PHMSA issued an advisory to operators regarding the applicability of its safety regulations to idled, inactive and abandoned pipe. Congress directed PHMSA to issue such an advisory in the recent PIPES Act of 2016, in response to several high profile incidents involving idled pipe. While operators frequently refer to idled, decommissioned, mothballed and/or inactive pipe, PHMSA does not recognize those terms. In its advisory, the Agency explains that it considers pipelines to be either active and subject to all relevant safety regulations or abandoned (i.e. permanently removed from service). With respect to a pipeline that is “purged” of all combustibles but not yet formally abandoned, PHMSA confirms its current practice of accepting deferral of certain activities, including inline inspection, as long as deferred activities are completed prior to or as part of returning a pipeline to service. This is consistent with prior PHMSA guidance.
In addition, PHMSA reminds operators of the requirements for formally abandoning pipe (at Part 192.727 for gas pipelines and 195.402(c)(10) for oil pipelines), including affirmative notice to PHMSA for offshore facilities and onshore facilities that cross waterways. Notably, the Agency recognizes that some pipelines may have been abandoned prior to the effective date of the abandonment regulations and owners may not have records relating to the location of those pipelines or whether they were properly purged of combustibles and sealed. PHMSA adds, however, that owners and operators have a “responsibility to assure facilities for which they are responsible or last owned do not present a hazard to people, property or the environment,” later adding “to the extent feasible.” Further, PHMSA notes that owners and operators are “fully responsible for the safety of their pipelines at all times and during all operational statuses.” The Agency also signals that it is considering proposing procedures in a future rulemaking for notifying regulators of purged but active pipelines.
In addition to regulatory obligations, the owner of an abandoned pipeline may have potential liability under common law for any nuisance or hazard that may be created by leaving pipe in the ground. These issues vary by state and each fact situation, and become more acute when water crossings are included.
In light of the above, owners and operators should ensure that they are aware of all potential issues and liabilities associated with proposals to abandon, purge or idle certain facilities and the possible acquisition of abandoned, purged, or idled pipeline facilities. Owners and operators should be prepared to demonstrate compliance with applicable laws and regulations for assets which they own or operate. In addition, the industry should anticipate future rulemakings that could require affirmative notice obligations for all abandoned pipelines as well as purged but active pipelines.