal would provide 
greater protection than that currently HMR requirements, raises a 
number of concerns. First, the units for thermal conductivity are 
incorrect. Although it may seem counter-intuitive, increasing the 
thickness of the thermal blanket using the method provided by AAR, 
would actually increase the thermal conductivity and decrease the 
performance of the thermal protection system. Additionally, there is no 
experiential or experimental basis for AAR's use of a 2,000 [deg]F fire 
temperature. The current requirement of a 1,600 [deg]F pool fire 
temperature is based on experimental data from a pool fire test 
involving liquefied petroleum gas (LPG). The experimental data, 
including the heat flux, were normalized over the entire surface of the 
car to represent total engulfment in a pool fire.
    Furthermore, it is unclear whether existing thermal blankets would 
meet AAR's proposed standard or even whether AAR's proposed standard 
requiring thermal blankets would provide an added benefit compared to 
that prescribed by PHMSA. AAR provided no evidence that requiring a 
thermal blanket and specifying the properties of the material will 
enhance safety. AAR asserts that, based on AFFTAC modeling, a tank car 
equipped with a thermal blanket can withstand a pool fire for hours, or 
in some circumstances, a tank car could indefinitely withstand a pool 
fire without failure and loss of lading. PHMSA and FRA have two 
concerns with this assertion. As an initial matter, while thermal 
conductivity is an input to the AFFTAC model, the model does not 
account for degradation of the material in a pool fire, and therefore 
it assumes the thermal conductivity is constant for the duration of a 
pool fire. However, if the thermal protection begins to degrade soon 
after 100 minutes (assuming constant properties) the results AFFTAC 
would be overly optimistic. Additionally, AFFTAC is not capable of 
analyzing a lading comprised of more than two components, such as crude 
oil. It has been suggested that two component materials can be used as 
a surrogate for crude oil. Before the design of the AAR proposed 
thermal protection system meeting the DOT-117 standard can be approved, 
the accuracy of using a two-component system as a surrogate for crude 
oil must be demonstrated.
    Assuming that AAR's proposal would add time--an assumption that, at 
this point, is unsupported by any objective data--AAR has not provided 
any evidence that there is a practical benefit to extending the time 
period before the lading is released from a location other than from 
the pressure relief device. The primary intent of the 100-minute 
requirement in the HMR is to provide first responders time to assess 
the accident and initiate remedial actions such as evacuating an area. 
There has not been any evidence presented that the current requirement 
is insufficient for achieving these goals.
    Finally, AAR's proposal sets up a technical standard, but it does 
not necessarily establish a minimum time requirement for survivability 
of the tank car. The potential for variability under the AAR proposal 
would present added uncertainty. In developing a first response 
strategy, a minimum level of certainty is needed, and controlling the 
anticipated variables is vital. This information is vital for first 
responders, who need to have a reasonable understanding of the expected 
time frame after an event to establish an effective plan that can be 
executed within the baseline time that is available.
    PHMSA addressed its rationale for choosing a minimum standard that 
requires a DOT-117/DOT-117R tank car to withstand a pool fire for at 
least 100 minutes and torch fire for at least 30 minutes in the 
preamble to the final rule. See 80 FR at 26670-26671. It noted that 
AAR's T87.6 Task Force agreed that a survivability time of 100 minutes 
in a pool fire should be used as a benchmark for adequate performance. 
Additionally, the 100-minute pool fire baseline is consistent with the 
current federal regulations for pressure cars transporting Class 2 
materials, and serves as the existing performance standard for pressure 
tank cars equipped with a thermal protection system. PHMSA also noted 
that the 100-minute pool fire baseline had been ``established to 
provide emergency responders with adequate time to assess a derailment, 
establish perimeters, and evacuate the public as needed, while also 
giving time to vent the hazardous material from the tank and prevent an 
energetic failure of the tank car.'' See 80 FR 26671.
    With respect to pressure relief devices, which are designed to work 
in conjunction with the thermal protection system, PHMSA noted that 
there was widespread concurrence among commenters for a redesigned 
pressure relief device for DOT-117 cars. See 80 FR at 26670-26671. The 
simulations performed by PHMSA indicated that a reclosing pressure 
relief valve was of primary importance, because when a tank car is 
exposed to a pool fire the PRD will maintain a low pressure in the tank 
and potentially extend the time before a tank car will thermally 
rupture. PHMSA also determined that high-flow capacity, reclosing 
pressure relief devices can be acquired reasonably in the market and 
they can be installed on new or retrofitted tank cars. These factors 
support the performance standard chosen by PHMSA for pressure relief 
devices. For the reasons stated, the appeal submitted by AAR on thermal 
protection in the final rule is denied.

G. Advanced Brake Signal Propagation Systems

Dangerous Goods Advisory Council
    DGAC appeals to PHMSA requesting the elimination of the 
electronically controlled pneumatic (ECP) brake requirement from the 
final rule. The DGAC appeal rests on three main arguments. First, DGAC 
agrees with the comments AAR and API submitted in response to the NPRM. 
Second, DGAC argues that the timeline for implementing the ECP brake 
requirement is inconsistent with the retrofit schedule adopted in the 
final rule and will require ECP brakes to be installed before 
retrofitting. Third, DGAC alleges there will be difficulties moving 
HHFUTs from Canada to the U.S. because Canada has not adopted similar 
ECP brake requirements.
PHMSA and FRA Response
    In regards to DGAC's appeal to eliminate the ECP brake requirement, 
PHMSA maintains that the retrofit schedule is consistent, and that the 
final rule will not lead to the unspecified difficulties that concern 
DGAC. Further, we respectfully disagree with DGAC's first argument 
agreeing with AAR and API regarding this issue. PHMSA considered the 
comments submitted by AAR and API in drafting the final rule, and as 
part of its appeal, DGAC provides no new information to support the AAR 
and API comments. Rather than restating its previous analysis here, 
PHMSA directs DGAC to the discussion of the ECP brake requirement in 
the final rule and the RIA. See 80 FR 26692-26703; and RIA, p. 33-36, 
207-278.
    The timeline for implementing ECP brakes on HHFUTs will allow the 
rail industry to orderly schedule retrofits to comply with both 
requirements. PHMSA expects that in most instances ECP brakes will be 
installed when a tank car is sent to the service shop for retrofitting. 
This will avoid taking the car out of service more than is absolutely 
necessary. There should be no need to install ECP brakes on a tank car 
prior to retrofitting the car. The RIA to the final rule estimates that 
about

[[Page 71961]]

60,000 tank cars will need to have ECP brakes installed. Approximately 
one-third of these cars will be new construction, and the remaining 
cars, retrofits. See RIA, pp. 218-219.
    Currently, crude oil and ethanol are the only Class 3 (flammable 
liquids) transported in trains that fall within the HHFUT definition. 
These hazardous materials are assigned to a packing group based on 
their flash point and initial boiling point. Crude oil may be 
classified as PG I (high danger), PG II (medium danger), or PG III (low 
danger).
    The final rule requires all DOT-111 and non-jacketed CPC-1232 tank 
cars used in PG I service to be retrofitted no later than April 1, 
2020.\19\ PHMSA anticipates that the industry will apply a vast 
majority of those retrofitted cars to unit train service because it 
makes financial sense to put the first retrofitted cars to use in the 
highest priority service. The ECP brake requirement for an HHFUT 
transporting at least one tank car loaded with PG I material does not 
go into effect until January 1, 2021. Therefore, PHMSA and FRA believe 
that the combination of new cars and retrofits completed prior to 
January 1, 2021, should be sufficient to supply the tank cars needed to 
operate in ECP brake mode. See RIA, p. 146.
---------------------------------------------------------------------------

    \19\ Non-jacketed DOT-111 tank cars used in PG I service must be 
retrofitted by January 1, 2017 (or, under a schedule, not later than 
January 1, 2018). Jacketed DOT-111 tank cars used in PG I service 
must be retrofitted by March 1, 2018. Non-jacketed CPC-1232 tank 
cars used in PG I service must be retrofitted by April 1, 2020.
---------------------------------------------------------------------------

    The same is true with respect to those HHFUTs transporting loaded 
tank cars of ethanol or crude oil not in PG I service. These trains 
must operate in ECP brake mode as of May 1, 2023, when traveling in 
excess of 30 mph. The final rule requires retrofitting all DOT-111 tank 
cars used in PG II service no later than May 1, 2023. Non-jacketed CPC-
1232 tank cars used in PG II follow closely behind with a retrofit 
deadline of July 1, 2023. For the reasons stated above, PHMSA reaffirms 
its position and disagrees that the timeline for implementing the ECP 
brake requirement is inconsistent with the retrofit schedule adopted in 
the final rule. See RIA, p. 146.
    Lastly, PHMSA discussed U.S./Canada harmonization efforts in the 
final rule. See 80 FR 26662. PHMSA recognizes that the transportation 
of flammable liquids by rail is a cross-border issue. In developing the 
final rule, U.S. DOT and TC worked closely to ensure that the new tank 
car standards for HHFTs do not create barriers to movement, but 
harmonization is not required in every instance. PHMSA and FRA strongly 
believe that the ECP brake requirement for HHFUTs is an important 
measure to help protect public safety and the environment in the U.S. 
That said, PHMSA and FRA carefully considered cross-border issues with 
respect to ECP braking, particularly when a train is crossing from 
Canada into the U.S., and provided authorization in the final rule for 
continued transportation. If an HHFUT without ECP brakes arrives in the 
U.S. from Canada, that train may continue in transportation at a speed 
that does not exceed 30 mph. This solution eliminates cross-border 
barriers to transportation and should alleviate any of the unspecified 
difficulties that concern DGAC. For these reasons, DGAC's appeal to 
eliminate the ECP brake requirement of the final rule is denied.
Association of American Railroads
    AAR also asks us to eliminate the new ECP brake standard for HHFUTs 
traveling in excess of 30 mph. AAR contends that PHMSA should remove 
the ECP brake requirement from the final rule, and provides 10 
arguments that purportedly support its position.
PHMSA and FRA Response
    In regards to AAR's appeal with respect to ECP braking, AAR's 
arguments do not present a compelling basis for repealing the ECP brake 
requirement in the final rule. PHMSA stands by the Final Rule's 
established two-tiered approach to braking systems that focuses on 
increasing safety for trains transporting large quantities of flammable 
liquids. All HHFTs traveling in excess of 30 mph must operate using a 
two-way end-of-train (EOT) device or a distributed power system. All 
HHFUTs traveling in excess of 30 mph must operate using ECP brakes. The 
ECP brake requirement begins on January 1, 2021, for any HHFUT 
transporting at least one loaded tank car of PG I material. For all 
other HHFUTs, the ECP brake requirement is mandatory beginning May 1, 
2023.
    The basis for the ECP brake requirement was thoroughly researched 
prior to publication of the final rule. ECP brakes allow for shorter 
stopping distances and reduced in-train forces. In the ECP brake mode 
of operation, all cars brake simultaneously by way of an electronic 
signal. ECP brake systems simultaneously apply and release freight car 
air brakes through a hardwired electronic pathway down the length of 
the train, and allow the engineer to ``back off'' or reduce the braking 
effort to match the track grade and curvature, without having to 
completely release the brakes and having to recharge the main 
reservoirs before another brake application can be made. These 
differences in the operation of the two braking systems give ECP brakes 
several business benefits. Operationally, ECP brakes have the potential 
to save fuel and reduce emissions, reduce wear and stress on wheels and 
brake shoes, and provide train engineers greater control on the braking 
characteristics of trains. From a safety perspective, ECP brakes 
greatly reduce the risk of runaway trains due to a diminished reservoir 
air supply, and reduce the probability of an incident by providing 40 
to 60 percent shorter stopping distances. ECP brake wiring also 
provides the train a platform for the gradual addition of other train-
performance monitoring devices using sensor-based technology to 
maintain a continuous feedback loop on the train's condition for the 
train crew. PHMSA is highly confident that this requirement will 
minimize the effects of derailments involving HHFUTs by limiting the 
number of cars involved in the derailment and decreasing the 
probability of tank car punctures. Indeed, an NTSB study published 
after PHMSA published the final rule supports the safety basis for ECP 
brakes, finding that ECP brakes provide better stopping performance 
than conventional air brakes and distributed power (DP) units in full 
service and emergency braking applications.\20\
---------------------------------------------------------------------------

