In a decision that has significance to hazardous liquid pipeline operators nationally, PHMSA has denied a Petition for Reconsideration of a matter involving an oil tank overflow incident at a Buckeye facility that occurred in 2005.  The oil was contained within a diked area, and promptly cleaned up.  The next day a state environmental official requested removal of some additional soil, which caused response costs to slightly exceed the $50,000 reporting threshold established in PHMSA rules, at Parts 195.50 and 195.52.  The operator promptly reported the incident to the National Response Center (NRC) as soon as these reporting obligations were met.

In 2010, just before the 5 year statute of limitations ran, PHMSA issued a NOPV alleging a violation of its release reporting rules.  Following a Hearing, PHMSA issued a Final Order in 2012 maintaining the finding of violation for late release reporting.  The operator filed a Petition for Reconsideration, noting how the Agency’s interpretation essentially requires pipeline operators to report releases before they are reportable.  On August 1, 2013, PHMSA issued a denial of the Petition for Reconsideration, stating that it intends to interpret its release reporting rules to apply within 1-2 hours of “discovery of the release itself, not the discovery or acknowledgement that the accident meets the reporting requirements listed in the regulation.”  Decision at p. 3 (emphasis in original).

Under Part 195.52, releases from hazardous liquid pipeline systems are to be reported to the NRC if they: (1) cause a death or injury requiring hospitalization; (2) result in an explosion or fire; (3) impact waters; or (4) exceed $50,000 in total cost, including damage to equipment and cleanup costs (but note that releases of less than 5 bbls associated with a maintenance activity that is confined to company property or ROW and cleaned up promptly is not reportable.  See Part 195.50(b)).

Section 9 of the 2012 Pipeline Safety Act amendments requires PHMSA to review and revise its release reporting rules at Part 195.52 (liquid) and Part 191.5 (gas), concerning timeliness of reporting.  Congress gave the Agency 18 months for that undertaking, which expired on July 3, 2013.  The Agency has not publicly addressed the July 3 deadline, but instead issued an Advisory Bulletin on January 25, 2013, stating that it intended to revise its reporting rules “at a later date.” (see our related alert) No new rules have yet been proposed.  Operators should be aware of the Agency’s current interpretation that release reports must be made even before an incident meets reporting criteria, and be prepared to comment on proposed rules when they are eventually issued.