United States: Pipeline Safety Legislative And Regulatory Developments

Last Updated: March 4 2016
Article by Frank Vlossak

Overview:

The last several months have seen significant congressional and regulatory action targeting pipeline safety. The rapid pace of work on this issue is expected to continue through the remainder of 2016. 

The Senate is preparing to pass a bill that would reauthorize pipeline safety programs, providing direction to PHMSA on ongoing regulatory efforts and directing the agency to establish safety standards for natural gas storage facilities. The Senate Commerce Committee approved this legislation in December. The House of Representatives has two committees with jurisdiction over pipeline safety issues. The Transportation and Infrastructure Committee has announced a hearing on pipeline safety on February 25, and the Energy and Commerce Committee is expected to hold its own hearing the following week. 

PHMSA is advancing significant new regulations through the rulemaking process. The agency published the proposed rule on "Safety of Hazardous Liquid Pipelines" last October, receiving public comments on it through January 8. PHMSA is also expected to release a parallel proposed rule on interstate natural gas pipelines.  

Senate Pipeline Safety Legislation:

On December 9, the Senate Commerce, Science, and Transportation Committee approved pipeline safety legislation by voice vote. During the markup, the Committee adopted a substitute amendment modifying the original version of the "Securing America's Future Energy: Protecting our Infrastructure of Pipelines and Enhancing Safety (SAFE PIPES) Act" (S. 2276).

The legislation includes provisions that would:

  • Reauthorize the Pipeline and Hazardous Materials Safety Administration (PHMSA) through September 30, 2019.
  • Direct PHMSA to prioritize pending rulemakings required by earlier statutes over initiating new pipeline safety rules.
  • Require PHMSA to conduct an assessment of gas and liquid pipeline integrity management. 
  • Require PHMSA to establish federal safety standards for underground natural gas storage. 
  • Grant PHMSA direct hire authority to address staffing issues.
  • Reestablish pipeline safety research and development partnerships and collaboration between PHMSA and the private sector. 

On February 1, during Senate debate on the "Energy Policy Modernization Act" (S. 2012), Senators Deb Fischer (R-NE) and Cory Booker (D-NJ) filed the text of S. 2276, as approved by the Commerce Committee, as an amendment. The Senate did not debate the amendment and the Senate's consideration of the energy bill itself stalled on February 4, over disagreements over what provisions should be added to address the Flint drinking water crisis. The Senate now will most likely consider the pipeline safety bill as a free-standing measure by "unanimous consent", requiring that no Senator object to its passage. 

House Pipeline Safety Legislation:

Both the House Energy and Commerce Committee and the House Transportation and Infrastructure Committee are preparing for hearings and legislative action on pipeline safety reauthorization:

  • The Energy and Commerce Committee is expected to hold a hearing on March 1.
  • On February 25, the Transportation and Infrastructure Committee's Railroads, Pipelines, and Hazardous Materials Subcommittee will hold a hearing on "Reauthorization of DOT's Pipeline Safety Program". 

House Natural Gas Storage Legislation:

On February 12, Representative Brad Sherman (D-CA) introduced the "Underground Gas Storage Safety Act" (H.R. 4578). The legislation would:

  • Direct PHMSA to promulgate "strong minimum safety standards for underground natural gas storage facilities" within six months of enactment. 
  • Specify that the new rules must require that storage operators: "[H]ave comprehensive and up-to-date processes, procedures, plans, mitigation measures, periodic assessments and reassessments, and emergency plans in place to maintain the safety and integrity of all underground gas storage facilities, whether operating, abandoned, idled, or plugged; and" comply "with all of the recommendations made by [PHMSA] in the second paragraph of [the] Advisory Bulletin..., issued February 2, 2016, except to the extent that the Secretary [of Transportation] establishes by clear and convincing evidence that it is not in the public interest."
  • Allow states to impose "more stringent safety standards for intrastate underground gas storage facilities."
  • Impose "emergency temporary regulatory requirements" on underground gas storage facilities that incorporate PHMSA's February 2, Advisory Bulletin and industry and Interstate Oil and Gas Compact Commission standards. 