    \20\ NTSB recently published the results of its simulation study 
of train braking as part of its investigation into the December 30, 
2013, incident in Casselton, ND, where a crude oil unit train 
collided with a derailed car resulting in the derailment of 21 tank 
cars. See Train Braking Simulation Study, Renze, K.J., July 20, 
2015, at http://dms.ntsb.gov/public/55500-55999/55926/577439.pdf.
---------------------------------------------------------------------------

1. North American Experience With ECP Brakes

    AAR's initial assertion is that PHMSA ignores the actual experience 
of North American railroads in operating trains equipped with ECP 
brakes. It contends that the experience of these railroads demonstrates 
that ECP brakes are unreliable. Additionally, AAR states that ECP 
brakes do not function materially better than trains with conventional 
air brakes that make use of DP and dynamic braking. Finally, AAR claims 
that neither PHMSA nor FRA made any effort to collect information from 
railroads about their experiences with ECP brakes and that PHMSA failed 
to incorporate the data that was gathered into its analysis.
    We disagree. In coordination with FRA, PHMSA did consider the 
experience of North American railroads

[[Page 71962]]

when we developed the requirement for ECP brakes on HHFUTs that operate 
in excess of 30 mph. Both the final rule and the RIA discuss at length 
the North American experience with ECP brakes. See RIA, pp. 216-236; 80 
FR 26997-26998. The information relied upon by PHMSA and FRA included 
comments from the railroads and suppliers, reports and papers presented 
by railroad officials discussing ECP brake effectiveness, and testimony 
at previous public hearings held by FRA. Examples of comments that 
PHMSA and FRA relied upon include AAR's comments on dynamic braking and 
RSI's comments on the costs of installing ECP brakes on newly 
constructed and retrofitted tank cars. See RIA, pp. 216-217, 218, 239, 
and 262-263.
    Examples of reports and presentations from railroad personnel 
include the following:
     ``Electronically-Controlled Pneumatic (ECP) Brake 
Experience at Canadian Pacific,'' Wachs, K., et al., which was 
presented at the 2011 International Heavy Haul Association (IHHA) 
Conference, in Calgary, AB, Canada. See RIA, pp. 216-217, 263, and 267.
     ``Norfolk Southern ECP Brake Pilot Project Update,'' 
Forrester, J., presented at the 2010 National Coal Transportation 
Association O & M Committee Meeting in Coeur d'Alene ID. See RIA, pp. 
236-237.
     ``ECP Perspectives,'' Maryott, D. presented at the 2008 
Air Brake Association Proceedings of the 100th Annual Convention and 
Technical Conference in Chicago, IL. See RIA, pp. 236.
    Much of the value of these reports, which were initiated and 
completed outside this rulemaking, was that PHMSA and FRA received hard 
numbers and data resulting from the direct testing of North American 
railroad operations using ECP brakes. The data from these reports 
included information on fleet reductions, rail wear, wheel wear, stop 
time, restart time, and stopping distances. Additionally, PHMSA and FRA 
relied on statements at two FRA public hearings held on October 4, 
2007, and October 19, 2007, that were held during FRA's rulemaking 
process establishing ECP brake system standards. The public hearing 
included comments from Mr. Michael Iden, an official of Union Pacific 
Railroad Company (UP), who described an example of how regulatory 
relief from brake inspections on trains with ECP brakes would help to 
save fuel while also reducing congestion (by allowing an ECP-equipped 
train to overtake slower trains that require more frequent brake 
inspections).\21\ Based on the totality of the evidence available, 
PHMSA and FRA unanimously concluded that applying an ECP braking 
requirement to a limited subset of trains, HHFUTs, is warranted when 
transporting extremely large quantities of Class 3 (flammable 
liquids).\22\
---------------------------------------------------------------------------

    \21\ PHMSA recognizes that Mr. Iden also provided a statement as 
part of UP's comment to the docket for this rulemaking. See PHMSA-
2012-0082-2558. In that statement, he restated his caution that 
``ECP braking should begin with high-mileage high-utilization 
cars.'' PHMSA agrees, which is why it has limited ECP braking to the 
highest use type trains. However, Mr. Iden now maintains that 
distributed power delivers comparable benefits to ECP brakes. In 
making this determination, Mr. Iden states that UP came to this 
conclusion through in-depth examination of event recorders of test 
trains. UP has not published the data or the analysis upon which 
this report was based. It did not provide this information to Booz 
Allen, which was actively collecting ECP brake information at the 
time of UP's tests, and it did not produce the information to PHMSA 
or FRA during this rulemaking.
    \22\ PHMSA's view also is supported by a 2014 presentation 
prepared by AAR's transportation research and testing organization, 
the Transportation Technology Center Inc. (TTCI). This presentation 
has been added to the docket. The TTCI ECP Brakes presentation is 
informative on the issue of the North American ECP braking 
experience and provides a distinct counterpoint to AAR's own 
arguments in this forum against the ECP braking provisions in the 
final rule. The presentation is broadly consistent with PHMSA's 
analysis in the RIA, confirming the many of the benefits of ECP 
brakes while also noting some of the difficulties acknowledged by 
PHMSA.
---------------------------------------------------------------------------

    AAR relies on a report titled ``Assessment of the Enhanced Braking 
Requirements in the Hazardous Materials: Enhanced Tank Car Standards 
and Operational Controls for High-Hazard Flammable Trains Final Rule of 
May 1, 2015'' (hereinafter referred to as the ``Oliver Wyman Report''), 
which lists a number of purported quotes from interviews with unnamed 
railroad officials in support of the contention that PHMSA and FRA did 
not incorporate the railroads' negative comments about ECP brakes into 
its analysis. These anecdotes (from UP, Canadian Pacific Railway (CP), 
and CSX Transportation, Inc.) essentially suggest that ECP brakes were 
tried and abandoned a number of years ago. These statements are not 
persuasive, as PHMSA and FRA acknowledged in the RIA at pages 223-225 
that there may be problems at the outset with using ECP brakes, just as 
there are with any newer technology. There is evidence that ECP brake 
technology has advanced since these railroads stopped operating trains 
using ECP brakes, see RIA, pp. 225-226, but there is no discussion in 
the Oliver Wyman Report about whether these railroads have considered 
re-adopting ECP brakes in limited circumstances, such as with captive 
unit train fleets.
    The purported quotes in the Oliver Wyman Report from officials of 
BNSF Railway Company (BNSF) and Norfolk Southern Railway Company (NS), 
while current, provide conclusions rather than analysis. In the rare 
instances where the Oliver Wyman Report does provide tangible numbers, 
there are no references that would allow PHMSA and FRA to research and 
verify the information and assess its applicability. See e.g., pp. 8, 
concerning the rate of failures on BNSF. If these railroads have actual 
data reflecting the real-world effectiveness of ECP brakes in North 
America, they have not provided it in the course of this appeal or the 
rulemaking process.\23\ Similarly, FRA has not received a written 
status report from BNSF on the progress of the testing for the 5,000 
Mile ECP test train that has been due to the agency since April 
2015.\24\ Therefore, AAR's unsupported contentions concerning the North 
American experience with ECP brakes do not present a compelling reason 
to revisit PHMSA and FRA's ECP brake requirement for HHFUTs on trains 
traveling in excess of 30 mph.
---------------------------------------------------------------------------

    \23\ The Oliver Wyman Report contends that FRA committed to 
collect data from ECP brake testing during the past eight years. 
This statement mischaracterizes FRA's statements. FRA's ECP brake 
rulemaking contains no such statements. See 73 FR 61512. FRA did 
contract with Booz Allen to collect and analyze ECP brake data, but 
that contract closed in 2010, and was not renewed largely because 
the railroads failed to provide data for analysis. Of course, the 
railroads have been free to provide data to FRA or publish papers 
expanding and reflecting upon their understanding of the 
effectiveness of ECP braking since 2010, but--except for the 2011 CP 
paper referenced earlier--the record is devoid of such documents.
    \24\ On August 18, 2015, BNSF and NS did make an oral 
presentation to FRA concerning the 5,000-mile pilot train. However, 
no written or electronic reports have been provided to the agency 
for review (the railroads cited the need for legal review) . This 
oral presentation identified concerns related to unanticipated 
penalty brake applications and repair times. FRA has not received 
written documentation to support the oral presentation or assess the 
integrity of the results and determine the underlying cause of these 
alleged events (for example, it may be helpful to compare the 
results to normal ECP-equipped trains that operate 3,500 miles 
between brake tests or how the pilot train compared to lines where 
there is more experience handling ECP-equipped trains). But, at 
least some of the problems BNSF presented orally appear to be 
``teething'' issues that should be resolved as railroad personnel 
servicing the 5,000-mile pilot train along its route become more 
familiar with ECP brake technology and as equipment to service the 
train becomes more available.
---------------------------------------------------------------------------

2. Foreign Experience With ECP Brakes

    AAR raises two issues about PHMSA's reliance on international 
experiences with ECP brakes. First, AAR contends that it was 
inappropriate for PHMSA to rely on the experiences of Australian and 
other foreign railroads with ECP brakes. AAR believes the ECP

[[Page 71963]]

brake operations in these other countries are dissimilar to operations 
in the U.S. AAR states this is because the international systems 
discussed tend to be closed-loop mining railroads that do not 
interchange with other railroads and rarely break apart the trainsets. 
Second, AAR claims that PHMSA and FRA mischaracterize the conclusions 
of the Sismey and Day Report, published in 2014, that conducted a 
survey of Australian railroads using ECP brakes to gauge their 
experiences with ECP brakes. See ``The ECP Brake--Now it's Arrived, 
What's the Consensus?,'' Sismey, B. and Day, L., presented to the 
Conference on Railway Excellence, 2014, Adelaide, Australia. Neither of 
these issues supports eliminating the ECP brake requirement from the 
final rule.
    PHMSA and FRA believe that AAR's argument overstates the 
differences between the international ECP brake model and unit trains 
in the U.S., particularly HHFUTs. As noted on page 220 of the RIA, 
PHMSA and FRA expect that the limited number of HHFUTs will stay 
together for an extended period of time to meet the demand for service. 
The tank cars in an HHFUT are not regularly being switched to different 
destinations. These types of trains are not acting like a typical 
manifest train that commonly enters a yard to be broken up and have its 
cars reclassified and redirected into other trains. Instead, they are 
making continuous loops to and from the loading and unloading 
facilities. This is how these trains are currently marketed. See RIA, 
pp. 220, 232-233. The final rule builds off of that model. Of course, 
there may be facilities that cannot take an entire unit train at once. 
This may necessitate breaking the train apart for the limited purpose 
of serving the facility. PHMSA and FRA account for this circumstance by 
recognizing that U.S. railroads will likely use overlay ECP brake 
systems. This would allow operations at a facility without using ECP 
brakes, ensuring a measure of flexibility. Once that service is 
completed, PHMSA reasonably expects that the cut of tank cars will 
retake its place in the HHFUT to make its return trip. These 
similarities make the Australian (and other international experiences) 
relevant.
    The claim that PHMSA mischaracterizes the Sismey and Day Report is 
surprising in light of PHMSA and FRA's reading of the Oliver Wyman 
Report. The Oliver Wyman Report cites to selective information from the 
Sismey and Day Report, which mischaracterizes its findings. To be 
clear, PHMSA and FRA accurately cite to the Sismey and Day Report in 
the RIA. See pp. 34-36. On page 34 of the RIA, PHMSA and FRA note that 
the report details how ECP brakes have performed in practice since 
Australian railroads began using the technology. PHMSA and FRA fully 
recognize in the RIA that the report highlights the benefits of ECP 
brakes and the associated challenges experienced by Australian 
railroads. In summarizing the conclusion of the Sismey and Day report, 
PHMSA and FRA note that ``[t]he report concludes that the challenges 
experienced in practice are largely resolved and that there is a 
business case to expand the use of ECP brakes into intermodal 
service.'' PHMSA and FRA do not see the basis for AAR's claims given 
the ``Conclusion'' of the Sismey and Day Report, which is as follows:

