Canada Gazette, Part I, Volume 148, Number 2: Regulations Amending the Transportation of Dangerous Goods Regulations (Safety Standard TP14877: Containers for Transport of Dangerous Goods by Rail)

January 11, 2014

Statutory authority

Transportation of Dangerous Goods Act, 1992

Sponsoring department

Department of Transport

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue

The Transportation of Dangerous Goods Regulations (TDG Regulations) include requirements for the manufacture and use of means of containment for transporting dangerous goods primarily by referencing technical standards.

There is a need for Canada to update the requirements for the design, manufacture and selection of tank cars for the transportation of dangerous goods by rail. The adoption of the new rail tank car manufacturing requirements, specifically for the DOT-111 tank car, needs to be accelerated because Canada will soon be manufacturing these tank cars, there is an increase in petroleum crude oil transport by rail, and there is a regulatory misalignment causing an administrative burden on industry.

Currently, the TDG Regulations do not require consignor certification. Consignor certification is an international requirement and adopting it in Canada would make it easier for our inspectors to find a contact person when a consignment is not compliant with the Regulations.

Under the present Regulations, there is a lack of information on the sampling methods used by the petroleum crude oil consignors and carriers for the classification tests and the selection of the proper containers for their transport. The method used to sample the crude oil is very important in determining its classification because its composition depends on many factors. Petroleum crude oil is typically non-homogeneous, containing some percentage of sediment, water and volatile light ends.

Finally, the TDG Regulations have a gap in classification information, because there is no requirement for proof of classification. This poses a challenge for inspectors trying to validate the classification of dangerous goods being offered for transport. This requirement would also address a Transportation Safety Board (TSB) of Canada recommendation (September 2013) that the Department of Transport review classification procedures and processes.

Objectives

The objective of the proposed Regulations is to introduce a new standard for rail tank cars, replacing the standard currently incorporated by reference in the TDG Regulations. In addition, the proposed Regulations introduce new requirements for documentation relating to the procedures and processes for classification of dangerous goods and sampling methods used by the consignors and carriers of petroleum crude oil. This amendment also proposes to include a consignor's certification on the shipping document.

Description

The proposed Regulations Amending the Transportation of Dangerous Goods Regulations would adopt Transport Canada Standard TP14877 — a revised standard — by reference, to replace the current CGSB43.147-2005, amended in July 2008 to update certain tank car design requirements, and certain selection and use requirements to bring them into harmonization with current U.S. regulations.

These amendments would introduce a new standard with the following changes:

These amendments would also introduce new requirements regarding the classification and the shipping documents:

“One-for-One” Rule

The proposal would constitute an “OUT” under the “One-for-One” Rule. This new proposed standard eliminates the need for over 30 equivalency certificates (permits) currently in place for the manufacture of new tank car designs. Since certificates are valid for 2 years, this equates to a reduction in administrative burden of $8,500 over 10 years, resulting in an annualized reduction of approximately $1,211. The cost of applying for an equivalency certificate is based on an average requirement of three hours at $43.14 per hour.

Small business lens

The small business lens does not apply to this proposed amendment.

Consultation

Safety standards are developed within technical committees composed of members of the container manufacturing industry (such as tank car manufacturers), user industry (such as tank car owners or leasers, shippers, or carriers), as well as regulatory bodies (such as the Federal Railroad Administration). Standards represent the consensus view of stakeholders in their development.

The new requirements pertaining to the classification of dangerous goods and the information on the shipping document are being proposed as a result of the TSB's recommendation to review the classification procedures and process, in response to the events at Lac-Mégantic. Consequently, there is an increased need to quickly incorporate these new requirements.

Given comments received regarding the recent Protective Direction No. 31 addressed to consignors and importers of petroleum crude oil in Canada, it was evident that clarification on classification documents accepted as proof of classification was necessary.

Rationale

Proof of classification

The new proposed requirement for consignors to keep a record of classification would address a gap in the information available to inspectors to validate the classification of dangerous goods. It would also address a recommendation from the Transportation Safety Board (TSB) [September 2013] to review classification procedures and processes.

