Secretly Approved in Alaska, Will LNG Trains Soon Appear in Rest of US?

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By Justin Mikulka and Steve Horn. Originally published at DeSmog Blog

In 2015, a federal rail agency authorized the Alaska Railroad Corporation to ship its first batch of liquefied natural gas (LNG) by rail in Alaska, but granted this permission behind closed doors, according to documents obtained by the Center for Biological Diversity (CBD) and provided to DeSmog.

The documents, a series of letters and legal memoranda obtained through the Freedom of Information Act (FOIA), show that the Federal Railroad Administration (FRA) may have violated the National Environmental Policy Act (NEPA) by permitting the shipping of LNG, a highly combustible and flammable material, via rail without any public notification or comment period. The agency granted the Alaska Railroad Corporation a legal exemption under 49 C.F.R. § 174.63(a).

That federal statute mandates that a “carrier may not transport a bulk packaging … containing a hazardous material in container-on-flatcar (COFC) or trailer-on-flatcar (TOFC) service … unless approved for transportation by” the FRA.

The Association of American Railroads (AAR), a rail industry lobbying group, has since petitioned the FRA for the ability to ship LNG tankers by rail (as opposed to containers or trailers on flatcars), filing the request on January 17, according to documents on file at Regulations.gov.

AAR petitions for rulemaking to authorize the transportation of methane, refrigerated liquid (“LNG”), by rail in … tank cars,” reads the AAR petition. “LNG should be authorized for rail transportation because it is a safe method of transporting this commodity, LNG shippers have indicated a desire to use rail to transport it, and because railroads potentially will need to transport LNG for their own use as a locomotive fuel.”

In its petition, AAR — whose members include nearly all of the major rail companies — says that natural gas companies want to explore transporting LNG by rail in various regions around North America.

“Notwithstanding the requirement for a special approval, customers have expressed interest in shipping LNG by rail from Pennsylvania to New England, and between the U.S. and Mexico,” wrote AAR. “Authorizing transportation of LNGby rail likely would stimulate more interest.”

As previously reported by DeSmog, much of the natural gas currently obtained via hydraulic fracturing (“fracking”) currently has no delivery mechanism, due to lack of both pipeline capacity and current legal authority to ship it on freight train tank cars. Alaska, home of the first operational LNG-by-rail market, currently is seeing a nascent push for fracking.

On February 9, the FRA acknowledged in a letter that it is currently reviewing AAR‘s petition, although it refers to the petition being filed January 13, not 17. Robert Fronczak, an AAR executive and author of the petition to FRA, did not respond to a request for comment.


Credit: U.S. Federal Railroad Administration

By Rail: Alaska Timeline

The current push to transport LNG by train in Alaska appears to begin with a November 14, 2014 letter written by Alaska Railroad’s Chief Operating Officer, Doug Engebretson, to the FRA. In the letter, the State of Alaska-owned company declared its desire to ship LNG by rail due in part to the state’s inadequate road system compared to its rail network.

“The Alaska Railroad serves the State of Alaska with approximately 611 miles of track and siding that extend from the southern port town of Seward, Alaska, to the northern terminus at Fairbanks, Alaska,” wrote Engebretson in the letter.

“Also unlike most locations in the Lower 48, the road system in Alaska is, at best, limited. In the 663,267 square-mile area of the state, there are only 4 limited roads on the interstate highway system, for a total of only 1,081 miles,” Engebretson continued. “Thus, the Alaska Railroad serves as a major transportation link among the more populated areas of the state, the only transportation provider for some remote areas, and a critical source of freight and other goods for areas that are not served by roads at all.”


Credit: U.S. Federal Railroad Administration

On February 6, 2015, Engebretson wrote a follow-up 17-page legal memorandum to the FRA seeking legal authority to ship LNG on Alaska Railroad’s trains. In its legal petition, the company asked for permission to allow two LNG-loaded trains, each 30 to 70 cars in length, on the rails per week.

Later that year, FRA‘s Associate Administrator of Railroad Safety, Robert Lauby, responded to Engebretson in an October 9, 2015 letter, authorizing the shipment of LNG on two freight trains per week. Lauby also laid out a list of 11 conditions to follow, which included allowing the company to conduct safety inspections and report them to FRA, instead of having the federal agency directly involved in inspections.