    ECP is here to stay and is becoming more widely accepted and 
understood. There have been issues in the introduction and 
implementation of ECP brakes which can be categorized as 
manufacturing/teething issues and unexpected surprises.
    These have not been experienced by all operators of ECP brakes. 
Solutions have now largely been identified to allow them to be 
managed to the point where their impact on operations is reduced or 
eliminated.
    There is as yet untapped potential for ECP brakes to improve 
train operations on Australia's rail networks.

    Watershed events for the future of ECP brakes and the rail 
industry:
     Introduction of ECP brakes on unit mineral trains which 
happened from 2005 onwards.
     Retrofit of ECP brakes on unit mineral trains which are 
underway in the Pilbara from 2012 onwards.
     The emergence of viable business cases for Introduction of 
ECP brakes onto intermodal unit trains and onto the wider wagon fleet 
used in general service.
    See p. 30, ``The ECP Brake--Now it's Arrived, What's the 
Consensus?''.
    There is one additional issue raised by AAR through the Oliver 
Wyman Report that merits discussion. This is the highlighting of 
purported difficulties experienced by international users who 
commingled trains using ECP brakes with trains using conventional air 
brakes. The Oliver Wyman Report claims, based on an anecdotal report of 
a single unnamed employee, that the former Quebec Cartier Mining 
Railroad or QCM (now AccelorMittal) has experienced difficulties with 
operations where three of the company's eight trains are equipped with 
ECP brakes while the other five trains have conventional brakes. The 
report claims that severe problems have occurred when trying to pick up 
bad order cars when some cars are equipped with ECP brakes while others 
are equipped with conventional air brakes. The Oliver Wyman Report then 
attributes to the unnamed employee a statement that the railroad is 
considering standardizing braking using just ECP brakes or just 
conventional air brakes.
    To be clear, the Oliver Wyman Report provides no hard evidence that 
QCM has instituted a plan to eliminate its fleet of trains equipped 
with ECP brakes or its trains equipped with conventional air 
brakes.\25\ However, the situation described above with bad ordered 
cars would not present the same problem for an HHFUT equipped with ECP 
brakes in the U.S. The QCM uses a stand-alone ECP brake system on its 
trains. The stand-alone ECP brake system eliminates the ability to 
revert to conventional air brake mode. PHMSA expects that U.S. 
railroads will use an overlay ECP brake system, which allows a car to 
be transported in ECP brake or conventional air brake mode. This was 
discussed extensively in the RIA. See pp. 219-220, 225, and 230.
---------------------------------------------------------------------------

    \25\ The Oliver Wyman Report does not state whether QCM would 
convert to all ECP brakes or all conventional air brakes.
---------------------------------------------------------------------------

    PHMSA also notes that QCM made a business decision to introduce 
trains equipped with ECP brakes onto its line in 1998. This means that 
QCM has voluntarily operated with a mixed allotment of ECP brake trains 
and conventional air brake trains for about 17 years. If the purported 
difficulties of maintaining ECP trains along with conventional air 
brake trains were as severe as the Oliver Wyman Report suggests, then 
PHMSA and FRA expect that QCM would have abandoned either ECP brakes or 
conventional air brakes long before June 12, 2015, which is the date of 
the Oliver Wyman Report.

3. Business Benefits of ECP Brakes

    AAR argues that ``PHMSA relied on the purported business benefits 
of ECP braking as predicted in a 2006 report by Booz Allen Hamilton,'' 
and did not make an effort to verify whether real-world experience with 
ECP brakes validated the Booz Allen predictions. It is AAR's view 
``that the benefits predicted by Booz Allen nine years ago did not 
materialize in subsequent field tests in North America and operations 
in foreign countries.'' Therefore, it states that PHMSA and FRA erred 
by calculating business benefits based on the Booz Allen analysis. AAR 
relies on the Oliver Wyman Report to support its contentions, see pp. 
24-48, but its contentions simply are not supported by the facts. PHMSA 
and FRA considered a number of sources in addition to the

[[Page 71964]]

Booz Allen Report to develop the final rule, including comments to the 
NPRM, reports and presentations analyzing ECP brake operations in North 
America and abroad, and testimony during two FRA public hearings on ECP 
brakes.
    Fuel Savings: The Oliver Wyman Report states that there are likely 
some fuel savings, but they are not ``validated.'' The Oliver Wyman 
Report states that the 5.4 percent fuel savings on CP occurred, but 
that the actual savings over an entire system would be less, because 
the terrain over which it realized the 5.4 percent savings was 
advantageous. The Oliver Wyman Report then states that PHMSA's 2.5 
percent estimate of fuel savings, less than half that realized by CP, 
and half of that predicted by the Booz Allen Report, was arbitrary, 
with no basis.
    As explained in the RIA on pages 216-217, 262-263, and 267, PHMSA 
and FRA assumed a reduction of more than 50 percent from the real-world 
CP experience because PHMSA recognized that the terrain where the 
testing occurred maximized fuel benefits. This was very conservative, 
and a larger estimate of fuel savings could have been justified. At no 
point does the Oliver Wyman Report present hard evidence that railroads 
would experience less fuel savings than the 2.5 percent PHMSA and FRA 
estimate. Instead, the Oliver Wyman Report offers something from the 
Sismey and Day Report that stated ``the general feeling was that there 
may be some fuel savings with ECP braked trains but no one would hazard 
a guess on the magnitude.'' The Oliver Wyman Report also quotes an 
unnamed employee from the QCM to support its position. This employee 
purportedly commented to Oliver Wyman that there had been no fuel 
consumption benefits from ECP brakes compared to conventional systems. 
This anecdotal evidence from an unnamed source is directly contradicted 
by independent published reports that we cited in the final rule about 
QCM, noting that its ECP-equipped trains had led to a decrease in fuel 
use of 5.7 percent. See 80 FR 26697. This evidence supports the 
reasonableness of PHMSA and FRA's fuel savings estimate, with the 
likelihood that any errors were to the conservative side. Even if we 
accepted the Oliver Wyman Report's unsubstantiated statement that ECP 
brakes would result in ``some fuel savings,'' the 2.5 percent we used 
for fuel savings in the final rule is a reasonable estimate of ``some 
savings.'' Therefore, we decline to reduce that estimate to zero as AAR 
urges.
    Wheel Savings:
    The Oliver Wyman Report states at p. 96:

[w]heel impact load detectors (WILD) have found wheels on ECP brake-
equipped trains with defects such as tread build up, flat spots, and 
wheel shelling. In the current ECP brake operation, these trains are 
handled as unit trains and are less subject to switching operations, 
therefore it appears, from BNSF's ECP experience, that higher brake 
usage is leading to increased wear and stress on wheels than might 
otherwise be seen on conventional air brake equivalent trains.

    The Oliver Wyman Report merely makes the statement above but does 
not present evidence to support that ECP-equipped trains have 
experienced more of these types of defects than equivalent unit trains 
with conventional air brakes operating under the same conditions on the 
same track. Notwithstanding, some initial increase in wheel wear, such 
as thermal mechanical shelling, is explainable--and, possibly, 
expected--during the familiarization phase when new train crews gather 
knowledge about the braking capabilities of ECP braking. PHMSA and FRA 
addressed this issue in the RIA on page 217. However, the Oliver Wyman 
Report does not provide the necessary context for the information to 
allow PHMSA and FRA to draw any judgments about its statements. To 
adequately evaluate such reports, it is important to untangle the 
potential causes so that we can determine whether the reported wheel 
wear was caused by issues related to ECP braking. The Oliver Wyman 
Report does not do that. As a result, it is impossible to conclude that 
the reported wheel wear is caused by ECP braking as opposed to factors 
related to track conditions or usage.
    PHMSA and FRA do note that the phrase ``higher brake usage'' 
possibly could explain the greater wheel wear found by some ECP brake 
operations. The wheel wear per unit time per car is higher because the 
cars tend to operate more miles. The savings in wheel wear, detailed on 
pages 263-266 of the RIA, are based on car-miles, as explained in the 
flow assumptions on pages 252-254 of the RIA. There is no evidence to 
suggest the cars with ECP brakes have more wheel wear per car-mile. As 
an example, if the cars have more wheel wear per unit of time and are 
experiencing a 50 percent reduction in wheel wear, that implies the 
cars are used for more than twice as many miles per car-year as cars 
not equipped with ECP brakes. PHMSA and FRA believe this is a 
reasonable inference to draw from the data and notes that it further 
contradicts other AAR assertions that more ECP-equipped tank cars will 
be needed. Evidence that ECP-equipped wheel temperatures are more even, 
as offered in the Oliver Wyman Report, makes it likely that savings per 
car mile are being realized in ECP-equipped trains. Neither AAR, nor 
the Oliver Wyman Report, offers any evidence of less wheel savings per 
car-mile than estimated in the RIA.
    The Oliver Wyman Report also states that rail renewal will not be 
coordinated with wheel maintenance because the tank car maintenance 
will be the responsibility of the tank car owners, not the railroad. 
FRA staff, including inspectors with recent employment experience on 
railroads, are not aware of any efforts to coordinate wheel maintenance 
with rail renewal on any operating railroads. This seems doubly 
irrelevant, as the RIA does not estimate rail savings as a quantifiable 
business benefit, while the Oliver Wyman Report describes a failure to 
coordinate maintenance in a way that is not current railroad practice.
    Brake Inspections: The Oliver Wyman Report contends that North 
American operations have produced no data to support PHMSA's claim that 
the overall tank car fleet size can be reduced because cycle times will 
improve due to longer intervals between brake inspection stops with ECP 
brake equipment.
    The Oliver Wyman Report contention does not comport with reality. 
Railroads do see advantages from increasing the current 1,000-mile 
brake inspection distance to 3,500 miles.\26\ FRA allowed the longer 
distance between inspections in its 2008 ECP Brake rule at the request 
of railroads as an incentive to the railroads to test ECP brake 
equipment and because of the safety features inherent in ECP brake 
systems. See 73 FR 61512 (Oct. 16, 2008). FRA has recently granted a 
request from BNSF and NS allowing these railroads to move forward with 
a pilot program that increases the distance between brake inspections 
to 5,000 miles on certain ECP-equipped trains. This pilot program 
allows BNSF and NS to conduct test operations using an ECP-equipped 
train from the Powder River Basin to Macon, Georgia with only one brake 
inspection per trip compared to four inspections (one Class I and three 
Class IA inspections) for the same train operated using conventional 
brakes. It follows