A material safety data sheet (MSDS) on its own is not a valid proof of classification. The MSDS must be accompanied by an explanation so that the inspector does not have to interpret information based on the MSDS alone. The proof of classification is available from the consignor of dangerous goods, and carriers are able to ask consignors to provide such proof to them. The proposed amendment would eliminate confusion and uncertainty on what actually constitutes proof of classification.

Sampling method document

The classification of flammable liquids is based on the flash point and boiling point of the liquid.

By definition, dangerous goods included in packing group I have a flash point less than or equal to 60°C and a boiling point of 35°C or less. Those included in packing group II have a flash point less than 23°C and a boiling point greater than 35°C.

Petroleum crude oil is typically non-homogeneous, containing some percentage of sediment, water and volatile light ends. This stratification complicates the classification of petroleum crude oil and can pose a challenge for inspectors, as petroleum crude oil is a mixture of chemicals for which the representativeness of a given sample varies greatly, based on many factors. The new requirements would allow Transport Canada inspectors to validate classification and confirm that the samples used for the assignment of the packing group (PG) are suitable and representative of the dangerous goods present in the means of containment.

The risk of not adopting this new requirement is that there will be uncertainty about the validity of classification tests and the only way for inspectors to validate classification would be to perform the tests themselves, which would be costly and inefficient.

The assignment of the packing group is very important because the proposed additional safety features on rail tank cars DOT-111 are applicable only to new tank cars manufactured for the transport of petroleum crude oil and ethanol assigned to packing groups I and II.

Proposed standard TP14877

The standard includes a requirement for all new tank cars used for the transport of dangerous goods in packing groups I and II to implement features for increased safety. These features are already in place for new tank cars carrying some dangerous goods included in packing groups I and II, including those for crude oil and ethanol.

By Association of American Railroads (AAR) rules, all DOT-111 tank cars ordered on or after October 1, 2011, for petroleum, crude oil and ethanol included in PG I and II must have additional safety features that are not prescribed by Canadian regulations. They include top-fitting protection, half head shields, increased thickness of the heads and the shell for non-jacketed tank cars and mandatory use of normalized steel.

All members of the AAR have to follow these rules for tank cars destined to interchange between railways in Canada and the United States. In Canada, most rail carrier companies are members of the AAR, so they already comply with the proposed changes to DOT-111 tank cars destined to the transport of petroleum crude oil assigned to packing groups I and II.

The new requirements are fully aligned with the Pipeline and Hazardous Materials Safety Administration (PHMSA) of the United States' proposed Petition P-1577, which has been published through an advance notice of proposed rulemaking. For the purposes of this cost-benefit analysis, it is assumed that this petition will be adopted within 1 to 1.5 years of this standard coming into effect. No incremental costs to industry are anticipated beyond this 1.5-year period, as the costs associated with this standard would have been experienced by industry in the absence of this standard coming into effect and because of voluntary adherence to the new standard.

The cost-benefit analysis focused on the increased cost to purchase new tank cars in the service of dangerous goods in packing groups I and II, excluding those for crude oil and ethanol, over the identified period of March 2014 to September 2015, as well as the number of cars that would be impacted.

Industry has estimated that each new tank car would cost an additional $18,000. This cost may be mitigated, however, as a consignor would be able to transport an additional 6 000 to 7 000 kg (13 000 to 16 000 lb.) of product in an enlarged tank car. Industry has also estimated that 40 000 tank cars will be manufactured in North America during the next 18 to 24 months. Of those, 30 000 are destined for crude oil or ethanol service. The remaining 10 000 are for all other services. It is estimated that 1 000 (or 10%) of those are destined for the Canadian market. Due to a lack of data on the distribution of new tank cars by commodity, it is assumed that all are destined for dangerous goods service. In reality, however, some tank cars are expected to be purchased for non-dangerous goods service.

In order to determine what percentage of the 1 000 tank cars would incur an incremental cost resulting from the new requirement, a commodity volume analysis was conducted. The analysis looked at the transported volumes of dangerous goods in packing groups I and II for the approximately 27.3 million tonnes of transported dangerous goods in 2012 (excluding crude oil and ethanol, and those not transported in the DOT-111 tank car). Tank cars transporting sulphuric acid, gasoline, sodium hydroxide and hydrochloric acid would be impacted by the new requirement, and these commodities represented 25% of the identified volume. Applying this ratio to the estimated new 1 000 tank cars, it is estimated that approximately 250 tank cars would incur an incremental cost.

