Marine Highway Transport of Toxic Inhalation Hazard Materials (2012)

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19 Current Logistics Systems Each year, there are approximately 34 million freight rail shipments. Of these, approximately 1.6 to 1.7 million ship- ments are for hazardous materials (5 percent), and of these, 100,000 to 105,000 are for TIH materials (0.3 percent). Almost two-thirds (64 percent) of all TIH shipments are moved by rail (18). This is the equivalent of approximately 75,000 car- loads. Most rail HAZMAT shipments, including virtually all TIH shipments, are transported in tank cars. Trucks carry the largest number of shipments, but rail moves more ton-miles. Annual liquid chlorine transport by truck totals approximately 500,000 tons, but these shipments tend to travel shorter distances than chlorine transported by rail and are always shipped in smaller quantities. Due to these factors, an estimated 85 percent of long-distance chlorine movements occur by rail (18). Ammonia Anhydrous ammonia, the richest, most common, and most cost-effective nitrogen source used by farmers, is transported via truck, barge, and rail, but rail is dominant for long-haul shipments. In 2007, 1.1 million tons of anhydrous ammonia was shipped by rail (848 million ton-miles with an average distance of 733 mi) as opposed to 1.5 million tons of anhy- drous ammonia and aqueous ammonia solution shipped by inland barge (1.221 billion ton-miles with an estimated aver- age distance of 795 mi; see Table 1). It is not possible to break out anhydrous ammonia for inland barge shipments sepa- rately in the published data. Pipeline transport is an option, but existing pipelines are at or near capacity with 2 to 3 million tons being transported each year. There is also the complicating factor of seasonal demand and decreases in anhydrous ammonia storage along the pipeline (3). Bulk anhydrous ammonia is typically shipped as a lique- fied compressed gas. This state is maintained by applying pressure, reducing temperature, or a combination of both. For long-distance marine shipping, ammonia is usually car- ried in mid-size liquefied petroleum gas (LPG) ships. LPG ships or barges carrying ammonia are either fully refriger- ated (FR) or semi-refrigerated (SR). The FR LPG ships have a large cooling capacity and keep the ammonia fully refrig- erated at -27°F (some sources say -32.5°C) and at a vapor pressure below the atmospheric pressure. SR LPG ships have a less powerful cooling capacity and can keep the ammonia at the liquefied condition with a temperature of -15°F to 5°F (some sources say -25°C to -15°C) and at a vapor pressure of 4 to 5 atmospheres. These vessels engage exclusively in inter- national trade; none of the vessels used in this trade are Jones Act vessels. Most ammonia destined for direct application to the soil and stored at terminals is transported by truck to the final destination. Long-distance trucking operations tend to be price competitive only when they have some type of back- haul. As an example, if a truck is backhauling corn, it can go 80 to 90 mi from the river without transport costs becoming prohibitive. If a truck is backhauling soybeans, the economi- cal shipping radius can be 130 to 140 mi. Of course, backhaul traffic, whether by truck, rail, or barge, can be seasonal and may or may not concur with fertilizer movement needs. When shipping by inland barge, typical shipment sizes for ammonia tend to be close to 5,000 short tons (7). Table 5 summarizes the salient characteristics of the cur- rent modal logistics systems for ammonia. Chlorine In terms of volume, pipeline is the preferred mode of transport for chlorine. However, most chlorine pipelines exist within a single plant complex, and all run 10 or fewer miles. Unlike the case with ammonia, there are no commer- cial long-distance pipelines for chlorine. Overall, pipelines carry about 75 percent of chlorine production (7). Unlike C H A P T E R 3 Current Operating Environment

20 ammonia, bulk chlorine rarely moves by truck. Railroads carry 20 to 25 percent of chlorine production, and barges only about 1 percent. Only two companies operate inland chlorine barges, and the producers own the barges, not commercial transporta- tion companies. According to industry sources, the level of activity is about 20 barge loads per month for the inland waterway system. Chlorine barges carry liquefied gas under pressure, without need for complex equipment or instrumentation. Chlorine barges are designed and engineered with margins of safety such that releases almost never occur. They are typically incor- porated into linehaul operations, which means the barges are handled by multiple vessels—including shift boats at each end of the voyage—whose crews may or may not be sufficiently familiar with the cargoes they are carrying. While the safety record for chlorine barges is excellent, this operational char- acteristic makes major carriers reluctant to risk carrying such cargoes in linehaul tows. In 2007, rail moved approximately 3,241,000 tons of chlorine (22). Eighty-five percent of long-distance chlorine movements occur by rail (18). Marine deliveries of elemental chlorine currently total 