Pipeline Safety Update - Issue No. 102

September 24, 2015

OMB Completes Review of PHMSA’s Proposed Rule to Amend Hazardous Liquid Pipeline Regulations

On September 17, 2015, the Office and Management and Budget (OMB) completed its review of the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) notice of proposed rulemaking (NPRM) that is expected to propose significant changes to hazardous liquid pipeline safety regulations.  The NPRM was preceded by PHMSA’s 2010 advanced notice of proposed rulemaking that explored a number of regulatory issues.  PHMSA is expected to issue the NPRM in the near future. 

PHMSA Rulemakings UpdateThe tables below summarize the status of PHMSA’s rulemakings as reported in the Department of Transportation’s (DOT) September Significant Rulemaking Report and by OMB’s Office of Information and Regulatory Affairs (OIRA) in the Spring 2015 Unified Regulatory Agenda.  Revisions appear in bold.  Note that PHMSA’s hazardous liquid pipeline NPRM has cleared OMB and is expected to issue in the near future.  PHMSA officials also have indicated that a significant proposed rule affecting gas transmission pipelines will issue this year or early 2016.

Pending Notices of Proposed Rulemaking

Rulemaking

Submitted to OMB*

DOT Estimated Publication Date

OIRA Estimated Publication Date*

Safety of On-Shore 
Hazardous Liquid Pipelines

May 1, 2014

October 2, 2015

August 2015

Safety of Gas 
Transmission Pipelines

April 27, 2015

October 7, 2015

August 2015

Valve Installation and Minimum Rupture Detection Standards

November 4, 2015 (estimated)

February 16, 2016

September 2015


 

Pending Final Rules

Rulemaking

Estimated Submission to OMB*

DOT Estimated Publication Date

OIRA Estimated Publication Date*

Expanding the Use of Excess Flow Valves in Gas Distribution Systems to Applications Other than Single-Family Residences

September 30, 2016

January 17, 2017

N/A




  

*Under Executive Order (EO) 12866, OMB reviews proposed significant rules to ensure they are consistent with applicable law, the President’s priorities, and the principles set forth in the EO, and to ensure the proposals do not conflict with another agency’s policies or actions.  OMB also analyzes the cost-benefit analyses in support of the proposals.  While the EO sets out deadlines for OMB evaluation, review periods are often extended. 

In addition, below is a synopsis of recently published rulemakings.  

Recently Published Rulemakings

Rulemaking

Date Published

Comment Date

NPRM:  Plastic Pipe Rule

May 21, 2015

July 31, 2015

NPRM: Operator Qualification Cost 
Recovery, Accident and Incident Notification, and Other Pipeline
Safety Proposed Changes

July 10, 2015

September 8, 2015

NPRM:  Expanding the Use of Excess
Flow Valves in Gas Distribution Systems
to Applications Other than
Single-Family Residences

July 15, 2015

September 14, 2015

Final Rule:  Pipeline Damage
Prevention Programs

July 23, 2015

N/A

 

Van Ness Feldman has developed a comprehensive Clean Power Plan Resource Guide.  The Resource Guide provides clear explanations of all the major components of not only the EPA’s final Clean Power Plan rule, but also the proposed federal plan and model trading rules, and the final rule establishing GHG performance standards for new, modified, and reconstructed power plants.

If you are interested in purchasing a copy of the Resource Guide, please contact 
Kyle Danish or Stephen Fotis.

Other PHMSA Updates

PHMSA urges FERC to consider “significant” anticipated pipeline safety costs in oil pipeline ratemakingSeptember 22, PHMSA submitted comments on the Federal Energy Regulatory Commission’s (FERC) pending notice of inquiry regarding the appropriate oil pipeline ratemaking pricing index for the 5 years beginning July 1, 2016. PHMSA urged that, when determining the next 5-year index, FERC consider the significant costs associated with additional safety regulations that PHMSA expects to adopt during that time period. Specifically, PHMSA identified costs associated with expanded integrity management regulations that will cover additional pipeline mileage, expanded operator qualification requirements, and the possible need for operators to more aggressively replace aging pipeline infrastructure.  PHMSA comments are here; search Docket No. RM15-20-000.

PHMSA holds public meeting on the National Pipeline Mapping System.  On September 10, PHMSA held a public meeting addressing a revised information collection request (ICR) relating to the National Pipeline Mapping System.  PHMSA representatives stated that the agency expects to request OMB’s approval of the ICR in early 2016.  Presentations from the public meeting are here

PHMSA holds public workshop on risk modeling methodologies.  On September 9, PHMSA held a public workshop addressing risk modeling methodologies for gas transmission and hazardous liquid pipelines and non-pipeline systems.  Workshop presentations are here.

