PHMSA Publishes Long-Awaited Mega-Rule for Gas Transmission Lines: Material Verification and MAOP Reconfirmation

Pipeline Safety Alert

(by James CurryKeith Coyle and Brianne Kurdock)

On October 1, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) published a final rule in the Federal Register amending the federal safety standards for gas pipeline facilities at 49 C.F.R. Part 192 (Rule). The Rule primarily addresses concerns identified in congressional mandates and National Transportation Safety Board (NTSB) recommendations for gas transmission lines.  The most significant provisions include new requirements for verifying pipeline materials, reconfirming maximum allowable operating pressure (MAOP), and performing periodic assessments of pipeline segments located outside of high consequence areas (HCAs), including in newly-defined moderate consequence areas (MCAs).  Other changes include amendments to the integrity management (IM) requirements, new requirements for reporting MAOP exceedances and the safety of inline inspection launcher and receivers, as well as related recordkeeping requirements.

This alert is the first in a four-part Babst Calland series on the Rule.  This first alert discusses the new MAOP reconfirmation and material verification requirements.  The next alert will cover MCAs and new assessment requirements for pipelines located outside of HCAs.  The third client alert will review the new recordkeeping requirements.  Finally, Babst Calland will survey the remaining Rule topics.

Materials Verification – 49 C.F.R. § 192.607

PHMSA established new materials verification requirements for certain kinds of gas transmission pipelines in response to a mandate in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (2011 Act).  Operators must create procedures for conducting destructive and nondestructive tests if they do not have traceable, verifiable, and complete (TVC) records for pipeline attributes required by other regulations.  Specifically, materials verification may be triggered by MAOP reconfirmation, integrity management, or repair regulations applicable to onshore gas transmission pipelines in Class 3 or 4 locations or HCAs.

The Rule provides operators with flexibility and allows for collection of missing pipe attributes over time, whenever a pipeline segment is exposed for maintenance or repairs, until a minimum number of excavations are performed.  Gathering and distribution lines are not subject to the materials verification rules.

What is in the Rule?

  • Procedure. Operators that are missing adequate records for these pipeline attributes must develop and implement procedures for conducting nondestructive or destructive tests, examinations, and assessments to verify material properties of aboveground line pipe, buried line pipe, and components. These tests, examinations, and assessments must be conducted whenever the pipe is exposed for anomaly direct examinations, in situ evaluations, repairs, remediations, maintenance, and excavations that are associated with replacements or relocations of pipeline segments that are removed from service.  An operator’s procedure must address (1) the tests, examinations, and assessments that are appropriate for verifying the necessary material properties and attributes; (2) accepted industry methods for verifying toughness; (3) materials verification of components; and (4) minimum requirements for test locations.  Additional requirements apply to the use of nondestructive methods.
  • Sampling Program.  An operator can also verify material properties and attributes by sampling similar locations and applying those results to comparable segments of pipe.  An operator may develop a sampling program in accordance with the requirements established by PHMSA, or may use an alternative approach after seeking a “no objection letter” from PHMSA.  Operators must develop an extended sampling program if test results are not consistent with available information, existing expectations, or assumed properties previously used.
  • Components. Operators must develop and implement procedures for establishing and documenting the ANSI rating or pressure rating of certain non-line pipe components greater than two inches that are based on the manufacturing specifications of the components, or material pressure ratings and type if specifications are unknown.
  • Recordkeeping.  Operators must maintain TVC records from the materials verification process for the life of the pipeline.
  • Compliance Deadlines. PHMSA did not set a deadline for completion of materials verification.  The agency acknowledged that a deadline is not practical since it would be difficult to predict when the pipeline would be exposed.  However, operators may need material properties information to comply with other sections of the code which do impose compliance deadlines.  For instance, it is unclear whether all affected operators would be able to complete materials verification under the opportunistic approach by the MAOP reconfirmation deadline of July 3, 2028.

What is not in the Rule?

The text of the Rule has changed in important ways as a result of public comment, input from the Gas Pipeline Advisory Committee (GPAC) and input from the Office of Management and Budget (OMB).

  • Applicability.  PHMSA removed the proposed applicability section and instead made material properties verification a process that operators must follow to obtain missing or inadequate information when  required by another Part 192 regulation.  PHMSA also removed the list of specific pipe attributes to be obtained.  Operators need only obtain  the attributes required for the triggering activity, e.g. MAOP reconfirmation.  PHMSA rejected industry arguments that material properties verification should not be required for pipeline segments tested to 1.25 times MAOP and should only apply to pipeline segments operating above 30 percent SMYS.
  • Materials Verification Plan.  PHMSA removed the proposed obligation that all operators create a materials verification plan.
  • Alternative and Extended Sampling Programs.  PHMSA changed the sampling program by allowing operators to propose an alternative sampling program and develop an extended sampling program to address inconsistencies between the gathered data and records.  PHMSA declined to remove the excavation standard of one excavation per mile or 150 if the population is greater than 150 miles, whichever is less.  PHMSA reduced the number of required test points for non-destructive tests from four to two quadrants.