“[Alaska Railroad] must perform a minimum of one track geometry car inspection annually (at least every 365 calendar days [and it] must report the results of this inspection to FRA within 30 days of completing the inspection,” wrote Lauby. “[The company] must perform at least four internal rail flaw inspections annually, with no more than 95 calendar days between each inspection [and] must report the results of this inspection to FRA within 30 days of completing each inspection.”

The original FRA permit allowed Alaska Railroad to ship LNG by rail for two years, with the permit expiring in October 2017. But a month later, Lauby wrote a November 2, 2015 follow-up to Engebretson, now granting Alaska Railroad the ability to ship three LNG trains per week until December 2020. The documents do not make clear what prompted FRAto take such an action.

During that same period, according to lobbying disclosure forms, Alaska Railroad began lobbying the FRA. The company hired C.J. Zanes, former chief of staff to U.S. Rep. Don Young (R-AK), and Katherine Scontras, former staffer for U.S. Sen. Susan Collins (R-ME), to undertake this effort.


Credit: Office of the Clerk, U.S. House of Representatives

Alaska Railroad, led by Scontras and Zane, has continued to lobby in support of LNG by rail ever since the third quarter of 2015. The company’s first batch of LNG officially hit Alaska’s tracks in September 2016, which has led to concerns from environmental groups.

A derailment or natural-gas explosion would devastate Alaska’s communities and wildlife. Our salmon and herring runs and impacted wildlife have never fully recovered from the Exxon Valdez spill, and that was almost 30 years ago,” Dune Lankard, Alaska representative for CBD, said at the time in a press release. “Alaskans deserve more than to be guinea pigs for the LNG industry.”

>NEPA Violation?

What is apparent from the documents obtained by CBD is that neither the public nor any other stakeholder besides Alaska Railroad appears to have been consulted on the proposed approval to move LNG by rail.

And that, in turn, may have been a violation of the National Environmental Policy Act, or NEPA, according to critics. Another question raised by project opponents is why NEPA does not appear to have been applied at all.

Normally, major infrastructure project proposals trigger a governmental review process under NEPA, which allows citizens, environmental groups, industry groups, and other interested parties to weigh in on the proposal either in comments, through public hearings, or sometimes both.

After all, as Alaska Railroad’s legal petition pointed out, along the 611-mile-long trip between Seward and Fairbanks, LNG-loaded trains would pass through Anchorage, Alaska, which has a population of over 300,000 people and is the most populous city in the state.

The NEPA process culminates with a federal agency producing either an environmental assessment or a more detailed environmental impact statement (EIS) on the proposed project, which recommends either approving or rejecting it.

NEPA, then, was apparently not in play for the LNG-by-rail authorization in Alaska, though the reasoning for this is not clear at this time. However, this national environmental law likely will take effect if AAR‘s petition for rule-making process proceeds, which seeks a regulatory system allowing LNG shipments by rail tank cars on a national scale.

NEPA requires environmental analysis for all federal actions (involving approval of specific projects) with the potential to significantly affect the quality of the environment,” Steve Jones, a CBD media specialist, told DeSmog.

FRA’s approval of Alaska Railroad’s transportation of hazardous materials should constitute a major federal action subject to NEPA. In addition, the transportation of hazardous materials most likely constitutes an action ‘significantly affecting the quality of the human environment.’”

“I would say authorizing the transport of LNG by [Alaska Railroad] is a ‘major federal action’ [as defined under NEPA] with potentially significant environmental effects that is subject to NEPA and FRA should have done an environmental assessment to determine whether a full-blown EIS was necessary,” Pat Parenteau, a law professor at Vermont Law School and former Director of Vermont Law School’s Environmental Law Center, told DeSmog.

“I am not aware of any exemption from NEPA requirements for this type of authorization. If the FRA is claiming such an exemption, I would like to see what it is based upon.”

At this point, however, neither CBD nor any other group can file a NEPA lawsuit against the FRA for Alaska Railroad’s LNG-by-rail permit. The statute of limitations expired 60 days after FRA‘s unpublicized November 2, 2015 letter to Alaska Railroad.

