The Gas Pipeline Advisory Committee (GPAC) convened in Washington D.C. at the end of March, 2018, to continue discussions from May and December 2017 regarding PHMSA’s proposed gas and gathering pipeline mega rule (“Safety of Gas Transmission and Gathering Pipelines” [PHMSA-1011-0023]. The meetings included discussion and voting on a number of provisions concerning
Administrative Rulemaking
Final Rule Adds 2020 Applicability Date to “Waters of the U.S.” Rule
In an attempt to bring clarity following the recent Supreme Court decision—which as noted in our prior post will result in expiration of the nationwide stay of the 2015 revised definition of “waters of the U.S.” that was imposed two years ago by the Sixth Circuit Court of Appeals—EPA and the Army Corps of Engineers (Corps) issued a final rule extending the applicability date of the 2015 revised definition to February 6, 2020. With this final rule, the Agencies seek to ensure that the pre-2015 “waters of the U.S.” definition will remain in place consistently throughout the country while the Agencies consider possible revisions. As expected, the final rule has already been subject to judicial challenge, further ensuring that the scope of “waters of the U.S.” will continue to remain uncertain in the near future as these challenges play out.
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Definition of “Waters of the U.S.” Remains Uncertain
On January 22, 2018, the Supreme Court in a unanimous decision threw the long contested issue of what constitutes “waters of the U.S.” back to the lower courts. Somewhat surprisingly, the Supreme Court held that federal district courts have jurisdiction to hear challenges to the rule, reversing a Sixth Circuit decision and suspending that court’s nationwide stay of the rule. In doing so, the Court guaranteed that a revised definition of “waters of the U.S.” will remain undecided for some time to come.
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Deregulation at DOT: Direction Unknown
A year ago, the oil and natural gas industry was preparing comments and responses to several expansive proposed rules issued by the Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA). With the advent of the Trump Administration and its focus on deregulation, those pending rules have since been withdrawn and are being reevaluated (among hundreds of other administrative agency rules). In the first 100 days of this Administration, the White House issued 58 executive orders and memoranda, nearly a quarter of which affected the pipeline industry directly or indirectly. In the six months since, the President has continued to issue directives aimed at eliminating regulatory burdens and expediting energy infrastructure. While these directives were met with initial relief from the industry, they lack clear deadlines and details and it has fallen on the various administrative agencies to interpret and implement them. To complicate matters, the Administration has simultaneously issued budget cuts across the board and has been slow to appoint key leadership positions. For an industry that relies on regulatory certainty, much remains uncertain.
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Underground Natural Gas Storage IFR Comment Period Reopened
On October 19, 2017, the Pipeline and Hazardous Materials Safety Administration (PHMSA) announced an additional comment period on its December 19, 2016 interim final rule (IFR) which established minimum federal safety standards for underground natural gas storage facilities. PHMSA will accept comments until November 20, 2017. This notice comes amidst the current administration’s executive orders on deregulation and a recent DOT request for comment on regulatory reform.
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NAS Recognizes Utility of Performance Based Rules
Posted in Administrative Rulemaking, Enforcement, Integrity Management, Natural Gas, Oil, PHMSA, Policy
In October 2017, the National Academy of Sciences (NAS) issued a pre-publication report on “Designing Safety Standards for High Hazard Industries.” Sponsored by PHMSA (and many years in the making), the Report focuses on oil and gas pipelines and the regulatory scheme used by the Pipeline and Hazardous Materials Safety Administration (PHMSA). Noting the differences between prescriptive and performance based rulemakings, the Report observes that while most federal agencies use a combination of both, PHMSA is one of the few federal agencies that primarily relies on performance based standards. The rationale used by PHMSA, the Report notes, is that pipeline integrity management is best maintained by placing responsibility on individual operators to identify and manage risks that may not be known to the regulators or common to the industry. (Report, p. viii).
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Stakeholder Meetings Scheduled for Revised Waters of the U.S. Rule
The EPA and the Army Corps of Engineers (Corps) announced a series of public teleconferences for stakeholder input on recommendations to revise the definition of “Waters of the United States” under the Clean Water Act. This definition is critical to the determination of whether wetlands or water discharge permits are required for construction projects or operations across all industries. In total, there will be ten teleconferences beginning on September 19, 2017, nine of which will be tailored to a specific industry sector and one of which will be open to the public at large (see summary below). The session specific to the energy, chemical and oil and gas industries is scheduled for October 24, 2017. The teleconferences will run throughout the fall on Tuesdays from 1 to 3 pm eastern.
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EPA and the Corps Take Steps to Revise “Waters of the U.S.” Definition
EPA and the Army Corps of Engineers (the Corps) issued a prepublication version of a proposed rule that will rescind prior 2015 revisions to the definition of “waters of the U.S.” under the Clean Water Act (CWA), pending the issuance of a more substantive rulemaking that reevaluates the definition. The prior revisions expanded federal jurisdiction over certain waters and prompted numerous judicial challenges and a subsequent nationwide stay of the rule.
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PHMSA to Reassess Underground Natural Gas Storage Rule
On December 19, 2016, PHMSA issued an interim final rule (IFR) to establish for the first time minimum federal safety standards for underground natural gas storage facilities. The rule was issued in response to the 2015 Aliso Canyon storage leak that lasted almost four months, and a subsequent Congressional mandate to issue federal standards for underground storage. Among other things, the IFR incorporated by reference (thereby making them mandatory) two American Petroleum Institute (API) Recommended Practices (RPs) regarding underground natural gas storage in salt caverns and reservoirs: (1) API RP 1170, “Design and Operation of Solution-mined Salt Caverns Used for Natural Gas Storage,” (July 2015); and (2) API RP 1171, “Functional Integrity of Natural Gas Storage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs,” (Sept. 2015). API finalized both of those RPs in response to the Aliso Canyon incident.
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