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On October 1, 2019, the Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency) published a Final Rule in the Federal Register updating its procedural requirements for issuing emergency orders (EO). In 2016, PHMSA issued temporary regulations for issuing emergency orders in an interim final rule (IFR). Unlike the process that ordinarily applies to PHMSA rulemakings under the Pipeline Safety and Administrative Procedure Acts, the Agency issued the temporary EO requirements without providing the public with prior notice or the opportunity to submit comments. The final rule takes effect on December 2, 2019, and includes changes that the Agency deemed necessary based on comments submitted after the IFR.
What is an Emergency Order?
Congress authorized PHMSA to issue EOs in the Protecting Our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2016. In response to an imminent hazard, PHMSA may issue an EO imposing restrictions, prohibitions, or safety measures on pipeline owners and operators. Unlike a Corrective Action Order or a Safety Order, PHMSA may issue an EO to a group of operators that share a common condition or even the entire industry. PHMSA anticipates issuing an EO to respond to natural disasters, when serious flaws are discovered in pipes or in equipment manufacturing processes, or when an accident reveals an industry practice is unsafe. Aggrieved owners and operators may challenge an EO by choosing a formal hearing before an administrative law judge (ALJ) or filing a written response with the Associate Administrator. In either scenario, the Associate Administrator must issue the final decision within 30 days of receipt of a petition for review.
What Did PHMSA Change in the New Final Rule?
PHMSA made several important changes to the process of challenging an EO in the final rule, including:
- Removing the discretion initially afforded to the Associate Administrator to unilaterally determine that no material facts are in dispute;
- Limiting PHMSA’s authority to issue EOs “to the extent necessary to abate the imminent hazard;”
- Providing that all pipeline operators subject to an EO will be personally served;
- Removing the Associate Administrator’s ability to determine that a formal hearing is more appropriate for a particular petition;
- Clarifying that a violation of the pipeline safety regulations can serve as part of the factual basis for an EO, but the Agency would not use an EO to allege or
make findings of violation;
- Acknowledging that the Agency carries the burden of proof to sustain an EO, but that the responsive party bears the burden of proving any affirmative defenses;
- Clarifying that a petition for review seeking a formal hearing and a “substantially similar” petition that does not request a hearing can be consolidated, but that the Agency does not intend to force the non-hearing petitioner to participate in the formal hearing process. The Agency also added a process to de-consolidate a proceeding if changed circumstances warrant such action; and
- Stating that if an emergency order has been in effect for more than 365 days, the Administrator will make an assessment regarding whether the unsafe condition or practice continues to exist. If the imminent hazard still exists, PHMSA will initiate a rulemaking. If it does not exist, the Administrator will rescind the emergency order.
For a more detailed assessment or a redline of this rule, please contact a member of the Pipeline and HazMat Safety Practice group.