Updates from Capitol Hill

Senate Subcommittee Convenes Field Hearing on Pipeline Safety and Schedules Second Hearing.  On September 18, the Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security of the Senate Commerce Committee convened a field hearing on pipeline in Billings, Montana.  PHMSA Administrator Marie Therese Dominguez appeared and discussed a number of PHMSA initiatives and priorities.  A webcast of the hearing and the prepared testimony of Ms. Dominguez and other witnesses are here

On September 29, Subcommittee chairman, Senator Deb Fischer (R-NE), will hold a second hearing in Washington D.C. to continue discussing current challenges with respect to the inspection and safe management of the nation’s pipeline network.  To date, no witnesses have been announced. 

Michigan Senators Propose Legislation Addressing Transportation of Hazardous Liquids on Great Lakes.  On September 23, U.S. Senators Debbie Stabenow (D-MI) and Gary Peters (D-MI) introduced legislation to prohibit shipment of crude oil by vessel on the Great Lakes and to require a comprehensive review of hazardous liquid pipelines in the Great Lakes region.  The proposed legislation contains provisions requiring (1)  federal studies on pipeline risks in the Great Lakes and alternatives to existing pipelines; (2) an assessment of current oil spill response and cleanup approaches and the requirement that they address ice-covered waters; (3) increased amount of publically available pipeline information; and (4) expanded criteria for determining high consequence areas for integrity management purposes.   

Updates from Industry

PAPA issues Pipeline Emergency Response Guidelines.  The Pipeline Association for Public Awareness issued its 2015 edition of “Pipeline Emergency Response Guidelines,” intended to provide emergency first responders with basic information needed to handle a pipeline incident safety. 

Select State Regulatory and Legislative Updates 

(New items are marked with an “*”; updated status information appears in italics)

CALIFORNIA

SB 295 (Jackson):  This bill, which has been amended several times, would require that, beginning January 1, 2017, the State Fire Marshal annually inspect all intrastate hazardous liquid pipelines subject to its jurisdiction and adopt regulations implementing this provision.  The bill prohibits the State Fire Marshal from becoming an inspection agent for interstate pipelines unless PHMSA transfers all regulatory and enforcement authority over those pipelines to the State Fire Marshal.  The bill has passed the Assembly and the Senate and has been presented to the Governor for signature.  If not vetoed, it will become law. 

AB 1420 (Salas):  This bill, which has been amended several times, would require that by January 1, 2018, (1) the Division of Oil, Gas and Geothermal Resources (Division) review, evaluate, and update existing regulations regarding all active gas pipelines 4 inches or less in diameter in sensitive areas and 10 years or older, and (2) operators of active gas pipelines submit maps identifying the location of those pipelines and provide other information to the Division.  The Division would be required to conduct random periodic spot checks to ensure the accuracy of the submitted maps and maintain a list of active gas pipelines in sensitive areas.  The bill also imposes a number of obligations on local health officers, operators, and the Division in the event of a leak in an active gas pipeline located in a sensitive area.  The bill has passed the Assembly and the Senate and has been presented to the Governor for signature.  If not vetoed, it will become law. 

SB 681 (Hill):  As initially proposed, this bill would have amended the Revenue and Taxation Code to prevent PG&E from claiming a tax deduction for safety expenditures and investigation reimbursement costs ordered by the CPUC as part of the $1.6 billion penalty relating to the 2010 San Bruno pipeline explosion.  On July 16, the Committee on Governance and Finance passed the bill and re-referred it to the Committee on Appropriations.  On August 31, the Senate amended the bill to state that a government-imposed fine or similar penalty imposed for the violation of any law is not an ordinary and necessary business expense and cannot be claimed as a tax deduction.  The bill was further amended to prohibit any gas corporation from claiming a tax deduction for expenses or expenditures identified by the CPUC in a decision penalizing the gas corporation for a natural gas safety violation.  On September 3, the Senate failed to pass the bill, because the “urgency clause,” which would have allowed the bill to take effect upon enactment, did not receive two-thirds majority support.  On September 11, the bill was ordered to the inactive file.

