PHMSA is extending the deadline for comments due today (March 21, 2017) on the Advance Notice of Proposed Rulemaking (ANPRM) issued on January 18, 2017. The new deadline for comments is May 19, 2017. The ANPRM was issued in response to a petition for rulemaking filed by state of New York, enquiring about risks posed by transport of petroleum by means other than pipeline, specifically by rail, and whether to establish vapor pressure standards for the transportation of crude oil. The ANPRM requested comments on whether a national standard should be developed for vapor pressure of crude oil, including the potential safety benefits and costs of establishing a standard. The intent of the ANPRM is to evaluate measures to reduce risk of fire and explosion in non-pipeline transport of crude oil such as a national vapor pressure standard and, if so, adopt appropriate threshold recommendations for the standard.
The state of Texas and the Texas Railroad Commission have petitioned the Fifth Circuit Court of Appeals to review PHMSA’s interim final rule regulating underground natural gas storage facilities. As required by the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016, PHMSA published an interim final rule last December establishing minimum federal safety standards for underground natural gas storage facilities, which became effective in January. Such facilities have come under increased scrutiny since the 2015 Aliso Canyon storage field leak that lasted almost four months.
During the last week of the Obama Administration, PHMSA released a pre-publication copy of the hazardous liquid pipeline safety final rule, which has been six years in the making. The rulemaking was intended to address issues raised by several sources: high profile pipeline accidents; directives contained in amendments to the Pipeline Safety Act; and recommendations from the NTSB and GAO. The final rule would implement many significant and expansive inspection and reporting requirements, including periodic integrity assessments and leak detection for pipelines outside of high consequence areas (HCAs), inspections of pipelines after extreme weather events, expanded reporting, and more stringent integrity management repair and data collection requirements.
President Trump signed another Executive Order (EO) on January 30, 2017, entitled Reducing Regulation and Controlling Regulatory Costs. The new EO, applicable to the entire Executive Branch, including all federal administrative agencies, makes a straightforward directive: “…for every one new regulation issued, at least two prior regulations be identified for elimination.” The Order goes on to state that the costs associated with any new regulations may not exceed the savings realized by repealing at least two prior regulations (“the total incremental cost of all new regulations…shall be no greater than zero.”).
On the first day of the new Trump Administration, Chief of Staff Reince Priebus issued a Memorandum to the heads of all Executive Departments and Agencies, requesting that all federal agencies suspend transmittal of any new proposed or final rules to the Office of the Federal Register (OFR) until the new Administration’s Agency appointees have an opportunity to review such proposals. The Memo also asks all agencies to “immediately withdraw” any proposed or final regulations that have been sent to the OFR but not yet published in the Federal Register (there is always at least a several day delay between the time that new rules are sent to OFR and then published in the Federal Register). In addition, the Memo requests that Agencies postpone the effective date (by at least 60 days) of any rules that have been published in the Federal Register but have not yet become effective.
PHMSA has issued an interim final rule (IFR) to establish – for the first time ever – minimum federal standards for underground natural gas storage facilities. The IFR imposes significant new requirements in a short timeframe for “downhole facilities,” including wells, wellbore tubing and casings at underground natural gas storage facilities. The IFR addresses construction, maintenance, risk management and integrity management procedures for these facilities and incorporates the requirements of recent API industry Recommended Practices (RPs) 1170 for salt caverns storing natural gas and 1171 for storage in depleted hydrocarbon reservoirs and aquifer reservoirs. In addition, the IFR requires underground gas storage operators to prepare and file annual reports, incident reports, safety-related condition repairs and register their facilities in the PHMSA operator registry.
The Gas Pipeline Advisory Committee (GPAC) will meet in Washington, D.C. next month to discuss PHMSA’s proposed gas rules. The meetings are scheduled for Wednesday and Thursday, December 7-8, 2017, from 8:30 a.m. to 5:00 p.m. both days. The meetings will not be webcast, but materials will become available on the www.regulations.gov website within 30 days after the sessions end (search for docket number PHMSA-2016-0136). PHMSA asks anyone planning to attend to register by December 1.
The Department of Transportation’s Office of Inspector General (OIG) released a report criticizing PHMSA’s implementation of Congressional mandates and recommendations from the NTSB, GAO and the OIG itself. The OIG’s findings paint a troubling picture of an unsophisticated agency. OIG highlights in particular the lack of sufficient procedures to track rulemakings and coordinate within various departments within the agency and with other intermodal agencies, resulting in delayed rulemakings and implementation of recommendations. While PHMSA has already been implementing organizational changes, the OIG notes that it is too soon to determine whether they will adequately address the Agency’s ability to meet mandates and recommendations in full and in time.
The Interagency Task force on Natural Gas Storage Safety formed last April in response to the massive prolonged Aliso Canyon gas leak, recently issued its report on the safety and reliability of underground natural gas storage. The report responds to a Congressional mandate in the recent reauthorization of the Pipeline Safety Act. It includes numerous (44) recommendations to industry to reduce the likelihood of leaks at underground natural gas storage facilities and minimize the impacts of leaks when they occur. These recommendations are not binding, but PHMSA is required to consider them in issuing final rules pursuant to 2016 Pipeline Safety Act amendments. The report recommendations primarily address well integrity, risk management, and data gathering and recordkeeping, which are likely to be incorporated in PHMSA’s forthcoming interim final rule to establish minimum federal standards. The Agency plans to issue an interim final rule before the end of this year. As this will be a new area of regulation for the Agency, industry should be mindful of the various legal issues regarding jurisdiction, state regulation and preemption, and dual jurisdiction, among others.
PHMSA released a pre-publication copy of its final rule expanding requirements for excess flow valves in natural gas distribution service pipelines. Excess flow valves automatically close and stop the flow of gas when there is a significant increase in gas flow (e.g., due to a damaged pipeline), thereby decreasing the risk of subsequent fire and rupture. These devices are currently required in new and replaced service pipelines that supply single-family residences. The recent rule, which will be effective six months after publication in the Federal Register, expands existing valve requirements to require: (1) installation of excess flow valves in new or replaced service lines to certain multi-family facilities, small commercial facilities, and branch service lines serving single family residences; (2) installation of manually operated curb valves or excess flow valves in new or replaced large capacity service lines; and (3) that operators notify customers of their ability to request installation of excess flow valves on existing service lines to serve multi-family and commercial customers and that operators perform installations as requested.