[[Page 71965]]

that if the railroads did not envision a benefit to the decreased 
frequency of brake inspections, they would not be pursuing the 5,000-
mile waiver.
---------------------------------------------------------------------------

    \26\ The recent TTCI ECP Brakes presentation notes that 
permitting 3,500 miles between brake inspections results in about 50 
fewer inspections per year for high-mileage cars. TTCI concluded 
that the current regulatory relief on brake inspections for trains 
with ECP brakes is a `` `reliable' benefit for high mileage cars 
($220/car/year),'' with a potential peak of $300/car/year. These 
estimates are comparable--although slightly less--to the $330/car/
year benefits PHMSA estimated.
---------------------------------------------------------------------------

    Cycle Times: The Oliver Wyman Report argues that PHMSA's 
assumptions regarding reduced cycle times and reductions in car fleet 
size are overstated because trains must still regularly stop for 
servicing events and crew changes. Additionally, the Oliver Wyman 
Report contends that the speed of a single train will be influenced by 
other trains on the system, and skipping inspections does not exempt a 
train from network congestion. These arguments, which are addressed in 
part above, do not present a compelling rationale for eliminating the 
ECP brake requirement for HHFUTs.
    Class IA brake tests can take several hours, and are usually 
performed in yards. If the ECP-equipped train is ready for departure 
eight hours earlier than usual, the train may be dispatched ahead of 
other trains that would have been dispatched before it in that eight-
hour window, and, it will, on average, arrive at the next yard eight 
hours earlier, as congestion effects are likely to be random. Also, 
there is no reason to revise the estimated reduction in tank car fleet 
size assumed by PHMSA and FRA. Train crew changes do not require Class 
IA brake tests, and are not relevant to this issue. Further, the Oliver 
Wyman Report's suggestion that wheel wear is increased because of 
increased usage would indicate that unit trains are experiencing 
shorter cycle times.
    Brake Shoe Savings: The Oliver Wyman Report contends based on a 
singular statement from an unnamed BNSF employee that it is unlikely 
that any brake shoe savings would be possible for ECP brakes compared 
to conventionally braked trains.
    While PHMSA and FRA did not calculate any savings for brake shoes 
in its analysis of business benefits, it appears that there might be a 
benefit, based on the comment in the Sismey and Day Report, cited in 
the Oliver Wyman Report, that shoe wear was very even on ECP-equipped 
trains when compared to trains with conventional air brakes. Thus, the 
concerns raised by the Oliver Wyman Report in this area are not 
relevant to PHMSA and FRA's determinations about ECP brakes.
    Network Capacity Benefits: The Oliver Wyman Report questions the 
RIA to the extent that it includes a statement that ``FRA found that 
ECP brakes offered major benefits in train handling, car maintenance, 
fuel savings, and increased capacity under the operating conditions 
present.'' The Oliver Wyman Report is unclear about the basis for this 
claim because it contends that ``FRA has not publically reported on any 
data collection and analysis from North American railroad test 
operations using ECP brakes.''
    The increased capacity discussed in the RIA comes from a statement 
in the Booz Allen Report. However, those benefits were based on ECP 
brakes being installed on a large proportion of the trains on a line. 
PHMSA and FRA do not expect the same situation with respect to HHFUTs. 
As a result, PHMSA and FRA did not include capacity benefits in the 
quantified business benefits.

4. Reliance on Business Benefits Compared to Safety Benefits of ECP 
Brakes

    AAR contends that PHMSA must rely on theoretical business benefits, 
even if not supported by actual experience, because AAR believes the 
costs far exceed the potential safety benefits of the final rule. We 
disagree. The safety benefits of ECP brakes are integral to the final 
rule. As such, PHMSA and FRA relied on both the business benefits and 
safety benefits to support the ECP brake requirement adopted in the 
final rule.
    PHMSA and FRA consider the safety benefits to be a fundamental 
element of the overall benefits and believe that the safety benefits 
estimated in the RIA are reasonable based on the evidence. The safety 
benefits of ECP brakes are thoroughly described in detail in the RIA on 
pages 78-120 discussing both low consequence events and high 
consequence events. This discussion examines the probability of these 
events occurring and includes a range of benefits. Furthermore, the RIA 
thoroughly examines the effectiveness rate for ECP brakes on pages 246-
251 in the context of accident mitigation and avoidance, finding that 
ECP brakes reduce the probability of tank car punctures in the event of 
derailment by about 20 percent.
    With respect to AAR's argument that PHMSA overly relied on 
theoretical business benefits, PHMSA and FRA requested comments from 
the industry in the NPRM. Industry did not submit any data to 
contradict our findings.\27\ Moreover, between the NPRM and final rule, 
PHMSA and FRA continued to conduct research to determine benefits that 
would be most accurate looking at real world experiences. The business 
benefits relied upon by PHMSA came from documented sources, including 
testimony and reports from Class I railroads. These sources include 
reports addressing operations on CP, BNSF, Quebec Cartier Mining, UP, 
and NS, as well as operations on international railroads. PHMSA and 
FRA's views were also informed by review of the Booz Allen report 
prepared for FRA in 2006. All these reports are cited in the RIA on 
pages 34, 217, 235, 236, and 263.
---------------------------------------------------------------------------

    \27\ Even in the appeal process, the Oliver Wyman Report 
provides little verifiable data to support its findings. Instead, 
the report relies almost exclusively on interviews conducted with 
various unnamed railroad employees.
---------------------------------------------------------------------------

    These sources discuss the actual effects of ECP brake usage on 
multiple railroads. Indeed, long before PHMSA began the rulemaking 
process for the final rule, BNSF reported fleet reductions on trains 
equipped with ECP brakes. Similarly, NS reported that ECP-equipped 
trains experienced a reduction in dwell time, operated at track speed 
for longer periods of time, were able to better control their speed, 
and had faster loading processes and better car loading performances 
than trains with conventional braking. This information is consistent 
with the recent TTCI ECP Brakes presentation noted above, which found 
among other things that ECP brakes could increase equipment 
utilization, allow for longer trains, and permit higher train speeds. 
While this presentation was not used in the development of the final 
rule, it is helpful in informing the current discussion on ECP brakes. 
However, even without the TTCI ECP Brakes presentation, PHMSA is 
confident the information cited in the RIA supports its analysis.

5. Cost Related to Implementation of ECP Brakes

    AAR argues that PHMSA underestimated the cost of implementing ECP 
braking in the final rule, and that the actual cost to implement ECP 
brakes on HHFUTs is more than six times PHMSA's estimate. This argument 
is based on AAR's contention that ECP brake-equipped tank cars and 
locomotives will not run in dedicated sets, segregated from the rest of 
the fleet. AAR contends that segregated fleets are not operationally 
possible. As a result, it suggests that 10 times as many locomotives 
will need to be equipped with ECP brakes as we estimated and that PHMSA 
underestimated the number of tank cars needed for ECP brake service on 
HHFUTs by more than 25 percent. See Oliver Wyman Report, pp. 49-70.
    These arguments are not new. PHMSA and FRA considered AAR's 
comments to the NPRM on this subject. We expect that railroads will be 
able to manage HHFUT fleets, which can be kept as captive fleet unit 
trains. Similar to unit coal trains that currently operate with ECP 
brakes, HHFUTs are expected

[[Page 71966]]

to stay together, including the locomotive. See RIA, p. 220. While 
railroads may regularly shift locomotives under current operations, 
PHMSA and FRA are confident that, like coal unit trains, railroads can 
manage a specialized fleet of ECP-equipped locomotives to handle 
HHFUTs. See RIA, p. 221. In this sense, managing locomotives for HHFUTs 
likely is similar to managing distributed power locomotives, which is 
already a common practice. Not all trains have distributed power, but 
the railroads have a history of being able to manage these assets 
efficiently.
    PHMSA and FRA do recognize there are costs associated with keeping 
a fleet of HHFUT locomotives. As a result, PHMSA and FRA estimated that 
it would cost around $80 million (undiscounted) to equip all the 
necessary locomotives with ECP brakes. This included equipping four 
locomotives for every train, even though we expect that railroads will 
only need an average of three locomotives for operations. We also 
included the cost of wrap-around cables to provide a backup preventing 
the lack of locomotives from becoming a bottleneck. Wrap-around cables 
allow a train to operate in ECP brake mode even when one or more 
locomotives or cars are not equipped with ECP brakes. Additionally, 
PHMSA and FRA accounted for fleet management costs.
    The Oliver Wyman Report assumes that all locomotives will be 
equipped with ECP brakes, with a total cost of about $1.8 billion. This 
appears to overestimate the costs, as it assumes that railroads cannot 
manage their locomotive fleets. Given the railroads' history of 
effectively managing their equipment, it is unlikely that railroads 
will equip all locomotives. However, if a railroad chooses to equip all 
locomotives, it will be an operating practices decision and not due to 
the regulation.
    The costs that PHMSA and FRA used are well documented in the RIA. 
They incorporate the comments PHMSA received to the NPRM. Many of these 
comments came from the rail industry, including AAR, RSI, and car 
manufacturers. For example, we estimated that it would cost $7,800 to 
retrofit a tank car with ECP brakes and $7,300 to equip a new car with 
ECP brakes. This was based on comments from RSI. The average cost--
based on the estimated number of new construction tank cars needed 
compared to the number of retrofit tank cars needed--was $7,633. AAR in 
its ``Supplemental Comments,'' which were posted to the docket on 
January 30, 2015, stated that the cost of ECP brakes per tank car is 
$7,665. The Oliver Wyman Report states that the cost per tank car for 
ECP brakes is $9,665. See p. 58. Based on the evidence available, PHMSA 
made a reasonable estimate of the cost of equipping each required tank 
car with ECP brakes.
    With respect to the cost of locomotives, the Oliver Wyman Report 
estimates the cost of equipping a current locomotive to be $88,300 and 
provides no estimate for equipping new locomotives. PHMSA and FRA 
anticipate that 2,532 locomotives would be needed to operate all HHFUTs 
in ECP brake mode. As discussed, this number is based on an average of 
three locomotives per HHFUT plus an additional locomotive for each 
HHFUT to act as a buffer when another locomotive is shopped. Therefore, 
based on current production, PHMSA and FRA expect that the railroads 
will be able to operate HHFUTs using new locomotives. We estimate the 
incremental cost of equipping a new locomotive with ECP brakes over 
current technology electronic brakes (i.e. Wabtec Fastbrake or New York 
Air Brake CCB-2) to be about $40,000. This information was provided by 
FRA's Motive Power and Equipment Division, and was based on the 
Division's background knowledge resulting from information from the 
manufacturers. As a result, PHMSA and FRA are confident that the 
estimate is reasonable.
    The Oliver Wyman Report also assumes that every employee must be 
trained on ECP brake systems. PHMSA and FRA believe the ECP brake 
requirements in the final rule can reasonably be accomplished without 
training every employee. Indeed, we significantly increased the number 
of employees we estimated would need to be trained from the NPRM to the 
final rule. This was because PHMSA and FRA reassessed their initial 
position from the NPRM based on the public comments. Using the waybill 
sample, we determined that approximately 68 percent of the total ton-
miles were on routes that had crude oil or ethanol unit trains. As a 
result, PHMSA and FRA adjusted the number of employees to include 68 
percent of the total crews. According to these estimates, around 51,500 
employees would need to be trained, as described on page 242 of the 
RIA.
    The Oliver Wyman Report also states that it takes significantly 
more time to make repairs on trains equipped with ECP brakes. We 
acknowledged that the lack of training and unfamiliarity with the ECP 
brake components likely contribute to such delays.\28\ See RIA, pp. 
223-224. However, once all employees who work at locations with ECP-
equipped HHFUTs are adequately trained, PHMSA and FRA expect the repair 
time will be reduced to match that of conventional brakes.
---------------------------------------------------------------------------

