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Statement of Need: PHMSA is responsible for the safe and secure movement of hazardous materials by all transportation modes, including the nation's railroads. The Hazardous Materials Regulations (HMR; 49 CFR parts 171-180) are designed to achieve three goals: (1) to ensure that hazardous materials are packaged and handled safely during transportation, thus minimizing the possibility of their release should an incident occur, (2) to ensure that the security risks associated with the transportation of hazardous materials in commerce are addressed, and (3) to effectively communicate to carriers, transportation workers, and emergency responders the hazards of the material being transported. The HMR also include operational requirements applicable to each mode of transportation. PHMSA's hazardous materials transportation regulatory program is designed to balance safety and security concerns with economic and societal goals. Rail shipments of hazardous materials are often transported in substantial quantities and are potentially vulnerable to sabotage or misuse. Such materials are already mobile and are routinely transported in proximity to large population centers. A primary safety and security concern involving the rail transportation of hazardous materials is the prevention of a catastrophic release in proximity to densely populated urban areas, events or venues with large numbers of people in attendance, iconic buildings, landmarks, or environmentally significant areas.

Summary of the Legal Basis: This final rule is published under authority of Federal hazardous materials transportation law (Federal hazmat law; 49 U.S.C. 5101 et seq.) Section 5103(b) of Federal hazmat law authorizes the Secretary of Transportation to prescribe regulations for the safe transportation, including security, of hazardous materials in intrastate, interstate, and foreign commerce. In addition, the Homeland Security Council has tasked DOT and DHS to improve security of rail shipments of toxic inhalation hazard (TIH) materials.

Alternatives: Alternative 1: Do nothing This alternative continues the status quo. We would not issue a final rule to require carriers to make route selections for certain highly hazardous materials based on a comprehensive assessment of the safety and security vulnerabilities along available routes nor would we require rail carriers to inspect rail cars for IEDs or implement measures to minimize time in transit for highly hazardous materials. The current security plan requirements would continue in place. Alternative 2: Impose enhanced safety and security requirements for a broad list of hazardous materials transported by rail Under this alternative, we would impose enhanced safety and security requirements for rail shipments of a broad list of hazardous materials, including explosives; flammable solids, liquids, and gases; poison and poison inhalation hazard materials; oxidizers and organic peroxides; and corrosive materials. Alternative 3: Impose enhanced safety and security requirements for specified rail shipments of highly hazardous materials Under this alternative, we would impose enhanced safety and security requirements only for those classes and quantities of hazardous materials that pose unique and substantial safety and security risks. Covered materials would include: (1) more than 2,268 kg (5,000 lbs) in a single carload of Division 1.1., 1.2, and 1.3 explosives; (2) bulk quantities (119 gallons or more) of PIH materials; and (3) highway route-controlled quantities of radioactive materials. For these reasons, we have selected this alternative.

Anticipated Costs and Benefits: Costs Rail carriers and shippers may incur costs associated with rerouting shipments or mitigating safety and security vulnerabilities identified as a result of their route analyses. Because the final rule builds on the current route evaluation and routing practices already in place for most, if not all, railroads that haul the types of hazardous materials covered, we do not expect rail carriers to incur significant costs associated with rerouting. Generally, costs associated with the provisions of this final rule include costs for collecting and retaining data and performing the mandated route safety and security analysis. We estimate total 20-year costs to gather the data and conduct the analyses proposed in this final rule to be about $17.4 million (discounted at 7%). Benefits The major benefits expected to result from this final rule relate to enhanced safety and security of rail shipments of hazardous materials. The requirements of the final rule are intended to reduce the safety and security risks associated with the transportation of the specified hazardous materials. We estimated the costs of a major accident or terrorist incident by calculating the costs of the January 2005 Graniteville, South Carolina, accident. This accident killed nine people and injured 554 more. In addition, the accident necessitated the evacuation of more than 5,400 people. Total costs associated with the Graniteville accident are almost $126 million. If the measures proposed in this final rule prevent just one major accident or intentional release over a twenty-year period, the resulting benefits would more than justify the potential compliance costs. We believe that they could.

Risks: It is possible to envision scenarios where hazardous materials in transportation could be used to inflict hundreds or even thousands of fatalities. Direct costs and those attributable to transportation system disruption that would surely result could easily total in the billions of dollars. We are operating under the premise that, in today's environment, it is necessary to take reasonable measures to reduce the likelihood that such events will be successful. The presence of such measures should, in fact, help deter potential attacks. The measures in the rule have the potential of reducing the likelihood of success of such an attack. Moreover, the American public has an expectation that reasonable measures will be taken to help ensure the security of hazardous materials present in our society so they are not used for nefarious purposes. Companies are taking or have already taken steps to develop systematic security plans and security awareness training. These requirements will help ensure a consistent approach in the area while permitting flexibilities that are important in keeping costs at reasonable levels.