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a a U.S. Department of Transportation Federal Railroad Administration MAR 0 3 2016 Mr. James R. Hertwig President and Chief Executive Officer Florida East Coast Railway 7150 Philips Highway Jacksonville, FL 32256 Dear Mr. Hertwig: Administrator 1200 New Jersey Avenue, SE Washington, DC 20590 This letter is in response to Florida East Coast Railway's (FEC) request under Title 49 Code of Federal Regulations (CFR) Section 174.63 for the Federal Railroad Administration (FRA) approval to transport liquefied natural gas (methane, refrigerated liquid (UN 1972), or LNG) by rail, in intermodal (IM) portable tanks in container -on -flatcar or trailer -on -flatcar service, from origination and destination points on the FEC network. As outlined below, it lists the next steps regarding your request. As FEC points out in its most recent letter, FEC originally discussed its interest in moving LNG with FRA on September 3, 2014. Since then, FRA has engaged in ongoing discussions with FEC regarding its potential plans to transport LNG in IM portable tanks, including inspecting the rail cars FEC proposes to use for the transportation of LNG, and visiting the specific portions of track FEC proposes to use to transport the commodity. FEC has engaged with FRA during this period as well, providing additional details regarding its plans for LNG transport within the various documents it submitted to FRA in 2015 and 2016. As an example of FRA and FEC's cooperative efforts, FRA has met with FEC on multiple occasions over the last year, and recently concurred with Phase One of FEC's LNG -as -a - locomotive -fuel test program. After concurring with Phase One of FEC's LNG -as -a -locomotive - fuel test program, and reviewing and evaluating the relevant information on the safety of FEC's LNG -fueled locomotive and tender, FRA concurred with FEC's proposals for limited non - revenue operation of its LNG -fueled locomotive consist over a portion of FEC's rail network. The proposed transportation of LNG by rail is a new opportunity for railroads, and a new challenge for safety regulators. No railroad in the United States currently transports LNG. LNG is a hazardous material, with temperatures of -260 degrees Fahrenheit at atmospheric pressure. We know any release of LNG in a non -controlled environment is dangerous, but the transportation of large quantities of LNG in a single train presents unique safety risks. Moving hazardous materials by rail is not new, and is one of the safest ways to move dangerous products. In fact, FRA believes it is safer to transport LNG by rail than it would be to transport the product by an alternative method. But the unique challenges posed by the rail transportation