Lining Plan Compliance HM 216B Tim Schaffer and Ken Campbell December 19th, 2018

Tim Schaffer Ken Campbell

Agenda 1 2 3 4 5 6 7 8 Tank Cars and Regulatory Timeline What is HM 216B 2 Tank Car Owners Responsibilities 3 Lining Owners Responsibilities 4 Tank Car Facility Responsibilities 5 6 EQAB/EQCI/EQCA Lining Plan/ Corrosive Service 7 Q & A 8

Regulatory Timeline:

CI Tank Cars: 11 Gage Jacket Thermal Protection Top Fitting Protection

NCNI Tank Cars: Both the car type and bolster area indicates the tank being non-coiled and non-insulated. (DOT 111 - Lading 1267)

Shell thickness requirements

Shell thickness requirements Option to incorporate additional thickness at build *Note: Data applies to tank cars with test pressures 60-200 psig; bottom shell thickness requirements only; allowable reduction for top shell/head is 1/8” ** Localized corrosion can not exceed 8” diameter and need to be separated from other local reductions by 16” *** Cars with corrosion pits with depth greater than width required to be restored before lining can be applied 1/16” over the life of the asset

Corrosive service Corrosive to the tank or service equipment: A material identified in Appendix D 49CFR Part 180.503 or a material when in contact with the inner shell of the tank or service equipment has a corrosion rate on steel greater than 2.5 milli-inches per year (mpy) Significantly broadens the spectrum of commodities considered corrosive Incorporates commodities ‘reactive’ to tank and service equipment List is not exhaustive – “any material that causes corrosive damage to the tank or service equipment is now also included” Includes regulated & non-regulated commodities

What is HM-216B? PHMSA Docket No. PHMSA-2010- 008 Incorporates seven different special permits for transportation and two petitions for rulemaking. Thirteen entities provided comments in response to the NPRM Builders, lessors, industry associations and shippers

Tank Car Owners Responsibility: Ensures correct commodities are listed on contracts. Define lining requirements. Ensures that repair facilities have the correct information when cars are being shopped. “Tank car owner is still responsible for its tank car and must establish the conditions under which interior coatings and lining can be applied or removed as well as the materials that may be in the tank car, even if the tank car owner is not the coating or lining owner.” Tank car owners must require that their lessees demonstrate that both the internal coating/lining and the designation and subsequent inspection intervals and methods used are appropriate…. Per PHMSA/FRA Remarks: Tank owners must assert control over the materials transported in their cars through lease agreements

Tank Car Owners Responsibility: Must ensure tank car facility has a written practice and training program for qualifying personnel (EQAB / EQCI / EQCA), and that it is suitable to provide protection to the asset. EQAB EQCI EQCA Car owner to ensure customer can demonstrate commodity-lining compatibility

Lining Owners Responsibility : Section 180.509 of Title 49 CFR (Code of Federal Regulation) Lining Plans – Information Required: (1) Manufacturer recommendations (2) Previous inspection reports (3) Repair records (4) Service history (in the form of number of trips) (5) In-service inspections Inspection interval not to exceed 8 years Must ensure tank car facility has a written practice and training program for qualifying personnel (EQAB / EQCI / EQCA), and that it is suitable to provide protection to the asset.

Lining Owners Responsibility: 2017 2007 GESP VALVE PRD 75 PSI 2018 STUB SILL 88 B.2 LINING 2028 SERVICE EQUIPMENT THICKNESS TEST TANK QUALIFICATION DUE QUALIFIED STATION STENCIL Shop ABC   p Interior

Tank Car Facility Responsibility: A tank car facility must obtain the permission of the equipment owner before performing work affecting alteration, conversion, repair, or qualification of the owner's equipment. For the purposes of qualification and maintenance, the tank car facility must use the written instructions furnished by the owner or have written confirmation from the owner allowing the use of written instructions furnished by the owner or have written confirmation from the owner allowing the use of written instructions furnished by another. A tank car facility must not use, copy distribute, forward or provide to another person the owner's confidential and proprietary written instructions, procedures, manuals, and records without the owner's permission.

Tank Car Facility Responsibility: A tank car facility must report all work performed to the owner. The tank car facility must also report observed damage, deterioration, failed components, or non-compliant parts to the owner. A tank car facility must incorporate the owner's Quality Assurance Program into their own Quality Assurance Program. A tank car facility must have a written practice and training program for qualifying personnel performing abrasive blasting (EQAB), coating inspection (EQCI) or coating application (EQCA) in tank cars in corrosive service.

EQAB / EQCI / EQCA: The tank car facility may have one written practice related to EQAB/EQCI/EQCA or may have individual written practices for each method. The tank car facility usually will have individual training programs for each method. The written practice(s) and training programs are often developed using two NACE documents as guidelines: NACE RP0495 “ Guidelines for Qualifying Personnel as Abrasive Blasters and Lining Applicators in the Rail Industry”. NACE SP0398 “Recommendations for Training and Qualifying Personnel as Railcar Coating and Lining Inspectors”.

EQAB / EQCI / EQCA: Written Practice(s): Establishes the minimum requirements for education, training, experience, examination and qualification of personnel. Content typically defines the following: Purpose, Scope, Definitions/Acronyms, References Functions & Responsibilities of Trainees, Instructors, Qualified team members and Qualifying Officials Education, Training & Experience and Minimum Employment Criteria Visual Acuity, Practical and Written/Oral Examinations requirements Initial Qualification requirements and expiration terms Annual requirements to maintain qualification Requalification requirements Code of Ethics, Suspension, Revocation, Reinstatement List of supporting documents/forms Record keeping requirements

EQAB Training Program: The development of an in-house training program is essential to foster the growth of the abrasive blaster’s skill set, to improve technical continuity in the industry and to strengthen organizations providing this function.

