PHMSA Requests Comments on Whether to Modify Regulations for Onshore Hazardous Liquid Pipelines

OVERVIEW

On October 18, 2010, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued an Advanced Notice of Proposed Rulemaking (ANPRM) requesting comments on whether and how the agency should amend the regulations for onshore hazardous liquid pipelines. The ANPRM does not propose any changes but seeks comment on potential regulatory amendments including whether:  (1) existing regulatory exceptions should be eliminated or modified; (2) the definition of high consequence areas (HCAs) for integrity management (IM) protection should be broadened or whether certain non-HCA areas along a pipeline should be identified for extra protection; (3) to establish and/or adopt minimum standards and procedures for leak detection for all pipelines; (4) to require the installation of emergency flow restricting devices (EFRDs) in certain areas; (5) to revise valve spacing requirements; (6) to specify repair timeframes for pipeline segments which are assessed as part of IM but which are outside of HCAs; (7) to establish and/or adopt standards and procedures for stress corrosion cracking (SCC).  Comments on the ANPRM are due by January 18, 2011.

BACKGROUND

The ANPRM is part of PHMSA’s comprehensive review of the federal pipeline safety regulations announced during Congressional hearings this summer and fall.  PHMSA’s issuance of the ANPRM is one element of a multi-pronged approach that includes a recent legislative proposal and other measures to ensure that the agency’s regulatory programs are of adequate scope and strength.  PHMSA and industry have studied many of the issues raised in the ANPRM for years.  The information PHMSA collects pursuant to the ANPRM would further supplement that record and serve as a basis for future, more concrete regulatory initiatives. 

ELIMINATION OF REGULATORY EXEMPTIONS

PHMSA seeks comment on whether any of the exceptions or limitations that currently apply to the transportation of hazardous liquids by pipelines should be repealed or modified.  Current exceptions include transportation through a pipeline by gravity, certain rural gathering pipelines, carbon dioxide pipelines downstream of certain points in injection and recovery operations, certain offshore pipelines in state waters, producer-operated pipelines on the Outer Continental Shelf (OCS), and certain breakout tanks.  The ANPRM also requests public comment on whether PHMSA should regulate underground hazardous liquid storage facilities or any other pipeline transportation facility.  The ANPRM only considers regulatory exceptions, not those that are specified by statute.  Many of these regulatory exceptions reflect PHMSA’s longstanding policy determinations.  Others exist to avoid jurisdictional conflicts with states and other federal agencies and duplicative regulation.

EXPANDING PROTECTION FOR CERTAIN NON-HIGH CONSEQUENCE AREAS OR EXPANDING THE DEFINITION OF HIGH CONSEQUENCE AREA 

HCAs are currently defined as commercially navigable waterways, high population areas, other populated areas, certain drinking water supplies and unusually sensitive ecological resources.   Pipeline operators must include those pipeline segments that are in or could affect an HCA in their IM programs.  The ANPRM considers two possible approaches to providing additional protections to non-HCAs.  First, an expansion of the definition of HCAs so that more pipe is subject to the IM requirements.  Second, the expansion of the IM requirements to areas beyond HCAs, or the use of the IM requirements as a model for additional safety measures in those areas.  PHMSA seeks comments, data and information on the criteria for identifying HCAs and how the public and local governments could be involved in the identification process.  PHMSA also requests comment on whether HCA identification should focus more on risk and whether HCAs should include all navigable waters, to make this type of HCA coextensive with Clean Water Act (CWA) jurisdiction.

LEAK DETECTION 

Current regulations require operators to have a means to detect leaks on pipeline segments that are subject to the IM requirements. Leak detection is not required outside of these areas.  The ANPRM seeks comment on whether and how leak detection requirements should be expanded to all areas on pipelines.  PHMSA seeks information on industry standards or practices, state regulations and new technologies that should be considered.  PHMSA also seeks comment on the effectiveness of current standards and whether leak detection performance requirements should differ based on the sensitivity of the environment.   

