PHMSA has issued a pre-publication copy of its much-anticipated Notice of Proposed Rulemaking (NPRM) concerning hazardous liquid pipeline safety issues. These proposed rules were prepared in response to certain Congressional mandates under the 2011 amendments to the Pipeline Safety Act as well as critiques from GAO and NTSB. This appears to be one of PHMSA’s most ambitious rulemakings to date, and is likely to generate significant comment from industry. The Agency issued the proposal after two recent Senate hearings on pipeline safety, and as Congress prepares to consider reauthorization of the Pipeline Safety Act. Comments are due by January 8, 2016.
On September 29, 2015, the D.C. Circuit Court of Appeals ruled that the National Environmental Policy Act (NEPA) did not require federal agencies authorizing portions of an interstate oil pipeline project to conduct a “whole-pipeline” environmental review. The case, Sierra Club v. U.S. Army Corps of Engineers, et al., clarifies the appropriate scope of NEPA review for oil pipeline construction projects where federal involvement is limited to granting authorizations for discrete aspects of the project.
In a recent Final Rule, PHMSA delayed indefinitely the effective date of its new amendment to 49 C.F.R. Part 192.305 concerning construction inspections, and agreed to consider an exception to the new requirement in Part 192.153(e) that ASME pressure vessels be pressure tested at 1.5 times MAOP. These actions were in response to several Petitions for Reconsideration concerning PHMSA’s March 11, 2015 Final Rule filed by groups representing natural gas distribution companies, interstate natural gas pipeline operators, pipeline safety representatives, and natural gas utilities. Although not unprecedented, PHMSA infrequently revises or delays indefinitely final regulations after the fact.
In response to comments and concerns from industry stakeholders, PHMSA recently revised its National Pipeline Mapping System (NPMS) information collection proposal that was issued over a year ago. Operators and industry members expressed concern in particular about the cost and time necessary to submit additional pipeline attributes as well as the sensitive nature of certain data. In response, the Agency reduced the number attributes it proposes to collect by a quarter, proposed to restrict access to certain sensitive security information, and outlined a three year phase-in period for the new attributes. While this represents an improvement from PHMSA’s initial proposal, many in the industry argued at a recent workshop that it is still unduly burdensome.
As the September 30th deadline for the Pipeline Safety Act reauthorization draws near, the Senate Committee on Commerce, Science, and Transportation convened a pipeline safety field hearing in Billings, Montana and recently scheduled a second hearing for September 29th in Washington, DC. Newly confirmed PHMSA Administrator Marie Therese Dominguez’s comments at the field hearing provide insight into current developments and priorities of the federal agency that is tasked with pipeline safety. In particular, Administrator Dominguez committed to issuing two outstanding rulemaking proposals in the near term, signaled that the Agency is increasing its focus on inspection and enforcement, committed to “vigorously” promote pipeline safety management systems, and conduct its own organizational self-assessment.
New FAQs on PHMSA/OSHA Boundaries for Regulatory Oversight at Midstream Facilities have been developed and presented to PHMSA management for final approval. The 7 new Frequently Asked Questions (FAQs) (click on Day 2, Item 2) were presented to PHMSA management and the Technical Advisory Committees (TACs) for both the liquid and gas industries at a meeting in D.C. at the end of August 2015. The FAQs are intended to avoid gaps or overlaps in regulatory oversight of midstream facilities, and provide more certainty to both the regulated community and state and federal agencies.
Environmental groups often seek to delay or stop pipeline projects by filing legal challenges under various state and federal environmental and/or energy laws. Recent court decisions have illustrated the difficult nature of such challenges, and in particular the difficulty environmental groups have in making a threshold showing of the legal basis for their challenge. An offshoot of the well-established principle that a litigant cannot raise someone else’s rights in court, the legal doctrine of ‘standing’ requires a litigant to demonstrate its interest in an actual case or controversy as a preliminary requirement for a case to be heard and decided in a court of law. In addition, a litigant citing a particular statute as the basis for a lawsuit must establish that it has an interest at stake that is within the ‘zone of interests’ protected by that statute.