AB 864 (Williams and Burke):  This bill, which has been amended several times, would require, by January 1, 2018, that operators of new or replaced oil pipelines located near environmentally and ecologically sensitive areas in the coastal zone use the best available technologies, including leak detection technology, automatic shutoff valves, or remote-controlled sectionalizing block valves, to reduce the amount of oil spilled during an event.  By July 1, 2018, operators of existing pipelines near these areas would be required to submit plans to retrofit their pipelines by January 1, 2020.  The State Fire Marshall would be required to adopt regulations implementing these provisions by July 1, 2017.  The bill has passed the Assembly and the Senate and has been presented to the Governor for signature.  If not vetoed, it will become law. 

SB 119 (Hill):  This bill, which has been amended numerous times, would adopt numerous modifications to California’s One-Call laws.  Of note, the proposed legislation would: (1) create the California Underground Facilities Safe Excavation Advisory Committee to coordinate education and outreach, develop standards, and conduct compliance audits, to be funded by the Safe Energy Infrastructure and Excavation Fund; (2) modify the one-call exemption for owners of real property to exempt only owners of residential real property using hand tools not requiring a permit; and (3) authorize the CPUC and the Office of the State Fire Marshal to enforce certain requirements against operators of natural gas and hazardous liquid pipelines.  The bill would impose a duty of reasonable care to prevent excavation damage when hand tools and certain other activities are permitted.  The bill has passed the Assembly and the Senate and has been presented to the Governor for signature.  If not vetoed, it will become law. 

ILLINOIS

The Illinois Commerce Commission (ICC) has proposed to amend its gas pipeline safety regulations to: (1) incorporate by reference the federal pipeline safety rules in effect on October 1, 2014, and (2) require that owners and operators of gas pipeline facilities submit to the ICC plans, procedures, and programs required or necessary to implement the gas pipeline safety standards.  Comments on the proposed amendments were filed December 22, 2014.  The proposed amendments were reviewed at the Joint Committee on Administrative Rules’ May 12 meeting.

MAINE

On March 31, the Maine Public Utilities Commission (MPUC) proposed to amend its gas pipeline safety regulations, in pertinent part, to: (1) require gas utilities installing natural gas facilities with trenchless technology to implement, as part of their public awareness programs, a stakeholder outreach campaign specific to the use of this technology; (2) require operators to include new construction tasks as covered tasks in their operator qualification programs; (3) include a utility accommodation policy that requires gas utilities to make appropriate accommodations, including temporary removal or relocation of facilities, to ensure safety when another utility performs excavation in proximity to a gas line in order to access an adjacent utility facility; (4) require tracking of components and materials used in the installation and maintenance of mains and service lines; and (5) require documents filed with the MPUC pertaining to pipeline integrity to be signed by a Maine-licensed professional engineer.  Comments were filed May 20.

MICHIGAN

*Governor Snyder issues Executive Order creating Pipeline Safety Advisory Board.  On September 3, Governor Snyder issued an Executive Order creating the Michigan Pipeline Safety Advisory Board (Board) to ensure the safety, maintenance, and transparency of issues relating to the state’s pipelines.  The Board is created in response to a recommendation in the July 2015 Report of the Michigan Petroleum Pipeline Task Force.  The Board will consist of 15 members from industry, environmental and conservation groups, the Governor’s cabinet, and members of the public, and will advise state agencies on pipeline routing, construction, operation, and maintenance. 

*Michigan signs agreement with Enbridge Energy to prevent passage of heavy crude through Mackinac Straits.  On September 3, the State of Michigan and Enbridge Energy, LP, (Enbridge) entered into an agreement under which Enbridge agrees to not transport heavy crude oil through two 20-inch diameter pipelines constructed in 1953 located in the Straits of Mackinac without State approval.  The agreement responds to the Task Force’s July Report which concluded that heavy crude is more likely to sink if released into open water and the State’s conclusion that transporting heavy crude through these Enbridge pipelines presents an unacceptable environmental and economic risk.

HB 4540 (Heise):  This bill would amend Michigan’s Freedom of Information Act to exempt from disclosure critical energy infrastructure information, such as specific engineering, vulnerability, or detailed design information, that: (1) relates details about the production, generation, transportation, transmission, or distribution of fuel or energy; (2) could be useful to a person in planning an attack; and (3) provides more than the general location of critical infrastructure.  The bill would exempt information regarding both existing and proposed infrastructure.  The bill was introduced and referred to the Committee on Oversight and Ethics on May 5.

