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PHMSA Issues Final Rule Regarding Expanded Safety Regulations for Hazardous Liquids Pipelines

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On January 13, 2017, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (“PHMSA”) issued a final rule amending its pipeline safety regulations for the design, construction, testing, operation, and maintenance of pipelines transporting hazardous liquids (“Final Rule”). The Final Rule broadens PHMSA’s data collection efforts and reflects an increased focus on a risk-informed and preventive approach to pipeline safety. In addition to the amendments described below, the Final Rule imposes stricter standards that determine how operators repair aging and high-risk infrastructure, increase the frequency of tests that assess the condition of pipelines, and require operators to integrate available data and known manufacturing and construction defects. Accordingly, compliance with these tighter pipeline safety regulations may require pipeline operators to invest in increased data and monitoring capabilities.

On January 20, 2017, the White House issued a directive to federal agencies to freeze the promulgation of new regulations by sending no regulations to the Office of the Federal Register (“OFR”) for publication and withdrawing any regulations sent to OFR but not yet published. The directive permits agencies to seek an exception from the Director or Acting Director of the Office of Management and Budget ("OMB") for certain health and safety regulations. It is not clear at this time whether PHMSA will seek such an exception for the Final Rule.

Extension of Reporting Requirements to Gravity and Hazardous Liquids Gathering Lines

Although PHMSA is currently statutorily limited to regulating gathering lines in high-consequence areas (“HCAs”) and “regulated rural gathering lines,” the Final Rule requires that operators of certain “gravity lines,” or pipelines that carry product by means of gravity, comply with requirements for submitting annual, safety-related condition, and incident reports. PHMSA also is amending the pipeline safety regulations to extend the annual, accident, and safety-related condition reporting requirements of 49 C.F.R. Part 195 to all hazardous liquid gathering lines, including lines not otherwise subject to PHMSA jurisdiction.

Inspections of Pipelines in Areas Affected by Extreme Weather and Other Similar Events

The Final Rule requires that operators commence inspection of their potentially affected assets within 72 hours after the cessation of an extreme weather or other similar event that has the likelihood to damage infrastructure. PHMSA will consider an event as having reached its cessation “when the affected area can be safely accessed by available personnel and equipment required to perform the inspection.”

Assessments of Pipelines Not Already Covered by Integrity Management Requirements

The Final Rule requires that operators periodically assess onshore, piggable, transmission pipeline segments in non-HCAs at least once every 10 years. Operators are required to comply with other provisions of 49 C.F.R. Part 195 in implementing these requirements, including having appropriate provisions for performing these periodic assessments and any resulting repairs in an operator’s procedural manual.

Expansion in the Use of Leak Detection Systems for Certain Hazardous Liquids Pipelines

The Final Rule requires all new covered pipelines, in both HCAs and non-HCAs, to have leak detection systems within one year after the Final Rule is published in the Federal Register. All covered pipelines constructed prior to the Final Rule’s publication are required to have leak detection systems within five years after the Final Rule is published in the Federal Register.

Increase in the Use of Inline Inspection Tools

The Final Rule amends 49 C.F.R. Part 195 to require that all hazardous liquids pipelines in HCAs and areas that could affect an HCA be made capable of accommodating inline inspection tools within 20 years, unless, subject to PHMSA approval, the basic construction of a pipeline will not accommodate the passage of such a device or the operator determines it would abandon the pipeline as a result of the cost of complying with the amendment.

The Final Rule will be effective six months after its publication in the Federal Register, although certain provisions of the Final Rule will have longer compliance periods. As discussed above, however, the Final Rule is subject to a regulatory freeze put in place by the White House, unless exempted due to a determination by PHMSA and OMB to allow its effect due to health and safety considerations.

The full text of the Final Rule is available here.

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