40,000 to 50,000 short tons per year. The determining factor in chlorine logistics is that pro- ducers cannot economically store chlorine. This means chlo- rine moves from the manufacturing site to the consuming location where it enters the production process immediately, with only nominal inventory on site. Chlorine is typically shipped and stored as a liquid in a container under pressure. The maximum size container (at least in the United States) shipped by rail is capable of holding 90 tons of liquid chlorine. The maximum size chlorine tank shipped on a barge may have a capacity of up to 1,100 tons. The usual size of a chlorine shipment on an inland barge is about 1,100 short tons, in either four or six integral tanks (not removable). Tank cars shipped by motor vehicle may have a capacity of up to 22 tons (39). The chlorine inside a 90-ton rail car would be shipped as a liquid under its own vapor pressure. Approximately 85 per- cent of the volume inside the tank would be liquid and the remaining amount vapor and some nitrogen (39). Railroad tank cars have a spring-loaded safety release device set to discharge at a gauge pressure of 225 psig (on cars marked 105A300W) or 375 psig (on cars marked 105A500W). Barge tanks will also have several release devices for each tank; the ones designated 4 QJ are designed to release at 300 psig. These design features protect against a rupture of the tank and a large release of material. Additional details on safety devices are published in “The Chlorine Manual,” published by the Chlorine Institute (39). Railroad companies have attempted to implement several safety-related operational measures that have met with resis- tance from shippers. A special-interest group consisting of the American Chemistry Council, the Chlorine Institute, The Fertilizer Institute, and PPG Industries Inc., filed a complaint before the STB seeking to halt implementation of enhanced safety measures applying to transportation of chlorine and other toxic and poisonous commodities on the Alabama Gulf Coast Railway (AGR) and other railroads operated by Rail- America Inc., including the Florida East Coast Railway, which operates from Jacksonville to Miami. The safety protocols that are being challenged begin with advance notification of a car’s delivery and continue with a special inspection of the car once it comes into the railroad’s possession. The toxic/poison cars are then placed into short, dedicated trains with no more than three toxic/poison cars per train, after which the dedicated train is operated at a deliberate pace. Trucking companies are reluctant to offer long-haul chlo- rine transportation services. One major chlorine producer Table 5. Summary of modal characteristics of ammonia transport (20). Rail Tank Car Truck Cargo Tank Pipeline Barge Each rail tank car can carry 80 tons of ammonia. Each truck cargo tank carries 20 tons of ammonia. In 2007, approximately 2.9 million tons of anhydrous ammonia was transported by pipeline. In 2007, approximately 1.5 million tons of ammonia (anhydrous and aqueous) were transported by inland barge. In 2007, there were just over 14,000 rail shipments* of anhydrous ammonia, delivering approximately 1.14 million tons of anhydrous ammonia. In 2007, truck cargo tanks (for hire and private) carried approximately 9.3 million tons of product on the nation’s highways. There are only two ammonia pipelines—one runs from Texas to Minnesota and the other from Louisiana to Nebraska and Indiana. Only a few retail and manufacturing locations are currently served by the river system. TFI members own or lease approximately 6,000 tank cars. Each additional truck cargo tank increases congestion on our nation’s roads and the risk of accidents. *1.14 million tons divided by 80 tons per car

21 interviewed for this study indicated that the company does not ship chlorine by truck or by ocean or coastwise vessel. In general, producers involved in this study do not ship by truck, primarily due to safety concerns. Interviewees indicated that barge transportation is possible if (1) consumption supports deliveries of 1,000 to 1,200 tons of chlorine per shipment and (2) marine facilities exist. Marine shipments of chlorine are severely limited by the number of facilities capable of receiving chlorine by barge. As a result of industry interviews, the researchers were able to determine that there are only two such facilities on U.S. inland water- ways. The two sites are a DuPont titanium dioxide plant in New Johnsonville, Tennessee, and a Westlake Monomers vinyl chloride plant in Calvert City, Kentucky, both located on the Tennessee River. Interviewees did not see any readily viable alternatives to rail movement, whether by water or other mode. The reasons include geographic location of the customer base, the matu- rity of the chlorine industry, and the practical limitation that producers cannot easily relocate plants to waterfront sites. Domestic chlorine shipments are typically sent to repack- agers for further distribution in 1-ton and 150-pound containers, primarily for water treatment. International ship- ments are handled by converting the chlorine molecule into a different product, such as ethylene dichloride (EDC), vinyl chloride monomer (VCM), or PVC. In current STB proceedings regarding rail rates for hazard- ous materials shipments, much of the shippers’ efforts before the STB have aimed at increasing direct competition between rail carriers. Little or no attention is given to the possibil- ity of promoting alternative transportation modes, such as marine transportation. Evidently, shippers expect continuing prominence of railroads in shipping of TIH materials in the long term. Regulatory and Security Environment General The three federal regulatory agencies responsible for cre- ating and enforcing security rules for TIH material ship- ments are the FRA, Pipeline and Hazardous Materials Safety Administration (PHMSA), and Transportation Security Administration (TSA). The primary U.S. DOT hazardous material regulations are issued by PHMSA in Title 49, Parts 172–174 and 179. The two relevant federal statutes are the Hazardous Materials Transportation Authorization Act of 1994 (HMTA) and the Federal Railroad Safety Improvement Act of 2008 (48). Under current U.S. DOT rules, railroads must adopt security plans for TIH materials, including analy- ses of safety and security risks (see 49 CFR 172.800, 172.802, 172.820.12). Where it is impossible to comply with both a federal and a non-federal (i.e., state or local) requirement, the non-federal requirements are preempted. When a non- federal requirement, as applied or enforced, frustrates the purpose or serves as an obstacle to carrying out the full effect of the federal law, it is preempted (48). Insurance to help guard against TIH-related liability risks is difficult and extremely costly for railroads to obtain. It is impossible for railroads to fully insure against the potential catastrophic losses associated with TIH shipments. Although there are certain specific regulatory requirements, marine carriers sometimes elect to exceed regulatory require- ments in their carriage of hazardous materials, especially TIH materials. For example, carriers sometimes insist that con- tracts provide for dedicated towboats even though dedicated towboats may not be required by regulation. Otherwise, the carrier may refuse to carry those cargoes altogether. Inland water carriers are not “common carriers,” so there is no leg- islative or regulatory mandate that they must accept certain cargoes. The cargo has to be attractive from a risk/reward standpoint or they will not accept it. Regulations Specific to Ammonia Ships carrying liquefied compressed ammonia are regu- lated by the U.S. Coast Guard in 46 CFR Part 154—Safety Standards for Self-Propelled Vessels Carrying Bulk Liquefied Gases. Barges carrying liquefied compressed ammonia are regulated by 46 CFR Part 151—Barges Carrying Bulk Liq- uid Hazardous Material Cargoes. These regulations contain requirements for vessel inspection, testing, and certification; vessel and cargo tank design and construction; equipment and materials; operations; and special requirements for specific cargoes. Additional limitations include the requirement that ammo- nia shipments have specialized crews and the requirement that a licensed ammonia tankerman be on towing vessels at all times. Crews transporting ammonia are required to take specific training courses. Tankerman barge safety training is designed to ensure workers are fully qualified to not only work safely but also protect the safety of the waterways. Kirby Inland Marine, a leading tank barge operator, requires train- ing on the topics of refrigeration theory, anhydrous ammo- nia safety, transfer procedures, transfer system components, transfer system problem troubleshooting, and first aid and CPR. Southern Towing has similar training requirements. Federal regulations prohibit any training facility from issuing certifications and endorsements until students have fully and successfully completed each training course. The U.S. Coast Guard is responsible for evaluating training courses provided by training facilities for compliance with federal regulations on the operation of tank barges in U.S. waters. Only fully qualified barge tankermen are allowed to work on barges

22 transporting hazardous liquids and materials (49). Captains must ensure that proper handling techniques and equipment are used during each cargo transfer. Ammonia tows generally consist of two (sometimes three) barges in the continuous custody of a single towboat with a specially trained crew that stays with the barges at all times, including load and discharge operations. While not man- dated, these measures are typically implemented because refrigerated ammonia barges are complex systems that have to be constantly monitored and under the care of crews that know what to do in routine and non-routine situations. Unit tows are not a Coast Guard mandate. Regulations Specific to Chlorine The Chlorine Institute is the policy maker and keeper of the rules for the chlorine industry, particularly with regard to safety. Regulations specific to chlorine are contained in 46 CFR Subpart 151.50.31. Chlorine barges can be tramped (as opposed to requiring a dedicated tow); however, there are limitations on their position in tow. Barges cannot be on the head or in an exposed location. Issues