US law trumps Washington state’s crude-by-rail restrictions, federal agency finds

A photograph of a line of tank cars.

The Pipeline and Hazardous Materials Safety Administration (PHMSA) said late Monday that federal law preempts a state law in Washington that restricts the rail transport of crude oils that exceed a certain vapor pressure limit.

“PHMSA determined that Washington State’s vapor pressure requirement does not conform to U.S. Hazardous Materials Regulations and is an obstacle to accomplishing and carrying out Federal Hazardous Materials Transportation Law,” PHMSA said Monday. The decision is among the latest actions in a federal proceeding in which PHMSA was seeking feedback on the issue.

PHMSA’s announcement refers to a study by Sandia National Laboratories that concluded that vapor pressure isn’t a significant factor in the risks associated with transporting crude oil via rail. Following the release of the study’s results, the U.S. Departments of Energy and Transportation recently suggested in a note to congressional leaders that vapor pressure shouldn’t be a factor in considering crude-by-rail movements.

Vapor pressure as a factor in potentially restricting crude-by-rail movement is a hot topic because the state of Washington enacted a law in 2019 setting vapor pressure limits, while other states have lobbied the federal government to pursue a similar mandate. Washington state’s crude-by-rail law calls for crude oil that will be unloaded in the state to meet a Reid Vapor Pressure limit of 9 pounds per square inch (psi). The law doesn’t ban crude-by-rail movement in the state, and the state has argued that the law is meant to reduce the risk of explosions or potentially fatal derailments.

But crude-producing states such as North Dakota have argued that Washington state’s mandate violates interstate commerce rules and effectively bans Bakken crude from being transported through the state. These states have asked the federal government, including PHMSA, to weigh in on the issue.

Washington state said it’s considering its options following the determination.

“Gov. Jay Inslee’s office is disappointed with the federal Pipeline and Hazardous Materials Safety Administration’s determination that Washington’s vapor pressure limit is preempted by federal law. Washington’s law helps protect the public from the inherent risks of transporting oil by rail by decreasing explosion risk in the event of an oil train derailment,” according to Inslee’s spokesman, Mike Faulk.

Faulk continued, “We are still reviewing PHMSA’s 74-page decision, but public health remains our top priority and we are considering our legal options. We are glad that PHMSA at least kept in place Washington’s advance notification requirements, which enable us to track when oil is being transported by rail through Washington to inform local and tribal first responders and help us prepare for any oil spill related emergency.”

Meanwhile, the American Fuel and Petrochemical Manufacturers (AFPM) applauded the determination.

“The findings, based on three years of extensive study, demonstrate that the state of Washington’s unlawful attempt to regulate the transportation of crude oil based on VP is flawed and does not enhance rail safety,” said Rob Benedict, AFPM’s senior director for petrochemicals, transportation and infrastructure. “Such unnecessary regulation would increase costs for a U.S. energy sector that is already facing tremendous challenges due to COVID-19 and would not improve safety.”

PHMSA’s chief counsel will submit this determination to the Federal Register. 

The chief counsel cited three reasons why federal laws overseeing hazardous materials transportation preempt Washington state’s vapor pressure limit for crude oil loaded and unloaded from rail tank cars, according to the notice expected to go into the Federal Register. 

First, Washington state’s vapor pressure requirement constitutes a scheme for classifying a hazardous material that’s not substantively the same as the hazardous materials regulations, PHMSA’s chief counsel said.

A second reason is that the vapor pressure requirement imposes requirements on the handling of a hazardous material that aren’t substantively the same as the requirements of the hazardous materials regulations.

The third reason is that PHMSA has determined that the vapor pressure requirement is an obstacle to accomplishing and carrying out the federal law governing the transportation of hazardous materials, the agency said. PHMSA also said it found that the administrative record regarding Washington state’s advance notice of transfer requirement is insufficient to make a determination whether the requirement is preempted under the federal law.