PHMSA Issues Advisory Bulletins Addressing the Requirement to Install Excess Flow Valves and Jurisdiction Over Direct Sales Gas Transmission Lines

Recently, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued two advisory bulletins reminding gas pipeline operators of important changes under the Pipeline Safety Act (PSA).  Specifically, PHMSA reminded gas distribution operators that under the Pipeline, Inspection, Protection, Enforcement, and Safety Act of 2006 (PIPES Act), they are required to install excess flow valves (EFVs) on certain service lines installed or replaced after June 1, 2008, even though PHMSA has not issued regulations adopting this requirement.  In addition, PHMSA informed operators that direct sales gas transmission lines that are regulated by the Federal Energy Regulatory Commission (FERC) under the Natural Gas Act are subject to PHMSA’s pipeline safety oversight and enforcement authority. 

Excess Flow Valves Required on Certain Service Lines

On June 5, PHMSA issued an Advisory Bulletin reminding gas distribution operators that the PIPES Act requires them to install excess flow valves on certain service lines installed or entirely replaced after June 1, 2008.  EFVs are safety devices designed to sense flow increases that may be caused by a rupture or break in a gas service line.  EFV’s automatically stop or limit the flow of gas if flows exceed a preset level. 

The PIPES Act directed PHMSA to promulgate regulations directing operators of gas distribution pipelines to establish integrity management programs and to include in those regulations the requirement that operators of distribution systems install EFVs on certain service lines installed or entirely replaced after June 1, 2008.  In the advisory bulletin, PHMSA acknowledged that developing a distribution integrity management regulation is taking longer than anticipated, but that PHMSA expects to issue proposed regulations in the near future. 

Despite PHMSA’s delay in issuing distribution integrity management regulations, gas distribution operators must comply with the PIPES Act.  Specifically, operators must install EFVs on single family residence service lines that:

• are installed or entirely replaced after June 1, 2008;
• operate continuously at a pressure no less than 10 pounds per square inch (psi);
• are not connected to a gas stream where the operator has prior experience with contaminants that could cause the EFV to malfunction and result in a loss of service; and
• meet performance standards for excess flow valves set forth at 40 C.F.R. § 192.381 and are commercially available.

PHMSA’s advisory bulletin serves as an important reminder to gas distribution operators that they are subject to a statutory mandate to install EFVs on service lines meeting specified criteria, even though PHMSA has not issued distribution integrity management regulations.  Failure to comply with this requirement could expose the operator to a risk of enforcement action. 

Direct Sales Gas Transmission Lines Are Subject to PHMSA Safety Oversight and Enforcement Authority

On May 13, PHMSA issued an Advisory Bulletin informing gas transmission pipeline operators that direct sales gas transmission pipeline facilities are no longer considered intrastate pipelines for purposes of the PSA and that such lines are subject to the regulatory oversight and enforcement of PHMSA. 

A direct sales gas transmission pipeline transports gas from an interstate gas transmission line to a direct sales customer who is buying gas for its own consumption.  Before enactment of the PIPES Act, such lines were excluded from the PSA’s definition of an interstate gas pipeline facility.  As a result, they were subject to state pipeline safety inspection and enforcement authority, even if they were subject to FERC jurisdiction under the Natural Gas Act.  This jurisdictional approach created uncertainty and increased the risk of inconsistent application of regulatory requirements for FERC-regulated interstate pipeline facilities. 

The PIPES Act revised the PSA’s definition of “interstate gas pipeline facility” to eliminate the exclusion for direct sales transmission lines.  Under the revised definition, all interstate pipeline facilities, including direct sales transmission lines, that are subject to FERC’s Natural Gas Act jurisdiction are subject to PHMSA’s pipeline safety oversight and enforcement authority.  PHMSA’s advisory bulletin explains that, although a state may have authority under the PSA to perform inspections of interstate facilities, including direct gas sales transmission lines, the state has no enforcement authority, and must refer any enforcement matters to PHMSA. 

The advisory bulletin also stated that, if a pipeline operator can demonstrate that a gas pipeline is subject to regulation by a state instead of FERC, then PHMSA may consider the line to be an intrastate line.  In such circumstances, the line may also be subject to that state’s pipeline safety oversight and enforcement authority if the state has requisite certification under the PSA.  Finally, the advisory bulletin made clear that direct sales pipelines that extend from intrastate pipelines to a customer remain intrastate pipelines and are not affected by the revision to the PSA.

PHMSA explained that the Advisory Bulletin, by ensuring that FERC-regulated direct sales gas transmission lines also are subject to PHMSA’s pipeline safety regulatory authority, will promote consistency in the enforcement of pipeline safety requirements for interstate pipelines.  In addition, centralizing pipeline safety oversight and enforcement for all interstate pipelines under PHMSA will remove uncertainty and confusion with respect to the jurisdictional status of such lines for pipeline safety purposes and make compliance easier for operators with facilities in multiple states.

Sean Jamieson, a Summer Associate at the firm, contributed to this article.