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.

Senate Committee Approves Cybersecurity Bill As Infrastructure Security Concerns Grow

Posted in Federal/ State Legislation, Infrastructure Security

The Senate Intelligence Committee recently approved the “Cybersecurity Information Sharing Act”, which would facilitate the sharing of information about cybersecurity threats or countermeasures by among private entities and with the federal government.  If information is shared in accordance with certain requirements (such as the use of technical controls to protect shared information), the bill provides broad protections for entities sharing information for cybersecurity purposes, including immunity against any legal action related to the monitoring, sharing, or receipt of information done in accordance with the Act.

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Pipeline Crack Detection and R&D Public Workshops Announced

Posted in Environmental, Integrity Management, Operation & Maintenance, PHMSA

PHMSA and the National Association of Pipeline Safety Representatives (NAPSR) announced a public workshop to be held on August 5, 2014, to discuss challenges associated with detecting and characterizing crack-like defects in oil and gas pipelines (e.g., environmentally assisted cracks and cracks associated with corrosion).  Presenters include the NTSB, the National Energy Board of Canada, PHMSA and certain pipeline operators.  Discussion will include:  (1) an update on developments in crack detection technology; (2) case studies using these technologies; (3) data collected to support engineering assessments; and (4) criteria for determining excavation of a probable crack defect, the associated timeframe, and models for determining crack growth rates.  The workshop will be held in Chicago, but will also be webcast.  Additional information, including the agenda, is available here.

Following this meeting, PHMSA and NAPSR will hold a two day Research and Development forum in Chicago on August 6 and 7 to develop a national pipeline research agenda.  The forum will target current gaps in technology and priorities for future research.  Working groups are slated to discuss the following issues:  damage prevention, leak detection/fugitive methane emissions, anomaly detection characterization, improving risk models and technology to address legacy material challenges (e.g., cast iron and seam weld issues).  More information is available here.

House Approves Bill to Reform Permitting Process for Cross-Border Pipelines, Despite Presidential Opposition

Posted in Construction & Design, Federal/ State Legislation, Policy

Despite veto threats from the Obama Administration, H.R. 3301, the “North American Energy Infrastructure Act”, passed in the U.S. House of Representatives by a vote of 238 to 173 on June 24, 2014.  The purpose of the bill (subject of a prior post) is to eliminate the Presidential permitting process for cross-border pipelines and electric transmission facilities.  For oil pipelines and electric transmission lines, the bill would only require a “certificate of crossing” for the construction, connection, operation or maintenance of the cross-border segment of a proposed project.  The certificate would be issued by the State Department (for oil pipelines) or by the Department of Energy (for electric transmission lines).  These Departments would be required to issue certificates of crossing within 120 days of completion of review of the proposed “cross-border segment” under the National Environmental Policy Act (NEPA), unless they find that the project is not in the national public interest.  For natural gas pipeline projects, a certificate of crossing would not be required, as the bill leaves in place the current authorization process of the Natural Gas Act, under which FERC approves siting, construction or operation of natural gas pipeline facilities, and the import or export of natural gas.  The bill would, however, eliminate the Presidential Permit requirement for natural gas pipeline projects.

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Pipeline Safety Management Systems Workshop Scheduled for July 2, 2014

Posted in Administrative Guidance, PHMSA, Policy

PHMSA announced its second workshop on Pipeline Safety Management Systems (PSMS) scheduled for July 2, 2014.  Notice, 79 Fed. Reg. 34393 (June 16, 2014).  The purpose of this workshop is to discuss the emerging national consensus standard regarding PSMS, draft American Petroleum Institute (API) Recommended Practice 1173, and to identify how concepts discussed at the prior workshop are addressed in this standard.  The standard was prompted by an NTSB recommendation to API as a result of the Board’s investigation of the Marshall, Michigan incident.  As explained by PHMSA, a PSMS is intended to be a formal framework for operators to measure and improve pipeline safety performance over time and to ensure that senior management is actively fostering a safety culture.  Registration information is available here.

Industry Performance Statistics Illustrate Improvements in Pipeline Safety

Posted in Enforcement, Integrity Management, PHMSA, Policy

As part of a 2014 industry initiative, the Association of Oil Pipelines and the American Petroleum Institute prepared its first “Annual Liquid Pipeline Safety Performance Report” (the Report).  Despite several high profile pipeline incidents in the past few years and increased PHMSA enforcement activity, these statistics reflect that PHMSA pipeline safety regulations and industry efforts over the past ten years have been successful in improving pipeline safety.

