On January 11, the Pipeline and Hazardous Materials Safety Administration (PHMSA) finalized its June 2020 proposed rulemaking intended to reduce regulatory burdens and offer greater flexibility to gas pipeline operators, previously discussed in our post here. Pipeline operators may voluntarily comply with the rule starting on the effective date of March 12, 2021, but mandatory compliance is not required until October 1, 2021. Although the rule implements moderate changes to the pipeline safety regulations, given the timing of the final rule’s release, it is at least possible that the new administration could withdraw the rule.
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PHMSA Advisories Target Distribution Pipeline Meters and Overpressure Protection
The Pipeline and Hazardous Materials Safety Administration (PHMSA) has issued two Advisory Bulletins directed to natural gas distribution pipeline owners and operators. PHMSA released the advisories in response to the National Transportation Safety Board (NTSB) recommendations arising out of two high-profile distribution pipeline incidents in Silver Spring, Maryland and Merrimack Valley, Massachusetts. The first advisory focuses on indoor meters and regulators to remind operators of the relevant regulatory requirements and risks. The second advisory covers low-pressure distribution systems, emphasizing the possibility of failures due to overpressurization.
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GAO Calls on PHMSA to Update LNG Regulations
The Government Accountability Office (GAO), an agency that conducts audits, evaluations, and investigations for the United States Congress, issued a report titled “Natural Gas Exports: Updated Guidance and Regulations Could Improve Facility Permitting Processes.” The report examines several aspects of federal agencies’ regulation of liquefied natural gas (LNG) facilities, but of most relevance to LNG operators is the finding that the technical standards that the primary regulators of LNG facilities incorporate into their rules are out of date.
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PHMSA Issues Gas Pipeline Regulatory Reform Proposal
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).
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D.C. Circuit Suggests FERC Should Try to Quantify Indirect Environmental Impacts of Pipeline Projects
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).
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