Tomorrow’s Federal Register will include three final rules published by the Pipeline and Hazardous Materials Safety Administration (PHMSA) that have been years in the making:  (1) Safety of Gas Transmission Pipelines: Maximum Allowable Operating Pressure Reconfirmation, Expansion of Assessment Requirements, and Other Related Amendments; (2) Safety of Hazardous Liquid Pipelines; and (3) Enhanced Emergency Order Procedures.  All three rules have been lingering at the Office of Management and Budget (OMB) for review for at least several months, and probably none have been more anticipated than the gas transmission and liquid pipeline rules.

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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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With an increased interest in the resolving disputes efficiently and avoiding litigation where possible, the time may be right for the Pipeline and Hazardous Materials Safety Administration (PHMSA) to clarify the process for settlement of pipeline safety compliance issues, whether through new rules or a written settlement policy. On the hazardous materials regulatory front, PHMSA has historically engaged in settlements that are guided by an express allowance for settlement under the regulations. The Agency has also engaged in settlements in at least some pipeline safety cases over the years and more so in the last year. Without specific rules or a written settlement policy in place, however, settlements of pipeline safety matters in practice may not be consistently implemented.

Many federal agencies have settlement policies that encourage parties in enforcement actions to discuss issues before progressing to full administrative hearings. Such policies offer the possibility of narrowing, if not resolving, legal disputes, which can benefit all parties by realizing efficiencies and avoiding the cost of protracted disputes. These efforts are analogous to pre-trial conferences in federal courts, where a court may ask the parties to discuss whether issues can be narrowed or resolved without full adjudication, in order to ‘expedite disposition of the action’ and ‘facilitate settlement’ (see Fed.R.Civ.Proc. 16(a)).
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Earlier this month, the U.S. Department of Transportation (DOT) issued a notice seeking input from the public on existing guidance documents within DOT and its modal operating administrations, including PHMSA.  In particular, DOT seeks input on guidance documents that are no longer necessary, are cost-inducing, inconsistent or unclear, not conducive to consistent enforcement, or

On September 7, 2018, a jury in a California state court found Plains All American Pipeline guilty on 9 criminal counts, stemming from a release of 140,000 gallons of crude oil from a Plains pipeline near Santa Barbara in 2015. Media across America reported on the criminal verdict in the Plains case, and certain commenters predict that the verdict could further energize pipeline opposition groups around the country. The case may be viewed best, however, as somewhat of an anomaly: a broadside of state legal requirements brought after an oil spill to a sensitive environment in California.

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In a letter issued to the Reporters Committee for Freedom of the Press (RCFP) and E&E News last week, PHMSA’s new Chief Counsel Paul Roberti announced its intention to publicly post advance notice of hearings requested by operators.  As reported by E&E News and reflected in the letter, PHMSA will now post hearing scheduling letters

A recent Report to Congress mandated by the most recent amendments to the Pipeline Safety Act was released by the Government Accountability Office (GAO), reviewing federal and state responsibilities and resources for inspection of pipelines that transport product across state lines.  Increases in funding have allowed the federal agency charged with regulating pipeline safety, the Pipeline and Hazardous Material Safety Administration (PHMSA or the Agency), to expand its own inspection workforce and reduce its reliance on state agents.  The Report to Congress finds that the Agency has not assessed future workforce needs, however, to determine the appropriate level of state participation.

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In a surprising turn of events this week, PHMSA approved a request from the media to attend a hearing in the Agency’s Southwest Region offices in Houston yesterday.  An environmental reporting service (E&E News) submitted a request to PHMSA last week to attend a hearing requested by Cheniere, in response to an enforcement action related to an incident at that company’s LNG export facility, and threatened legal action after receiving no response to their request.  [See E&E News March 16, 2018 article E&E News seeks open PHMSA hearing on Cheniere leaks and E&E News March 21, 2018 article Pipeline regulators open Sabine Pass safety hearing.]  In agreeing to the request just days before the Hearing, PHMSA’s Associate Administrator for Pipeline Safety Alan Mayberry was quoted by E&E News as stating that “PHMSA has decided for purposes of this hearing to open the hearing to the press and to members of the public.”  Although the hearing yesterday was open to the public at the outset, it was later closed following a break.  To date, PHMSA administrative enforcement hearings have been closed to the public.  While this does not likely signal an official policy change on behalf of the Agency, it nonetheless suggests that PHMSA could make the decision to open administrative enforcement hearings to the public in the future, on a case by case basis.

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Oil and gas pipeline technical advisory committee meetings will be held on December 13-15 in Washington, D.C.  The agenda covers updates on PHMSA pipeline safety programs and policy issues.  The oil and gas peer review committees, comprised of federal and state agency representatives, industry and the public, will discuss a variety of topics within that agenda, related to inspection and enforcement, updates regarding pending rulemakings and regulatory reform initiatives, underground gas storage, and more.  This is one of the first opportunities to hear from the Agency’s new leadership (especially recently appointed PHMSA Administrator Skip Elliott and Deputy Administrator Drue Pearce).  The meetings should provide valuable insight to the priorities and policy initiatives under the Trump Administration affecting oil and gas critical energy infrastructure. 
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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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