“Need To Raise Hell”

When reached for comment, FRA pointed DeSmog to the Pipeline and Hazardous Materials Safety Administration (PHMSA). A PHMSA official told DeSmog there is no timeline for when it will decide whether to grant AAR‘s petition to allow LNG-by-rail tank car shipments permanently and outside of Alaska. Alaska Railroad officials did not respond to a request for comment.

“As if outdated rail cars carrying volatile crude oil didn’t pose enough of a danger to the tens of millions of Americans who live and work … near our country’s rail lines, the railroad industry is now quietly seeking permission to transport explosive LNG through our communities,” Ross Hammond, U.S. campaigns director for Stand.earth, told DeSmog. “First responders, public officials, and communities along the rail lines will need to raise hell if there’s any hope of stopping this.”

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23 comments

  1. Huey Long

    The Alaska railroad is somewhat unique as it was built by the Feds, is owned & operated by the State of Alaska, and has no physical connection to the rest of the North American railroad system. Furthermore, it runs through some remote territory so if a train were to go boom it’d likely only kill the crew and a herd of reindeer.

    That being said, I sure hope this doesn’t start a precedent in the lower 48 states and Canada, where the railroads are run for the benefit of the shareholders and physical plant maintenance is often deferred. A few years back a Bakken crude train derailed in Quebec and killed seventy something people if I recall correctly.

    A serious LNG derailment could be far worse as even if the gas doesn’t explode it can still suffocate folks.

    1. PlutoniumKun

      I’m not sure suffocation is a major hazard with LNG. When spilled it vaporises and disperses very rapidly in the open – it might be more problematic in an enclosed space like a railway tunnel. Since its more or less pure methane its significantly less toxic than other liquid hydrocarbons. The big issue is if it is set alight as it vaporises. Then you basically have a thermobaric explosion, which would definitely spoil your day if you were in the vicinity.

      1. jackiebass

        In a train wreck there would be many sparks that would cause the escaping gas to explode. The only hope would be if none of the cars leaked. To give you an idea about the power of an explosion, a 1 pound container of propane exploding can lift a house off of it’s foundation. Most gas grills when full have 20 pound of propane. Propane would be comparable to liquified natural gas in it’s explosive power. So what you are talking about is a super bomb. To understand the danger look up anything about a leaking natural gas line exploding in a populated area. The damage is enormous.

        1. patrick

          Let me share this: several years ago we were shown a safety film called ‘Bleve!’. my take away was if I ever saw a truck or rail car mounted tank on fire I was going to go in the opposite direction fast. In the film, people a mile away who had stopped on a freeway to watch the fire -which looked like a butane torch flame- received sun burn level burns on their faces when the tank expoded killing and injuring several fire fighters who were spraying water in a failed attempt to control the temperature inside the tank. “A BLEVE (boiling-liquid, expanding-vapor explosion) is a physical explosion of compressed vapor and rapidly vaporizing liquid. Upon vessel failure the vapor space sends out a shock wave from the liquid flashing to vapor. If the material is flammable, a fireball may follow it. The rapid explosion can also cause projectile effects.” http://www.fireengineering.com/articles/print/volume-155/issue-4/features/bleve-facts-risk-factors-and-fallacies.html

  2. Ignacio

    As I understand it, natural gas transport is cheaper by pipelines for short distances (about less than 2.000 miles) without the need of expensive condensation or liquefaction units. LNG transport is much more expensive but becomes favourable for long distances using freigth transport.

    It strikes me that, instead of building more pipeline capacity, AAR is pushing for railroad LNG transport and using road LNG transport. The reason migth be that fracking natural gas production won’t last enough to get the pipelines amortized.

    Could someone explain the economics of natural gas in the US?

    1. PlutoniumKun

      I’m no expert on the US natural gas system, but in general transporting natural gas by pipeline is almost always cheaper, so your points are correct. The primary cost of manufacturing LNG from natural gas is maintaining the very high pressures and low temperature. It takes something of the order of 30% of the volume of methane to generate the energy to do the compression. So it has been traditionally used for two purposes – transportation by sea, and its use on a small scale in peakshaving (storage during periods of high production or low demand). There is also a small specific market for LNG in use for vehicles.

