PHMSA finalizing new regulations for issuing emergency orders

The PIOGA Press

(by Keith J. Coyle)

The Pipeline and Hazardous Materials Safety Administration (PHMSA) is expected to finalize new regulations for issuing emergency orders in the coming weeks. The new regulations represent the culmination of a rulemaking process that PHMSA began two years ago during the final months of the Obama administration.

The Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act) gave PHMSA the authority to issue emergency orders if “an unsafe condition or practice, or a combination of unsafe conditions and practices, constitutes or is causing an imminent hazard[.]” 49 U.S.C. § 60117(o)(1). The PIPES Act directed PHMSA to establish temporary regulations for exercising that authority by no later than August 21, 2016, and final regulations by no later than March 19, 2017.

On October 14, 2016, PHMSA adopted temporary regulations for issuing emergency orders in an interim final rule. Federal agencies can adopt regulations in an interim final rule without providing the public with prior notice or the opportunity to comment, provided that good cause is shown under the Administrative Procedure Act. Stating the statutory deadline in the PIPES Act met the good cause standard, PHMSA established the temporary emergency order regulations as an interim final rule and provided a 60-day, post-publication comment period.

The temporary regulations set out the procedural requirements for issuing emergency orders and obtaining administrative review. Like the good cause exception in the Administrative Procedure Act, the PIPES Act authorizes PHMSA to issue an emergency order without providing prior notice or the opportunity for a hearing if an imminent hazard exists. PHMSA must consider certain factors before issuing an emergency order, and the order itself must contain specific information about the nature of the imminent hazard, the entities affected, the restrictions, prohibitions, or safety measures imposed, and the procedures for obtaining relief.

The temporary regulations created an expedited, two-track process for obtaining administrative review of an emergency order. A petitioner either can seek a formal hearing before an administrative law judge or request a decision without a formal hearing from the Associate Administrator for Pipeline Safety. PHMSA must issue a final decision within 30 days of receiving the petition in either scenario. Consistent with the PIPES Act, the temporary regulations acknowledge that expedited judicial review of an emergency order can be sought in the federal district courts.

Six industry trade associations and two pipeline operators submitted comments expressing concerns with various aspects of the temporary regulations. Several of the commenters asked PHMSA to consider changing the substantive standards that apply to the issuance of emergency orders and the procedural requirements that apply in obtaining expedited judicial review, including by adding further due process protections. The Administrative Procedure Act requires PHMSA to consider these comments in developing the final regulations. According to the U.S. Department of Transportation’s latest Significant Rulemaking Report, PHMSA hopes to issue those regulations in October 2018.

PHMSA’s final emergency order regulations could have an important impact on the future of the pipeline industry. In describing the particular circumstances that might warrant the issuance of an emergency order, PHMSA has identified natural disasters affecting a specific geographic region, serious manufacturing flaws and incidents caused by unsafe industry practices. PHMSA has stated that in these cases an emergency order could be issued imposing restrictions, prohibitions, or safety measures on all affected pipeline operators. Because that order can be issued without prior notice and the opportunity for a hearing, the provisions included in PHMSA’s final regulations will play an important part in ensuring that the pipeline industry is afforded due process in obtaining expedited administrative and judicial review.

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