MISSOURI

On June 3, the Missouri Public Service Commission issued an Order opening a proceeding to revise the state’s gas pipeline safety rules to make them consistent with federal rules.  The Commission staff will solicit input from interested stakeholders and the public is invited to submit comments.

NEW JERSEY

AR 258 (Dancer):  This Assembly Resolution affirms the importance of modernizing and replacing aging cast iron and unprotected steel natural gas pipelines in New Jersey to ensure public safety, improve reliability, and foster economic growth and job creation.  The resolution was introduced and referred to the Assembly Committee on Telecommunications and Utilities on June 29.

A 4658 (Muoio):  This bill would require that public utility employees immediately call 911 to report emergencies resulting from work they perform.  This bill also would require public utilities to implement a training program to ensure that employees are knowledgeable with regard to roles and responsibilities, locating natural gas pipelines and identifying leaks, and the importance of local emergency response assistance.  Violations could result in fines of up to $20,000.  This bill was introduced and referred to the Assembly Committee on Telecommunications and Utilities on June 29.

A 2711 (Handlin):  This bill proposes to create the New Jersey Taskforce on Underground Utility Lines for the purpose of studying issues related to placing overhead utilities underground.  The bill was referred to the Assembly Committee on Telecommunications and Utilities on February 24, 2014.

S 2422 (Greenstein & Bateman):  This bill would require natural gas pipeline utilities to repair or replace leaking natural gas pipelines within time frames to be established by the Department of Environmental Protection (DEP).  In consultation with the Board of Public Utilities, the DEP would adopt regulations to prioritize time frames for repair and replacement of pipelines based on the severity of leaks, best practices and repair standards, and de minimis exceptions to repair and replacement requirements.  The penalties for noncompliance would be those set forth in the Air Pollution Control Act.  The bill was referred to the Senate Economic Growth Committee on September 18, 2014.

A 4260 (Eustace):  This bill is the Assembly version of S 2422, currently pending in the Senate.  The Assembly bill was introduced and referred to the Telecommunications and Utilities Committee on March 2.

NEW YORK

AB 7965 (Rodriguez):  This bill would amend the Public Service Law to require gas corporations to file with the New York Public Service Commission (NYPSC) a plan addressing aging and leak-prone pipelines.  Plans must: (1) prioritize the replacement of cast and wrought iron pipeline; (2) include completion timelines; and (3) establish workforce development plans to train and increase the number of laborers qualified to repair and replace leak-prone pipe.  Gas corporations also would be required to file an annual summary documenting projects completed within the previous year.  If approved by the NYPSC, gas corporations would be able to recover infrastructure replacement costs up to 1.5 percent of annual revenue.  The bill was introduced and referred to the Committee on Appropriations, Authorities, and Commissions on June 2. 

AB 5083 (Paulin):  This bill would amend the Public Service Law to require that the Department of Public Service establish a uniform system for classifying gas leaks and develop implementing regulations.  Gas Companies would be required to annually report the location, classification, date, and date of repair of leaks.  The NYPSC would be required to determine whether New York should require winter surveillance of cast or ductile iron pipelines.  The bill was referred to the Corporations, Authorities, and Commissions Committee on February 12.  The Assembly amended the bill on June 12, and passed and sent the bill to the Senate on June 19.  The Senate referred the bill to the Rules Committee.

SB 5206 (Griffo):  This bill is the Senate version of AB 5083.  The bill would establish reporting requirements for various classifications of gas leaks by utility corporations.  The bill was amended on June 14 and re-referred to the same committee.

AB 730 (Lentol):  This bill would require that the Department of Environmental Conservation would require applicants for issuance or renewal of a major facility license to demonstrate they have implemented state and federal regulations for prompt detection of petroleum discharges from tanks and connecting pipelines, including installation of proper detection equipment.  The bill was introduced and referred to the Standing Committee on Environmental Conservation on January 7.

AB 2547 (Rodriguez):  This bill would require operators of gas distribution and gas utility facilities to accelerate the repair, rehabilitation, and replacement of pipeline or equipment that is leaking, may pose a high risk of leaks, or may no longer be fit for service.  The bill also would require the NYPSC to adopt a cost recovery program, develop timelines prioritizing the repair of all leaks based on severity, require the use of best available technologies to detect gas leaks, adopt standard methodology for calculating and reporting lost and unaccounted for (LAUF) gas, and adopt limits on cost recovery for LAUF gas.  The bill was referred to the Energy Committee on January 16.

