US states against railing ethane from Marcus Hook

Applications to transport ethane have come under fresh scrutiny after the Ohio train derailment in February, write Amy Strahan and Abby Caplan

A number of northeast US states' attorney generals are opposing plans to transport ethane by rail domestically from the Marcus Hook terminal in Pennsylvania over safety concerns. This is despite the country shipping similar gaseous products such as ethylene and LPG and other more hazardous chemicals on railways.

Texas-based industrial gas supplier Gas Innovations is aiming to start the first US ethane rail shipments, eyeing new domestic customers and Gulf coast exports for the relatively cheap natural gas liquid (NGL) produced in the Marcellus shale in northeast US. The firm transports small volumes of ethane by truck from Marcus Hook, collecting the supply from midstream operator Energy Transfer's Mariner East NGL pipeline system that runs from Marcellus to the east coast terminal.

Gas Innovations first applied for a permit from the US Pipeline and Hazardous Materials Safety Administration (PHMSA) to ship ethane cryogenically by rail in August 2021. The application was left in limbo until the regulator published a notice in December 2022 calling for comments until 4 January, highlighting its similarity to issues raised in pending discussions on rail transport of LNG.

The ethane application is now attracting fresh scrutiny from state officials following the 3 February train derailment on a Norfolk Southern line in East Palestine, Ohio, which ignited 11 tank cars carrying hazardous materials. The accident spurred Norfolk Southern to announce changes to its safety programme, including adding more detectors to seek out hot spots around the axle — which preliminary investigations suggest was the cause of the fire and subsequent derailment — and acoustic bearing detectors to identify vibrations.

A 21 February letter from 14 state attorney generals to the PHMSA argued that Gas Innovations' application should be denied as it fails to define destinations for ethane. It also argues that ethane, while similar in character to ethylene, which is transported by rail in the US, is heavier than ethylene and LNG, and would not disperse as readily into the atmosphere in the event of a leak or accident.

"Ethane tends to form ground-hugging clouds, which may increase the risk of cascading car failures as pooling around other non-compromised tank cars may lead to embrittlement of outer tank steel and loss of containment," the attorney generals write. "Comparisons to the safety record of transporting ethylene by rail are therefore not helpful to Gas Innovations' application."

Yet US rail shipments of LPG, which is heavier than air and ethane, already comprise a significant share of railway traffic in the US. About 1.14mn bl (92,000t) of propane was delivered by rail between the US midcontinent — from fractionators processing Marcellus NGLs — and east coast in December, and 298,000 bl from the midcontinent to the Gulf coast, data from the EIA show.

Railroaded into ‘baffling' position

"[The attorney generals] must not understand what's currently on the railroads," Gas Innovations director of LNG refrigerants T Madray says. "Or they don't understand the similarities of ethane and ethylene."

The company has received interest from a variety of end-users for railed ethane for enhanced crude recovery, in aerosols, and a variety of other applications, Madray says. The opposition from New York state attorney general Letitia James is "a little baffling", he says, bearing in mind it would not be on any proposed rail route from Marcus Hook. The application clearly states the ethane would be bound for the US Gulf coast and western Canada, Madray says.

But even more disheartening has been the PHMSA's response to Gas Innovation's application, he says. "I have not had any feedback for over a year, and I have made dozens of emails and calls to PHMSA with zero feedback on the permit," he says. "It speaks a lot to how poor our regulatory process works."

North American ethane shipment routes

US ethane output

US ethane exports