Pipeline Safety Alert On December 14, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released a pre-publication version of an interim final rule (IFR) establishing minimum federal safety standards for underground natural gas storage facilities. The IFR takes effect 30 days from publication in the Federal Register. Since this rule is styled as an IFR, PHMSA will not be providing a public comment period before the rule takes effect.
Comments on the IFR are due 60 days from the date of publication. PHMSA may consider making changes to the rule based on the comments filed. Comments on the new PHMSA information collection request contained in the IFR (related to new reporting requirements for storage) are on a shorter timeframe and are due 30 days from publication.
What’s Changing?
• Downhole Regulation: PHMSA will regulate the downhole portions (wells and reservoirs) of underground gas storage facilities for the first time. Although PHMSA has had statutory authority to regulate storage since 1968, the agency declined to use that authority for policy reasons. The 2015 Aliso Canyon natural gas storage leak prompted changes to the Pipeline Safety Laws earlier this year, and those changes require PHMSA to regulate storage.
• Incorporation of API Recommended Practices (API RP): PHMSA will incorporate by reference the API recommended practices for underground natural gas storage (RP 1170 for salt caverns and RP 1171 for depleted reservoirs) covering reservoir and well design, integrity and monitoring, risk management, recordkeeping, integrity verification, site security and safety, emergencies, procedures, training and other subjects. Notably, the IFR mandates compliance with the “should” statements and other permissively worded provisions in the API RPs.
• Reporting: PHMSA will require storage operators to file annual, incident and safety-related condition reports, and file 60-day notices for certain construction activities (new storage facilities, new wells, well workovers) and other changes (acquisitions, divestitures, changes in the responsible operating entity).
• Timing: Existing storage facilities must meet the operations and integrity provisions of the applicable API RP within one year of publication. New storage facilities, built more than six months after publication, must comply with all of the applicable provisions in the API RPs, upon commencement of operations. Reporting obligations will take effect sooner – 30 days from publication of the IFR. Operators must file initial annual reports within six months of the effective date of the IFR.
Why Now?
• Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act): As discussed in our June Client Alert, Section 12 of the PIPES Act directed PHMSA to regulate underground gas storage facilities by June 22, 2018. Congress added this mandate largely in response to a significant gas leak from the Aliso Canyon storage facility in California. The mandate requires PHMSA to consider certain factors in developing storage regulations, including the use of consensus standards, the economic impact on individual gas customers and end users, and the recommendations of the Aliso Canyon task force that Congress authorized in section 31 of the PIPES Act.
• Good Cause Exception: Citing the good cause exception in the Administrative Procedure Act (APA), PHMSA issued the IFR without prior notice or the opportunity to comment. PHMSA stated that good cause exists to dispense with the notice and comment process because the lack of enforceable federal safety standards for underground gas storage facilities “presents an immediate threat to safety, public health, and the environment.” PHMSA also noted that incidents at underground natural gas storage facilities can be costly and interrupt the supply of natural gas to consumers.
What’s Next?
• Additional Regulations: The IFR is the first step in PHMSA’s storage rulemaking plan. PHMSA may or may not make changes to the IFR based on comments received after it is issued. Beyond the IFR, PHMSA has indicated that it may adopt additional, and potentially more stringent, regulations for storage. PHMSA has established a dedicated storage website with a library of relevant documents.
• PHMSA Inspection and Enforcement: PHMSA has stated it will begin inspections and enforcement once the IFR goes into effect. PHMSA has numerous enforcement tools, including compliance orders and other injunctive tools, and civil penalties ($200,000 per day, per violation, not to exceed $2 million for any related series of violations, as adjusted for inflation).
• State Partners: PHMSA will apply to storage the same federal state cooperative oversight model it uses for pipelines. A state authority must have a certification or agreement with PHMSA to regulate intrastate gas storage facilities. The state must adopt the minimum federal standards, and may apply additional or more stringent requirements, if they are compatible with federal requirements. Many state agencies that currently regulate intrastate underground gas storage safety do not participate in the federal program. These states will need to establish certificates or agreements with PHMSA. Participating states may also need to make changes to their safety standards to make them consistent with the new federal regulations.
• User Fees: PHMSA issued a separate notice in November of its intention to begin collecting user fees from storage operators to fund the agency’s oversight program, and method of allocating fees among storage operators. Comments are due on that important notice on January 6, 2017.
Seven Questions on the IFR
Babst Calland’s Pipeline and HazMat Safety team have reviewed the IFR and poses some initial questions that industry stakeholders may consider as they plan ahead.
• Did PHMSA appropriately analyze the impacts of converting permissive recommendations in the API RPs to requirements? While many operators support the use of industry consensus standards for underground storage, how will operators be affected by PHMSA’s decision to convert the permissive “should” provisions into requirements?
• Does PHMSA’s conversion of “should” statements to mandatory requirements remove some of the flexibility incorporated into the API RP to cover different storage facility designs and vintages, local geology, different risks and operational configurations? Will operators have sufficient flexibility to address integrity issues based on risk?