      A particular issue with the growth in gas fracking is that it produces very large quantities, but its long term production is less certain. A typical conventional well will need to produce steadily over 20-25 years to justify the capital expensive of processing and pipelines. But a typical fracked well has an 18 month period of production. Hence fracking can only be economic if there is an existing infrastructure suitable, or if you are pretty sure that there is sufficient geology to allow repeat fracking for 20 years or more (The EPA states that this is a minimum of 90 sq km of suitable shale).

      Its possible that in Alaska there is a ‘peak’ of gas being produced which is not likely to last long enough to justify building additional pipeline capacity. So LNG production maybe seen as a short term solution to sellng that gas. Its also possible that the low wholesale gas prices in mainland US has changed the economics such that the Alaskan producers see the only option as LNG for export (probably to Japan).

    2. PaintersDrunk

      Gas pricing is often thought to be based on volume and market prices (Henry Hub).
      However, other factors should be included. These factors include BTU content, other gases (some Texas wells have Helium content) and there are significant tax advantages from flaring, depletion, and transportation.
      The real question ought to be ” Why are we acting like a third world country and shipping raw materials?”
      “Why not ship value added items such as plastic resin or fertilizer or any other petrochemical ?”

      1. Scott

        Natural gas is also used for heating and power generation. If AAR wants to ship LNG from Pennsylvania to New England, it will almost certainly be used for those purposes. The pipelines into the region are at or near capacity. LNG has been used for decades to store gas for periods of peak demand. Some storage facilities can create LNG, while others require it to be trucked from larger facilities in Massachusetts and Pennsylvania. The biggest source of LNG in the area is a terminal in Everett, which receives LNG from oversees and goes less than a mile from downtown Boston.

        1. Tim

          Around Boston LNG is already frequently transported by truck and has been for years. One of the frequent truck routes from the Everett terminal is not far from where I live.

  3. homeroid

    Being Alaskan, There is a LNG plant in Nikiski. I believe you could buy it, Penney’s on the dollar. There are no trains to Nikiski. Should they get a pipeline from the north slope to Fairbanks, Then a LNG plant could run train cars to Seward and ship from there. Up here these dreams have been twisting people for so long. I look forward to the stinging nettle and the fiddle heads. Also i doubt Anchorage would be happy with LNG going through the richest neighborhoods. This whole thing is speculation, In these parts. America is a whole different game.

  4. Jim A.

    Just to point out that a tanker car ISN’T container-on-flatcar (COFC) or trailer-on-flatcar (TOFC) . Those are separate units place on top of flat cars… I wonder whether the extra cost of a NG pipeline in the land of permafrost are why they want to ship by rail rather than pipeline. What did the Alaska pipeline cost per mile compared to a pipeline in the lower 48?

    1. PlutoniumKun

      Good point about permafrost and construction costs. Ironically, global warming is likely to increase a process called solifluction (essentially, soil levels slipping over permafrost layers) which is a nightmare for construction. So this may we’ll be a factor in their thinking.

      1. Susan the other

        but yikes! doesn’t this make railroads shift and buckle too? Is the natural gas liquified in Fairbanks or Seward? And did they say LNG was being considered for train fuel? One problem with pipelines (remember Porterville CA) is that they can blow and it takes months to find the hole/holes. And the air gets so toxic it kills people just to breathe it. Anschutz spent a fortune putting in gas pipelines from Wyoming to various destinations and now he is turning to manufacturing electricity in Wyoming and transmitting it off to California, etc. I think this plan is a disaster waiting to happen. Both trains and pipelines. Too bad they can’t make SNG, maybe sink some LNG in retrofitted submarines and then do the transportation at a depth that keeps the stuff solid. Mmmm – maybe park the subs offshore and feed nearby power plants. That sounds like something the Japanese might do as they were experimenting recently with methane hydrates. It all sounds nuts compared to solar or geothermal.

  5. justanotherprogressive

    Errr…..either I’m confused or someone else is. LNG is already transportable by rail car. What the ARA seems to be asking for is an exemption to the type of rail car and packaging that LNG is required to be transported in, hence the reference to PHMSA.

