As the Pipeline Safety Act (PSA) reauthorization deadline approaches, the Democrats on the House Energy and Commerce Committee recently released draft discussion legislation titled, The Safer Pipelines Act of 2019. The “discussion draft” was released in advance of a Committee hearing held on June 19, 2019. At the hearing, it became clear that the recent legislation was drafted behind closed doors and that it was not well received by the minority Republicans on the Committee or industry representatives.
With this most recent draft legislation, several noteworthy legislative changes are likely to be considered by the Committee, although two Committee Republicans questioned whether marking up the draft was worth the effort. Notably, PHMSA declined to participate in the hearing because it did not have sufficient time to review the draft. Industry trade group representatives provided testimony as well as a representative from the Pipeline Safety Trust. The more significant proposals are summarized below and relate to: (1) lowering the criminal liability standard; (2) expanding the definition of regulated gathering pipelines; (3) clarifying and expanding citizen suits; (4) substantially increasing the amount of operator information made available to local responders and to the public; and (5) other integrity management requirements regarding phasing out direct assessment and requiring automatic shut off valves for liquid pipelines.
The Safer Pipelines Act of 2019 introduces a number of significant potential legislative additions that go well beyond either of the other two proposals already pending. Many of the proposals were initially put forward by the Pipeline Safety Trust. These are summarized below along with notable commentary from the June 19th hearing.
- Criminal Liability – Section 9 proposes to lower the criminal liability standard under the PSA from “knowingly and willfully” to “knowingly or recklessly” (emphasis added). The existing standard sets a high bar for criminal prosecution under the PSA, while the proposed standard would mirror the current standard under the Hazardous Materials Transportation Act. When pressed by the Committee on the proposal, Chuck Lesniak, testifying on behalf of the Pipeline Safety Trust, explained that a higher standard was needed to deter bad actors and defined a bad actor as someone who does the bare minimum under PHMSA rules, or less.
- Gathering Pipelines – Section 3 would expand the definition of regulated gathering pipelines such that it would be solely focused on operating pressure regardless of diameter size. It would eliminate the express statutory exemption for rural gas gathering pipelines, which is an ongoing subject of a PHMSA rulemaking that is still making its way through the PSA advisory committee process. For liquid pipelines, it would add a statutory definition of “regulated gathering line” that would include all onshore gathering lines operating at a pressure greater than 20 percent specified minimum yield strength (SMYS). This would be a significant change from existing Part 195 regulations that currently define a gathering line by whether it is 8 5/8 inches in diameter or less and based on its function. This new proposal would expand the number of regulated gas and liquid gathering lines, oversight for which is likely to fall to states because most gathering pipelines are intrastate. Industry representatives and some Committee members stressed the cost of this proposal and emphasized PHMSA’s limited staffing and budget resources.
- PSA Citizen suits – Section 7 would include a provision to clarify that a person may bring a mandamus civil action to compel DOT/PHMSA to perform a nondiscretionary duty. This concept was previously rejected by the Ninth Circuit Court of Appeals, which in 2015 held that the City of San Francisco could not sue DOT for failure to perform a nondiscretionary duty in regard to the San Bruno incident. This could increase the ability of public citizen groups to file claims against PHMSA, especially given the current deregulatory environment.
- Integrity Management Changes – Other new provisions would include eliminating the option to use direct assessment under the integrity management regulations (Section 5(a)) and a requirement that all liquid pipelines subject to integrity management rules implement automatic shutoff valves (ASVs) and “automatic spill detection” (Section 5(b)). A Committee member questioned whether it was prudent to take away a tool, such as direct assessment, from PHMSA’s tool box. Industry representatives argued that direct assessment provides useful information depending on the circumstances, especially at facilities. “Automatic spill detection” is not a term used in the industry and the decision whether to install ASVs to date has been based on an operator’s analysis of whether it would be effective to minimize a release and its consequences.