    \28\ The current lack of availability of the necessary ECP brake 
system components can also contribute to delays.
---------------------------------------------------------------------------

6. Potential for Network Disruption

    AAR contends that mandating ECP brakes will cause significant 
collateral damage because ECP brakes are unreliable. AAR similarly 
believes that deployment of ECP brakes will disrupt major arteries in 
the national railroad network, thereby degrading the performance and 
capacity of the network. Further, AAR argues that the ECP brake 
requirement could delay Positive Train Control (PTC) implementation, 
which has been deemed safety-critical.
    PHMSA and FRA addressed these arguments in the RIA in our 
discussion on the reliability of ECP brakes. See RIA, pp. 222-226. 
PHMSA and FRA conducted substantial research into the implementation of 
ECP brakes and found no examples of damage to the network where ECP 
brakes were properly integrated. As a result, we expect that with the 
correct infrastructure in place--such as sufficient training of 
railroad personnel and proper deployment of equipment and ECP brake 
components to ensure that they are readily available when needed--
railroads can manage the ECP brake implementation without a disruption 
to the network. As noted in the RIA, at least one manufacturer has 
stated that the issue with ECP brake systems ``is not reliability, but 
rather, availability of power and shops.'' ``The Science of Train 
Handling'', William C. Vantuono, Railway Age, June 2012, at 25-26. 
Because of these issues, PHMSA recognized that there may be delays 
associated with ECP brake implementation at the initial stages, as 
there would be during the roll-out of any newer technology. However, 
given that the ECP brake operations are not required on HHFUTs until 
January 1, 2021, for trains transporting a loaded tank car of Class 3, 
PG I, flammable liquid, and May 1, 2023, for all other HHFUTs 
transporting Class 3 flammable liquids, PHMSA believes there is 
sufficient time built into the implementation to ensure the network is 
not significantly disrupted by delays attributable to ECP braking 
technology.
    AAR's reliance on the Oliver Wyman Report does not alter PHMSA and 
FRA's

[[Page 71967]]

position. The Oliver Wyman Report claims that ``[a]dding a second 
braking technology to a large portion of the North American rolling 
stock fleet will materially increase the operational complexity of the 
railroad industry, and will reverse gains in productivity achieved over 
the past 35 years.'' See Oliver Wyman Report, p. 79. We analyzed the 
size of the fleet that would be required to be equipped with ECP brakes 
in the RIA. The number of cars and locomotives required to operate an 
HHFUT fleet equipped with ECP brakes likely would be relatively small 
and captive (a maximum of 633 unit trains on the network at any given 
time, see RIA, p. 219) when compared to the total universe of train 
movements.
    The Oliver Wyman Report also raises a number of issues, including 
concerns about ECP cables, ECP brake-equipped locomotives, ECP brake 
car components, crosstalk, and unexpected stopping. None of these 
purported issues support eliminating the ECP brake requirement in the 
final rule. Much of what is presented is anecdotal evidence based on 
reports from unnamed railroad personnel that are lacking in data or 
analysis. Further, some of the railroads cited as providing information 
on their ECP braking experience have no experience with the current 
version of ECP brakes that is compliant with July 2014 update to the 
AAR Standard S-4200 series. For example, CP has not used ECP braking 
since removing it from limited operations in 2012, while UP has not 
operated ECP-equipped trains in approximately six years.
    AAR raised the ECP brake cable issue in its comments to the NPRM 
and PHMSA and FRA addressed those comments in the final rule. See 80 FR 
26702. AAR commented that the cables and batteries for ECP brakes would 
need to be replaced every five years. PHMSA and FRA accounted for this 
cost in the RIA on page 228.
    We also addressed the crosstalk issue in the RIA at page 225. 
Crosstalk occurs when there is an interruption in the signal, usually 
caused when two ECP brake trains pass in close proximity, which results 
in an ECP-equipped train going into emergency brake mode. PHMSA and FRA 
acknowledged that this was an issue in earlier iterations of ECP brake 
systems, but software updates to the ECP brake programming had resolved 
the problem. See ``The ECP Brake--Now it's Arrived, What's the 
Consensus?'' Indeed, AAR acknowledged this by incorporating the 
software update into the AAR Standard S-4200 series in July 2014.
    The Oliver Wyman Report further contends that PHMSA and FRA 
incorrectly assessed the effect of ECP brakes on wheel wear. The basis 
for this contention appears to be some recent ``test operations'' on 
BNSF where wheel defects such as tread build up, flat spots, and wheel 
shelling have been found. See Oliver Wyman Report, p. 94. PHMSA and FRA 
note that the quoted ``BNSF 14 Run Overview 2014'' has not been 
provided for reference, and, as discussed above, the report does not 
present any evidence that ECP-equipped trains actually experience more 
of these types of defects than equivalent trains with conventional air 
brakes operating under the same conditions over the same track. 
Although some initial increase in wheel wear, such as thermal 
mechanical shelling, would be explainable during the familiarization 
phase when new train crews gather knowledge about the braking 
capabilities of ECP brakes, see RIA, p. 217, the Oliver Wyman Report 
does not put its information in a context that allows PHMSA and FRA to 
draw any judgments about that information. The same is true with 
respect to the reporting of a recent situation where a single train had 
14 separate wheel exceptions taken. The Oliver Wyman Report merely 
concludes the wheel exceptions were due to ECP braking without 
examining the potential causes to determine whether the reported wheel 
wear was actually caused by issues related to ECP braking or something 
else. Therefore, as presented, there is no evidence that the reported 
wheel wear is caused by ECP braking as opposed to factors related to 
usage or other track conditions. This is important because wheel wear 
is a function of use. Further, as noted above, the phrase ``higher 
brake usage'' possibly explains the greater wheel wear found in some 
operations. The wheel wear per unit time per car is higher because the 
cars operate more miles. PHMSA and FRA calculated the savings in wheel 
wear, detailed on pages 263-266 of the RIA, based on car-miles, as 
explained in the flow assumptions on pages 252-254 of the RIA. There is 
no evidence to suggest these cars have more wheel wear per car-mile.
    The Oliver Wyman Report also argues that PHMSA and FRA did not 
address potential problems with buffer cars for HHFUTs. In the RIA, p. 
238, we address the costs associated with equipping the buffer cars 
with wrap around cables. This was considered the lowest cost option. 
PHMSA and FRA recognized that there are other options, as the Oliver 
Wyman Report details. The Oliver Wyman Report option of equipping a 
fleet of buffer cars with ECP brakes is significantly more expensive 
than the reasonable alternative we provided. If railroads chose to use 
a permanent fleet of ECP-equipped buffer cars, that would be a business 
decision, not a regulatory requirement.
    Finally, AAR contends that the ECP brake requirements in the final 
rule may delay implementation of PTC. Railroads are currently required 
by statute to implement PTC by the end of the year 2015. The ECP brake 
requirement for HHFUTs does not become effective until January 1, 2021, 
or May 1, 2023, depending on the commodity being transported. This 
means that railroads should have PTC implemented well in advance of the 
ECP brake requirement. Thus, we do not foresee a situation where the 
ECP brake requirements will delay PTC implementation.

7. Reliance on the Sharma Report

    AAR contends that PHMSA and FRA erred in using the new Sharma & 
Associates report (Sharma Report) to calculate the benefits due to the 
reduced probability of punctures on HHFUTs operating in ECP brake mode. 
It argues that the assumptions used in the Sharma Report are flawed in 
numerous ways. AAR provides the ``Summary Report Review of Analysis 
Supporting `Hazardous Materials: Enhanced Tank Car Standards and 
Operational Controls for High-Hazard Flammable Trains' Final Rule'' 
(TTCI Summary Report), which TTCI personnel prepared, as a supporting 
document. We disagree with AAR's contentions. For the reasons discussed 
below, PHMSA and FRA find that AAR's arguments do not support 
eliminating the ECP brake requirement in the final rule.
    Statistical approach: The statistical approach used in the Sharma 
Report to analyze the potential benefits of ECP brakes in the final RIA 
is not flawed. The confidence band suggested by the TTCI Summary Report 
is applicable to situations where a minimum value is being specified. 
The confidence band is needed to understand the range of values and the 
potential for values to fall below the specified value. For example, 
when specifying tensile strength of a material (based on average test 
values) it is important to know the potential variability, in the form 
of a confidence band, of the strength. In the case of the RIA, PHMSA 
and FRA's analysis determined the effectiveness of ECP brakes based on 
the average of the calculated number of punctures. Implicit in a 
comparison of averages is that in some cases the effectiveness will be 
less than the average and in others greater than the average.

[[Page 71968]]

    Consider the notion of ``test'' versus ``simulation.'' As an 
example, if one were conducting a physical test to determine the effect 
of a change in thickness on the impact energy of a specimen, one might 
have to conduct several tests and then apply statistical techniques to 
the measured values to arrive at the results. On the other hand, if one 
were using a finite element simulation to measure the same condition, 
one set of simulations would be sufficient. In fact, every simulation 
with the same set of input parameters would produce the same output. 
The variability that is associated with ``testing'' is not there.
    Another problem with using the conventional statistical methods, 
such as confidence intervals and margins of error, is that the cases 
PHMSA is ``sampling'' are not random. In fact, they were deliberately 
chosen to represent a range of input conditions. Additionally, the 
methods suggested in the TTCI Summary Report would not be appropriate 
because there is no variance in the ``measured'' results of our trials. 
Each trial (a simulation with a specific set of inputs) always produces 
the exact same set of outputs. Hence, our ``variation'' is not produced 
by the random variation of factors beyond our control; it is 
essentially the result of specific input conditions, though the outputs 
are not predictable from the outset.
    The Sharma Report considers all different combinations of initial 
speed and number of cars behind the point of derailment (POD). The 
sample size for the conventional and ECP brake systems consists of 162 
cases (separate derailment simulations) each. For the two-way EOT brake 
configuration, 90 cases were considered. As indicated above, these 
cases were used to simulate average derailment conditions using each 
brake configuration. The methodology is not trying to predict the 
outcome of a specific derailment within some margin of error, nor is it 
being used to assure that all outcomes meet some minimum requirement 
within some confidence interval (such as how a set of tensile tests 
would be used to establish a design stress for a material). For these 
reasons, the TTCI Summary Report analogy of an election is, again, 
flawed, as the system is not trying to predict the results of one 
particular event.
    Inconsistent values in tables: The TTCI Summary Report also points 
to number of inconsistencies in the values reported for the most likely 
number of punctures and the analyses in which they are used throughout 
the RIA. PHMSA recognizes that there was a transcription error in Table 
BR4 of the RIA, see p. 210, and corrects those errors here. Table BR4 
should read as follows:

