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the finding that the technical standards that the primary regulators of LNG facilities incorporate into their rules are out of date.

Continue Reading GAO Calls on PHMSA to Update LNG Regulations

Two months ago, we issued a post regarding oral arguments before the U.S. Court of Appeals for the Sixth Circuit in National Wildlife Federation v. Secretary of the Department of Transportation. That case asked whether approval of pipeline spill response plans by the Pipeline and Hazardous Materials Safety Administration (PHMSA) triggered consultation and review processes under the Endangered Species Act (ESA) and the National Environmental Policy Act (NEPA). In an opinion released on Friday, June 5, 2020, the Sixth Circuit answered that question in the negative. The court’s decision avoids adding another substantial burden to the review process for response plans, and, since it reaches the same result as the only other appellate court to consider the question, the decision likely will not attract the attention of the Supreme Court.
Continue Reading Sixth Circuit: Spill Response Plans Do Not Trigger Endangered Species Act or NEPA Review

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).

Continue Reading PHMSA Issues Gas Pipeline Regulatory Reform Proposal

The United States Department of Transportation (“DOT”), Office of the Inspector General (“OIG”) recently issued its audit findings of the Pipeline and Hazardous Materials Safety Administration’s (“PHMSA’s”) procedures and standards for reviewing whether liquified natural gas (“LNG”) facilities meet federal safety standards. The audit was designed to assess PHMSA’s (1) review of proposed LNG facilities, (2) inspection of existing LNG facilities, and (3) evaluation of state gas programs that are tasked with inspecting LNG facilities. While the OIG found that PHMSA’s inspection of existing interstate LNG facilities met agency standards, the audit identified several deficiencies with PHMSA’s siting of proposed LNG facilities and its review processes of state programs. This report comes as PHMSA’s proposed overhaul of its Part 193 LNG safety regulations moves toward publication.

Continue Reading OIG Critical of PHMSA LNG Reviews

As we previously reported, the Federal District Court for Montana vacated the U.S. Army Corps of Engineers (“Corps”) Nationwide Permit (“NWP 12”) on April 15, 2020, finding that the Corps had failed to consult with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service prior to issuing NWP 12. The court’s decision vacated NWP 12 nationwide and prevents the Corps from authorizing a broad range of projects that are unrelated to the project at issue in that case, the Keystone XL Pipeline.  Yesterday, the Corps requested that the court stay the effect of its ruling pending the Corps’ appeal to the Ninth Circuit. The Corps requested in the alternative that the court stay its ruling with respect to all projects across the country, except the Keystone XL Pipeline.

Continue Reading Update: Corps Seeks Stay of Montana District Court’s NWP 12 Ruling

A Montana federal district court recently dismissed a challenge by an environmental group seeking to compel the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) to comply with certain provisions of the Mineral Leasing Act, 30 U.S.C. § 181 et seq.,. See Wildearth Guardians v. Chao, CV-18-110-GF-BMM, 2020 WL 1875472 (D. Mont. Apr. 15, 2020).  In this case, the environmental group Wildearth Guardians brought suit under the Administrative Procedure Act (“APA”) alleging that PHMSA failed to comply with its legal obligation under the Mineral Leasing Act to “[p]eriodically, but at least once a year,  . . . cause the examination of all pipelines and associated facilities on Federal lands[.]”  Although PHMSA did not contest Wildearth’s assertion that the agency had failed to periodically inspect certain pipelines on federal lands, PHMSA argued that the suit must be dismissed because Wildearth lacked standing to challenge PHMSA’s inaction and the environmental group was unable demonstrate that PHMSA’s failure to inspect the pipelines constituted a “failure to act” under the APA. The district court agreed and narrowly interpreted what constitutes a “failure to act” under  the APA in a manner that could present obstacles for third parties seeking to compel agencies to comply with its their regulatory obligations.

Continue Reading Environmental Group’s Attempt to Compel PHMSA Action Dismissed

The coronavirus (COVID-19) pandemic understandably has strained available personnel and other resources as oil and gas pipeline operators focus on maintaining their essential operations. For the gas industry, the pandemic comes at a time that coincides with the initial deadlines associated with the first installment of the Pipeline and Hazardous Materials Safety Administration’s gas “mega” rule, July 1, 2020. In order to provide gas operators with further flexibility due to constrained resources, PHMSA announced a 6-month stay of enforcement of initial Part 192 compliance deadlines in the rule, “if a regulated entity fails to meet such requirement by Dec. 31, 2020, for reasons attributable to the [COVID-19] National Emergency.”

Continue Reading Ongoing COVID-19 Pandemic Prompts Gas Pipeline Enforcement Stay

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.

Continue Reading PHMSA Proposes Regulatory Reform Rule

On April 9, the United States Court of Appeals for the Sixth Circuit heard arguments in National Wildlife Federation v. Secretary of the Department of Transportation, a pair of consolidated appeals arising from approval of two spill response plans by the Pipeline and Hazardous Materials Safety Administration (PHMSA). Operators of many onshore oil pipelines must submit, and PHMSA must review, plans to prevent or respond to a “worst case discharge” into or on navigable waters or their adjoining shorelines (49 C.F.R. Part 194). This planning process is a product of the Oil Pollution Act’s amendments to the Clean Water Act. In ruling on these appeals, the Sixth Circuit will determine whether PHMSA approval of those plans requires something that the agency historically has not done: consultation under the Endangered Species Act (ESA) or review under the National Environmental Policy Act (NEPA).

Continue Reading Will Pipeline Spill Response Plans Require a Biological Opinion or NEPA Review?

Over the past week and in just the last 24 hours, several federal and state agencies have issued guidance documents and orders impacting the oil and gas pipeline industry. Through this guidance and other orders, federal and state governments are recognizing the oil and gas industry as critical to responding to COVID-19, while at the same time providing for some flexibility in the likelihood that operators will face resource and staffing constraints in executing their pipeline safety compliance obligations.

Continue Reading COVID-19 Oil and Gas Update – Agencies Provide Limited Enforcement Discretion and Confirm Infrastructure as Essential