MAOP Reconfirmation – 49 C.F.R. § 192.624

Since 1970 operators have established the MAOP of gas transmission lines using either of two methods.  The first method requires MAOP to be based on the lowest of the following four pressures: (1) the design pressure of the pipeline, (2) a percentage of the test pressure the pipeline experienced after construction, (3) the highest actual operating pressure that certain pipelines experienced during a five-year historical window, or (4) the maximum safe operating pressure given the pipeline’s history.  The second method, which is commonly referred to as the grandfather clause, allows MAOP to be based solely on the highest actual operating pressure that pipelines installed before the original effective date of PHMSA’s regulations experienced during a five-year historical window.

In the 2011 Act, Congress directed PHMSA to establish regulations for reconfirming the MAOP of certain higher-risk gas transmission lines.  That mandate was primarily based on NTSB safety recommendations issued in response to the 2010 San Bruno incident.  The Rule prescribes the applicability, methods, compliance deadlines, and recordkeeping requirements for MAOP reconfirmation.

What’s in the Rule?

  • Applicability.  The Rule requires operators to reconfirm the MAOP of onshore gas transmission pipelines that meet either of two criteria.  First, MAOP reconfirmation is required if a segment is located in an HCA or Class 3 or 4 location, and the operator does not have TVC records to substantiate the current MAOP.  PHMSA declined to define TVC in the Rule, and referenced the guidance that the Agency provided in advisory bulletins issued in 2011 and 2012.  Second, MAOP reconfirmation is required if a segment is located in an HCA, a Class 3 or 4 location, or an MCA (only if the segment is piggable); the current MAOP exceeds 30 percent of specified minimum yield strength (SMYS); and the operator established that MAOP using the grandfather clause.
  • Methods.  The Rule provides gas transmission line operators with six methods for reconfirming the MAOP of covered segments.  First, the operator can perform a pressure test in accordance with subpart J.  The reconfirmed MAOP is established based on the test pressure, divided by 1.25 or the applicable class location factor, whichever is greater.  If the operator lacks TVC records for diameter, wall thickness, of grade the pipe, the operator must obtain the missing information by complying with the new materials verification requirements.  Second, the operator can implement a pressure reduction and base the reconfirmed MAOP on the highest actual operating pressure experienced during the five years preceding October 1, 2019, divided by 1.25 or the applicable class location factor, whichever is greater.  The five-year historical operating pressure must have been sustained for “a cumulative minimum duration of eight hours during a continuous 30-day period” Additional requirements apply to reconfirming MAOP through a pressure reduction in response to a class location change.  Third, the operator can conduct an engineering critical assessment in accordance with the new requirements in 49 C.F.R. § 192.632.  Fourth, the operator can replace the pipe.  Fifth, the operator can implement a pressure reduction for small potential impact radius (PIR) (150 feet or less) pipelines based on the highest actual operating pressure experienced during the five years preceding October 1, 2019, divided by 1.1.  The operator must perform increased patrols and conduct instrumented leakage surveys to reconfirm MAOP under the small PIR method.  Finally, the operator can use an alternative technical evaluation process, provided the operator notifies and receives a no objection letter from PHMSA.
  • Compliance Deadlines.  The Rule provides several compliance deadlines for reconfirming the MAOP of covered segments.  Operators must develop MAOP reconfirmation procedures by July 1, 2021, and perform MAOP reconfirmation for at least 50 percent of covered pipeline mileage by July 3, 2028.  Operators must complete MAOP reconfirmation for all pipeline mileage by July 2, 2035, or four years from the date that a segment becomes subject to the regulation, whichever is later.
  • Recordkeeping.  The Rule establishes a lifetime recordkeeping requirement for MAOP reconfirmation records, including records of investigations, test, analyses, assessments, repairs, replacements, alterations, and other actions.

What’s Not in the Rule?

As with materials verification, PHMSA made several important changes to the rule based on public comments and input from the GPAC and OMB.

  • Grandfather Clause Repeal.  PHMSA chose not repeal the grandfather clause in its entirety.  While requested by certain commenters, the Agency concluded that a complete repeal of the grandfather clause would be impractical due to its applicability to other pipelines, including gathering lines, and significant cost-benefit concerns.
  • In-Service Incidents.  PHMSA originally proposed to apply MAOP reconfirmation to pipeline segments that had experienced reportable, in-service incidents.  PHMSA did not include that provision in the Rule, concluding that the casual factors leading to such incidents are already addressed by the integrity management provisions of Part 192.
  • Reliable.  The Agency decided to remove the word “reliable” from the proposed TVC standard to maintain consistency with the 2011 and 2012 PHMSA advisory bulletins.
  • Low-Stress Lines.  PHMSA decided against applying the reconfirmation requirement to grandfathered pipelines operating below 30 percent SMYS, finding that extending the requirement to such pipelines would not be cost-effective and that such lines present lesser risk to public safety.

For a more detailed assessment and a redline of the Rule, please contact a member of the Pipeline and HazMat Safety practice group.

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