As further indication of the Agency’s increased focus on pipeline construction activity, PHMSA will publish an Advisory Bulletin on September 12, 2014 intending to clarify pre-construction notification requirements. Under PHMSA regulations, operators are required to notify PHMSA through the National Registry of Pipeline and LNG Operators not later than 60 days before certain events, including construction of (1) a facility other than a section of line pipe (including replacement, modification, upgrades, etc.) that costs $10 million or more; (2) 10 or more miles of a new pipeline; or (3) any new LNG plant, LNG facility or hazardous liquid pipeline facility. 49 C.F.R. Parts 191.22(c)(1); 195.64(c)(1).
Neither the regulations nor prior rulemakings define “construction” for purposes of determining when the 60-day notice requirement is triggered, as acknowledged by PHMSA in the Advisory. Regardless, PHMSA states that it “strongly encourages operators to provide the required notification(s) not later than 60 days prior to whichever of the following construction-related activities occurs first: material purchasing and manufacturing; right-of-way acquisition; construction equipment move-in activities; onsite or offsite fabrications; or right-of-way clearing, grading, and ditching.” PHMSA also clarifies in the Advisory its interpretation that the requirement to notify the Agency of the “construction of 10 or more miles of a new pipeline” applies to new pipelines as well as the replacement of 10 or more contiguous miles of line pipe in an existing pipeline. While PHMSA concedes that the construction-related activities it identifies do not necessarily represent “commencement of construction” for purposes of the notice obligation, the Agency is nonetheless requesting and encouraging cooperation by operators in regard to providing early notice.
PHMSA continues to show interest in new construction issues, which is not a traditional area of inspection for the Agency. As a matter of law, the Agency’s authority for such inspections and enforcement is not fully clear, and requiring prior notice for activities that even the Agency acknowledges may not fall within the ambit of commencement of “construction” is questionable. As a matter of practical application, it also raises concerns of inefficiencies for both the Agency and operators alike given that many of these activities may occur during pre-planning stages before an operator has fully committed to a particular project.