California Representative Introduces Crude-By-Rail Bill

Rep. John Garamendi, D-Calif., has introduced a bill that prohibits the transport of crude oil via rail if the crude oil's Reid Vapor Pressure (RVP) exceeds 9.5 pounds per square inch (psi).

Garamendi introduced the Crude by Rail Volatility Standard Act, or H.R. 5553, Monday, alongside four Democratic co-sponsors: Reps. Bill Foster of Illinois, Barbara Lee of California, Nita M. Lowey of New York and Jamie Rasin of Maryland.

The bill has been referred to the U.S. House Subcommittee on Railroads, Pipelines and Hazardous Materials.

"Every day we delay the implementation of a stronger safety standard for the transport of Bakken crude oil-by-rail lives are at risk," said Garamendi, whose district represents an area just outside of San Francisco and Sacramento in northern California and includes the cities of Davis and Fairfield. Garamendi introduced similar legislation in 2015.

"My bill simply requires oil companies to decrease the volatility to market levels rather than carrying unstable products through communities. I am committed to enacting this legislation into law this year as part of the surface transportation reauthorization," he said.

The bill would set a maximum volatility or pressurization for crude oil and similar hazardous materials transported via rail. The prescribed limit of 9.5 psi is the RVP standard for crude oil futures contracts on the New York Mercantile Exchange (NYMEX). 

This standard would remain in place until the Pipeline and Hazardous Materials Safety Administration (PHMSA) finalizes regulation that sets a national maximum volatility standard. PHMSA had sought input on establishing such a standard in 2017 as a result of a petition by the then attorney generals for New York and five other states. But progress on that assessment has stalled since then. 

The Question Of RVP limits

Garamendi's bill comes after state efforts last year to define RVP limits for crude oil transport via rail. Washington state Gov. Jay Inslee, a Democrat, signed into law in 2019 a bill that restricts the rail transport of crude oil with a RVP greater than 9 psi. But several states, including North Dakota, have pressed PHMSA and parent agency U.S. Department of Transportation, to respond to the law. Those states say the law violates the Interstate Commerce Clause of the U.S Constitution, while North Dakota lawmakers contend that the law restricts the rail transport of Bakken crude, which has a higher RVP.

U.S. Department of Transportation Secretary Elaine Chao responded to state lawmakers in November, saying PHMSA's Office of Chief Counsel is reviewing the states' petition and the comments PHMSA received as a result of a public comment period on the petition. That office will issue a final determination in due course, said Chao's letters, which were dated Nov. 7.

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