The Pipeline and Hazardous Material and Safety Administration (PHMSA), which is part of the US Department of Transportation, issued a rule allowing the transport of liquefied natural gas (LNG) by rail. With newly designed tank cars, no permit is required. Also, PHMSA’s rule placed no limit on the number of LNG cars in a single train and no speed limit.

Failure to Issue EIS
Several states, environmental organizations, and an American Indian tribe challenged PHMSA’s rule with petitions for review to the US Court of Appeals for the DC Circuit. After consolidating all the petitions, the DC Circuit held that PHMSA did not comply with the National Environmental Policy Act (NEPA), because PHMSA did not issue an Environmental Impact Statement (EIS).

Low Probability but High Risk
According to the DC Circuit, “NEPA required PHMSA to prepare an EIS” because “transporting LNG by rail poses a low-probability but high-consequence risk of a derailment that could seriously harm the environment:….”

When a federal agency authorizes activity with a high-consequence risk, the agency must prepare an EIS unless the agency’s record shows the “grave harm’s probability so low as to be remote and speculative, or if the combination of probability and harm is sufficiently minimal.” In this case, where PHMSA acknowledged two derailments within a four-year period in which the newly designed tank cars were breached, “the risk of a third is neither remote nor speculative.” The two prior derailments did not result in injuries, but neither involved large numbers of LNG tank cars. PHMSA made no analysis of the effect of similar incidents involving many LNG tank cars.

To see the DC Circuit’s opinion https://media.cadc.uscourts.gov/opinions/docs/2025/01/20-1317-2094705.pdf