              Table BR4--Risk Improvement Due to Braking, With POD Distributed Throughout the Train
----------------------------------------------------------------------------------------------------------------
                                                          Most-Likely number of punctures             Percent
                                                 ------------------------------------------------   improvement
                                                                                                    due to ECP
            Tank type               Speed, mph     Conventional     Two-way EOT                     brakes only
                                                      brakes        (DP: lead +     ECP Brakes      compared to
                                                                       rear)                        two-way EOT
----------------------------------------------------------------------------------------------------------------
7/16'' TC128, 11 gauge jacket,                30            3.75            3.25            2.91            10.5
 \1/2\'' full[hyphen]height head
 shield.........................
                                              40            6.80            6.14            4.64            24.4
                                              50            9.31            7.86            7.23             8.0
9/16'' TC128, 11 gauge jacket,                30            3.03            2.66            2.12            20.3
 \1/2\'' full[hyphen]height head
 shield.........................
                                              40            5.64            5.09            3.78            25.7
                                              50            7.82            6.57            6.01             8.5
----------------------------------------------------------------------------------------------------------------

The TTCI Summary Report suggested that the effectiveness rate 
calculated in Table BR7 would change as a result of the transcription 
error in Table BR4. However, this is incorrect because Table BR7 
calculates the effectiveness of ECP brakes after the effectiveness of 
the tank car upgrades is calculated. In other words, the ECP brake 
effectiveness values reported in Table BR7 reflect the effectiveness of 
ECP brakes in derailments involving DOT-117 and DOT-117R specification 
tank cars. As a result, Table BR7 continues to read as follows:

        Table BR7--Effectiveness Rate of ECP Brakes Weighted by Volume of Product Spilled in a Derailment
----------------------------------------------------------------------------------------------------------------
                                                                                        ECP
                                     Number of      Total spill   Share of total   effectiveness    Cumulative
                                     incidents        volume          volume        rate at 30,    effectiveness
                                                                                    40, 50 mph       rate  (%)
----------------------------------------------------------------------------------------------------------------
Below 34 mph....................              33         798,433            22.8           20.10             4.6
35-44 mph.......................               8       1,488,350            49.2           25.80            12.7
45 mph and above................               5         980,180              28            8.60             2.4
                                 -------------------------------------------------------------------------------
    Total.......................              46       3,499,656             100  ..............            19.7
----------------------------------------------------------------------------------------------------------------

    Modeling used in the final rule: The TTCI Summary Report contends 
the modeling and analytical approach used in the final rule is 
sufficiently different from the modeling and analytical approach used 
in the NPRM, suggesting that reliance on the final Sharma report for 
the final rule warranted additional notice and comment. Yet AAR 
discussed this very work in detail in its comments to the NPRM review. 
AAR's comments to the NPRM appended a 13-page critique of the LS-Dyna 
methodology authored by Dr. Steven Kirkpatrick of Applied Research 
Associates. In addition, the main body of AAR's comments to the NPRM 
contained several references to both Dr. Kirkpatrick's critique as well 
as Sharma's reliance on the LS-Dyna work. In developing the final rule, 
we refined the modeling and analytical approach used in the NPRM to 
account for and take into consideration many elements

[[Page 71969]]

of AAR's comments and Dr. Kirkpatrick's critique. For example, the 
modeling conducted during preparation of the NPRM was limited to 
modeling the results of a derailment of a 100-car train, assuming the 
derailment occurred at the first car behind a train's locomotive. In 
response to AAR's comments and Dr. Kirkpatrick's critique, in 
developing the final rule, we conducted additional modeling again using 
a 100-car train model, but this time to more accurately represent real 
life derailment scenarios, we modeled and analyzed the effects of cars 
derailing throughout the train consist (i.e., assuming the 20th, 50th, 
and 80th cars in a consist derail), not just the first car. Similarly, 
to address AAR and Dr. Kirkpatrick's concerns regarding the impactor 
size used in the modeling, we conducted a sensitivity analysis using 
both smaller and larger-sized impactors than used in the NPRM modeling. 
This sensitivity analysis demonstrated that impactor size affected the 
number of tank cars punctured and the velocity at which those cars 
punctured only negligibly.
    One element of the analysis that was introduced for the final rule 
was the mechanism for calculating overall effectiveness based on the 
distribution of PODs along the train. This addition to the analysis was 
in response to the critique of the technique by AAR/TTCI in comments to 
the NPRM suggesting that this distribution be accounted for in the 
analysis. This element was added to the analysis in the final rule 
stage in response to AAR's comments critiquing the NPRM.
    The Sharma Report model was validated in both the number of cars 
derailed and number of punctures in real life derailments such as 
Aliceville. Indeed, the rear car distance traveled in one set of Dyna 
simulations matched the Aliceville locomotive's event recorder data 
with a difference of less than four percent. This indicates that, in 
spite of all the potential variations, the derailment simulations 
closely matched what actually occurred in the Aliceville accident as 
evidenced by the event recorder download. See RIA, p. 214.
    On the issue of impactor size distribution, the TTCI Summary Report 
notes that ``the distribution of impactor size was very similar.'' 
PHMSA and FRA disagree. The average impactor size variation between the 
three distributions was 58 percent. We would not characterize that as 
``similar.'' Past work on tank car puncture resistance--including 
substantial work conducted by Dr. Kirkpatrick (and funded by the 
industry/AAR)--shows that the effect of a 58 percent variation in 
impactor size is quite significant.
    Furthermore, the review of Sharma's modeling in AAR's comment to 
the NPRM suggested that the distribution presented above might be 
skewed towards smaller impactors. However, as noted by Dr. Kirkpatrick 
in his earlier work, when the combinations of complex impactor shapes 
(such as couplers and broken rail) and off-axis impactor orientations 
are considered, many objects will have the puncture potential of an 
impactor with a characteristic size that is less than 6 inches. See 
``Detailed Puncture Analysis of Tank Cars: Analyses of Different 
Impactor Threats and Impact Conditions,'' Kirkpatrick, SW., DOT/FRA/
ORD-13/17, March 2013.\29\ The impactor distributions considered in 
PHMSA and FRA's analysis in the final rule are consistent with this 
notion.
---------------------------------------------------------------------------

    \29\ https://www.fra.dot.gov/eLib/details/L04420.
---------------------------------------------------------------------------

    Need for additional study: The TTCI Summary Report contends that 
the modeling and analysis utilize a number of assumptions and 
simplifications, the effects of which need further study. AAR made a 
similar comment in its comments on the NPRM, and the extended analysis 
in the final rule addressed these issues by studying/reviewing several 
additional elements of the methodology. PHMSA and FRA addressed several 
prior criticisms submitted in connection with the NPRM, including:

 The effect of varying the POD along the length of the train
 The effect of alternate train lengths
 The effect of varying internal pressures
 The effect of varying impactor sizing, etc.

    In addition, the RIA for the final rule includes justification for 
many of the assumptions made in the analysis, including the friction 
coefficients used, the coupler model, and the lateral derailment load 
values. See RIA, pp. 63-72, 207-212, 213-216, and 246-247. In other 
words, this is similar to AAR's earlier critique on the topic and we 
addressed most elements of that critique in the RIA.
    Derailment location: The TTCI Summary report states that ``the 
probability distribution for derailment location within the train does 
not appear to take train length into account,'' thus exaggerating the 
benefit of operating in ECP brake mode. The Sharma Report estimated the 
distribution of PODs using the best available data, which included all 
reasonable derailments. Any ``exaggeration'' of benefits towards ECP 
brakes due to the PODs being skewed towards the front of the train 
would tend to exaggerate the benefit of DP trains even more. Thus, even 
if the distribution was skewed towards the front, the Sharma Report 
does not exaggerate the relative benefits of ECP brakes compared to DP 
trains.
    Use of derailment data from all train types: The TTCI Summary 
Report asserts that the analysis performed on the probability of 
derailments occurring throughout the train seems to use data from all 
train types to derive a distribution of derailment locations. This is 
true. The locations of train derailments are more uniformly spread 
under mixed traffic conditions compared to unit trains. This tends to 
push the average location of POD further towards the rear of the train. 
In fact, the POD, as a percent of the length of train for unit trains, 
is about half that of freight trains (21% compared to 41%). As a 
result, PHMSA and FRA expect that the use of derailment data of all 
train types (as opposed to unit trains only), results in a prediction 
of lower benefits for ECP braking. Using PODs from unit trains only 
would have led to ECP brake benefits being higher. We considered this 
during development of the final rule and determined our assumptions 
were conservative.
    Analyzing the number of cars trailing POD: The TTCI Summary Report 
notes that ``[t]he critical parameter is not the first car in the train 
that was derailed, but rather the number of cars trailing the first car 
derailed.'' PHMSA and FRA agree. This is exactly how all the LS-Dyna 
modeling was done. We modeled 100 cars, 80 cars, 50 cars, and 20 cars 
behind the POD, and interpolated the results for the other cases.
    Net braking ratios: The TTCI Summary report notes that PHMSA and 
FRA make multiple references in the RIA to the use of higher net 
braking ratios (NBR) with ECP brakes. While the RIA does make reference 
to a higher NBR, the LS-Dyna simulations were all performed with the 
same braking ratio. The results presented in the RIA are based on ECP 
brakes with 12 percent NBR, the same used for the other brake systems 
considered. See RIA, pp. 324. So, the benefits attributed to ECP brakes 
regarding the reduced number of cars punctured do not include any 
contribution from increased braking ratio.
    However, it is important to note that even though the NBR allowed 
for the different brake systems are theoretically the same, the use of 
ECP brakes does, as a practical matter, allow a train to better 
approach the high end of the limit. This

[[Page 71970]]

is because features inherent to ECP brake design allow a more uniform 
and consistent effective brake cylinder pressure to be maintained as 
compared to conventional pneumatic brakes.\30\ Closed loop feedback 
control of the cylinder pressure is an inherently more reliable method 
of obtaining the commanded pressure than the open loop, volume 
displacement method used in conventional brake systems. Furthermore, 
trains equipped with ECP brakes can detect and report low brake 
cylinder pressure malfunctions on individual cars, which can then be 
addressed. In contrast, a malfunctioning pneumatic control valve 
generating lower than commanded pressure may go unnoticed indefinitely. 
Additionally, the overall braking ratio of a train equipped with ECP 
brakes can be much closer to the allowable upper limit than a 
conventionally-braked train because the cars in an ECP-equipped train 
are all braking at the same effective brake ratio (to the extent that 
the physical capacity of their individual construction allows). The 
brake ratios of cars in a conventionally-braked train can vary over the 
allowable range (8.5 percent to 14 percent loaded NBR), so the train 
average brake ratio is limited by this variation already built into the 
existing fleet. For these reasons, PHMSA and FRA expect that DOT-117/
DOT-117R cars (with ECP brakes) can be built (or converted from 
existing cars) with an NBR close to 14 percent and operated (in ECP 
trains) with a train average brake ratio also very close to 14 percent. 
In contrast, the train average brake ratio of a train with conventional 
air brakes is likely to be significantly lower, even if some of the 
cars have close to a 14 percent NBR.
---------------------------------------------------------------------------

    \30\ The NTSB's recent study notes that ECP brake systems can 
provide the same target NBR for each car in the consist and apply a 
consistent braking force to each car nearly simultaneously, which 
allows all cars to decelerate at a similar rate. This minimizes run-
in forces, and therefore reduces the likelihood of a wheel 
derailment and the sliding of braked wheels. All of these factors 
potentially allow ECP brakes to operate nearer to AAR's upper limit 
for NBR. See ``Train Braking Simulation Study,'' pp. 10-11.
---------------------------------------------------------------------------

