Lawrence J. Bracken II, Michael S. Levine and Geoffrey B. Fehling

In today’s interconnected society, cyber breaches are inevitable. As the saying goes, it is not a matter of if, but when, an organization will be breached. This is particularly true for businesses in the energy sector, which is one of the most frequently targeted industries for cyber attacks. From producers to pipelines and refineries, energy companies’ computer systems are increasingly at risk of becoming the target of a sophisticated and targeted cyberattack, making cyber risk mitigation paramount.

See the full article, published in The American Oil & Gas Reporter, December 2017.

In the aftermath of Hurricane Harvey, the devastating storm that recently swept through central Texas, both the Pipeline and Hazardous Materials Safety Administration (PHMSA) and the U.S. Chemical Safety and Hazard Investigation Board (CSB) are urging special precautions to minimize the impact of the storm on pipeline and other energy infrastructure in the state.

Continue Reading PHMSA and CSB Urge Special Precautions in the Wake of Hurricane Harvey

The recent shut-down of Colonial Pipeline Company’s Line 1 in Alabama should remind the public and the government just how critical oil and gas pipelines are to America’s energy supply needs.  As in most of the country, energy and food supplies are generally replaced on a short time frame, with three days being a typical limit on storage.  Any disruption in service thus creates a shortage in essential services, in very short order.  Gas prices in six Eastern states jumped quickly after the Colonial incident, due to increased costs and limits on product volume shipped by truck.  Colonial is working diligently with PHMSA to investigate, repair and remediate the incident site, and, even as that work is ongoing, Colonial is constructing a temporary bypass line to restore service as quickly as possible.  But Colonial’s Line 1 supplies upwards of 40% of all refined gasoline needs along the East Coast, and until pipeline service is restored, the effects will be noticed by a large percentage of the U.S. population.

Continue Reading Critical Energy Infrastructure Remains Just That: Critical

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.

Continue Reading Legislative Action on Transportation and Energy Bills

PHMSA’s oil spill response regulations have been subject to increased scrutiny by Congress, the NTSB and citizen groups since the 2010 Deepwater Horizon and Marshall, Michigan incidents.  The National Academy of Sciences (NAS) recently published a diluted bitumen study which concludes that while diluted bitumen does not pose an increased risk in transportation, it behaves differently than lighter crude oils following a spill.  As a result, NAS made recommendations to various federal agencies with oil spill response oversight and oil pipeline operators to ensure adequate responses to spills of diluted bitumen.  In response, PHMSA announced that it will convene a public workshop on April 12, 2016 on these and other oil spill response planning issues covered by its pipeline regulations (Part 194) and rail and motor carrier regulations (Part 130).

Continue Reading Oil Spill Response Planning Developments

At an emergency press conference held today by the United States Department of Transportation (DOT), Secretary of Transportation Anthony Foxx announced that DOT has issued a one-time approval for special operating authority to engage in air transportation to specified markets.  The approval will be limited in duration, valid only from the evening of December 24 until early morning on December 25, 2015.  In granting this authority, DOT has approved one-time use of a specially powered aircraft, which the Federal Aviation Administration (FAA) has approved for nighttime operations.

The full press conference is worth viewing, with a link here.

On July 28, 2015, the National Wildlife Federation (NWF) informed the U.S. Department of Transportation (DOT) of its intent to sue for violations of the Clean Water Act (CWA) § 311(j) and Executive Order 12777 (which guides federal implementation of the Oil Pollution Act of 1990). Specifically, NWF alleges that DOT has for over 20 years failed to issue regulations requiring an owner or operator of an offshore facility landward of the coast line to prepare and submit a facility response plan (FRP) applicable to discharges of oil or hazardous substances to waters of the United States. NWF Notice of Intent Letter, at 1. According to NWF, issuing such regulations is a non-discretionary duty under the CWA.

DOT regulations at 49 C.F.R. Part 194 require FRPs for onshore facilities, and the U.S. Department of Interior, Bureau of Safety and Environmental Enforcement regulations at 30 C.F.R. Part 254 require FRPs for offshore facilities, meaning “the area seaward of the line of ordinary low water along that portion of the coast which is in direct contact with the open sea and the area seaward of the line marking the limit of inland waters.” 58 Fed. Reg. 7489, 7490 (Feb. 8, 1993).