    I don’t have time right now to look up all the regs or the actual memos, but I think maybe the author is confused about what the real problem is……

    This seems to be a packaging issue, not a NEPA issue, but I need to do more research to make sure…..

  6. Loblolly

    I used to work in the oil patch. Natural gas used to be burned off. It’s presence was an inconvenience.

    Flared, is what they called it. Pillars of flame burning night and day.

    I wonder how much co2 that put in the atmosphere for nothing?

    Will this maybe get them to leave the disgusting tar sands alone or ease up on fracking?

    CNG is preferable to coal.

    1. MoiAussie

      Better to put C02 into the atmosphere than methane which has 25 the global warming effect. But better still to capture it and use it for something.

  7. Cliff

    As an engineer who has spent the last several years working on locomotives which burn natural gas (in its gaseous state) supplied from an LNG tank car, I would like to provide some basic information regarding LNG that might be useful for those interested in this topic.

    – LNG is very cold (-260F) liquified methane (CH4). In nearly all situations the main safety hazard in the case of a leak or spill is frostbite.
    – The pressure of the liquid in the tank car can vary and increases over time. It usually leaves the plant at a very low saturation pressure, just a couple of psi. You have to pump it out of the tank, there isn’t enough pressure for it to flow rapidly. If you leave the tank in the sun for a month? It will vent out of the first of 3 required pressure relief devices and dissipate upwards into the atmosphere.
    – PlutoniumKun gets it somewhat correct above in that the danger is a spill in an enclosed location like a tunnel where the liquid has a chance to boil to its gaseous state and mix with oxygen without escaping, at which point it is very dangerous.
    – CH4 is much lighter than air, and quickly dissipates in open air — it is simply not possible to have a “hyperbaric explosion”, nor can it suffocate you (your feet would freeze solid first if you stood in a pool of it), without enclosure.
    – Gaseous propane and LNG are in no way comparable. Liquid propane (LP) is considerably more dangerous than liquid methane (LNG) because the resulting gas is heavier than air and can pool in low places like basements or ship hulls or geographic depressions. An explosion in a high-pressure gaseous pipeline accident is in no way comparable to what happens when a tank of cryogenic liquid leaks, at any flow rate, in the open atmosphere.
    – Not only is the boiling (vaporization) point several hundred degrees lower, but the ignition temperature of methane is higher, than that of both diesel and gasoline, both of which are hauled by rail. And alongside you on the highway in a thinner tank.
    – At fire training classes at the research center at the U of Texas, they fill a 10′ deep concrete tank the size of a small swimming pool with LNG — and then light it. (Actually they drop a lit cigarette in it first, and it just puts the cigarette out.) It doesn’t explode, the vapor simply burns off at the boiling rate of the LNG. It literally can not explode in the open atmosphere. The take aways from the class are 1) stay out of it, you’ll freeze to death 2) if it is not lit, let it boil and dissipate 3) if it is lit, stand back and let it burn.
    – When we need to purge the LNG tank car for some reason we hook a 2″ hose to it, run the hose to a stand about 10′ tall (think Bunsen burner), open the valve, then light it and wait for it to quit burning.

    justanotherprogressive is correct in that LNG is already transportable by approved rail car. So are far more dangerous (and actually explosive) chemicals, petroleum, and petroleum distillates. The Bakken crude is especially dangerous in a derailment because it contains large amounts of dissolved gases (think champagne as opposed to wine).

    1. Oregoncharles

      When I was in college in Portland, I passed a house that had experienced a natural gas explosion in the basement, which apparently was closed off. The house was in the street, rather as if a giant had picked it up and dropped it.

      It could also collect in attics, with similar results.

      I take it the swimming pool was in the open?

      The takeaway: it might qualify as a freak accident if the gas escaped, in quantity, in some sort of enclosed space, but it definitely could happen. Thought: what if the rail cars are stuck for days, maybe derailed? Wouldn’t the cars themselves be an explosion hazard? And of course, there’s quite a fire hazard even if it doesn’t explode. It was mostly fire that killed people in that town in Canada; there’ve been several similar fires, one in Oregon, since, which happened not to be in populated areas.

  8. Ed

    I guess people have heard about that idea that if a LNG tanker is blown up in a port it will be equivalent to an atomic bomb so they figure this might be the same kind of thing

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