  • The number of releases from liquid pipelines decreased 62% over the last ten years (based on three year averages).
  • While the volume of barrels of crude or petroleum product transported has increased, the amount released over the last ten years decreased by 47% (based on three year averages).
  • Releases caused by corrosion decreased by 79%, third party damage by 78% and those caused by material defects, seam and weld failures decreased by 31% (based on three year averages).

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States Increasingly Active in Oil Spill Response and Pipeline Safety

Posted in Federal/ State Legislation, Incident Response, Pipeline Safety Act

In response to recent oil spills by rail and pipeline as well as a report by DOT’s Office of Inspector General criticizing PHMSA oversight of state pipeline safety programs, states are becoming increasingly active in oil spill response and oil transportation safety.  Under the Oil Pollution Act of 1990 (OPA), state spill response regulations may exceed federal requirements.  33 U.S.C. 2718 (stating that OPA does not preempt a State’s imposition of additional liability or requirements regarding oil releases within the State or any removal activities associated with a release).  Some states, including California, Washington, Oregon, and Alaska, already impose additional spill response requirements.

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FERC EA Fails to Consider Impacts from Related Pipeline Construction Projects

Posted in Construction & Design, Environmental, Judicial/ Administrative Decisions

In a decision that may affect how impacts of related pipeline construction projects are analyzed, the D.C. Circuit Court of Appeals recently remanded an environmental assessment (EA) prepared by FERC under the National Environmental Policy Act (NEPA).  Delaware Riverkeeper Network et al. v. FERC, D.C. Cir. No 13-101 (June 6, 2014).  The Court held that the Commission violated NEPA by improperly considering the project’s environmental impacts in isolation from three inter-related projects undertaken or proposed by the same operator on the same pipeline within a short period of time.  The Court remanded the case to FERC for further consideration of the cumulative environmental impacts of the four related natural gas pipeline construction projects.

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Canada Proposes Strict Liability Rules for Oil Pipeline Releases

Posted in Environmental, Incident Response

Canada’s Minister of Natural Resources recently announced measures to enhance the liability and accountability of pipeline companies for oil spills.  The proposed measures, which have not yet been presented to the Canadian Parliament but are intended to become effective by 2017, introduce absolute liability for owners and operators of federally regulated pipelines.  If passed by the Parliament, companies will be liable for up to $1 billion in costs and damages from spills from their pipelines regardless of causation.  The proposed legislation also requires companies to have financial resources on hand—namely, a minimum of $1 billion in financial capacity for major oil pipelines—to respond to leaks, spills, and ruptures.  It empowers Canada’s National Energy Board (NEB) to access federal money for initial cleanup and remediation costs and to take control of incident response if the responsible company is unwilling or unable to do so.  In such circumstances, the proposed measures would also allow NEB to recover from industry any response costs incurred by government, communities or individuals.

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New Emergency Order and Safety Advisory Affecting Crude Shipments by Rail

Posted in Administrative Guidance, Enforcement, PHMSA

The DOT has issued an Emergency Order requiring that railroads operating trains carrying more than 1,000,000 gallons of Bakken crude oil (approximately 35 tank cars) in a particular state must notify the State Emergency Response Commission (SERC) of the expected movement of such trains through the counties in that state.  The notification must: (1) provide an estimate of the number and frequency of trains affected by the Order; (2) identify the oil being transported; (3) provide applicable emergency response information required under 49 C.F.R. Part 172; (4) identify the routes over which the material will be transported; and (5) provide an operator point of contact.  If notification is not made to a SERC within 30 days of the date of the Order, the railroad is prohibited from transporting such volumes of Bakken crude until notification is provided. 

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OIG Audit Criticizes PHMSA Oversight of State Pipeline Safety Programs

Posted in PHMSA, Policy

The DOT’s Office of Inspector General (OIG) recently issued an Audit Report  finding that PHMSA’s oversight of state pipeline safety programs is not sufficient to ensure that states comply with program evaluation requirements and properly use suspension grant funds. The audit, prompted by NTSB’s investigation of the September 2010 San Bruno, CA tragedy, assessed PHMSA’s policies, procedures and oversight activities applicable to states certified under PHMSA’s Natural Gas Program. 

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