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The Pipeline and Hazardous Materials Safety Administration (PHMSA) is close to finalizing a rule applicable to the safety of natural gas transmission pipelines that has been nearly eight years in the making. Both Congress and the industry have urged PHMSA to issue a final rule and PHMSA has now signaled that the rule is currently awaiting final approval by the Office of Management and Budget (OMB). With a final rule that could be published in the coming weeks or months, pipeline operators should be prepared to review and modify their compliance programs as appropriate.
Continue Reading Gas Pipeline Safety Rule Clearing Final Hurdle: Operators Should Prepare

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)).
Continue Reading Pipeline Safety Settlements: Time to Take a Page from Hazmat?

Congress recently convened its third Committee Hearing on reauthorization of the Pipeline Safety Act, before the House Energy and Commerce Committee.  Much of the discussion of focused on pipeline security, among other issues that have been discussed in prior hearings. Adding to the focus was the absence of an invited representative from the Transportation Security Administration (TSA), the agency who is tasked with sharing oversight of pipeline security with PHMSA. The TSA has come under criticism in light of a recent Government Accountability Office report that was critical of the agency’s Pipeline Security Division and its ability to ensure the safety and reliability of pipeline energy network from both cyber and physical security saboteurs. That report cited “significant weaknesses” in TSA’s program and pointed to, among other challenges, a shortage of qualified inspectors to address cyberattacks and other physical intrusions facing pipelines.
Continue Reading Third Pipeline Safety Act Hearing Focuses on Security

The Executive Order (EO) “Promoting Energy Infrastructure and Economic Growth,” issued by the White House on April 10, 2019 has primarily been heralded as an effort to prevent states from blocking pipelines under their Clean Water Act Section 401 certification authority. President Trump addressed a number of other energy issues in the same Executive Order, however, all attempting to remove barriers to energy projects in the U.S. As summarized below, these include a call for updating regulations governing LNG facility safety regulations, addressing sunset provisions in agreements for energy infrastructure on federal lands, and requesting reports assessing impediments to fuel supply in New England and export efforts in West Coast, and ways to promote economic growth in Appalachia.
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Continue Reading Recent Executive Order Extends Beyond Section 401 Water Quality Certifications

In advance of a Senate Commerce Committee Hearing on reauthorization of the Pipeline Safety Act, Senators Markey, Warren, and Blumenthal announced legislation to address distribution pipelines and risks associated with the September 2018 Merrimack Valley incident.  The Leonel Rondon Pipeline Safety Act of 2019, named after a man who died in the incident, would impact various aspects of distribution pipelines, including emergency response, integrity management, operation and maintenance, safety management systems, and recordkeeping.  Further, for all pipeline operators the bill would increase civil penalties under the statute by a factor of 100, from $200,000 per day to $2 million per day and for a maximum of $2 million to $200 million for a related series of events.  Even though the majority of the bill’s provisions are limited to distribution pipelines, certain of these proposals could be expanded more broadly during the reauthorization process to apply to gathering and transmission pipelines.
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Continue Reading Distribution Pipelines and Increased Penalties Feature in Senate Pipeline Safety Bill

The first Congressional Hearing on Pipeline Safety Act Reauthorization for 2019 was held this week before the House Transportation and Infrastructure Committee.  The Hearing did not have as much drama as last summer’s Hearing before the same Committee, where PHMSA Administrator Skip Elliott was asked sharply to explain why the Agency had failed to fulfill so many Congressional mandates and National Transportation Safety Board (NTSB) Recommendations.  In his written testimony at this week’s Hearing, Administrator Elliott stated that “When I spoke [here] last year, I heard clearly from [Committee] members that finalizing outstanding Congressional mandates must be a top priority.”   The Committee staff report issued for the Hearing listed 12 “unmet mandates,” and Administrator Elliott’s written testimony conceded that PHMSA yet to address 8 mandates from the 2011 Pipeline Safety Act (PSA) reauthorization, and another 4 from the 2016 PSA reauthorization.  Of that dozen outstanding mandates, 4 relate to reports and 8 involve rulemaking.  Jennifer Homendy, a member of the NTSB, testified that the NTSB has 24 “open” recommendations to PHMSA, several on the Board’s “most wanted” list for completion.  Homendy previously served as the Democratic Staff Director of the Subcommittee on Railroads, Pipelines, and Hazardous Materials for the House Transportation and Infrastructure Committee.
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Continue Reading Congress Turns its Attention to Pipeline Safety Act Reauthorization

The federal Pipeline Safety Act (PSA or the Act) mandates minimum safety standards for pipelines and certain associated storage and facilities (including LNG and other terminals). Congress should take up legislation to reauthorize the Act this year. Since the last reauthorization in 2016, there have been several noteworthy developments that have affected the industry, the…

The Department of Transportation’s Office of Inspector General within the (DOT OIG) announced recently that it will audit oversight of liquefied natural gas (LNG) facilities by the Pipeline and Hazardous Materials Safety Administration (PHMSA).  DOT OIG notes that the “self-initiated” audit will assess PHMSA’s oversight of LNG facility compliance with federal regulations.  The OIG noted…

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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Continue Reading Industry Impact from Criminal Verdict in Pipeline Oil Spill

As part of its integrity management regulatory scheme, the Pipeline and Hazardous Materials Safety Administration (PHMSA) is requesting comments on a draft risk modeling report.  In certain densely populated or environmentally sensitive areas, PHMSA integrity management rules require the continual evaluation of ways to reduce pipeline threats to minimize the likelihood and consequences of an incident.  Because these rules are performance based, the methodology for analyzing and assessing risk is not prescribed and the industry employs a variety of approaches.  PHMSA’s draft report similarly does not dictate a particular methodology but clearly favors probabilistic and quantitative risk models that may not be practical or effective for many operators.  Operators should take the opportunity to review and comment on the draft report to ensure that their experiences and insights with risk modeling are reflected prior to finalizing the document.  Based on a request from industry trade groups, PHMSA recently extended the comment period an additional 30 days until October 17, 2018.
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Continue Reading Draft Pipeline Risk Modeling Report Issued for Public Comment