- Cost Benefit Analysis – Section 4 proposes to eliminate the PSA’s cost benefit analysis requirements, which some public groups such as the Pipeline Safety Trust argue is responsible for PHMSA’s lack of regulation of certain pipelines (e.g., rural gas gathering lines). Stakeholders disagreed on the utility of the cost benefit provisions in the PSA. Industry argued that it is necessary and Pipeline Safety Trust representative Lesniak countered that it was in part a cause of rulemaking delays and questioned the need for PHMSA to conduct a cost benefit analysis itself when OMB is obligated to do so for all rulemakings.
Other provisions in the most recent draft legislation relate to topics covered by existing reauthorization proposals, but provide for very different approaches as outlined below. Notably, The Safer Pipelines Act of 2019 discussion draft does not include any permit streamlining, expansion of criminal behavior associated with pipeline vandalism, voluntary safety incentives, information sharing or pilot program proposals that were included in Administration’s/DOT’s Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2019. It also does not include any changes in response to the 2018 Merrimack Valley incident regarding distribution pipelines, overpressure protection and management of change.
- Civil Penalties – For civil penalties, which the Leonel Rondon Pipeline Safety Act proposes to increase by a factor of 100, Section 8 of the most recent draft legislation would simply eliminate the civil penalty cap on a “related series of violations.” It would also increase the civil penalties available for operators of LNG facilities and for operators who discriminate against an employee providing pipeline safety information.
- Information sharing/public awareness – While not the subject of much discussion at the hearing, Section 6 of the most recent draft proposal would significantly increase an operator’s obligations to provide information to first responders and to the public. All of these proposals raise national security concerns given that the information is proposed to be made public. Operators would be required to make certain information such as maps, emergency response plan, O&M manuals and IM manuals available to state emergency response commissions and local emergency planning committees (LEPC) and possibly local fire, police, and other emergency response entities where there is no LEPC. In addition, operators would be required to provide every municipality with a map of its facilities and provide updated maps within 6 months. Operators would also have to file detailed annual “pipeline segment reports” to include periodic testing, results of that testing, leak detection, 5 year incident history, inspection and enforcement history, and IMP activities. DOT/PHMSA would have to make the following information publicly available: operator annual segment reports, incident reports, safety related condition reports and integrity management plan. While DOT’s recent legislative proposal would increase some construction and design review reporting requirements and make other improvements to authorize PHMSA to engage in liaison activities with state and local officials, The Safer Pipelines Act of 2019 would go much farther. It would impose many new requirements on operators to engage with local responders, reporting obligations to PHMSA, and to require that PHMSA to make certain information available to the public.
- MAOP Verification – On the topic of verification of maximum allowable operating pressure (MAOP) for gas transmission pipelines, Section 10 would expand the requirement to all gas transmission pipelines. The existing statutory provision regarding MAOP verification, which was added in 2012, is limited to pipelines located in class 3 and class 4 locations and class 1 and 2 high consequence areas. Further, the proposal would require that all gas transmission pipelines be subject to a hydrostatic pressure test that incorporates a spike test, which is beyond the scope of existing regulatory pressure testing requirements under Part 192, Subpart J and proposed changes in the pending gas mega rule that is being finalized.
This was the fourth PSA reauthorization hearing held to date. The most recent discussion draft is the third legislative proposal to be floated so far this year to reauthorize the PSA. The Leonel Rondon Pipeline Safety Act, HR 2139/S. 1097 was introduced in April and DOT submitted its own proposal to Congress in early June, Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2019.
Republican Committee Chairman Upton noted that this most recent draft legislation “doesn’t have a ghost of a chance of being passed in the Senate or signed by the President.” Many Committee members noted that going forward they hoped to work together on a bill that would receiver wider bipartisan support. The draft legislation is scheduled for a markup next week, but some cautioned that the Committee should not rush to a markup especially in light of PHMSA’s absence at the hearing. The deadline to reauthorize the PSA and continue funding PHMSA expires on September 30, 2019.