AB 2648 (Pretlow):  This bill would amend the Public Service Law to define “excavation” as including the use of hand tools, and would require excavators to request mark outs for excavation using hand tools through the One-Call notification system.  Agricultural tilling, routine residential or right-of-way maintenance, and landscaping activities are exempt, provided the activity is performed with non-powered equipment.  The bill also would amend the definition of “underground facilities” to include all facilities that an operator uses to provide “services or materials,” regardless of whether the operator installed the facility.  The bill was referred to the Corporations, Authorities, and Commissions Committee on January 20.

AB 2777 (Brennan):  This bill would require gas corporations to file an annual gas safety report with the Department of Public Service.  The report would include a description of the strategic planning and decision-making methodology employed in prioritizing pipeline replacement projects, the corporation’s operations and maintenance activities relating to gas safety, the corporation’s intrastate inspections policies, and a list of pipeline replacement projects.  The Department must report deficiencies in the gas corporation’s project prioritization or administration of pipeline infrastructure to the Public Service Commission, which could order reasonable improvements.  This bill was referred to the Corporations, Authorities, and Commissions Committee on January 20.  On March 24, the bill was passed by the Assembly and referred to the Senate Committee on Corporations, Authorities, and Commissions.

SB 5811 (Perkins):  This bill is the Senate version of AB 2777, and would require gas corporations to file an annual gas safety report with the Department of Public Service.  On June 4, the bill was referred to the Senate Committee on Energy and Telecommunications.

NORTH DAKOTA

On November 10, 2014, the North Dakota Public Service Commission (NDPSC) issued a notice that it is proposing to amend its pipeline safety regulations to include PHMSA’s gas and hazardous liquid safety regulatory requirements adopted through November 6, 2014, and on January 7, issued an Order submitting the proposed rules to the Attorney General.  The Order notes that, although the NDPSC has the authority to regulate the safety of the state’s hazardous liquid pipelines, it currently does not have a certified hazardous liquid safety program with PHMSA.  The proposed rules were published in the April 2015 North Dakota Administrative Code Supplement 356.

OREGON

*Oregon Public Utility Commission increases civil penalties for pipeline safety violations.  On August 11, the Oregon Public Utility Commission adopted a final rule increasing civil penalties for pipeline safety violations to conform with federal limits of $200,000 for each violation, not to exceed two million dollars for any related series of violations.

HB 3410 (Helm):  This bill would establish a nine-member Task Force on Secure Pipelines to study and report on state and federal safety standards, new technologies for safer pipeline transportation of petroleum, natural gas, and other flammable substances, costs related to such technologies, and incentives to encourage the use of such technologies to construct or retrofit pipelines and related facilities.  The Task Force would be required to report its findings by September 15, 2016.  The bill was referred to the Committee on Energy and Environment on March 6, with a subsequent referral to the Joint Committee on Ways and Means. 

PENNSYLVANIA

SB 561 (Rafferty):  This bill would amend the Gas and Hazardous Liquids Act to replace the Pennsylvania Public Utility Commission with the Department of Transportation of the Commonwealth as the entity with safety jurisdiction over pipelines.  The bill also would require the newly created Department to seek certification from PHMSA to enforce pipeline safety requirements for intrastate gas and hazardous liquid pipelines, and to act as an interstate inspection agent on behalf of PHMSA.  The bill was referred to the Consumer Protection and Professional Licensure Committee on March 6. 

HB 445 (Baker):  This bill would amend the Underground Utility Line Protection Law to (1) impose additional duties on facility owners, including submitting reports of alleged excavation damage violations, (2) establish an annual fee for excavators requesting information from the One Call System, and (3) create a Damage Prevention Committee to review reports of alleged violations and issue informal determinations imposing administrative penalties.  The bill was referred to the Consumer Affairs Committee on February 11.

SB 418:  This bill would amend the Underground Utility Protection Law to require the exclusive use of steel products produced in the United States for the construction, alteration, repair, improvement, and maintenance of gathering lines.  The bill was referred to the Consumer Protection and Professional Licensure Committee on February 12.

SB 367 (White):  This bill would amend the definition of “line” and “facility” in the Underground Utility Protection Law to include gathering lines used to gather natural gas from unconventional gas wells.  The effect of this legislation is to make these lines in Pennsylvania subject to the state’s One-Call system.  This bill was referred to the Consumer Protection and Professional Licensure Committee on January 30. 

To download a full text PDF, which includes Dates of Interest, upcoming PHMSA State Seminars, and State Specific Association Meetings, please click here.