The estimated incremental cost for industry of implementing the new requirement over the identified period would be approximately $4.5 million. Calculated as present value, the estimated total cost would be $4.2 million. As noted above, this cost estimate does not account for potentially significant mitigating factors, such as the increased revenue potential of a larger tank car, as well as the assumption that all new tank cars would be used for transporting dangerous goods.

It should also be noted that the consultation period for Petition 1577 closed on November 5, 2013. It is anticipated that this consultation process will result in additional information from industry and other stakeholders on the potential costs and benefits of implementing TP14877.

If the decision is made not to adopt the new standard, then industry will continue manufacturing tank cars without applying the new safety features, thus leading to a reduction in safety for new DOT-111 tank cars.

Consignor's certification

A consignor's certification is a statement that is added to the shipping document that includes the name of the person preparing the consignment. Their name will appear on the shipping document certifying that the consignment has been prepared as per the applicable regulations. The International Civil Aviation Organization (ICAO) Technical Instructions for the Safe Transport of Dangerous Goods by Air, the International Maritime Dangerous Goods Code (IMDG Code) and the United States Code of Federal Regulations, Title 49 (49 CFR) already require consignor's certification, so adopting this requirement creates harmonization with international regulations.

A consignor's certification would eliminate the challenge imposed on inspectors trying to identify the contact person for acquiring information on the consignment of dangerous goods.

Implementation, enforcement and service standards

Compliance with the Transportation of Dangerous Goods Act, 1992 and the TDG Regulations is accomplished through the existing inspection network in Canada. The network includes both federal and provincial inspection forces that inspect all modes of transport and all consignors of dangerous goods.

Contact

Geneviève Sansoucy
Legislation and Regulations
Transport Dangerous Goods Directorate
Department of Transport
Place de Ville, Tower C, 9th Floor
330 Sparks Street
Ottawa, Ontario
K1A 0N5
Telephone: 613-990-5766
Fax: 613-993-5925
Email: TDGRegulatoryProposal-TMDPropositionReglementaire@tc.gc.ca

PROPOSED REGULATORY TEXT

Notice is given, pursuant to subsection 30(1) (see footnote a) of the Transportation of Dangerous Goods Act, 1992 (see footnote b), that the Governor in Council, pursuant to section 27 (see footnote c) of that Act, proposes to make the annexed Regulations Amending the Transportation of Dangerous Goods Regulations (Safety Standard TP14877: Containers for Transport of Dangerous Goods by Rail).

Interested persons may make representations concerning the proposed Regulations to the Minister of Transport within 30 days after the date of publication of this notice. All such representations must be in writing and cite the Canada Gazette, Part Ⅰ, and the date of publication of this notice, and be sent to Geneviève Sansoucy, Legislation and Regulations, Transport Dangerous Goods Directorate, Department of Transport, Place de Ville, Tower C, 9th Floor, 330 Sparks Street, Ottawa, Ontario K1A 0N5 (tel.: 613-990-5766; fax: 613-993-5925; email: TDGRegulatoryProposal-TMDPropositionReglementaire@tc.gc.ca).

Ottawa, December 12, 2013

JURICA ČAPKUN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE TRANSPORTATION OF DANGEROUS GOODS REGULATIONS (SAFETY STANDARD TP14877: CONTAINERS FOR TRANSPORT OF DANGEROUS GOODS BY RAIL)

AMENDMENTS

1. (1) Item 12 of the table to section 1.3.1 of the Transportation of Dangerous Goods Regulations (see footnote 1) is struck out.