EQAB Training Program: EQAB training programs typically include the following topics: Safety – confined space entry, PPE, Abrasive blasting process and equipment hazards Company procedures related to abrasive blasting Blast Cleanliness Standards – SP5 (NACE #1) White Metal, SP10 (NACE #2) Near White Metal, SP6 (NACE #3) Commercial, SP7 (NACE #4) Brush-off Operational Objectives and Best Practices/Techniques Overview of common inspection equipment associated with the abrasive blasting process Often includes information and photos related to interior weld seam condition and requirements Photos depicting acceptable and rejectable blast cleanliness

EQCI Training Program: 49 CFR 180 requires facilities performing this function must have available a coating inspector who has been qualified in-house on the basis of demonstrated ability, achievement, experience and training. Tank cars transporting commodities that are corrosive to the tank must have internal coatings inspected by a qualified technician per DOT 49 CFR 180.501 and 180.509 A comprehensive training program is imperative.

EQCI Training Program: EQCI training programs typically include the following topics: Safety – confined space entry, PPE, etc Company procedures related to interior coating inspection Information related to common interior coating systems – what they look like when newly applied and after being in service Overview of common abrasive blasting and coating inspection equipment Coating failure and its causes – car design, surface preparation, application deficiencies Blast Cleanliness Standards – SP5 (NACE #1) White Metal, SP10 (NACE #2) Near White Metal Information and photos related to interior weld seam condition and requirements Inspection of newly applied and in-service coatings Photos depicting examples of coating failures Photos depicting acceptable coatings Proper methods for repairing newly applied and in-service coatings

EQCA Training Program: AAR regulation M1002 also known as C-III, Appendix L requires that protective interior coatings shall be applied in accordance with the material manufacturers application procedure and/or the contracting authorities requirements by personnel qualified in accordance with a written company practice. A comprehensive training program is imperative. NOTE: Some facilities allow dual qualification of an employee upon successful completion of EQCA training (i.e., employee also becomes qualified as EQCI). This must be defined in the written practice.

EQCA Training Program: As long as your written practice allows and of course states that “duel” qualifications are acceptable under the company policy. It is not uncommon to have applicator and inspector COMBINED. “An employee that possesses the EQCA qualification is automatically deemed an EQCI as well.”

EQCA Training Program: EQCA training programs typically include the following topics: Safety – confined space entry, PPE, Airless spray equipment hazards, etc Company procedures related to abrasive blasting, coating inspection and coating application Information related to common interior coating systems – what they look like when newly applied and after being in service Overview of common abrasive blasting, coating application and coating inspection equipment Blast Cleanliness Standards – SP5 (NACE #1) White Metal, SP10 (NACE #2) Near White Metal Information and photos related to interior weld seam condition and requirements Overview of all steps associated with interior coating application Review of coating manufacturer and/or contracting authority application procedures, requirements and other related information or documents

EQCA Training Program: Inspection of newly applied and in-service coatings Coating failure and its causes – car design, surface preparation, application deficiencies Photos depicting examples of coating failures Photos depicting acceptable and rejectable coating applications Proper methods for repairing newly applied and in-service coatings

EQCA Training Program:

Touch Up A comprehensive EQCA program should incorporate both coatings application and also the correct method of repair acceptable for a return to service condition.

Regulatory Bodies for North American Rail FRA – Are the Federal Regulators in Washington, DC. AAR – Are the quality system administrators. BOE – Are the authorized auditing body for the AAR/FRA. TC – Are the Canadian Federal Regulators in Ottawa, ON. Title 49 CFR (Code of Federal Regulations) Part 180 Link: https://www.law.cornell.edu/cfr/text/49/180.509

Title 49 CFR (Code of Federal Regulations) Part 180 § 180.503 Definitions The following definitions and those contained in §§ 171.8 and 179.2 of this subchapter apply: Coating/lining owner means the person with the financial responsibility for purchasing and maintaining the integrity of the interior coating or lining. Corrosive to the tank or service equipment means a material identified in Appendix D of this part or a material when in contact with the inner shell of the tank or service equipment has a corrosion rate on steel greater than 2.5 milli-inch per year (mpy) (0.0025 inch per year). Defects mean abrasions; corrosion; cracks; dents; flaws in welds; distortions; erosion; missing, damaged, leaking or loose components and fasteners; and other conditions or imperfections that may make a tank car unsafe for transportation and/or require it to be removed from service. Title 49 CFR (Code of Federal Regulations) Part 180

Why The Regulations: LINING INSPECTION No hazmat releases over this period 1/16” over the life of the asset LINING INSPECTION (As part of Tank Car Re-qualification) Mandated inspection required on all lined tanks in corrosive service (corrosion rate of 2.5 milli-inch per year) Lining owner must have an inspection plan Max. 8 year interval

Corrosion Rates…..

Asset Protection / Lining Plan Compliance: Tank car and lining owners should align themselves with a coating manufacturer that provides quality products compatible with the commodity and service environment in order to protect their assets. Aligning with a coating manufacturer that has representatives with significant rail industry specific auditing, coating application and inspection procedure and training program development experience results in a higher level of regulatory compliance. Commodity lining pairings through testing.

Questions:

Contact Info For assistance with rail related inquiries, please contact: Tim Schaffer Ken Campbell KAM – Rail Segment Mgr. Trans. of Chemicals +1 843 333 6397 +1 519 770 8732 tim.schaffer@akzonobel.com kenneth.campbell@akzonobel.com