NWF argues that DOT has not authorized PHMSA to review or approve FRPs for offshore pipelines landward of the coastline located in waters of the United States, nor to issue regulations requiring owners or operators of such pipelines to prepare and submit FRPs. NWF alleges that this creates a gap in the federal regulatory requirements associated with FRPs. As an example, NWF points to the fact that DOT has not required and has not approved FRPs for lines such as sections of an Enbridge offshore pipeline (“Line 5”) located under the Straits of Mackinac, the St. Clair River, and other inland navigable waters. Apparently, Enbridge prepared and submitted FRPs for these sections of Line 5 to PHMSA, but the Agency declined to approve them, as it has not been authorized by DOT to review or approve FRPs for offshore pipelines landward of the coastline. NWF argues that DOT must establish a regulatory requirement for owners or operators of such lines to prepare, submit, and obtain approval of an FRP and that if DOT fails to do so, it is in violation of CWA § 311(j)(5)(A)(i).

The focus of the letter and NWF’s potential suit is on inland waters that are jurisdictional under the CWA, which highlights the importance of the U.S. EPA and Army Corps of Engineers’ May 27, 2015 final rule defining “waters of the United States.” NWF has threatened to sue DOT within sixty days if it does not issue the regulations that NWF alleges are required. This would be the second lawsuit brought against DOT and its sub-agencies in the last few years concerning FRPs. PHMSA was sued in 2013 by a watchdog group, Public Employees for Environmental Responsibility (PEER), over the Agency’s failure to produce copies of operators’ FRPs (and related records) that the group had requested under the Freedom of Information Act (FOIA). The suit is still pending, with PHMSA filing regular status reports informing the court of its progress in producing the requested records.

PHMSA has re-issued an Advisory, reminding gas and hazardous liquid pipeline operators of the potential for damage to their pipeline facilities caused by the passage of hurricanes.  The Advisory, which was originally published in 2011, explains that hurricanes can adversely affect pipeline operations and can increase the risk of pipelines becoming exposed or constituting a hazard to navigation in the case of underwater pipelines in the Gulf of Mexico.  According to PHMSA, such circumstances trigger an operator’s obligation to take appropriate corrective measures.  80 Fed. Reg. 36042, 36043 (June 23, 2015) (citing 49 C.F.R. Parts 192.613 (surveillance of gas pipelines); 195.401(b) (repairs on hazardous liquid pipelines); 192.613, 195.413 (underwater inspections of shallow-water gas and hazardous liquid pipelines)).

Continue Reading PHMSA Advisory Regarding Damage to Pipeline Facilities Caused by Hurricanes

The American Petroleum Institute (API) announced today the release of a new pipeline safety management system standard, ANSI/API Recommended Practice 1173.  The standard has been under development since NTSB recommended that a safety management system (SMS) standard be developed for the pipeline industry in 2012, in its report following the 2010 oil pipeline accident in Marshall, Michigan.  RP 1173 was developed by API with input from NTSB, PHMSA, states, and industry representatives.  After the draft standard was issued for public comment in early 2014, PHMSA held a series of public workshops (see prior posts on the February and July 2014, and April 2015 workshops), bringing together representatives from pipeline industry sectors, state and federal regulators, and public safety advocates to discuss SMS best practices.

Continue Reading Pipeline Safety Management Systems Standard (ANSI/API RP 1173) is Released

Under pressure from Congress, NTSB, and the public to take regulatory action in light of recent accidents involving oil trains, PHMSA finalized its regulations applicable to “High-Hazard Flammable Trains” in a Final Rule (the Rule) issued a mere nine months after it was proposed in an August 1, 2014 Notice of Proposed Rulemaking (NPRM).  The Rule amends PHMSA’s hazardous materials regulations at 49 C.F.R. Parts 171 – 180, incorporating numerous NTSB recommendations on rail safety as well as input from stakeholders.  Among the main features of the Rule are enhanced standards for new tank cars and an aggressive retrofitting schedule for older tank cars transporting crude oil and ethanol.  It creates operational protocols for trains transporting large amounts of flammable liquids, as well as new sampling and testing requirements intended to improve classification of unrefined petroleum products offered for transportation.  The new standards were developed in coordination with Canadian transportation safety officials, in recognition of the fact that oil trains moving product across the international border “are part of a North American fleet and a shared safety challenge.”

Continue Reading PHMSA Rail Transportation Rules Reflect Pressure to Act in the Face of Recent Oil Train Derailments