    Control of unit trains: The TTCI report takes issue with a 
statement in the RIA to the final rule concerning unit train operations 
being more difficult to control than other types of trains. The 
excerpts, and TTCI's comments, are qualitative characterizations of 
unit train operations. However, the excerpt from the RIA did not 
influence the objective analysis we performed in support of this rule.
    Peak ECP brake benefits: TTCI takes issue with the modeling that 
shows ECP brake effectiveness peaking at 40 mph. The TTCI Summary 
reports states, '' [i]ntuitively, it would seem that the benefit of ECP 
brakes would either increase or decrease as speed increases.'' 
Derailment performance is the result of several physical phenomena. 
Consider a derailment that happens at a very slow speed. Given the 
physical strength of the tanks and the energy levels involved, there 
would be no punctures for either a conventionally braked train or an 
ECP-equipped train. As a result, there would be no perceived derailment 
benefit to ECP brakes at very low speeds when the benefit is measured 
by puncture probability. As the speeds increase, and one starts seeing 
multiple punctures as a result of the derailment, the benefits of ECP 
braking become more apparent. However, at higher speeds, the percentage 
of braking time spent in the ``propagation mode'' (where ECP brakes 
offer the most benefit) is a smaller portion of the overall time spent 
braking. Consequently, the relative benefits of ECP braking start to 
diminish at speeds over 40 mph.
    Derailment rates: The derailment rate we used was based on the most 
recent five complete years of data: 2009-2013. Using the most recent 
years to construct this rate largely incorporates the factor of 10 
decrease in the observed derailment rate cited by TTCI into our 
estimate of future derailments. It is not realistic to expect tenfold 
decreases in the derailment rate to continue indefinitely. In our 
judgement, the rate decrease may have bottomed out, so we used a 
constant rate based on the most recent data, which reduces the rate to 
the fewest derailments per carload observed in the available data, to 
forecast future derailments.
    Criticism of Train Operation and Energy Simulator (TOES) modeling: 
The TTCI Summary Report attempts to respond to perceived criticism of 
the TOES modeling TTCI used to evaluate emergency braking scenarios 
involving ECP brakes. As an example, the TTCI Summary Report takes 
issue with the statement in the RIA that TTCI's modeling ``only 
captures a part of the benefit of ECP.'' See RIA, p. 70. TTCI contends 
that

[t]his statement implies that the ECP braking system has an effect 
on other aspects of the derailment dynamics that were included in 
the DOT analysis, such as impactor size distributions and tank car 
puncture resistance. In fact, the amount of energy is the only thing 
that ECP brakes (or any brake system, for that matter) can directly 
affect.

    The TTCI Summary Report's contention, however, ignores the reduced 
coupler force benefits of ECP braking. The lower coupler forces 
inherent to an ECP brake application reduce the chaos/energy input into 
the simulation. The TTCI Summary Report did not consider or even 
acknowledge the benefits associated with this aspect of ECP braking.
    The TTCI Summary Report also takes issue with statements in the RIA 
discussing PHMSA and FRA's conclusion that AAR's predictions of two-way 
EOT or DP performance are overestimated. See RIA, pp. 68 and 70. This 
is because AAR's comments, which rely on a TTCI Summary Report, expect 
that DP and two-way EOT devices offer a benefit if the derailment 
occurs in the rear half of the train. This is incorrect. There is no 
benefit to DP if the POD is in the second half of the train. Under 
derailment conditions (where trains break in two), DP offers no benefit 
over conventional brakes. By keeping the train together in their 
simulations, AAR attributed benefits to DP and two-way EOT devices 
where none exist. Indeed, this issue is addressed in NTSB's Train Brake 
Simulation Study, published on July 20, 2015. See p. 12. While this 
newly issued study was not used in the development of the final rule, 
it is informative on ECP brake performance in emergency braking 
compared to DP emergency braking. Indeed, the NTSB specifically looked 
at derailments with air hose separation and train separation occurring 
in the second half of the train and found ``there is no benefit to DP 
if the emergency is initiated in the second half of the train.'' \31\ 
Thus, the NTSB study determined that trains operating in ECP brake mode 
``[are] not substantially affected by the location of the emergency 
initiation.''
---------------------------------------------------------------------------

    \31\ NTSB also notes that this scenario is more consistent with 
recent tank car derailments than a derailment where there is no 
train separation.
---------------------------------------------------------------------------

    Finally, The TTCI Summary Report argues that ``there is no analysis 
produced that shows that reducing the number of cars in the Aliceville 
derailment from 26 to 24.5 (or even 24) cars would have resulted in a 
significant--or any--benefit in terms of reduced severity of the 
accident.'' We disagree. The reduction of the number of cars punctured 
is fundamental to improving tank car safety. All the comments from AAR 
and the industry, whether it is adding head shields, jackets, or 
thickness, have aimed exactly for this result: reducing the number of 
cars punctured. One way to reduce the number of cars punctured is to 
stop them from entering the pile-up in the first place. By TTCI's own 
analysis, which is skewed towards overestimating the benefits of DP, 
ECP braking provides an eight percent reduction in the

[[Page 71971]]

number of cars entering the pile-up, and a further twelve percent 
reduction in kinetic energy, a combined benefit of about 20 percent due 
to ECP braking. If one then combines this benefit with the structural 
benefit such as jackets and head shields, one starts seeing cumulative 
significant reductions in damage severity, which is the intent of the 
final rule.

8. Integration of ECP Brakes With Positive Train Control (PTC)

    Relying on the Oliver Wyman Report, AAR asserts that requiring ECP 
brakes on HHFUTs will present integration challenges with PTC for two 
reasons. First, implementation of the ECP brake requirement will 
require new braking algorithms. Second, there will be difficulties 
associated with installing two complex technologies on locomotives 
simultaneously. PHMSA and FRA addressed both of these arguments in the 
final rule and do not find either argument compelling.
    The Oliver Wyman Report states that braking algorithms will need to 
be modified and that there will be great difficulty and expense 
creating algorithms for PTC for ECP trains. PHMSA and FRA previously 
addressed this argument in the preamble to the final rule. See 80 FR 
26702-26703. We recognize that PTC coupled with ECP brakes may result 
in significant business benefits--such as increased fluidity and higher 
throughputs--but there is simply no regulatory requirement directing 
that ECP brake systems be integrated with PTC. Further, the Oliver 
Wyman Report assertion that integration is necessary for safety reasons 
is not supported by data or analysis. PTC operates on a block system 
with forced braking to ensure that a single block is not occupied by 
two trains at once. In other words, if one train is occupying the 
block, then a trailing train cannot enter the block. An algorithm based 
on a conventionally braked train will provide a conservative cushion 
for the stopping distance for a train operating in ECP brake mode, but 
it does not change the fact that under PTC only one train will occupy 
the block at a time. Operations during this time could be used to 
safely collect the data needed to develop the algorithm to apply to 
trains operating in ECP brake mode. Of course, once developed, the 
benefits of shorter stopping distances can then be safely integrated 
into the system, but such actions would be voluntary business decisions 
by a railroad based on a belief that integration between ECP brakes and 
PTC will provide efficiencies not otherwise available.
    The Oliver Wyman Report further contends that there will be costs 
associated with placing locomotives in the shop to install ECP brake 
systems in addition to PTC programming. PHMSA and FRA accounted for the 
costs of installing ECP brakes on locomotives on page 219-220 of the 
RIA, assigning a cost of $40,000 per locomotive.\32\ This is for new 
locomotives, because PHMSA and FRA expect that the allotment of 
locomotives needed to operate HHFUTs will come from new builds. As a 
result, shop time likely will be reserved for regular inspections 
(e.g., 92-day and 368-day inspections), at which time the railroads may 
take the opportunity, to the extent necessary, to focus on PTC 
installation issues.
---------------------------------------------------------------------------

    \32\ PHMSA notes that its $40,000 estimate is consistent with a 
recent TTCI ECP Brakes presentation. In that presentation, TTCI 
estimated the cost of equipping a locomotive with ECP brakes at 
$40,000 based on a 2011 study. That is less than half the cost 
estimated in the Oliver Wyman Report. PHMSA recognizes that costs 
can change over time, but the presentation is instructive on the 
issue of costs.
---------------------------------------------------------------------------

    The Oliver Wyman Report attempts to buttress its argument on costs 
by stating that there will be hidden costs due to the complexity of 
integrating PTC and ECP brakes on the same locomotive. Such comments 
are purely anecdotal and not supported by any data or analysis. The 
purported costs are unquantified in the Oliver Wyman Report and appear 
to be based solely on the comments of an unnamed UP mechanical officer. 
PHMSA notes that UP has minimal experience with ECP brakes, using the 
technology for about eight months over six years ago.
    Finally, PHMSA and FRA note that the Oliver Wyman Report states ECP 
braking is not a mature technology and, therefore, ``will increase 
operational disruption and failures that compromise safety.'' PHMSA and 
FRA addressed contentions about technological readiness in the RIA at 
page 222-225. It is unclear why the Oliver Wyman Report insists on 
characterizing ECP brake technology as ``immature.'' Such statements 
are unsupported and, indeed, contradicted by various other sources. In 
the RIA, we cited an independent report calling ECP a ``mature'' 
technology. To place the quote in context, PHMSA and FRA now cite to 
the entire paragraph:

    Application of ECP-brakes in freight trains is a technology that 
can reduce derailment frequency. The technology for ECP-brakes is 
mature and such brakes are applied in passenger trains and in block 
trains for freight in Spoornet, South Africa and by Burlington 
Northern Santa Fe (BNSF) and Norfolk Southern (NS) in the USA. ECP-
brakes in freight trains would reduce the longitudinal forces in the 
train during braking and brake release, and in particular for low 
speed braking it would significantly reduce the risk of 
derailment.\33\

    \33\ See ``Assessment of freight train derailment risk reduction 
measures: A4--New Technologies and Approaches,'''', Report for 
European Railway Agency, Report No. BA 000777/05, April 19, 2011, at 
9, http://www.era.europa.eu/Document-Register/Documents/DNV%20Study%20-%20Final%20A4%20Report%20-%2020110419%20-%20Public.pdf.
---------------------------------------------------------------------------

    PHMSA and FRA recognize that ECP brakes are not in widespread use 
in the U.S., but that is not a proxy for maturity of the technology. 
AAR first began developing interchange standards for ECP brake systems 
in 1993. As noted in the RIA, North American railroads have used ECP 
brakes in some form since at least 1998. Australian railroads began 
widespread use of ECP brakes in 2005. The technology has grown and 
improved over that time as the industry has worked to resolve 
``crosstalk'' and ``interoperability'' issues. Even TTCI, in its recent 
ECP Brakes presentation, notes that AAR ``agrees that ECP is a mature 
technology.'' Of course, this is not to suggest that no issues will 
arise with ECP brakes as railroads implement the braking system on 
HHFUTs. However, PHMSA and FRA account for such issues in the RIA, 
recognizing there will need to be significant investment in training 
and to ensure sufficient equipment is on hand to address normal 
operational issues. Therefore the accumulation of business benefits was 
assumed to be demonstrated one year after ECP trains are put into 
service, recognizing that this change in operating culture will take 
time. See RIA pg. 218.

