On July 24, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published an invitation to comment on a preemption application submitted by the States of North Dakota and Montana. The States’ application asks PHMSA to override vapor pressure limits for crude by rail imposed by the State of Washington. New Washington law, which became effective on July 28, 2019, prohibits loading or unloading crude oil from a rail car unless the vapor pressure is lower than nine pounds per square inch. The law also requires facilities receiving crude by rail to provide “advance notice” of the “type” and “vapor pressure” of the crude. According to North Dakota and Montana, the new law effectively targets Bakken crude—thought by some to be more volatile—and should be preempted by the Hazardous Materials Transportation Act, which PHMSA administers.
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Policy
Proposed CEQ Guidelines on Climate Change and NEPA Focus on Permit Streamlining
The Council on Environmental Quality (CEQ) issued new draft guidance at the end of June intended to further permit streamlining generally and greenhouse gas (GHG) analysis specifically. The new guidance replaces previous CEQ guidance issued by the Obama Administration on how GHG effects should be estimated for projects during review under the National Environmental Policy Act (NEPA). Whether and how a federal Agency must consider GHG emissions during NEPA review continues to be a controversial issue for pipeline construction and expansion projects that require federal permits.
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House Democrats Seek Bipartisan Support with Revised Pipeline Safety Bill
By Catherine D. Little, Annie M. Cook & Robert E. Hogfoss on
In an attempt to garner support from House Republicans following last week’s release of draft legislation to reauthorize the Pipeline Safety Act (PSA), Democrats on the House Energy and Commerce Committee released a more bipartisan version, The Safer Pipelines Act of 2019, H.R. 3432. The revised bill was subsequently approved by a House Energy and Commerce subcommittee and heads to the full committee for consideration and mark-up. At a minimum, it appears that legislators in the House are working towards issuing a bill prior to the August recess and reauthorization deadline of September 30, 2019. The revisions to the House pipeline safety seem designed to make a more palatable bill for the Senate as it contains some significant proposed changes from the prior discussion draft that was the subject of a contentious hearing in the House.
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Beyond the Scope of NOPVs – Recent Region Recommendations
By Catherine D. Little, Annie M. Cook & Robert E. Hogfoss on
The Pipeline and Hazardous Materials Safety Administration (PHMSA) has recently issued some Region Recommendations in enforcement actions that have either added new material allegations or requested relief beyond that contained in the underlying matter. The Agency’s rules do not provide for Region Recommendations to be used in that manner. If PHMSA decides to add new allegations or seek additional relief in an enforcement action, the rules (and precedent) anticipate those modifications will be made through an amendment of the underlying enforcement documents. Amended enforcement documents, if material, allow a Respondent a new opportunity to request a Hearing. It is not clear why PHMSA has started issuing Region Recommendations in this manner, but if left unchallenged it may have the effect of circumventing additional or expanded Hearings.
Region Recommendations are intended to respond to information submitted by the Respondent and to recommend the terms of final action to either the Presiding Official (where there has been a Hearing) or to the Associate Administrator (when no Hearing has occurred but a respondent has issued additional information for Agency consideration). Region Recommendations are typically prepared only in contested matters, especially after a Hearing. Where a matter is not contested, then the enforcement documents as issued presumably state all relevant allegations and describe the relief requested, thus a Region Recommendation should be unnecessary.
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Pipeline Safety Draft Legislation Adds New Proposals to Reauthorization Debate
By Catherine D. Little, Annie M. Cook & Robert E. Hogfoss on
As the Pipeline Safety Act (PSA) reauthorization deadline approaches, the Democrats on the House Energy and Commerce Committee recently released draft discussion legislation titled, The Safer Pipelines Act of 2019. The “discussion draft” was released in advance of a Committee hearing held on June 19, 2019. At the hearing, it became clear that the recent legislation was drafted behind closed doors and that it was not well received by the minority Republicans on the Committee or industry representatives.
With this most recent draft legislation, several noteworthy legislative changes are likely to be considered by the Committee, although two Committee Republicans questioned whether marking up the draft was worth the effort. Notably, PHMSA declined to participate in the hearing because it did not have sufficient time to review the draft. Industry trade group representatives provided testimony as well as a representative from the Pipeline Safety Trust. The more significant proposals are summarized below and relate to: (1) lowering the criminal liability standard; (2) expanding the definition of regulated gathering pipelines; (3) clarifying and expanding citizen suits; (4) substantially increasing the amount of operator information made available to local responders and to the public; and (5) other integrity management requirements regarding phasing out direct assessment and requiring automatic shut off valves for liquid pipelines. …
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Gas Pipeline Safety Rule Clearing Final Hurdle: Operators Should Prepare
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.
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Pipeline Safety Settlements: Time to Take a Page from Hazmat?
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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Third Pipeline Safety Act Hearing Focuses on Security
By Troutman Pepper Pipeline Practice & Catherine D. Little on
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.
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Recent Executive Order Extends Beyond Section 401 Water Quality Certifications
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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Executive Order Impact on 401 Water Quality Certification Appears Limited
President Trump recently issued two much anticipated Executive Orders aimed to streamline the permitting of U.S. energy infrastructure. One Executive Order (EO) focuses primarily on Clean Water Act (CWA) state issued water quality certifications and associated EPA guidance and regulations. In “Executive Order on Promoting Energy Infrastructure and Economic Growth,” the Administration takes aim at “outdated Federal guidance and regulations” under Section 401 of the CWA that are “causing confusion and uncertainty and are hindering the development of energy infrastructure.” While states and environmental organizations are concerned that the EO will limit a state’s authority under the CWA, the impact of the EO at least initially appears to be limited, as the statute and the case law on point already establish certain limits regardless of the EO. What remains to be seen is the import of any proposed rulemakings issued as a result of this EO, or whether these issues prompt any legislation that proposes to amend Section 401 of the CWA.
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Continue Reading Executive Order Impact on 401 Water Quality Certification Appears Limited