PHMSA is proposing regulatory reform changes to the federal pipeline safety regulations at 49 CFR 190, 194, and 195, predominantly impacting liquid pipelines. Consistent with the Administration’s directives, the proposed revisions are intended to reduce regulatory burdens and improve regulatory clarity, without compromising safety and environmental protection. The proposed revisions were published in the Federal Register on April 16, 2020 and comments are due by June 15, 2020. These proposed changes would clarify and revise the requirements for how operators submit records to PHMSA; make important clarifications to the scope of pipelines that would require oil spill response plans; and, specific to liquid pipelines, substantially increase the property damage incident reporting threshold, allow remote monitoring of rectifier stations, and clarify integrity management guidance.

While most of these changes will be welcomed by industry, the exact wording of the revisions as well as their application by the agency after a final rule will be important so as not to create new confusion or inadvertently add regulatory burdens instead of flexibility. The most notable suggested revisions are outlined below. A majority of these changes would be applicable to liquid pipelines, with the exception of the procedural changes. PHMSA is working on a forthcoming gas pipeline regulatory reform proposed rule which has been projected to issue in the coming months.

Proposed Procedural Changes

Minimum Standards for Submitting Records

The pipeline safety laws currently provide PHMSA with broad authority to require operators to make records available upon request. PHMSA has historically allowed operators to submit records electronically, but the rule would make those submissions subject to certain minimum requirements. In particular, the proposed minimum standards would require that records be submitted in a form that (1) would permit PHMSA to download or print the records, without redacting or altering the document (i.e., without adding a time stamp, watermark, etc.), and (2) does not hinder PHMSA’s access to the record (searchability, document tracking, etc.). If finalized, this will be a notable change as some PHMSA Regions have historically accepted the exchange of documentation on view only website portals.

Submission of Confidential Information

To reduce the burden of redacting certain documents that are submitted to PHMSA, the agency proposes revising the rules related to the submission of confidential information to ensure that operators are no longer required to submit redacted versions of records that may contain confidential information when those documents are submitted for purposes other than rulemaking or special permit proceedings. In all other instances, operators may still submit redacted information, but they would no longer be obligated to do so. Additionally, the proposed rules would require operators at the time of submission to provide specific explanations for why information should be deemed confidential. Depending on the nature of the information, there may be instances where submitting redactions would nevertheless be prudent.

Proposed Oil Response Plan Changes

In the suggested revisions to Part 194, PHMSA is proposing a variety of revisions in an effort to align the section with requirements under the Oil Production Act of 1990 and streamline how operators of onshore oil pipelines must plan, prepare, and submit facility response plans. While some of the revisions are intended to clarify the regulations, the more notable changes include:

Applicability

In the proposed rule, PHMSA is proposing to revise the language in section 194.3 to clarify that “part 194 applies to pipeline facilities that would affect the navigable waters of the U.S. or adjoining shorelines within 12 hours” of a release, consistent with the current exception set forth at 49 C.F.R. § 194.101(b). Additionally, PHMSA is proposing to further clarify an existing exception from the requirement to develop a response plan for “pipelines 6 5/8 inches or less in diameter, ten miles or less in length, and where the operator determines that it is unlikely that the worst-case discharge from any point on the line section would adversely affect, within 4 hours after the initiation of the discharge, any navigable waters, public drinking water intake, or environmentally sensitive areas.”

Removing Distinction Between “Substantial Harm” and “Significant and Substantial Harm”

In order to reduce confusion, PHMSA has also proposed removing the distinction in the regulations between pipeline facilities that could cause “substantial harm” and those that could cause “significant and substantial harm.”  PHMSA clarifies that the distinction is essentially meaningless, “[t]here is no functional difference between the requirements for facilities that could cause ‘significant and substantial harm’ and facilities that could cause ‘substantial harm.’”

