PHMSA and the National Association of Pipeline Safety Representatives (NAPSR) recently announced a one-day public workshop on Class Location Methodology to be held on April 16, 2014. 79 Fed. Reg. 16421 (March 25, 2014). The purpose of the workshop is to discuss whether applying the gas pipeline integrity management (IM) requirements beyond high consequence areas would mitigate the need for class location requirements, an issue that the 2012 amendments to the Pipeline Safety Act directed PHMSA to evaluate and report on to Congress by January 4, 2014 (no report has yet been issued). PHMSA invited public comment on this in 2011 (in conjunction with an Advance Notice of Proposed Rulemaking on natural gas IM) and again in 2013. The workshop will feature an overview of the comments received to date, as well as presentations from PHMSA, state regulators, and other stakeholders on both IM methodology and the use of class locations to identify areas of higher risk along pipelines.
Several cold weather events in the last few years have highlighted the interrelationship between natural gas and electric markets and underscored the need for improvements in coordination across those industries. In an attempt to address what one Commissioner described as “the defining issue” facing FERC over the next few years, the Commission recently proposed revisions to its regulations intended to increase coordination between interstate natural gas pipelines and the electric industry. The Notice of Proposed Rulemaking describes the challenges faced by both sectors due to their divergent scheduling practices, which can create reliability concerns especially during times of peak energy demand. It also proposes scheduling changes to address these challenges.
PHMSA recently proposed revisions to its Operator Identification (OPID) forms in an effort to streamline reporting, reduce unnecessary notifications, and collect additional information. In order to assist the Agency in identifying new operators and monitoring changes to existing pipeline systems, PHMSA requires that operators obtain an operator identification number for their pipeline system(s) and provide the Agency with notice of certain changes, including various construction projects and changes in ownership. 49 C.F.R. Parts 191.22; 195.64. PHMSA proposes to revise the Agency’s OPID Assignment Request and Registry Notification forms to align with categories on PHMSA incident and accident report forms, enhance clarity, reduce the number of notification types, and collect additional information on miles of pipe and facility description by State. In conjunction with this proposal, the Agency has identified detailed redline changes to the Assignment Request and Registry Notification, including four flow charts providing guidance on the correct type of registry notification.
The U.S. EPA and Army Corps of Engineers announced on March 25th a proposed rule revising the scope of waters protected under the Clean Water Act (CWA). The proposed rule, which has not yet been published in the Federal Register, seeks to clarify the extent of federal CWA jurisdiction following the U.S. Supreme Court’s decisions in Solid Waste Agency of Northern Cook County v. U.S., and Rapanos v. United States. These decisions resulted in considerable uncertainty within EPA, the regulated community and lower courts regarding the reach of the CWA, particularly over isolated wetlands and other non-navigable water bodies.
The National Institute of Standards and Technology (NIST) recently released the final “Framework for Improving Critical Infrastructure Cybersecurity.” The Framework addresses procedures and processes for reducing cyber risks to critical infrastructure – which includes the transportation sector and pipeline systems. These voluntary guidelines address existing global cybersecurity standards and practices and summarize cybersecurity activities common across critical infrastructure sectors. The Framework was developed by NIST for the purpose of helping organizations to understand, communicate, and manage cyber risks, and is a key deliverable under Executive Order 13636 and Presidential Policy Directive 21 issued by President Obama on February 12, 2013.
In response to concerns raised by shippers, on March 6, 2014, DOT amended its recent Emergency Order (see prior pipelinelaw alert) imposing certain testing and classification requirements on all persons who offer crude for transport by rail in the U.S. The Amended Order clarifies the scope and frequency of the testing requirements, including that (1) tests should be of ‘sufficiently representative samples’ to determine the crude oil’s flash point and boiling point prior to shipment; (2) existing test data may be relied upon if there is a “reasonable degree of certainty” that it is representative of the product; and (3) tests should occur with “sufficient frequency” to ensure data remains accurate and current. Establishment of testing intervals should account for variability of the material, including the time, temperature, and location of extraction.
