Posted: 16 Feb, 2017

On January 13, 2017, just one week before President Trump’s inauguration, PHMSA released final updates to the Pipeline Safety Regulations applicable to onshore transportation of hazardous liquids (“Final Rule”). On the first day of the new Trump Administration, Chief of Staff Reince Priebus issued a Memorandum to the heads of all Executive Departments and Agencies, requesting that all federal agencies suspend transmittal of any new proposed or final rules to the Office of the Federal Register (OFR) until the new Administration’s Agency appointees have an opportunity to review such proposals. The Final Rule, subject to the Priebus Memo was withdrawn by PHMSA on January 24, 2017. The Final Rule must now be reviewed by a member of the Trump Administration.

While the Final Rule removes some of the industry concerns within the October 2015 proposal, some still remain. Industry efforts to revisit specific provisions that are unworkable are expected to include direct engagement with PHMSA as well as regulatory reform on specific issues.

PHMSA’s regulatory program for hazardous liquids pipelines was passed in Hazardous Liquid Pipeline Safety Act (HLPSA) of 1979. The HLPSA, codified in the Pipeline Safety Laws, PHMSA setting minimum Federal safety standards for hazardous liquid pipelines in Part 195 of the Pipeline Safety Regulations. 49 C.F.R. § 195.0, et seq. Part 195 applies to interstate pipelines that transport hazardous liquids or carbon dioxide and associated facilities, including pipelines situated on the Outer Continental Shelf (OCS). Generally, existing Part 195 lays out standards for design, construction, pressure testing, operation and maintenance, corrosion control, how personnel should be trained and qualified, accident reporting and recordkeeping. Part 195 also includes an integrity management program that covers pipelines in high consequence areas (HCAs) or locations that have a high population density or are environmentally sensitive.

The Final Rule extends the requirement to use leak detection systems beyond HCAs to all regulated, non-gathering hazardous liquid pipelines. Prior to the Final Rule, the integrity management and leak detection requirements in Part 195 applied only to pipelines in HCAs, i.e., those pipelines situated in areas with a higher population density or with some level of environmental sensitivity. PHMSA was responsive to certain of industry’s concerns in crafting the Final Rule; however, in some areas, there is concern that prescriptive rules and a uniform approach can be problematic to impose on a dynamic industry.

It is not yet clear whether or how PHMSA will respond to the freeze Memo regarding this rulemaking. The rules were prepared in response to statutory directives in both the 2011 and 2016 Amendments to the Pipeline Safety Act (PSA). The law offices of Hunton & Williams state that “Pipeline operators would be well advised to view this regulatory freeze with caution, because the major elements of the PHMSA rules at issue may yet become effective, and because their existence – even if suspended at present – arguably raises the standard of care that operators may be held to in civil actions.”

Sources: The National Law Review
Hunton & Williams LL in PipelineLaw.Com