(2) The table to section 1.3.1 of the Regulations is amended by adding the following after item 34:
Item

Column 1

Short Form

Column 2

Safety Standard or Safety Requirement
34.1 (35.1) TP14877 Transport Canada Standard TP14877 E, “Containers for Transport of Dangerous Goods by Rail, a Transport Canada Standard”, December 2013, published by the Department of Transport

2. The Table of Contents of Part 2 of the Regulations is amended by adding the following after the entry for section 2.2:

Proof of Classification............................................................. 2.2.1

3. The italicized list after the heading “Definitions” in Part 2 of the Regulations is amended by adding the following in alphabetical order:

technical name

4. Part 2 of the Regulations is amended by adding the following after section 2.2:

2.2.1 Proof of Classification

(1) A consignor who allows a carrier to take possession of dangerous goods for transport or who imports dangerous goods into Canada must keep a proof of classification for a period of at least two years that begins on the date that appears on the shipping document.

(2) For the purposes of this section, a proof of classification is

Figures 10.5 and 20.2 of the Manual of Tests and Criteria are examples of test reports.

A material safety data sheet (MSDS) is not a proof of classification unless it is accompanied by a document that explains how the dangerous goods were classified.

(3) A proof of classification must include the following information:

5. The Table of Contents of Part 3 of the Regulations is amended by adding the following after the entry for section 3.6:

Consignor's Certification....................................................... 3.6.1

6. The italicized list after the heading “Definitions” in Part 3 of the Regulations is amended by adding the following in alphabetical order:

49 CFR

ICAO Technical Instructions

IMDG Code

7. Part 3 of the Regulations is amended by adding the following after section 3.6:

3.6.1 Consignor's Certification

(1) A shipping document must include, after the information required under section 3.5, one of the following certifications:

(2) The French version of the certification set out in paragraph (1)(b) may be replaced by: “Je soussigné déclare que la désignation officielle de transport ci-dessous décrit de façon complète et exacte le contenu de la présente expédition et que celle-ci est classée, emballée, marquée et étiquetée/placardée et à tous égards en bon état pour le transport conformément aux réglementations internationales et nationales applicables.”.

(3) The certification must be made by an individual who is the consignor or an individual acting on behalf of the consignor and must set out that individual's name.

8. The entries for sections 5.15 and 5.15.1 in the Table of Contents of Part 5 of the Regulations are struck out.

9. (1) Paragraph 5.10(1)(b) of the Regulations is amended by adding “or” at the end of subparagraph (i) and by replacing subparagraphs (ii) and (iii) with the following:

(ii) TP14877;

(2) The italicized text after subparagraph 5.10(1)(b)(ii) of the Regulations is struck out.

(3) Subparagraph 5.10(1)(d)(iii) of the Regulations is replaced by the following:

(iii) TP14877, or

10. (1) Paragraph 5.14(1)(b) of the Regulations is amended by adding “or” after subparagraph (i) and by replacing subparagraphs (ii) to (iv) and any italicized text with the following:

(ii) TP14877;

(2) The italicized text after subparagraph 5.14(1)(b)(ii) of the Regulations is struck out.

(3) Subparagraph 5.14(1)(d)(ii) of the Regulations is replaced by the following:

(ii) TP14877,

(4) Subsections 5.14(3) and (4) of the Regulations are repealed.

11. Sections 5.15 and 5.15.1 of the Regulations are repealed.

12. Paragraph 10.7(4)(a) of the Regulations is replaced by the following:

13. The portion of UN Number UN1267 and UN1268 of Schedule 1 to the Regulations in column 5 is replaced by the following:

Col. 1

UN Number

Col. 5

Special Provisions
UN1267 90
UN1268 90

14. Paragraph (a) of special provision 32 of Schedule 2 to the Regulations is replaced by the following:

15. Schedule 2 to the Regulations is amended by adding the following after special provision 89:

90

(1) The consignor must classify these dangerous goods on the basis of samples.

(2) The consignor must keep a document that explains the sampling method and includes the following information:

(3) The document must be kept for a period of at least two years that begins on the date that appears on the shipping document.

Many methods are available for the sampling of petroleum products. An example can be found in American Society for Testing and Materials Standard ASTM D4057-12, “Standard Practice for Manual Sampling of Petroleum and Petroleum Products”.

UN1267, UN1268

TRANSITIONAL PROVISION

16. A person may, for a period of six months that begins on the day on which these Regulations come into force, comply with the Transportation of Dangerous Goods Regulations as they read immediately before that day.

COMING INTO FORCE

17. These Regulations come into force on the day on which they are published in the Canada Gazette, Part Ⅱ.

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