ILTA in late August commented to the Pipeline and Hazardous Materials Safety Administration on North Dakota’s and Montana’s request for a preemption determination on the July 2019 Washington State law Crude Oil by Rail – Vapor Pressure.
ILTA asked PHMSA to find that Washington State’s law limiting the Reid Vapor Pressure of crude oil is preempted by Federal Hazardous Materials Regulations. ILTA said the state law is also in conflict with the Dormant Commerce Clause of the U.S. Constitution, which prevents states from interfering with interstate commerce between the states.
The HMR are essential regulations that ensure consistency across the United States for the regulation of hazardous materials in transportation, such as petroleum crude oil. “If every jurisdiction could specify the properties of commodities involved in interstate commerce that move through their jurisdiction, the supply chain for such commodities would be unworkable,” ILTA wrote in its August 20 comments. “PHMSA must assert its jurisdiction over the properties of hazardous materials in transportation and find that the Washington State Law is preempted.”
Several ILTA members operate liquid terminals in the State of Washington that either handle, or have handled in the past, crude oil for refining or for export. By limiting the amount of crude with an RVP greater than or equal to 9 psi based on 2018 volumes handled, the state interferes with terminal operators’ ability to enter the market, or to adjust their operations to meet changes in market demand and creates an uneven playing field that allows some facilities to more readily respond to the market, ILTA explained. “Not only would this prevent new terminals from coming into the market, it would prevent those operators whose facilities may have handled little or no crude in 2018 from adjusting their volumes upward even if they handled greater volumes prior to 2018,” ILTA wrote.