U.S. Markets closed

House Democrats Seek To Slow White House Plan For LNG Rail Shipments

FreightWaves

The Democratic head of the House committee with transportation oversight wants to put the brakes on a Trump administration proposal to let freight railroads haul liquefied natural gas in tank cars.

Transportation and Infrastructure Committee Chairman Peter DeFazio (D-Oregon) and Congressman Tom Malinowski (D-New Jersey) on Sept. 12 introduced a bill requiring extensive reviews on the safety and operational practices of using tank cars carrying LNG before any approval is granted.

In April, President Trump ordered the Department of Transportation to authorize the movement of LNG by rail within 13 months. The DOT's Pipeline and Hazardous Safety Administration in June also had no initial objections to New Fortress Energy's application seeking to use special cryogenic tank cars to haul supercooled liquids.

"The administration's absurd plan to allow trains of up to 100 cars filled with LNG to move by rail is extremely reckless," DeFazio said in a statement. "Putting LNG into rail cars and moving it through highly populated communities presents a significant risk to the safety of the public and the environment, with the possibility of catastrophic consequences."

The bill calls for PHMSA and the Federal Railroad Administration (FRA) to conduct safety tests to see if tank cars are suitable for transporting LNG, while also factoring in the operating conditions and what public and environmental benefits would result. 

Once the two agencies have completed their study, the Government Accountability Office would conduct an independent evaluation of the agencies' findings and analysis. The lawmakers say their concern over LNG riding the rails comes as the industry is seeking to reduce train crew size and run longer trains.

In late June, the House passed a DeFazio amendment that was part of an appropriations bill, which prohibited the DOT from issuing a special permit to move multiple sets of 100-car unit trains of LNG in tank cars.

The interest in shipping LNG comes as companies  seek to ramp up exports of U.S.-produced LNG as global demand shifts away from coal for power generation. U.S. LNG production has spiked in recent years as energy companies have mastered hydraulic fracturing and horizontal drilling technology that enables energy companies to extract fossil fuels from tight shale formations.

The U.S. railroad industry sees potential in shipping more LNG volumes. The Association of American Railroads welcomed the President's executive order in April, saying LNG can move safely by rail and should not be held up by a lengthy permitting process.

Image Sourced from Google

See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.