PHMSA recently finalized a rule that significantly revises certain aspects of liquid pipeline safety regulation under 49 CFR Part 195.  Nearly nine years in the making, the final rule is intended to address PHMSA and NTSB accident investigation findings from the Marshall Michigan spill in 2010 as well as 2011 and 2016 outstanding Congressional mandates and GAO recommendations.  A version of this rule was initially scheduled for publication in the Federal Register in the last week of the prior presidential administration in 2017.  It was held back as a result of the regulatory freeze and subsequent deregulatory review by the Trump administration which pared down certain changes in the recent final rule.

Effective July 1, 2020, this rule expands requirements to address risks to pipelines outside of environmentally sensitive and populated areas, requiring integrity assessments and leak detection for all pipelines (with some exceptions).  In addition, the rule makes changes to the integrity management requirements, including data integration and to emphasize the use of inline inspection (ILI) technology.  Notably, PHMSA declined to revise existing Part 195 integrity management and non-integrity management repair criteria and explained that it would instead issue a supplemental notice of proposed rulemaking on those issues.

Even though the rule does not go into effect until the middle of next year, operators should begin to prepare to address the more substantive requirements such as scheduling integrity assessments on non-HCA pipelines, implementing leak detection systems on non-HCA pipelines, and collecting and preparing to integrate additional data attributes for integrity management pipelines, among other activities.  This is particularly important given the Agency’s recently finalized gas rulemaking which will likewise trigger integrity assessments, analysis and other requirements.  While timelines in the final rules (liquid and gas) provide time to phase in the requirements, there is likely to be a strain on industry resources and contractors with the technology and the qualifications to implement these tasks during this time.  The more extensive proposals are summarized below.

Expansion of Integrity Assessments outside HCAs

The rule establishes a new requirement that operators perform integrity assessments every 10 years for pipelines outside of HCAs (49 C.F.R. 195.416).   An initial assessment is required by October 1, 2029 and periodic assessments are required at least once every 10 years from the prior assessment (or as otherwise necessary to ensure public safety and the environment).  The rule requires use of ILI for this assessment unless it is impracticable (and outlines other possible methods for performing the assessment).

Expansion of leak detection outside HCAs

PHMSA revises 49 C.F.R. 195.134 and 195.444 to extend leak detection beyond HCAs to all new and existing pipelines, except for gathering pipelines.  Once the rule is effective, PHMSA provides for a 5 year compliance period for existing pipelines that are in service (until October 1, 2024) and for new pipelines not yet placed into service, PHMSA provides for 1 year for compliance (until Oct 1, 2010).

Extreme Weather Inspection 

The rule includes a new requirement at 49 C.F.R. 195.414 that operators perform inspection of pipelines in areas affected by extreme weather and natural disaster events.  Inspections must commence within 72 hours after the cessation of the event (defined as the point in time when the affected area can be safely accessed by personnel and equipment required to perform the inspection).  An operator must take prompt remedial action to ensure safe operation of the pipeline, which “might” include six different actions provided in the rule (ranging from shut down to notifying affected communities).

Various Integrity Management Changes

ILIRevises 49 C.F.R. 195.452 to require assessment by ILI (with certain requirements depending on the pipeline and the threats at issue) unless it is impracticable (and unless it is a newly constructed pipeline where the baseline can be established by pressure test). In addition, all liquid pipelines in HCAs and areas that could affect HCAs must be made capable of accommodating ILI within 20 years (with some exceptions).

Data IntegrationRevises the data integration requirements by adding specific elements that must be analyzed and reviewed under IMP at 49 C.F.R. 195.452(g).  Operators must begin integrating all data elements outlined in the rule on Oct. 1, 2020 with all attributes integrated by Oct 1, 2022.

Responding to AnomaliesRevises general language regarding responding to IMP anomalous conditions, including an obligation to “ensure that the repairs are made in a safe and timely manner and are made so as to prevent damage to persons, property, or the environment.  The calculation method(s) used for anomaly evaluation must be applicable for the range of relevant threats.

Inspections of  Certain Underwater Pipelines in HCAsNotwithstanding integrity management assessment schedules otherwise required under 49 C.F.R. 195.452, an operator of any underwater liquid pipeline facilities located in a HCA that is not an offshore facility and any portion of which is located at depths greater than 150 feet must (1) complete ILI for integrity threats not less than once every 12 months and (2) integrity assessments using route surveys, depth of cover surveys, pressure tests, ECDA, or other technology are completed on a schedule based on the risk that the facility poses to the HCA (49 C.F.R. 195.454).

Extension of Reporting Requirements for Certain Gravity and Rural Gathering Lines

PHMSA has extended the reporting requirements under Part 195, Subpart B to apply to pipelines transporting liquid by gravity and non-regulated rural gathering lines (49 C.F.R. 195.13 and 195.15), among other more minor clarifications.  This data collection will be used to further analyze whether the Agency’s regulations should be expanded to include pipelines that are not currently regulated.  The Agency notes that any decision to expand oversight of gathering (and by extension other currently non-regulated pipelines) beyond what is currently regulated “will be driven by risk assessment and analysis based on evaluations of incident and accident data, data related to infrastructure and further technological advancements such as the unconventional production practices used in shale formations.”  PHMSA has not required any reporting specific to transportation-related flow lines in this rulemaking.

