Congress Passes Pipeline Safety Improvement Act of 2002

Passed by the Senate and agreed to by the House of Representatives on November 13 and 15, 2002, respectively, the Pipeline Safety Improvement Act of 2002 (Act) is the one piece of energy legislation to emerge from congressional efforts to enact a comprehensive energy bill. (The remainder of the legislative initiatives associated with the effort were put aside shortly after the mid-term election, but are expected to be reintroduced early in the 108th Congress.) The President is expected to sign the Act.

The Act, which amends the 1994 Pipeline Safety Law by tightening federal inspection and safety requirements, applies to pipeline facilities transporting natural gas or hazardous liquids (petroleum or petroleum products) in interstate commerce. In addition, the Act applies to intrastate pipelines and local distribution companies, but is administered by the States to the extent that State regulations satisfy federal standards. It also applies to gathering facilities in populated areas. The 2002 Act does not affect the specific provisions of the 1994 law that cover liquefied natural gas facilities.

The major issues addressed by the pipeline safety law include:

• Risk Analysis and Integrity Management Programs for Gas Pipelines. The Act requires operators of natural gas pipelines to conduct an analysis of the risks to each of their pipeline facilities located in high-density areas (HDAs), and to adopt and implement written integrity management programs for such facilities. Whether or not the Department of Transportation (DOT) issues regulations as required by the Act, pipeline operators are obligated by the Act itself to conduct these analyses and adopt programs within 24 months following enactment. In addition, pipeline operators are affirmatively required by the Act to: (1) complete integrity assessments of their HDA facilities within ten years of enactment, (2) complete assessments for 50% of such facilities within the first 5 years, and (3) ensure that assessments of facilities with the highest risk are given priority for completion. All facilities located in HDAs are to be reassessed every seven years thereafter.
• Penalties. The Act increases the civil penalties the DOT may assess against a pipeline operator for safety violations from a maximum of $25,000 to $100,000 for each violation, and from $500,000 to $1,000,000 for a related series of violations.
• Coordination of Environmental Reviews. The Act establishes an Interagency Committee, to be led by the Chairman of the Council on Environmental Quality, for the purpose of developing a coordinated environmental review and permitting process to enable pipeline operators to conduct any necessary pipeline repairs.
• Pipeline Qualification Programs. Pipeline operators are required to develop and implement a qualification program to ensure that individuals who perform pipeline facility operation and maintenance tasks which affect the operation or integrity of the pipeline governed by the DOT’s regulations are qualified to conduct such tasks.
• One-Call Notification Programs. In an attempt to improve one-call notification programs, the DOT is required to “encourage” operators of such programs to adopt and implement certain best practices set forth in the “Common Ground” report published by DOT. Furthermore, DOT must establish a 3-digit nationwide toll-free telephone number to be used by State one-call notification systems.
• Public Education Programs and Safety Information Grants. The Act expands the requirements that pipeline operators establish continuing public education programs, specifically requiring that the public be educated on the use of the one-call notification system, possible hazards from unintended releases from the pipeline facility, the physical indications that such a release has occurred, and what steps to take in the event of a release. Pipeline operators are required to modify their existing public education programs within one year of enactment. Furthermore, the Act authorizes the DOT to issue grants for “technical assistance,” not to exceed $50,000, to local communities and groups of individuals relating to the safety of pipeline facilities in local communities, provided that such grants not be used to fund lobbying or direct litigation efforts.
• Protection of Employees Providing Pipeline Safety Information. The Act includes whistle-blower protection by prohibiting pipeline operators from firing or taking adverse action against an employee for certain specified actions relating to pipeline safety, including providing information to the employer or Federal government.
• Pipeline Integrity, Safety, and Reliability R&D Program. The Act requires the heads of the DOT, the Department of Energy, and the National Institute of Standards and Technology to establish a program of research, development, demonstration, and standardization to ensure the safety and integrity of pipeline facilities.
• Population Encroachment and Rights-of-Way. The Act requires the DOT, in consultation with the Federal Energy Regulatory Commission and other appropriate Federal agencies and State and local governments, to complete within one year of enactment a study of land use practices, zoning ordinances, and rules regarding the preservation of environmental resources as such affect pipeline rights-of-way.
• National Pipeline Mapping System. Within 6 months of enactment, pipeline operators are required to provide the DOT with information regarding the location of their pipeline facilities for use in the National Pipeline Mapping System.
• Safety Orders. If the DOT decides that a pipeline facility has a “potential safety-related condition,” the Act authorizes the Secretary to order corrective action, including physical inspection, testing, repair, or replacement.