Hazardous Liquid Pipeline Safety Rule:

On October 13, 2015, PHMSA published the Notice of Proposed Rulemaking (NPRM) titled "Pipeline Safety: Safety of Hazardous Liquid Pipelines." The NPRM proposes significant new requirements for operators of crude oil, refined product and other hazardous liquid pipelines, including:

  • "[R]equire that the operators of all gravity lines comply with requirements for submitting annual, safety-related condition, and incident reports."
  • "[R]equire that the operators of all gathering lines (whether onshore, regulated, or unregulated) comply with requirements for submitting annual, safety-related condition, and incident reports."
  • Mandate "inspections of pipelines in areas affected by extreme weather, natural disasters, and other similar events" within 72 hours of such an event.
  • Expand integrity management requirements to "require periodic inline integrity assessments of hazardous liquid pipelines that are located outside of [High Consequence Areas]."
  • "[R]equire that all new hazardous liquid pipelines be designed to include leak detection systems."
  • Tighten and enhance the repair criteria for hazardous liquid pipelines to "ensure that immediate action is taken to remediate anomalies that present an imminent threat to the integrity of hazardous liquid pipelines in all locations."
  • Mandate "that all pipelines subject to the [Integrity Management] requirements be capable of accommodating inline inspection tools within 20 years." 

Public comments on the NPRM were due on January 8, 2016. The Association of Oil Pipelines (AOPL) and the American Petroleum Institute (API) submitted comments reflecting the concerns of the liquid pipeline industry regarding the rule, and suggesting a series of changes. The associations only directly opposed one significant provision of the rule, the requirement that operators ensure that certain pipelines can accommodate in-line inspection tools within 20 years. 

The associations summarized their overall feedback regarding the NPRM, asking:

...that the proposed regulations do not: pose additional, unintended safety risks for pipeline personnel; fail to incorporate the proven application of good engineering judgment and the consideration of facts and science in operating pipelines with integrity;...improperly analyze the benefits and costs of the proposed rules; or, impose new requirements without careful understanding of their integration with existing pipeline regulations and the operational feasibility of the proposed rules.

On February 1, PHMSA's Liquid Pipeline Advisory Committee held a meeting to consider and vote on the NPRM. Committee members, which include representatives of industry, safety advocacy organizations and state and local governments, discussed and voted to endorse or recommend modifications of provisions of the NPRM. After the meeting, PHMSA released a document describing the rule, including the recommended changes approved by the Committee.  

PHMSA will now work on drafting the final rule, which must also be reviewed by the Office of Management and Budget.

Operator Qualification and Incident Notification:

On July 10, 2015, PHMSA published an NPRM titled "Operator Qualification, Cost Recovery, Accident and Incident Notification, and Other Pipeline Safety Proposed Changes". The NPRM would: establish new requirements for certain pipeline employee qualifications; require that pipelines notify the National Response Center "as soon as practicable" following "confirmed discovery" of a covered incident; establish a process for recovering costs for safety review of new projects that cost more than $2.5 billion or employ new technologies; require notification to PHMSA of pipeline flow reversals and changes to the type of product transported; incorporate by reference industry standards on inline inspections and stress corrosion cracking direct assessment (SSCDA); and implement other changes to pipeline safety regulations.

Gas Pipeline Rule:

According to the Department of Transportation's February, 2016 "Significant Rulemaking Report",  PHMSA is expected to release a proposed rule for gas pipelines by March 7, 2016. The pending gas pipeline rule parallels the "Safety of Hazardous Liquid Pipelines" NPRM. PHMSA began the process of developing this NPRM in 2011, with publication of an Advanced Notice of Proposed Rulemaking (ANPRM) titled "Pipeline Safety: Safety of Gas Transmission Pipelines". In the ANPRM, PHMSA stated that it "is now considering whether additional safety measures are necessary to increase the level of safety for those pipelines that are in non-HCA [high consequence areas] as well as whether current [integrity management] requirements need to be revised and enhanced to assure that they continue to provide an adequate level of safety in HCAs."

The Department of Transportation has frequently missed projected dates for action on pipeline rulemakings in the past. The expected complexity and potential cost of the gas pipeline safety rule could contribute to further delays in its promulgation and efforts to finalize the regulations before the conclusion of the Obama Administration. 

Valve Installation and Rupture Detection:

The Administration's latest "Unified Regulatory Agenda" projects that PHMSA will issue an NPRM on "Valve Installation and Minimum Rupture Detection Standards" by October, 2016. According to the Department of Transportation, the NPRM would "would propose installation of automatic shutoff valves, remote controlled valves, or equivalent technology and establish performance based meaningful metrics for rupture detection for gas and liquid transmission pipelines."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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