Pipeline Law

Pipeline Law

Welcome to the Underground

Lawyers with the Hunton & Williams LLP Pipeline Practice group have been providing legal support to America’s oil and gas pipeline industry for a quarter century. During that time, they have gained extensive experience on a wide variety of issues of concern to the industry, the regulatory agencies and the public. Hunton & Williams’ pipeline group also has extensive geographical reach in this practice area, with matters in almost all 50 states. Our goal is to help solve problems, not prolong them, and our experience helps to achieve timely resolution.

EPA Proposes New Standards for Use of Dispersants Under the National Contingency Plan

Posted in Administrative Rulemaking, Environmental, Incident Response

EPA has proposed to revise requirements under the National Oil and Hazardous Substance Contingency Plan (NCP) to address concerns raised during the Deepwater Horizon oil spill pertaining to the use of dispersants and other spill mitigating products.  Specifically, the proposed revisions address concerns relating to NCP standards for the efficacy, toxicity, and environmental monitoring of dispersants.

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Criminal Plea Serves as a Reminder of Harsh Penalties for “Knowing and Willful” Pipeline Safety Violations

Posted in Enforcement, Operation & Maintenance, Pipeline Safety Act

As a stark reminder of the availability of criminal sanctions for violations of federal pipeline safety regulations, a pipeline corrosion monitor has pleaded guilty to charges brought under the federal Pipeline Safety Act (49 U.S.C. 60101 et seq.) and faces up to 15 years in prison and $750,000 in fines.

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North Dakota Crude “Oil Conditioning” Order: Vulnerable to Preemption Challenge?

Posted in Administrative Rulemaking, Federal/ State Legislation, PHMSA

The North Dakota Industrial Commission (NDIC) issued an order last month requiring Bakken producers to condition crude oil prior to transport in order to make it safer for shipment by rail (the Order).  The Order follows a series of federal regulatory and legislative efforts intended to improve the safety of transportation of crude by rail. [See prior posts on PHMSA crude by rail safety alert and proposed crude by rail safety rules].  State legislative and regulatory efforts to impose requirements in areas already regulated by federal law may raise constitutional concerns under the doctrine of preemption.  The Order is potentially vulnerable to a preemption challenge if it can be shown that it mandates practices inconsistent with applicable federal regulations occupying the field, including in particular interstate rail transportation of hazardous materials, and that it unreasonably burdens interstate commerce.

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Final PHMSA Rule Updating Standards Incorporated by Reference

Posted in Administrative Rulemaking, Operation & Maintenance, Pipeline Safety Act, Public Awareness/ Community Relations

PHMSA published a final rule to amend the federal pipeline safety regulations to incorporate by reference new and updated editions of industry standards, among other non-substantive editorial corrections and clarifications.  The Agency incorporates various technical industry standards and design specifications into its regulations that, as a result, effectively will have the force of law as if they were published in the federal regulations.  These standards have not been updated in the regulations since 2010.

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Anticipated Increases in Pipeline Regulatory Compliance Costs Prompt FERC Proposed Policy

Posted in Administrative Guidance, Environmental, PHMSA, Policy

In light of anticipated increases in operator compliance costs associated with PHMSA safety initiatives, FERC is issuing a Proposed Policy Statement for public comment that would allow interstate natural gas pipelines to use cost recovery mechanisms, such as surcharges or cost trackers, to recoup expenditures related to improved safety, reliability, and regulatory compliance.  Comments on this proposed change will be due within 30 days of the proposal’s publication in the Federal Register, with reply comments due 20 days later (thus initial comments will be due after January 3, 2015).

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Focus on Records During Acquisitions, or Risk Significant Liabilities

Posted in Practice Pointers

The development of new oil and gas in various shale plays around the U.S. has led to a rise in the number of transfers and acquisitions of pipeline assets.  Prudent operators have always requested and reviewed documentation as part of their due diligence in making acquisitions, but it is becoming increasingly important that certain records be located during due diligence or factored into the transaction if such records are lacking and must be recreated.  Decision makers involved in pipeline acquisitions may only involve pipeline safety managers or counsel late in the process, without sufficient time to include the issue of records as part of the transaction.  That can be a costly mistake.

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PHMSA Issues Notice of Random Drug Testing Annual Percentage Rate for Calendar Year 2015

Posted in PHMSA, Reporting Obligations

PHMSA regulations require operators to perform random drug testing on a certain percentage of their “covered employees” (i.e. employees, contractors, and contractor employees who perform regulated operations, maintenance, or emergency response functions on a pipeline or LNG facility, 49 C.F.R. Part 199.3).  49 C.F.R. Part 199.105(c).  The Agency publishes the minimum percentage of covered employees subject to random drug testing each year, with the percentage to become applicable on January 1 of the calendar year following publication.  Id.  According to a recent Federal Register Notice, PHMSA has determined that the minimum random drug testing rate for covered employees will remain at the current rate, 25 percent, during calendar year 2015.

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PHMSA Issues Expansive Advisory and Guidance Regarding IM Program Effectiveness

Posted in Administrative Guidance, Integrity Management, PHMSA, Policy

PHMSA issued an Advisory Bulletin to announce Guidance on operator requirements to measure integrity management program effectiveness under Part 192 and 195.  Issued as a supplement to a 2012 Advisory on the topic, the Advisory and associated Guidance respond to Agency inspections identifying weaknesses in this area and a NTSB recommendation following the San Bruno, California incident to develop and implement effectiveness standards for IM and other performance-based programs. The Guidance appears to impermissibly broaden the Agency’s requirements for IMP programs without pursuing formal notice and comment rulemaking.

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Pipeline Abandonment: Safety and Supply Concerns at the Heart of Recent Developments

Posted in Practice Pointers

Recent legislative and regulatory developments at the federal and state levels signal lawmakers’ increased attention to issues related to the abandonment of oil and gas pipelines.  The U.S. House of Representatives is currently considering a bill, proposed earlier this year in the wake of a release of crude oil in the streets of a Los Angeles suburb from an out-of-service pipeline. The bill would amend the federal Pipeline Safety Act to require inspections of pipelines to confirm their status each time they are listed as abandoned or transferred as part of a sale.  Just after this bill was introduced in the House, the State of Louisiana passed a law requiring approval from the State Public Service Commission for the abandonment of portions of interstate natural gas pipelines entirely within the State, allowing the Commission to deny such approval if abandonment would cause gas supply inadequacies.  Other states, such as North Dakota, have also recently passed legislation concerning proper procedures for pipeline abandonment.  These developments reflect the range of issues associated with pipeline abandonment, from public safety to energy supply reliability.

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Proposed Expansion of NPMS Information Comment Period Extended

Posted in PHMSA, Public Awareness/ Community Relations, Recordkeeping, Reporting Obligations

PHMSA extended the comment period for its recent proposed expansion of information that operators must submit to the National Pipeline Mapping System (NPMS).  In response to an industry request for additional time, the Agency extended the comment period (which originally expired on September 29th) to December 1, 2014.

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