Enforcement

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On November 19, 2020, the Federal Energy Regulatory Commission (FERC) Office of Enforcement (Enforcement) issued the 2020 Annual Report on Enforcement (Report). The Report informs the public and the regulated community of Enforcement’s fiscal year activities occurring October 1, 2019, through September 30, 2020 (FY 2020).  Notably, the Report does not include any enforcement actions resulting in civil penalties involving pipeline companies. As stated in the Report, the unprecedented pandemic allowed Enforcement to make several compliance-related accommodations, including extending deadlines, suspending new audits, and postponing the contacts it makes in connection with surveillance inquiries. It is expected that, in a post-COVID-19-era and with a new administration, FERC’s enforcement approach may be more active in the coming years.
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Continue Reading FERC’s 2020 Annual Report on Enforcement: Key Focus for Pipeline Companies

On March 20, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) Office of Pipeline Safety issued a Notice to gas and hazardous liquid pipeline, underground natural gas storage and liquefied natural gas (LNG) facility operators, as well as PHMSA state partners, explaining that it will stay enforcement of certain PHMSA pipeline safety requirements in light of the President’s March 13, 2020, Declaration of National Emergency relating to COVID-19. The Notice acknowledges that operators may have limited personnel resources in light of the COVID-19 National Emergency and may need to take actions to meet ongoing operational and maintenance needs in a manner that “may not fully meet federal operator qualification (OQ), control room management (CRM), and employment drug testing requirements.”
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Continue Reading PHMSA Issues Notice of Stay of Enforcement to Pipeline Operators

National Environmental Policy Act (NEPA) analyses and Endangered Species Act (ESA) Section 7 consultations are high on the list of project time, cost and risk drivers. The impact of these environmental reviews on projects often turns on the scope of those reviews, which in turn depends on determining which effects will be caused by the action. In August 2019 the US Fish and Wildlife Service and National Marine Fisheries Service established, for the first time, a regulatory causation standard governing ESA section 7 consultations, and, in January 2020, the Council on Environmental Quality proposed a new regulatory causation standard governing NEPA reviews.
Continue Reading Streamlining NEPA and ESA Reviews: Importance of the Scope of Analysis

On October 11, 2016, PHMSA released a Policy Statement notifying owners and operators of oil and gas pipelines that it is finally making its civil penalty framework publicly accessible, and that respondents may now request proposed civil penalty calculations in enforcement actions.
Continue Reading Pipelines Subject to Higher Penalties under New PHMSA Civil Penalty Policy

A previously abandoned natural gas pipeline exploded in Seattle, Washington on March 9, 2016, injuring nine firefighters, destroyed two buildings, and damaged multiple nearby structures.  The entity responsible for regulating intrastate and interstate gas pipelines in the state, the Washington Utilities and Transportation Commission, recently released a report from its investigation of the incident, concluding that it was caused by (1) external damage to the above-ground portion of the service line; and (2) improper abandonment of the line, which had not been cut and capped when it was taken out of service in 2004.  The report highlights the importance of adhering to federal regulatory requirements concerning proper pipeline abandonment, which was also the subject of a recent PHMSA Advisory Bulletin issued in response to a Congressional directive in the 2016 PIPES Act.
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Continue Reading Pipeline Blast Highlights Necessity of Proper Abandonment Procedures

Taking the first step to implement its new emergency order authority, PHMSA has issued an interim final rule which will be effective immediately upon publication in the Federal Register. Final rules must be issued by March 19, 2017, but PHMSA will accept and consider comments filed within 60 days of publication. …
Continue Reading Emergency Order Interim Regulations Released

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. …
Continue Reading Pipe Subject to Safety Regulations Until Formally Abandoned: PHMSA Advisory

Barring any near catastrophic, unanticipated global event, the U.S. oil and gas industry should see a bottom to the market in 2016, and the beginning of a return to a more balanced and profitable recovery.  But that economic recovery will be set against a new global backdrop.  The well-documented expansion of oil and gas shale resources over the past 5 to 8 years increased U.S. production markedly.  By 2015, the U.S. had become the world’s largest producer of oil and gas.  That occurred as the U.S. was recovering from a severe recession, and while global demand for oil and gas held steady.  OPEC, Russia, Venezuela and other producing countries all chose not to cut back in production, for fear of losing market share to the new U.S. source of supply.  Those facts led to oversupply, and a significant reduction in price for U.S. oil and gas products.  The predicted drop in price of crude to $30/bbl occurred in 2015, then dropped below $30 in early 2016.  And while the global price of oil and gas remained suppressed, the U.S. supply of stored oil and gas inventory hit record highs by the end of 2015.
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Continue Reading Pipeline Law 2016: A Year For Balance