The Pipeline and Hazardous Materials Safety Administration (PHMSA) on May 28, 2020, issued a pre-publication Notice of Proposed Rulemaking titled Gas Pipeline Regulatory Reform. The proposal is issued pursuant to the Administration’s executive orders directing federal agencies to reduce burdens and in response to comments from the industry. In keeping with that intent, the proposed changes appear generally favorable to the gas pipeline industry and should ease certain regulatory burdens related to discrete areas of gas pipeline incident reporting, construction (welding requalification), operation (primarily distribution and plastic pipelines), and maintenance (rectifier inspections and low-pressure pipelines).
As previously reported, the Federal District Court for Montana vacated the U.S. Army Corps of Engineers (“Corps”) Nationwide Permit (“NWP 12”) on April 15, 2020, finding that the Corps had failed to consult with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service prior to issuing NWP 12. The court’s decision vacated NWP 12 nationwide and prevents the Corps from authorizing a broad range of projects that are unrelated to the project at issue in that case, the Keystone XL Pipeline. On April 27, 2020, the Corps requested that the court stay the effect of its ruling pending the Corps’ appeal to the U.S. Court of Appeals for the Ninth Circuit, and, on May 11, 2020, the District Court narrowed its order to allow continued authorization of maintenance on existing pipelines and construction of certain non-pipeline projects.
In an effort to relieve the economic impact associated with the response to COVID-19, President Trump recently signed an Executive Order (EO) designed to promote economic recovery by reducing regulatory burdens for businesses. Under the EO, all federal agencies are directed to (1) review regulations and rescind, modify, waive, or provide exemptions to those regulations that may impair economic growth and (2) consider whether any of the temporary modifications or waivers should be permanently adopted through formal rulemaking. While the EO is intended to provide relief during the COVID-19 pandemic, it is unclear whether it will have a tangible impact on enforcement of the federal pipeline safety or environmental laws for the oil and gas pipeline industry. Continue Reading Executive Order Promotes Enforcement Discretion and Deregulation
The U.S. District Court for Montana amended and narrowed its April 15, 2020 order yesterday vacating Nationwide Permit (NWP) 12, which authorizes minimal impacts from “utility line activities” to jurisdictional waters. Despite the case centering on the Keystone XL Pipeline, as previously reported, the court’s April 15 order vacated NWP 12 nationwide for all activities (including pipelines, broadband, electric, water and sewer) until the U.S. Army Corps of Engineers (Corps) consults with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service (Services) pursuant to the Endangered Species Act (ESA). Nearly a month later, the court amended the vacatur’s applicability by limiting it to the construction of new oil and gas pipelines, pending completion of the consultation process and compliance with all environmental statutes and regulations. Under the amended order, the Corps may continue to authorize the use of NWP 12 for “maintenance, inspection, and repair activities” on existing projects, including existing pipelines, as well as non-pipeline construction activities (e.g., broadband, electric, water, and sewer). Continue Reading Court Limits Nationwide Permit 12 Vacatur to New Oil and Gas Pipeline Construction
The United States Department of Transportation (“DOT”), Office of the Inspector General (“OIG”) recently issued its audit findings of the Pipeline and Hazardous Materials Safety Administration’s (“PHMSA’s”) procedures and standards for reviewing whether liquified natural gas (“LNG”) facilities meet federal safety standards. The audit was designed to assess PHMSA’s (1) review of proposed LNG facilities, (2) inspection of existing LNG facilities, and (3) evaluation of state gas programs that are tasked with inspecting LNG facilities. While the OIG found that PHMSA’s inspection of existing interstate LNG facilities met agency standards, the audit identified several deficiencies with PHMSA’s siting of proposed LNG facilities and its review processes of state programs. This report comes as PHMSA’s proposed overhaul of its Part 193 LNG safety regulations moves toward publication.
In light of its recent decision in County of Maui v. Hawaii Wildlife Fund, the Supreme Court of the United States has instructed the United States Court of Appeals for the Fourth Circuit to revisit its decision in Upstate Forever v. Kinder Morgan Energy Partners, L.P. On remand, the Fourth Circuit will be the first lower court to apply the Supreme Court’s new “functional equivalent” standard to determine whether the Clean Water Act (CWA) requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater. Under this “functional equivalent” standard, courts must consider a variety of factors to determine whether a release constitutes a “discharge of any pollutant” as defined by the CWA, including: (1) transit time, (2) distance traveled, (3) the amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source, (4) the manner by or area in which the pollutant enters the navigable waters, and (5) the degree to which the pollution (at that point) has maintained its specific identity. As we discussed in detail on a previous post, it is unclear how lower courts will apply these subjective factors, and notably this initial case will be applying the standard specifically in the context of pipelines.
As we previously reported, the Federal District Court for Montana vacated the U.S. Army Corps of Engineers (“Corps”) Nationwide Permit (“NWP 12”) on April 15, 2020, finding that the Corps had failed to consult with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service prior to issuing NWP 12. The court’s decision vacated NWP 12 nationwide and prevents the Corps from authorizing a broad range of projects that are unrelated to the project at issue in that case, the Keystone XL Pipeline. Yesterday, the Corps requested that the court stay the effect of its ruling pending the Corps’ appeal to the Ninth Circuit. The Corps requested in the alternative that the court stay its ruling with respect to all projects across the country, except the Keystone XL Pipeline.
A Montana federal district court recently dismissed a challenge by an environmental group seeking to compel the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) to comply with certain provisions of the Mineral Leasing Act, 30 U.S.C. § 181 et seq.,. See Wildearth Guardians v. Chao, CV-18-110-GF-BMM, 2020 WL 1875472 (D. Mont. Apr. 15, 2020). In this case, the environmental group Wildearth Guardians brought suit under the Administrative Procedure Act (“APA”) alleging that PHMSA failed to comply with its legal obligation under the Mineral Leasing Act to “[p]eriodically, but at least once a year, . . . cause the examination of all pipelines and associated facilities on Federal lands[.]” Although PHMSA did not contest Wildearth’s assertion that the agency had failed to periodically inspect certain pipelines on federal lands, PHMSA argued that the suit must be dismissed because Wildearth lacked standing to challenge PHMSA’s inaction and the environmental group was unable demonstrate that PHMSA’s failure to inspect the pipelines constituted a “failure to act” under the APA. The district court agreed and narrowly interpreted what constitutes a “failure to act” under the APA in a manner that could present obstacles for third parties seeking to compel agencies to comply with its their regulatory obligations.
The U.S. Supreme Court issued its long-awaited opinion in County of Maui v. Hawaii Wildlife Fund, addressing whether the Clean Water Act (CWA) requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater. In its decision, the Court established a new “functional equivalent” test with potential impacts to pipeline construction projects, ongoing maintenance, and possibly pipeline spills. The application of this new rule, however, is far from straightforward.
The coronavirus (COVID-19) pandemic understandably has strained available personnel and other resources as oil and gas pipeline operators focus on maintaining their essential operations. For the gas industry, the pandemic comes at a time that coincides with the initial deadlines associated with the first installment of the Pipeline and Hazardous Materials Safety Administration’s gas “mega” rule, July 1, 2020. In order to provide gas operators with further flexibility due to constrained resources, PHMSA announced a 6-month stay of enforcement of initial Part 192 compliance deadlines in the rule, “if a regulated entity fails to meet such requirement by Dec. 31, 2020, for reasons attributable to the [COVID-19] National Emergency.”