The Department of Transportation’s Surface Transportation Board (STB) last week announced that it has established a new committee to provide it with independent advice and policy suggestions on issues related to the common carrier obligation of railroads to transport toxic by inhalation hazard (TIH) chemicals such as anhydrous ammonia and chlorine. Specifically, the STB wants the committee to outline what is a railroad’s reasonable response to a shipper’s request that it transport TIH cargo.
The Toxic by Inhalation Hazard Common Carrier Transportation Advisory Committee (TIHCCTAC) will convene for a two-year period, during which the STB anticipates it will produce a report that will include a recommended policy statement regarding the railroad’s common carrier obligation to transport TIH chemicals. The STB recently posted a notice in the Federal Register seeking comments on the committee structure and nominations for committee members.
The STB said it seeks input from interested parties on a number of issues, including what the appropriate scope of the committee’s mandate should be; how that scope would affect the committee’s operation; how big the committee should be; and how the committee membership should be allocated among various stakeholder groups to achieve balance.
The STB held a number of hearings in 2008 to discuss the extent of the railroad’s common carrier obligation to haul hazardous materials, including TIH products. “A railroad may not refuse to provide service merely because to do so would be inconvenient or unprofitable,” the STB noted. It added, however, that the obligation is “not absolute, and service requests must be reasonable.”
“For many hazardous materials, including TIH, rail is the safest and most efficient mode of transportation,” the STB said in its recent Federal Register notice. “But, according to the railroads, the transportation of these materials subjects them to the potential for extremely high liability in the event of an accident.”
At one of the 2008 hearings, the American Association of Railroads (AAR) suggested that the STB adopt a policy statement that would require a TIH materials shipper to “indemnify and hold harmless the railroad against liability arising from a release of such materials in excess of (1) the maximum amount of insurance that the railroad carries for TIH transport, or (2) $500 million for Class I railroads, whichever is greater; and to provide reasonable assurances in the form of insurance or other means to support such indemnity.”
Other commentators at those hearings, particularly those representing TIH shippers, urged the STB to reject the AAR policy statement, and charged that the railroads were inflating rates to drive TIH shipments off the tracks.
“While the Board views the safe transportation of hazardous materials as crucial to this nation’s economic and national security, and the transportation by rail of hazardous materials as vital to our nation’s industrial production, the Board is an economic regulator, and, as such, seeks to address the economic component of TIH transport,” the Federal Register notice said. “It hopes to facilitate dialogue regarding and resolution of those economic concerns between and among TIH shippers and the railroads.”
The new committee will work toward this end, according to the STB. “The Board believes that an industry-derived solution to the question of what constitutes a reasonable response to a shipper’s request that a railroad transport TIH cargo might be a better and potentially more economically sustainable solution than a Board-imposed solution, though the latter remains a lawful alternative in the absence of industry-wide consensus,” the notice said.
“The TIHCCTAC will be tasked with producing a report and recommendations on how the Board should balance the common carrier obligation to transport this commodity with the risk of catastrophic liability in setting appropriate rail transportation liability terms for TIH cargo,” said the STB. “The TIHCCTAC’s focus and its solution … should revolve around the amount of economic responsibility for liability that railroads can reasonably ask TIH shippers to assume before the carrier will transport TIH cargo.”
The STB proposes that the new committee will meet monthly starting in the final quarter of 2010, and will consist of up to 27 voting members, including its chair, with seven representatives from the Class I and II railroads; three representatives from Class III railroads; five representatives from chlorine shippers; five representatives from anhydrous ammonia shippers; four representatives currently engaged in academia or policy analysis; two representatives with an insurance or underwriting background; and one representative from tank car owners, car lessors, or car manufacturers. In addition, three committee members will be from the STB in a non-voting capacity, and additional members from the Department of Homeland Security and Transportation may be chosen to serve in advisory, nonvoting capacities.
Comments regarding the proposed TIHCCTAC structure and scope must be received by 5 p.m. E.D.T., Friday, Sept. 24, 2010. Nominations for members must be received by 5 p.m. E.D.T., Monday, Oct. 25, 2010. Comments and nominations can be submitted to the STB either via its e-filing format at http://www.stb.dot.gov., or by mail at Surface Transportation Board, Attn: STB Ex Parte No. 698, 395 E Street, S.W., Washington, DC 20423-0001. Mailed responses should include an original and 10 copies.
More information can be obtained by calling Ronald Molteni, Office of the General Counsel, at 202-245-0267.