EMERGENCY FLOW RESTRICTING DEVICES

Operators are not currently required to install EFRDs, though operators of pipelines subject to the IM requirements must consider whether to install EFRDs to protect HCAs and consider specific factors when doing so.  PHMSA seeks comment on existing industry standards or practices for EFRDs, and whether installation should be mandatory. 

VALVE SPACING

Operators are required to install valves at locations along the pipeline to minimize damage or pollution from accidental discharges, as appropriate given the characteristics of the location.  Operators are also required to locate valves on each side of a drinking water reservoir crossing or any water crossing more than 100 feet wide.  Operators of pipelines subject to the IM requirements may install valves, including EFRDs, as one of several measures to protect HCAs.  The ANPRM seeks comment on whether current regulations provide operators with too much discretion when selecting valve locations and, if so, whether valves should be required for water bodies narrower than 100 feet wide, and at other specific locations throughout the pipeline system in and beyond HCAs.    The ANPRM also requests comments on the appropriateness of a maximum valve spacing requirement, the availability of valve spacing standards, remote control of EFRDs, and whether valve requirements should be imposed only for new or modified pipelines.

REPAIR TIMEFRAMES OUTSIDE OF HIGH CONSEQUENCE AREAS 

The ANPRM recognizes that many operators perform in-line inspection (ILI) and make repairs on pipeline segments beyond those located in HCAs.  However, the IM anomaly repair timeframes do not apply to pipeline segments that do not affect HCAs.  The ANPRM seeks comment on whether the IM repair time frames should apply beyond HCAs, apply only to certain anomalies, and how risks and repairs on HCAs versus non-HCAs should be prioritized.  PHMSA is also interested in feedback on improvements in ILI tool technology and whether standards should be adopted for conducting ILI assessments, qualification of persons interpreting ILI data, interpreting and processing ILI data, data quality, and accounting for tool accuracy.

STRESS CORROSION CRACKING

SCC is induced by the combined influence of tensile stress and a corrosive medium. PHMSA seeks comment on whether suitable industry standards exist for preventing, detecting, assessing and remediating SCC on pipelines, or whether new standards are necessary.  In particular, PHMSA seeks comment on whether the National Association of Corrosion Engineers (NACE) SP0204-2008, “Stress Corrosion Cracking Direct Assessment Methodology” would address the concerns associated with SCC.  PHMSA also seeks information on the suitability and implementation record of the Canadian Energy Pipeline Association (CEPA) SCC Recommended Practices 2nd Edition, 2007.  Finally, the ANPRM requests comment on the effectiveness of SCC detection tools and methods, the mandatory use of SCC tools where there is an SCC threat, and the suitability of a periodic review of the effectiveness of operator corrosion programs.

COSTS AND SAFETY BENEFITS

For each potential regulatory change, PHMSA seeks information on the potential costs associated with modifying the existing regulations, safety and societal benefits, impacts on small businesses and environmental impacts. 

IMPLICATIONS OF THE ADVANCED NOTICE OF PROPOSED RULEMAKING

PHMSA’s ANPRM lays the groundwork for potentially substantial increases in the scope and rigor of the pipeline safety regulations, building upon PHMSA’s recent proposals to expand existing requirements to all low-stress hazardous liquid pipelines (See June 29, 2010 Issue Alert) and to expedite the implementation of requirements for pipeline control room management (See September 20, 2010 Issue Alert).  With the prospect of broader application of pipeline inspection, repair and protective measures, a key question is the extent to which PHMSA will continue to take a risk-based approach to regulation, particularly in light of recent pipeline incidents in California, Michigan, and Texas, which have focused significant attention on PHMSA’s pipeline safety program.    There is the potential for interplay between the ANPRM and the strong public and Congressional interest in pipeline safety, with several pipeline safety bills introduced in both chambers this fall, in addition to the Administration’s legislative proposal, which touches on some of the subjects covered in the ANPRM.  Whether and how the role of PHMSA expands, through continued rulemaking and/or legislation, remains to be seen.  The request for public comment on the ANPRM is an important opportunity for entities that could be affected by future regulatory changes to provide input into the regulatory process.