 

 

 

 

 

 

On October 1, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) issued three long awaited final rules.  This post addresses the Agency’s final rule on Emergency Orders, a significant new tool in PHMSA’s pipeline safety enforcement tool box that can be issued to the entire industry or portion of the industry.  Alerts on the other two rulemakings are forthcoming (i.e., the first of three final rules regarding natural gas pipelines and amendments to the liquid pipeline rules).

Continue Reading PHMSA Updates its Latest Enforcement Tool: Emergency Order Final Rule

Tomorrow’s Federal Register will include three final rules published by the Pipeline and Hazardous Materials Safety Administration (PHMSA) that have been years in the making:  (1) Safety of Gas Transmission Pipelines: Maximum Allowable Operating Pressure Reconfirmation, Expansion of Assessment Requirements, and Other Related Amendments; (2) Safety of Hazardous Liquid Pipelines; and (3) Enhanced Emergency Order Procedures.  All three rules have been lingering at the Office of Management and Budget (OMB) for review for at least several months, and probably none have been more anticipated than the gas transmission and liquid pipeline rules.

Continue Reading PHMSA Publishes Long-Awaited Final Rules

Troutman Sanders Pipeline partners Catherine Little, Bob Hogfoss and Annie Cook authored an article published in Law360 on the Pipeline Safety Act reauthorization legislation currently in the U.S. House and Senate. The current authorization of federal pipeline safety laws and funding of the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) expires at the end of September, and the statute is up for reauthorization this year.

To read the entire article in Law360, click here.

On August 12, 2019 the U.S. Fish Wildlife Service (“USFWS”) and National Marine Fisheries Service (“NMFS”) (collectively, the “Services”) released pre-publication versions of three final rules that are expected to significantly affect the applicability and implementation of the Endangered Species Act (“ESA”).  These regulations relate to the process and standards for listing species and designating critical habitat, the scope of protections for threatened species, and the process for consultations with federal agencies under Section 7.

To read the entire blog post, click here.

On Friday, August 9, the Environmental Protection Agency (“EPA”) unveiled a pre-publication version of a notice of proposed rulemaking (“NOPR”) to clarify state water quality certification (“certification”) procedures under Section 401 of the Clean Water Act (“CWA”) to allow for increased regulatory certainty in federal licensing and permitting activities, and particularly authorization of infrastructure projects.  EPA Administrator Andrew Wheeler announced on Friday that the “proposal is intended to help ensure that states adhere to the statutory language and intent of Clean Water Act.”  The NOPR proposes substantive changes to the scope of state water quality certification authority under the CWA and the procedures governing these certifications, focusing on the plain language of the statute and at times departing from prior case law precedent.

To read the entire blog post, click here.

Both the Senate and the House now have bills in varying stages of review for reauthorization of the Pipeline Safety Act, which expires at the end of September.  There are some notable differences in the bills, reflecting the Democratic majority in the House and the Republican majority in the Senate.  Neither bill has been put before the entire chamber for a vote.  If they do progress further, it remains to be seen how the bills will ultimately be reconciled. Continue Reading Pipeline Safety Act Reauthorization: Issues for Resolution

On July 24, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published an invitation to comment on a preemption application submitted by the States of North Dakota and Montana.  The States’ application asks PHMSA to override vapor pressure limits for crude by rail imposed by the State of Washington.  New Washington law, which became effective on July 28, 2019, prohibits loading or unloading crude oil from a rail car unless the vapor pressure is lower than nine pounds per square inch.  The law also requires facilities receiving crude by rail to provide “advance notice” of the “type” and “vapor pressure” of the crude.  According to North Dakota and Montana, the new law effectively targets Bakken crude—thought by some to be more volatile—and should be preempted by the Hazardous Materials Transportation Act, which PHMSA administers. Continue Reading Vapor Pressure Remains a Volatile Topic

FERC’s consideration of indirect environmental impacts of the projects it certifies has been heavily debated as the concerns over climate change increase.  Both the National Environmental Policy Act (NEPA) and Natural Gas Act (NGA) require that FERC consider how an interstate natural gas pipeline directly and indirectly affects the human environment.  Although consideration of direct impacts may be a less controversial topic, FERC’s approach with respect to indirect impacts[1] has proven to be more complex.  It is particularly relevant in light of the Council on Environmental Quality’s (CEQ’s) June 2019 proposed guidance, directing how federal agencies should assess project-related greenhouse gas emissions, discussed in detail here and here.  The guidance suggest that FERC should employ a “rule of reason” when considering impacts of greenhouse gas emissions and if FERC lacks adequate information about these emissions, it does not need to quantify them.  This recommended approach, however, seems to conflict with how the D.C. Circuit interpreted FERC’s duty in analyzing greenhouse gas and other indirect emissions in its earlier June 2019 decision Birckhead v. FERC, USCA Case No. 18-1218 (D.C. Cir. 2019).  Continue Reading D.C. Circuit Suggests FERC Should Try to Quantify Indirect Environmental Impacts of Pipeline Projects

The Council on Environmental Quality (CEQ) issued new draft guidance at the end of June intended to further permit streamlining generally and greenhouse gas (GHG) analysis specifically.  The new guidance replaces previous CEQ guidance issued by the Obama Administration on how GHG effects should be estimated for projects during review under the National Environmental Policy Act (NEPA).  Whether and how a federal Agency must consider GHG emissions during NEPA review continues to be a controversial issue for pipeline construction and expansion projects that require federal permits.

Continue Reading Proposed CEQ Guidelines on Climate Change and NEPA Focus on Permit Streamlining