Marine Highway Transport of Toxic Inhalation Hazard Materials (2012)

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1 Marine Highway Transport of Toxic Inhalation Hazard Materials In the first phase of this research effort, NCFRP Project 17, “North American Marine Highway Operations,” the authors noted the need to further research the possibility of diverting heavy and hazardous shipments to water. From a strictly environmental and pub- lic safety viewpoint, it would appear that diverting heavy and hazardous shipments to water would be desirable. After reviewing the research recommendations, the project panel appointed by the Trans- portation Research Board determined that this additional research should be undertaken as Phase 2 of the initial study. Specifically, the objective of this second phase of research was to develop a business case for transporting a larger share of chlorine and anhydrous ammonia shipments via the marine highway system than is currently shipped via water. (“Anhydrous” means “without water.”) Both of these products are classified as toxic inhalation hazard (TIH) materials. The business case, at a minimum, would need to consider the following issues: market definition; return on investment; obstacles; impacts on other modes and their likely reac- tions; labor issues; environmental concerns and benefits directly related to the transport of the two commodities; risks; regulatory, security, infrastructure, and vessel requirements; transportation congestion impacts; and lessons learned from international experience (e.g., Marco Polo/Smart Rivers). The underlying question driving this research effort was the following: If the market favors marine transportation, why isn’t marine transportation already expanding? In attempting to answer this question and identify the factors that inhibit the growth of the system, the authors researched the following topics: • Nature of the cargo (anhydrous ammonia and chlorine). • Current delivery systems and practices. • Motivation for encouraging more waterborne shipments. • Experience of Europe and Canada in this area. • Vessel requirements and associated capital expenditures. • Currently available fleets for rail, truck, and marine. • Economic issues. • Major obstacles to further development and expansion. • Potential courses of action. Ammonia and chlorine are pervasive in everyday life. Agricultural industries are the major users of ammonia, accounting for over 85 percent of all ammonia produced in the United States. Ammonia (nitrogen) is the nation’s dominant commercial fertilizer and is used either directly in anhydrous form or indirectly in manufactured fertilizers. Chlorine is S U M M A R Y

2an essential component in 45 percent of all commercial products. The major uses of chlorine (in descending order of quantities used) are for the manufacturing of organic compounds, manufacturing of vinyl chloride to make polyvinyl chloride (PVC) plastics, manufacturing of inorganic chemicals, water treatment, and bleaching of pulp and paper. Ammonia is widely used throughout U.S. agricultural areas and thus, like chlorine, must be transported from a limited number of production and import locations to geographically dispersed U.S. agricultural production areas. Most chlorine is shipped from production locations directly to consumption sites. Users do not typically consume large amounts of chlorine at any given site. Roughly two-thirds of chlorine is never shipped, but rather is used on site in chemical manufacturing or is moved by pipeline to nearby facilities. The researchers arrived at the conclusion that further expansion or development of TIH marine transportation services is not likely—and may not even be possible—given current obstacles and market conditions. Geographical dispersion is the most formidable obstacle to a significant increase in the volume of TIH marine shipments. The capital cost of equip- ment and infrastructure and the difficulty of acquiring permits were cited several times by interviewees as the most important limiting factors for marine shipments. The risk of a cata- strophic accident also limits the interest of potential new market participants because such incidents have no liability limit. Because of these risks, users of ammonia and chlorine may begin relocating to sites closer to producers, thereby eliminating transportation altogether. Steps will most likely have to be taken to actively discourage transportation by rail and encourage transportation by water. (Trucking is not economically viable and is rarely con- sidered by shippers for high-volume and/or long-distance shipments.) This report describes various alternative courses of action. Almost all of them include some type of government action—not necessarily a direct financial incentive—in order to change the environment within which these transportation services are offered. They include the following: • Limit risk to carriers and shippers. • Require safer equipment and technology. • Require ammonia to be diluted for transport. • Establish grants to support the acquisition of equipment or infrastructure modifications. • Establish tax incentives to promote facility and supply chain modifications. • Restrict movements through high-population areas (high threat urban areas). • Maintain and upgrade the infrastructure and guarantee its condition. • Encourage the location of new plants and facilities near marine terminals. • Integrate the value of marine transportation into national planning. However, there are no measures that can overcome the geographical dispersion of pro- ducers and users, the lack of density in any given corridor, and the fact that the markets are mature. Therefore, significant expansion of TIH material transportation via marine high- ways is not anticipated. A bibliography of documents consulted but not cited is included in this report as Appen- dix C in order to allow the reader to further explore issues that are tangential to the objective of this study.