Last week, PHMSA’s oil and gas pipeline technical advisory committees convened to review and discuss significant pending rulemakings and regulatory reform initiatives, among other topics.  At the same time, the White House touted its deregulation efforts, including the purported elimination of 22 regulations in the past year for each new rule passed.  For an agency that is facing outstanding statutory mandates to enact certain regulations, with reauthorization looming in 2018, it is expected that PHMSA will promulgate some new rules in the New Year.  It is not yet known, however, what the content of those rules will be and whether the expansive gas ‘mega rule’ will be among those finalized in 2018.  Given the overall regulatory climate to reduce regulation and burden, a little certainty might be appreciated in the New Year. Continue Reading All I want for Christmas is … regulatory certainty?

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.  Continue Reading Advisory Committee Meetings May Add Insight to Policy Priorities

In response to questions from lawmakers on whether federal law adequately provides for the prosecution of “criminal activity against infrastructure,” the Department of Justice (DOJ) recently committed to “vigorously” prosecute those who damage “critical energy infrastructure in violation of federal law.”  Historically, vandalism on oil or gas pipelines has been relatively uncommon, largely because most of the infrastructure is buried underground.  Since 9/11 and in response to increased high profile pipeline construction projects, however, acts of vandalism—and more intentional attacks—have increased.

Continue Reading Congress and DOJ Consider Existing Protections as Pipeline Sabotage Increases

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.

Continue Reading Deregulation at DOT:  Direction Unknown

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.

Continue Reading Underground Natural Gas Storage IFR Comment Period Reopened

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).

Continue Reading NAS Recognizes Utility of Performance Based Rules

The Department of Transportation formally requested public comment on existing rules and “other agency actions,” including but not limited to guidance documents and policy statements, that are good candidates for repeal, replacement, suspension, or modification without compromising safety.  This request covers all DOT modal agencies, including PHMSA, the FAA, the FRA, NHTSA, among others.   In addition to requesting comments, DOT indicated that it may hold a public meeting on these issues. Comments are due November 1, 2017.

Continue Reading DOT Requests Comments on Regulatory Review

The 5th Circuit U.S. Court of Appeals reversed several key aspects of a PHMSA Final Order in a recent opinion issued on August 14, 2017. That decision is significant for the fact that few final actions by this agency have been presented for judicial review, and, of those, even fewer have been successful.  The decision is based on a complex set of facts and legal issues that went through several years of administrative appeals before the agency.  As with most complex cases, many of the factual issues were unique, and are not likely to be repeated.  There are a few larger, procedural themes to be gleaned from the decision that apply more broadly, however, both to this agency and administrative law generally.

Continue Reading Judicial Review of PHMSA Order: Limitations of Agency Deference

In the wake of Hurricane Irma, PHMSA issued a press release regarding hurricane preparedness and response.  As operators implemented hurricane preparedness plans to minimize the impact of the storm, PHMSA noted several significant allowances for pipeline systems impacted by the hurricane including the following:

  1. Temporarily suspending enforcement for noncompliance with pipeline operator qualification or pre-employment and random drug testing requirements associated with the use of pipeline personnel for response and recovery activities.  The enforcement stay is limited to Florida, Georgia, North Carolina, South Carolina, and Puerto Rico.  It does not relieve operators of their responsibility to use trained, non-impaired workers to perform operations and maintenance tasks.
  2.  Acknowledging that some operators may need to extend the hours of service for pipeline controllers.
  3.  Reminding operators that the Agency is prepared to respond to requests for emergency special permits to assist in disaster relief efforts conducted in response to Hurricane Irma, whether to waive requirements or permit the use of innovative technologies not yet accommodated under the hazardous materials or pipeline safety regulations.
  4.  Delay and rescheduling of planned inspections for interstate operators affected by the storm;

In addition, PHMSA issued 2 emergency waivers of the hazardous materials regulations with respect to persons conducting operations under the direction of the EPA Regions 2 or 4 or the United States Coast Guard (USCG) 7th District within Hurricane Irma emergency and disaster areas of Florida, Puerto Rico, South Carolina, the United States Virgin Islands, and certain counties in Georgia.  The waivers are intended to support EPA and USCG actions to prepare for, respond to, and recover from threats to public health, welfare, and the environment caused by the actual or potential oil and hazardous materials incidents resulting from Hurricane Irma.  In addition, EPA approved emergency fuel waivers under the Clean Air Act for 38 states and Washington, DC due to continued impacts caused by Hurricane Harvey to Gulf Coast refineries and large scale evacuations in response to Hurricane Irma.  Specifically, EPA waived requirements for reformulated gasoline through September 26 and low volatility gasoline through September 15, 2017.

Similar to the precautions operators have taken in advance of other catastrophic events, precautions should be taken before initiating restart of refineries, terminals, offshore and inland pipelines, and other manufacturing facilities.  In its response to Irma, PHMSA highlighted prior advisories it has issued in response to hurricanes, flooding, and other emergency situations.  These advisories include recommendations for (among other things) bringing assets back online, including review for structural damage and aerial inspections to check for leaks.  Operators are required to report incidents and accidents to PHMSA that meet reporting thresholds, and the Agency encourages close communication on other damage caused by hurricanes.  Careful damage assessment and restart of assets is critical.