In one of the most sweeping proposals since the creation of the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), the agency has announced proposed regulations to update requirements relating to gas gathering and transmission lines. We find that there are four main areas our readers definitely should be aware of.
First, the proposed regulations would add new assessment and repair criteria for gas pipelines. Most notably, the proposal will subject thousands of miles of pipelines built before 1970 to verification and testing requirements. These older pipelines had previously been exempt from such requirements. This new requirement would mean that operators of older pipelines will need to make safety assessments on pipelines which were largely unregulated. This may be challenging and costly for operators given the lack of records and age of many of these pipelines.
Second, the proposal also expands the agency’s definition of a “gathering line” that is subject to the new safety standards, potentially embracing pipelines previously classified as unregulated production lines. This is an expansive extension of federal authority into oil and gas production areas that have previously been regulated by individual state agencies and state law.
Third, the PHMSA also seeks to expand its regulatory reach to new areas, designated as “Moderate Consequence Areas” (“MCAs”), which would require integrity assessments and safety protections in each “onshore area that is within a potential impact circle … containing five (5) or more buildings intended for human occupancy, an occupied site, or a right-of-way for a designated interstate, freeway, expressway, and other principal 4-lane arterial roadway.”
This new category seems to be a compromise between the industry and the PHMSA to avoid expanding the definition of High Consequence Areas (“HCAs”), which require stricter safety standards. MCAs are a middle ground that ensures the prompt remediation of pipeline segments while allowing operators to allocate their resources to HCAs.
Fourth and finally, following an extreme weather event such as a hurricane, flood, earthquake, landslide, or other natural disaster, the proposed regulations also would require an operator to inspect all potentially affected pipeline to detect conditions that could adversely affect the pipeline.
The PHMSA stated that the proposed regulations address the four congressional mandates from the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, one Government Accounting Office recommendation, and six National Transportation Safety Board recommendations.
Undoubtedly, the proposed rulemaking will be controversial and generate extensive comments from operators, state officials, and environmental groups. A 60-day public comment period will begin for the proposed rulemaking when it is published in the Federal Register, which has yet to occur.