On July 28, 2015, the National Wildlife Federation (NWF) informed the U.S. Department of Transportation (DOT) of its intent to sue for violations of the Clean Water Act (CWA) § 311(j) and Executive Order 12777 (which guides federal implementation of the Oil Pollution Act of 1990). Specifically, NWF alleges that DOT has for over 20 years failed to issue regulations requiring an owner or operator of an offshore facility landward of the coast line to prepare and submit a facility response plan (FRP) applicable to discharges of oil or hazardous substances to waters of the United States. NWF Notice of Intent Letter, at 1. According to NWF, issuing such regulations is a non-discretionary duty under the CWA.
DOT regulations at 49 C.F.R. Part 194 require FRPs for onshore facilities, and the U.S. Department of Interior, Bureau of Safety and Environmental Enforcement regulations at 30 C.F.R. Part 254 require FRPs for offshore facilities, meaning “the area seaward of the line of ordinary low water along that portion of the coast which is in direct contact with the open sea and the area seaward of the line marking the limit of inland waters.” 58 Fed. Reg. 7489, 7490 (Feb. 8, 1993).
NWF argues that DOT has not authorized PHMSA to review or approve FRPs for offshore pipelines landward of the coastline located in waters of the United States, nor to issue regulations requiring owners or operators of such pipelines to prepare and submit FRPs. NWF alleges that this creates a gap in the federal regulatory requirements associated with FRPs. As an example, NWF points to the fact that DOT has not required and has not approved FRPs for lines such as sections of an Enbridge offshore pipeline (“Line 5”) located under the Straits of Mackinac, the St. Clair River, and other inland navigable waters. Apparently, Enbridge prepared and submitted FRPs for these sections of Line 5 to PHMSA, but the Agency declined to approve them, as it has not been authorized by DOT to review or approve FRPs for offshore pipelines landward of the coastline. NWF argues that DOT must establish a regulatory requirement for owners or operators of such lines to prepare, submit, and obtain approval of an FRP and that if DOT fails to do so, it is in violation of CWA § 311(j)(5)(A)(i).
The focus of the letter and NWF’s potential suit is on inland waters that are jurisdictional under the CWA, which highlights the importance of the U.S. EPA and Army Corps of Engineers’ May 27, 2015 final rule defining “waters of the United States.” NWF has threatened to sue DOT within sixty days if it does not issue the regulations that NWF alleges are required. This would be the second lawsuit brought against DOT and its sub-agencies in the last few years concerning FRPs. PHMSA was sued in 2013 by a watchdog group, Public Employees for Environmental Responsibility (PEER), over the Agency’s failure to produce copies of operators’ FRPs (and related records) that the group had requested under the Freedom of Information Act (FOIA). The suit is still pending, with PHMSA filing regular status reports informing the court of its progress in producing the requested records.
The United States Court of Appeals for the Ninth Circuit has affirmed dismissal of a lawsuit brought in 2012 by the City and County of San Francisco (San Francisco) to challenge PHMSA’s oversight of State enforcement of pipeline safety standards before and after the San Bruno pipeline incident in 2010. Specifically, in its lawsuit San Francisco took issue with PHMSA’s approval of the California Public Utilities Commission (CPUC) certification to regulate intrastate pipelines in California and the Agency’s disbursement of federal funds to the CPUC to carry out its pipeline safety program in compliance with its certification. The Ninth Circuit opinion affirms the District Court’s ruling in the case that the federal Pipeline Safety Act (PSA or the Act) citizen suit provision does not authorize mandamus-type citizen suits against PHMSA, and that any decision by the Agency to refrain from reviewing or rejecting a State’s certification to regulate its intrastate pipelines or to fund a State pipeline safety program is not subject to judicial review.
PHMSA has recently issued a Final Rule establishing review criteria for state excavation damage programs, as well as a process for enforcing Federal excavation damage requirements in states with inadequate excavation damage prevention enforcement. The Final Rule will be published in tomorrow’s Federal Register and is effective January 1, 2016.