Court decision forces withdrawal of LNG rail rule
In a regulatory shift, the Pipeline and Hazardous Materials Safety Administration (PHMSA) has officially rescinded a 2020 rule that authorized the transport of liquefied natural gas (LNG) by rail. The move follows a January 2025 ruling by the U.S. Court of Appeals for the D.C. Circuit, which found that PHMSA failed to conduct a required environmental impact statement, which violated the National Environmental Policy Act (NEPA). The court’s decision vacated the rule in its entirety and directed PHMSA to revise the regulations accordingly.
Effective June 23, 2025, PHMSA's conforming amendments remove all provisions related to LNG rail transport using DOT-113C120W9 tank cars from the Hazardous Materials Regulations. This rollback restores the regulatory framework to its pre-2020 state and highlights the importance of environmental due diligence in federal rulemaking. While LNG transport by highway, vessel, or in portable tanks remains permitted, the decision halts broader rail-based LNG shipments, a development with significant implications for energy infrastructure, public safety, and environmental oversight.
Quick recap
The original rule, finalized in July 2020, allowed LNG to be transported by rail in specially designed tank cars. It was part of a broader push to expand domestic energy transport options and reduce reliance on pipelines and trucks. The DOT-113C120W9 tank car was introduced with enhanced safety features, including a thicker outer shell, to address concerns about the volatility of LNG.
However, environmental groups quickly challenged the rule in court. They argued that PHMSA had bypassed critical environmental review steps and underestimated the risks of transporting a highly flammable substance through populated areas.
The court’s decision and its impact
In January 2025, the D.C. Circuit ruled in favor of the petitioners, stating that PHMSA had violated NEPA by failing to prepare an environmental impact statement. The court vacated the rule entirely and returned it to the agency for further proceedings. PHMSA responded by issuing conforming amendments to remove the rule from the regulations.
These amendments revert several sections of the Hazardous Materials Regulations to their pre-2020 versions and delete provisions that were created specifically for LNG rail transport. Notably, the DOT-113C120W9 tank car specification has been removed, and any existing cars built to that spec must now be relabeled to reflect current regulations.
What remains and what’s next?
The rollback does not affect the transportation of LNG by other means, such as highway, vessel, or in UN T75 portable tanks by rail. Nor does it prevent companies from applying for special permits to transport LNG by rail in specific cases.
PHMSA has also issued an Advance Notice of Proposed Rulemaking seeking public input on how to modernize hazardous materials regulations. This includes exploring whether there is still industry demand for LNG rail transport and how such transport might be safely authorized in the future.
Key to remember: PHMSA rescinded a 2020 rule allowing LNG to be transported by rail, following a federal court ruling. The rollback restores previous safety regulations, while leaving room for future proposals.