Methods Used to Prepare Response Plans

Additionally, the proposed revisions to Part 194 implement a variety of changes that would codify current policy and streamline how response plans are submitted for review by the Agency. Among other changes, these include: (1) eliminating various duplicative or redundant requirements in FRP submissions; (2) harmonizing requirements with those of USCG; (3) allowing operators to submit DOT annexes to existing response plans prepared for state regulators; (4) clarifying that an operator must submit plans before putting a pipeline facility in service rather than prior to beginning construction; and (5) adding a requirement that operators resubmit response plans at least every 5 years from the date of the last approval.

Proposed Changes to Liquids Rules

Increased Property Damage Accident Reporting Threshold

PHMSA is proposing adjustments to the current threshold for accidents that are subject to accident reporting and notification to the National Response Center. To account for inflation since the rule’s inception, PHMSA is proposing that the property damage threshold for accident reporting should be adjusted from $50,000 to $118,000.

Remote Monitoring of Rectifier Stations

PHMSA is also proposing a revision that will allow operators to monitor rectifier stations remotely. If an operator chooses to monitor a rectifier remotely, however, PHMSA proposes that the operator should be required to physically inspect the rectifier station whenever they conduct a cathodic protection test.

Revisions to Part 195 Integrity Management Appendix C

In response to industry comments, PHMSA proposes to revise its guidance in Appendix C of Part 195 for implementing a liquid integrity management program. This includes revising considerations for spills in fields and drainage tiles and reorganizing certain guidelines.

As noted above, comments are due by June 15, 2020. If you would like assistance in analyzing the impact of these proposed rules to your pipeline system, please let us know.

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Photo of Catherine D. Little Catherine D. Little

Catherine Little has been advising oil and gas pipelines, terminals and LNG facilities on energy and environmental administrative law for over 25 years at all levels of federal, state and local government, with particular emphasis on regulatory compliance, litigation and enforcement defense and…

Catherine Little has been advising oil and gas pipelines, terminals and LNG facilities on energy and environmental administrative law for over 25 years at all levels of federal, state and local government, with particular emphasis on regulatory compliance, litigation and enforcement defense and administrative adjudication under the Pipeline Safety Act, Natural Gas Act, Clean Water Act (including wetlands), Oil Pollution Act and National Environmental Policy Act. Her team has sought appellate review for enforcement matters with favorable results and works closely with industry and regulators alike to obtain favorable results for their clients. Catherine also regularly counsels clients with respect to pipeline construction and design issues, permitting, confidential investigations, spill and release reporting and response.

Photo of Annie M. Cook Annie M. Cook

Annie Cook’s practice focuses on administrative, environmental, and oil and gas transportation laws. Annie counsels clients on regulatory issues, compliance and litigation strategy, construction and siting, and permitting and enforcement defense relating to the Pipeline Safety Act, the Natural Gas Act, the Clean…

Annie Cook’s practice focuses on administrative, environmental, and oil and gas transportation laws. Annie counsels clients on regulatory issues, compliance and litigation strategy, construction and siting, and permitting and enforcement defense relating to the Pipeline Safety Act, the Natural Gas Act, the Clean Water Act, the Oil Pollution Act, National Environment Policy Act, TCSA, and related state and local laws.  Her team also represents clients regarding related transportation security issues and in responding to inquiries and investigations from the Department of Transportation’s Office of Inspector General. Annie’s clients include owners and operators of oil and natural gas pipeline and related storage, terminal, and LNG facilities as well as other energy industry stakeholders.

Photo of Mandi Moroz Mandi Moroz

Mandi’s practice focuses on assisting clients at all stages of environmental representation, including litigation, regulatory, and transactional matters. She has experience working with clients involved in toxic tort, nuisance, and asbestos litigation. In addition to her litigation experience, she has a breadth of…

Mandi’s practice focuses on assisting clients at all stages of environmental representation, including litigation, regulatory, and transactional matters. She has experience working with clients involved in toxic tort, nuisance, and asbestos litigation. In addition to her litigation experience, she has a breadth of experience working to advise clients on a variety of regulatory needs ranging from potential CERCLA liability in the acquisition of a property to potential violations of federal pipeline safety laws.