Specific to Railroads Railroads and their TIH cargoes are subject to regulations of PHMSA and STB, both of which are part of the U.S. DOT, as well as the regulations of TSA, which is part of the Depart- ment of Homeland Security (DHS). Local officials can do little to restrict rail operations. The Rail Safety Improvement Act of 2008 established fed- eral regulatory requirements known as HM-232E: Enhanc- ing Rail Transportation Safety and Security for Hazardous Materials Shipments, whereby rail operators are required to perform route risk analysis (including assessment of route alternatives) and consider 27 required criteria, includ- ing network infrastructure characteristics, railroad operat- ing characteristics, human factors, and environmental and terrorist-related parameters. The following are the 27 factors to be considered: 1. Volume of hazardous material transported. 2. Rail traffic density. 3. Trip length for route. 4. Presence and characteristics of railroad facilities. 5. Track type, class, and maintenance schedule. 6. Track grade and curvature. 7. Presence or absence of signals and train control systems along the route (“dark” versus signaled territory). 8. Presence or absence of wayside hazard detectors. 9. Number and types of grade crossings. 10. Single versus double track territory. 11. Frequency and location of track turnouts. 12. Proximity to iconic targets. 13. Environmentally sensitive or significant areas. 14. Population density along the route. 15. Venues along the route (stations, events, places of con- gregation). 16. Emergency response capability along the route. 17. Areas of high consequence along the route, including high-consequence targets as defined in § 172.820(c). 18. Presence of passenger traffic along route (shared track). 19. Speed of train operations. 20. Proximity to en route storage or repair facilities. 21. Known threats, including any non-public threat scenar- ios provided by DHS or U.S. DOT for carrier use in the development of the route assessment. 22. Measures in place to address apparent safety and security risks. 23. Availability of practicable alternative routes. 24. Past incidents. 25. Overall times in transit. 26. Training and skill level of crews. 27. Impact on rail network traffic and congestion. According to pronouncements made by the Association of American Railroads, the federal government does not allow railroads to set rates at a level high enough to recover from TIH shippers the billions of dollars of added costs associated with TIH shipments. In addition to liability costs, these added costs include the costs of TIH-related insurance, the multi- billion dollar costs of installing PTC technology on tracks over which TIH materials are transported, and the costs of comply- ing with the extensive government-mandated safety and secu- rity operating procedures that railroads must have in place due to the higher risks associated with TIH commodities. Since 2010, railroads have been required to conduct risk analyses annually to assess the safety and security risks along the current route utilized to transport the specified ship- ments, and they must also assess the risks on practicable alternative routes over which they have authority to operate. Railroad security plans must include the following: (1) a procedure for consulting with offerors and consignees to min- imize the time that a HAZMAT shipment is stored incidental to its movement from origin to destination; (2) measures to limit access to such shipments during temporary storage and delays in transit; (3) measures to mitigate risk to population centers during temporary storage incidental to transporta- tion; and (4) pre-trip inspections for signs of tampering with the rail car, including its seals and closures, and an inspection for any item that does not belong, is suspicious, or may be an improvised explosive device (IED) (50). In addition to a structured evaluation of routes utilized to transport HAZMAT, federal regulations will require rail-

23 roads to implement a PTC signal system on routes where TIH materials are transported by 2015. Railroads will have to install PTC on approximately 73,000 mi and around 17,000 locomotives. Roughly 75 percent of these miles are subject to the PTC mandate because they are used to trans- port TIH materials. In other words, if not for TIH materi- als, railroads’ PTC-related costs would be many billions of dollars lower (28). New regulations also require rail tank cars transporting the most toxic HAZMAT to be designed to comply with higher safety standards than the existing tank cars. Under proposed TSA regulations, a railroad must have a security coordinator, procedures to determine the location and shipping information for each TIH rail car under its physical custody, and the ability to provide TSA with such information within 1 hour of request. There are also stringent require- ments on transfers of cars containing TIH materials between interchanging railroads and between railroads and shippers or receivers. These include the requirement that cars being trans- ferred within an HTUA, or which may subsequently enter an HTUA, may not be left unattended at any time during the transfer of custody.