9. Impact on Small Business

    AAR contends that the final rule fails to address or mitigate the 
harmful impact on small business, including Class III railroads, 
commuter railroads, smaller contractors, and hazardous materials 
shippers. The basis for this contention is that federal law requires 
PHMSA and FRA to assess the impact of the final rule on small business 
and consider less burdensome alternatives. We did assess the impact of 
the final rule on small business and considered less burdensome 
alternatives to develop the final rule.
    PHMSA and FRA conducted a Regulatory Flexibility Analysis (RFA), 
which looked at the costs associated with small businesses for the 
entire final rule. See 80 FR 26725-26735. The RFA included a focused 
analysis of braking requirements. See 80 FR 26732-26733. As stated in 
the RFA, about 22 percent of short lines (160 of 738 small railroads) 
transport flammable liquids in

[[Page 71972]]

HHFTs and most small railroads the final rule affects do not operate at 
speeds higher than the restricted speeds. Indeed, before we issued the 
NPRM and the final rule, the American Short Line and Regional Railroad 
Association (ASLRRA) recommended to their members that they voluntarily 
operate unit trains of crude oil at a top speed of no more than 25 mph 
on all routes. ASLRRA issued this letter in response to the Secretary's 
Call to Action on February 12, 2014, and it has been added to the 
docket.
    PHMSA and FRA did acknowledge that some small railroads may be 
affected by the ECP brake mandate because they accept unit trains of 
crude oil (and other trains that trigger the mandate) from Class I 
railroads. However, we accounted for this impact in two ways in the 
final rule. First, as discussed on page 220 of the RIA, PHMSA and FRA 
assumed an overlay ECP brake system. This will allow the tank cars to 
work both with ECP brakes and conventional air brakes. While the 
initial cost to the car owner is slightly higher than a stand-alone ECP 
brake system, we expect that the added flexibility of an overlay system 
makes it the most likely alternative to be chosen by car owners. Aa a 
result, any small railroad that accepts a unit train of crude oil would 
be able to use their own power (locomotives) because the trains would 
travel at a maximum speed of 30 mph and would be able to use 
conventional air brakes. Second, PHMSA and FRA also anticipate that 
Class I and smaller railroads will make use of alternatives, such as 
trackage rights or interchange agreements, which will allow smaller 
railroads to avoid equipping their locomotives with ECP brakes. Under 
this type of scenario, Class I railroad crews operating an HHFUT in ECP 
brake mode could continue operating over the smaller railroad's line, 
and the HHFUT would pass through the interchange with the train intact.
    AAR also raised the concern that short line railroads would be 
assuming the responsibility for troubleshooting ECP brake-related 
problems by accepting HHFUTs from Class I railroads. AAR states that 
this type of troubleshooting requires expertise beyond that of most 
small railroads because they do not have the resources to hire trained 
electronic engineers with the necessary expertise to identify the 
source of ECP system failures. PHMSA and FRA addressed the need for 
training on small railroads in the RIA on page 220. Because the final 
rule includes the less burdensome alternatives discussed above, PHMSA 
and FRA believe that there are effective methods for avoiding the type 
of training described.
    Finally, AAR states that where an interchange agreement requires 
the small railroads to use existing power, there would be an enormous 
expense for the small railroad because that railroad would need to 
equip locomotives with ECP brakes for handling interchanged unit 
trains. AAR asserts that this is a particularly large problem because 
most small railroads have older locomotives that are not processor-
based and that lack the required space to install an ECP brake system. 
It estimates it would cost approximately $250,000 to equip a non-
processor based locomotive with ECP brakes. For the reasons discussed 
above, PHMSA and FRA do not anticipate that older locomotives would 
need to be equipped.

10. Conflict With the Statute Requiring Two-Way EOT Devices

    AAR argues that the ECP brake requirement in the final rule is 
prohibited by 49 U.S.C. 20141. This statute provides that ``[t]he 
Secretary shall require two-way end-of-train devices (or devices able 
to perform the same function) on road trains, except locals, road 
switchers, or work trains, to enable the initiation of emergency 
braking from the rear of a train.'' The statute further requires the 
Secretary to establish performance based regulations to govern the use 
of two-way EOT devices and allows the Secretary ``to allow for the use 
of alternative technologies that meet the same basic performance 
requirements.'' See 49 U.S.C. 20141(b)(2). AAR contends that PHMSA and 
FRA's ECP braking requirement is defective because it directs freight 
railroads to use ECP brake systems instead of two-way EOT devices. This 
argument is without merit because any HHFUT operating in ECP brake mode 
must comply with the ECP-EOT requirements in part 232, subpart G. See 
Sec.  174.310(a)(3); 80 FR 26748.
    FRA initially issued regulations governing the use of conventional 
two-way EOT devices in 1997. See 62 FR 278 (Jan. 2, 1997). These 
regulations are in part 232, subpart E, and are targeted at trains with 
conventional air brakes. Subpart E requires a conventionally braked 
train to have a two-way EOT device or an alternative technology unless 
it meets one of the explicit exceptions identified in Sec.  232.407(e). 
For example, under Sec.  232.407(e), a conventionally braked train is 
not required to operate with a two-way EOT device if a locomotive or 
locomotive consist is located at the rear of the train that is capable 
of making an emergency brake from the rear--as would occur with a lined 
and operative DP locomotive located at the rear of the train--or when 
the train does not operate over heavy grade and the speed of the train 
is limited to 30 mph.\34\
---------------------------------------------------------------------------

    \34\ See 49 CFR 232.407(e), identifying additional exceptions to 
the two-way EOT requirement for trains with conventional air brakes.
---------------------------------------------------------------------------

    AAR appears to be under the misconception that the final rule fails 
to comply with 49 U.S.C. 20141 because it foregoes the requirements in 
part 232, subpart E, for HHFUTs operating in excess of 30 mph. However, 
the final rule pertaining to ECP brakes does comply with 49 U.S.C. 
20141. It mandates compliance with part 232, subpart G, for any HHFUT 
operating in ECP brake mode. Indeed, subpart G contains EOT device 
requirements that are specific to trains operating in ECP brake mode. 
See Sec.  232.613.
    The ECP-EOT device requirements in section 232.613 were promulgated 
as part of FRA's ECP regulations in 2008. See 73 FR 60512 (Oct. 16, 
2008). These regulations were issued, in part, under 49 U.S.C. 
20141.\35\ See 73 FR at 61552. While ECP-EOT devices perform many of 
the same functions as conventional two-way EOT devices, FRA recognized 
that ECP-EOT devices also have different features than those required 
for trains operated using conventional air brakes:
---------------------------------------------------------------------------

    \35\ It is worth noting that FRA's ECP regulations were also 
issued under 49 U.S.C. 20306. This provision allows the Secretary to 
waive the statutory provisions in 49 U.S.C. ch. 203 ``when those 
requirements preclude the development or implementation of more 
efficient railroad transportation equipment or other transportation 
innovations under existing law.'' FRA held public hearings on 
October 4, 2007, and October 19, 2007, which included comments and 
discussion about ECP-EOT devices. Based on the comments received 
during these public hearings and a related public hearing on January 
16, 2007, FRA determined it was appropriate to exercise the 
Secretary's authority under 49 U.S.C. 20306 to promulgate its ECP 
regulations.

    In addition to serving as the final node on the ECP brake 
system's train line cable termination circuit and as the system's 
`heart beat' monitoring and confirming train, brake pipe, power 
supply line, and digital communications cable continuity, the ECP-
EOT device transmits to the [head end unit or] HEU a status message 
that includes the brake pipe pressure, the train line cable's 
---------------------------------------------------------------------------
voltage, and the ECP-EOT device's battery power level.

    See 73 FR 61545. Although FRA noted that the ECP-EOT device 
operates differently than a conventional two-way EOT device, the ECP-
EOT device does ensure that an automatic emergency brake application 
occurs in the event of a communication breakdown:

    Since the ECP-EOT device--unlike a conventional EOT device--will 
communicate

[[Page 71973]]

with the HEU exclusively through the digital communications cable 
and not via a radio signal, it does not need to perform the function 
of venting the brake pipe to atmospheric pressure to engage an 
emergency brake application. However, ECP-EOT devices do verify the 
integrity of the train line cable and provide a means of monitoring 
the brake pipe pressure and gradient, providing the basis for an 
automatic--rather than engineer commanded--response if the system is 
not adequately charged. In the case of ECP brakes, the brake pipe 
becomes a redundant--rather than primary--path for sending emergency 
brake application commands. Under certain communication break downs 
between the ECP-EOT device, the HEU, and any number of CCDs, the 
system will self-initiate an emergency brake application.

    Id. Section 232.613 requires the ECP-EOT device to send a beacon 
every second from the rear unit of the train to the controlling 
locomotive. The EOT beacon works as a kind of fail-safe. It functions 
virtually identically to the radio signal of a conventional two-way EOT 
device with one important exception: if the EOT Beacon is lost for six 
seconds on a train operated in ECP brake mode, then the train goes into 
penalty brake application, which will brake all cars in the train 
simultaneously. In contrast, a two-way EOT device may lose 
communication for up to 16 minutes, 30 seconds, at which point the 
train speed must be reduced to 30 mph.
    Based on these factors, PHMSA and FRA conclude that the ECP brake 
component of the final rule complies with the requirements of 49 U.S.C. 
20141. AAR should be aware that HHFUTs operating in ECP brake mode must 
have an ECP-EOT or an appropriate alternative, such as an ECP-equipped 
locomotive, at the rear of the train. This requirement is consistent 
with FRA's ECP brake regulations at part 232, subpart G.
    For the above reasons, AAR's appeal to eliminate the new ECP brake 
standard of the final rule is denied.

III. Summary

    PHMSA denies the appellants' (DGAC, ACC, AAR, AFPM, and Treaty 
Tribes) appeals on Scope of Rulemaking, Tribal Impacts and 
Consultation, Retrofit Timeline and Tank Car Reporting Requirements, 
Thermal Protection for Tank Cars, and Advanced Brake Signal Propagation 
Systems. We conclude we reasonably determined how to apply new 
regulations and provided the regulatory analysis to support those 
decisions. While we understand that shippers, carriers, and tank car 
manufacturers for Class 3 flammable liquids will face new challenges in 
the wake of these regulations, we maintain that they are capable of 
complying with the final rule.
    We also deny DGAC's appeal to eliminate or provide further guidance 
for the Sampling and Testing program. The sampling and testing program 
is reasonable, justified, necessary, and clear as written. 
Additionally, we disagree that a delayed compliance date of March 31, 
2016 should be provided for implementation of the requirements in Sec.  
173.41 for shippers to implement changes for training and 
documentation.
    With respect to Information Sharing/Notification, PHMSA announced 
in a May 28, 2015, notice that it would extend the Emergency Order 
applicable to the topic of Information Sharing/Notification 
indefinitely, while it considered options for codifying the disclosure 
requirement permanently. Furthermore, on July 22, 2015, FRA issued a 
public letter instructing railroads transporting crude oil that they 
must continue to notify SERCs of the expected movement of Bakken crude 
oil trains through individual States. While the treaty tribes and other 
stakeholders will have the opportunity to comment on these future 
regulatory proposals in the course of that rulemaking proceeding, PHMSA 
will continue to seek opportunities to reach out to the tribes and 
consultation from tribal leaders.

    Issued in Washington, DC on November 5, 2015.
Marie Therese Dominguez,
Administrator, Pipeline and Hazardous Materials Safety Administration.
[FR Doc. 2015-28774 Filed 11-17-15; 8:45 am]
 BILLING CODE 4910-60-P