DOT’s issuance of this Amended Order demonstrates the evolving regulation of transportation of oil by rail, as PHMSA and FRA continue their “Operation Classification” initiative to review shipments of Bakken crude and consider new rules regarding rail hazmat safety and tank car design.
On February 27, 2014, PHMSA hosted a day-long public workshop on Safety Management Systems (SMS). The workshop coincided with the public release of draft industry standard API RP 1173 for Pipeline Safety Management Systems, which is currently under development (as explained in a previous post). The public had an opportunity to hear from members of the American Petroleum Institute Committee developing the standard, as well as from representatives of other industries that have implemented both voluntary and mandatory SMS standards. Presenters also discussed various aspects of a successful SMS, such as the roles of leadership and management, the role of safety assurances, and the development of a safety culture.
The development of API RP 1173 is a cooperative effort among pipeline companies, regulatory agencies, the public, and industry trade groups. Its purpose is to provide pipeline operators a framework for developing a holistic, process-oriented approach to safety, with an emphasis on continual assessment and improvement. The standard contains 10 essential elements, including Leadership and Management Commitment, Stakeholder Engagement, Emergency Preparedness and Response, and Documentation and Record-Keeping. It is based upon a “plan-do-check-act” cycle, whereby operators plan to achieve particular results in accordance with organizational policies and goals and, after execution, review and analyze their results as a basis for continual improvement. PHMSA has not stated whether it will propose mandatory compliance with the standard.
The public is invited to read and comment upon the draft standard before April 11, 2014. More information can be found here.
In response to a string of recent accidents and subsequent investigations regarding the shipment of crude oil by rail, DOT issued an Emergency Order on February 25, 2014, requiring that crude shipped by rail be tested and properly classified prior to shipment. The Order makes a finding that unsafe practices by rail shippers are causing an “imminent hazard” to public health and safety and the environment. It applies to all persons who offer crude for transport by rail in commerce within the United States.
The Sierra Club recently filed a complaint in U.S. District Court for the Northern District of California against the U.S. Army Corps of Engineers (Corps), alleging that the Corps wrongfully withheld documents pertaining to its evaluation of the environmental impacts of the proposed Keystone XL pipeline. In March 2013, the Sierra Club requested preconstruction notifications (PCNs) submitted by TransCanada to the Corps, pursuant to Freedom of Information Act (FOIA) (5 U.S.C. § 552, et. seq.). The Corps denied the Sierra Club’s request on the basis that the PCNs, which contain detailed route information, were exempt from FOIA disclosure under the “inter-agency documents” exemption to FOIA (FOIA Exemption 5) (5 U.S.C. § 552(b)(5)). The Sierra Club subsequently filed an appeal with the Corps asserting that the exemption does not apply to documents prepared by an outside party and submitted to an agency. The Sierra Club’s current suit alleges violations of FOIA and the Administrative Procedure Act.
PHMSA recently announced a one day public workshop to discuss the development of a safety management system (SMS) national consensus standard for the pipeline industry. In the NTSB’s Investigation of the Marshall, Michigan incident, the agency stated that Enbridge’s centralized safety management system was deficient because it failed to consider the safety of operational processes, such as control center operations and integrity management. In addition, the NTSB found that “pipeline safety would be enhanced if pipeline companies implemented SMSs” and made a recommendation to the American Petroleum Institute (API) to develop a safety management standard specific to pipelines. For that reason, API is currently developing Recommended Practice (RP) 1173 for Pipeline Safety Management Systems, which is expected to be published in 2014. PHMSA Administrator Jeff Wiese has described this standard as predicated on a “plan-do-check-act” model that adds dimensions that are missing from the integrity management regulations with regard to safety culture and processes for risk mitigation tracking and reporting. While some operators already voluntarily implement SMS programs, it is unclear whether PHMSA will require pipeline operators to implement SMS programs and/or incorporate API RP 1173. The workshop, scheduled for February 27, 2014 in Arlington, Virginia, will include discussion on the success of SMS systems in the aviation, chemical, nuclear and health care industries. The meeting agenda will be posted here and the workshop will be webcast to the public.