Several legislative developments of significance to the pipeline and energy transportation industries are in progress, with the introduction of a bipartisan pipeline safety reauthorization bill in the House, the passage of a bipartisan energy bill in the Senate, and the passage of a bill in the Senate that provides for the use of drones to monitor pipelines and other energy infrastructure.

Pipeline Safety Act Reauthorization

The House Transportation and Infrastructure (T&I) Committee has introduced bipartisan legislation, H.R. 4937 to reauthorize the Pipeline Safety Act (PSA). Since February, both the House T&I and the Energy and Commerce Committees have conducted hearings and the E&C Committee has been considering draft legislation. H.R. 4937, the Protecting our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2016, however, is the first pipeline safety reauthorization bill to come from the House. The bill includes many provisions contained in the E&C draft and Senate pipeline safety bill S 2276 passed in March (e.g., regulation of underground natural gas storage; allowances for certified states to participate in interstate inspections; and PHMSA/certified state post-inspection briefings). Two notable provisions were added, however, including the authority to issue emergency orders to the entire industry and a requirement that liquid pipeline operators provide post-incident safety data sheets on any spilled oil to Federal On-Scene Coordinator and States within 6 hours of notice to the National Response Center.

As to the emergency order proposed legislative language, it would grant PHMSA a new enforcement tool that could be issued to an individual operator, a group of operators or the entire industry, based upon a written finding by PHMSA that there is “an imminent hazard.” Such orders would be issued without prior notice or opportunity for hearing, although there would be a post-issuance opportunity for a formal hearing by a DOT Administrative Law Judge and a judicial review process requiring expedited consideration. A concern already voiced from industry trade groups and others is that the Agency already has sufficient emergency authority under its Corrective Action Order and Safety Order provisions, which also allow issuance of orders without prior notice or opportunity for a hearing. In addition, PHMSA has issued far more guidance and advisory documents than formal rules in recent years, and then used existing emergency order authority to convert those non-binding guidance or advisory documents into enforceable requirements. The concern is that more emergency authority could lead to even further disconnect between published rules and enforcement demands.

Also, note that H.R. 4937 does not include any change to the PSA criminal liability standards or any whistleblower incentives, despite a previous recommendation from the DOT Office of Inspector General (OIG) that the PSA criminal liability standard be lowered from knowing and willful to reckless and to add whistleblower incentives. In addition, the bill did not include a significant and controversial provisions from the E&C draft which would revise the PSA citizen suit provision to clarify that would allow parties to bring an injunction against DOT for failure to perform a nondiscretionary duty (in response to a recent Ninth Circuit decision). The full Committee marked up and unanimously approved the bill, and the E&C Committee continues to work on its own bill. Meanwhile, with respect to underground natural gas storage, PHMSA and the Department of Energy (DOE) recently announced a new Interagency Task Force on Natural Gas Safety to develop best practices that will likely inform a future rulemaking.

Energy Policy Modernization Act

The Senate recently passed its bipartisan energy policy bill, S. 2012, the focus of which is energy infrastructure modernization and increased energy efficiency. Among other things, the bill would amend the 2005 Energy Policy Act provisions related to FERC’s role in coordinating applicable federal authorizations and NEPA compliance for natural gas projects under the Natural Gas Act in order to:

  • Express the “sense of Congress” that all federal authorizations required for a facility should be issued within 90 days after an application for a Certificate of Public Convenience and Necessity is considered to be complete by FERC;
  • Provide for FERC to refer interagency disputes that delay or unreasonably deny a federal authorization needed for a natural gas project to the Council on Environmental Quality to ensure timely resolution;
  • Require deference by other agencies considering federal authorizations for a project to the scope of environmental review set by FERC;
  • Require each agency considering an aspect of an application for a needed federal authorization to carry out its obligations in conjunction with NEPA review and to implement procedures to complete the authorization process within the 90-day timeframe provided above; and
  • Require the head of an agency that has not completed its authorization process within the 90 days to notify Congress and FERC of its failure to do so and to describe in the notification its plan to ensure completion.

Drone Surveillance of Pipelines

The Senate also passed amendments to the House Federal Aviation Administration (FAA) reauthorization bill, H.R. 636, that would ensure that operators of critical infrastructure (including pipelines) would be able to use unmanned aircraft for surveillance of their facilities. In particular, the bill would allow use of unmanned aircraft beyond the visual line of sight to carry out any activities taken to ensure compliance with certain federal or state regulatory, permit or other requirements (including the requirements of 49 C.F.R. Part 192 and 195, as well as surveying requirements associated with permit applications for new pipeline construction) and activities taken in response to a pipeline incident, natural or manmade disaster, severe weather event, or other incident that may cause damage to the facility. The measure will be recommitted to the House for its consideration and approval.