• Are the implementation timeframes reasonable and practicable? The one-year implementation timeframes may be aggressive. Even if an operator was already following the API RPs, PHMSA’s conversion of the “should” provisions to mandatory requirements could result in significant changes to an operator’s program.
• Is there sufficient information in the record that there is an emergency situation that supports PHMSA’s use of the good cause exception? PHMSA issued this rule using the IFR mechanism, with near immediate effect and without notice and comment, citing to the good cause exception in the Administrative Procedure Act. Does the evidence support the existence of a national emergency?
• Has PHMSA analyzed the factors it must consider under the general rulemaking provisions and the separate underground storage provisions in the Pipeline Safety Laws? 49 U.S.C. §§ 60102 and 60141.
• Is PHMSA’s Regulatory Impact Analysis for the IFR based on accurate assumptions about the actual costs and benefits of the rule? In particular, does PHMSA address the potentially significant costs of converting the flexible “should” provisions in the API RPs to mandatory requirements in the IFR?
• Will existing state regulations for intrastate storage facilities be immediately preempted in those states where the storage regulator does not have a certification or agreement with PHMSA? If so, will PHMSA conduct inspection and enforcement in those states, at least until State storage regulators can obtain certifications or agreements from PHMSA?
Please contact one of the members of our Pipeline and HazMat Safety team to obtain more information about the implications of PHMSA’s IFR.
Click here for PDF.
Administrative Watch
The United States Environmental Protection Agency (EPA) has recently finalized rulemakings that extend standards promulgated under Title VI of the Clean Air Act (CAA) to substitutes for ozone depleting substances (ODS). The use of such substitutes will now potentially trigger new compliance obligations for many industries.
A final rule published by EPA in November will subject certain substitute refrigerants to new requirements, such as leak rate thresholds, inspection, reporting and corrective action requirements associated with leaks, and sales restrictions of such substances. Under Section 608 of the CAA and 40 CFR 82, subpart F, EPA had previously imposed such requirements exclusively for substances listed as a class I or class II ODS under CAA Section 602. However, within this rulemaking, EPA interpreted its authority under CAA Section 608 to include regulation of many non-ODS, including hydrofluorocarbons (HFCs) and perfluorocarbons (PFCs), based in part on its estimation of such substances’ potential to contribute to global warming. Therefore, use of ODS substitute refrigerants that are not exempted from the “venting” prohibition in 40 CFR 82.154 may now trigger additional compliance requirements under Title VI of the CAA, even if such substances are not ODS.
EPA has also finalized a rule pending publication that further restricts the use of many ODS alternatives under its Significant New Alternatives Policy (SNAP) program. Under Section 612 of the CAA, EPA’s latest SNAP rule will restrict the use of several HFCs, hydrofluoroolefins (HFOs), and other refrigerant types within many applications based upon their high global warming potential.
These recent rulemakings indicate that companies should not assume CAA Title VI-related regulations to be limited to ODSs. Rather, even the exclusive use of non-ODS substances may nonetheless incur additional compliance obligations under Title VI.
If you have questions related to these rulemakings or EPA’s regulations pertaining to refrigerants, please contact Michael H. Winek at mwinek@babstcalland.com or (412) 394-6538, or Varun Shekhar at vshekhar@babstcalland.com or (412) 394-5679.
Click here for PDF.
The PIOGA Press
The following first appeared as a Pipeline Safety Alert issued by law firm Babst Calland.
On October 17, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a General Policy Statement on Civil Penalties in the Federal Register. Representing the most recent step in the evolution of PHMSA’s enforcement process, the policy statement is significant for several reasons.
First, PHMSA is making a public commitment to release its proposed civil penalty calculation for individual enforcement cases. While standard practice for many other federal agencies, PHMSA has not historically provided the regulated community with its methodology for calculating proposed civil penalty amounts. Second, PHMSA is acknowledging the adoption of a Civil Penalty Framework as the agency’s policy for calculating proposed penalties, and will publish that Civil Penalty Framework on its website. Under PHMSA’s previous policy, operators received that document only upon request. Finally, and perhaps most significantly, the policy statement confirms that PHMSA will be assessing higher civil penalties (within the statutory maximums) in future enforcement cases, and that greater weight will be afforded to certain factors in determining penalty amounts.
The statutory framework
The pipeline safety laws require PHMSA to consider several factors in determining the amount of any civil penalty assessed for a particular violation. Three mandatory factors must be considered in all cases: (1) the nature, circumstances and gravity of the violation, including adverse impact on the environment; (2) the degree of the violator’s culpability, any history of prior violations and any effect on ability to continue doing business; and (3) the violator’s good faith in attempting to comply. Two other factors may be considered as a matter of discretion: (1) the economic benefit gained from the violation without any reduction because of subsequent damages, and (2) any other matters that justice requires. As recently adjusted for inflation under the Federal Civil Penalties Inflation Adjustment Act of 2015, PHMSA’s administrative civil penalties are capped at $205,638 per violation per day, not to exceed $2,056,380 million for any related series of violations. PHMSA has repeatedly held that a violation is not part of a related series for purposes of the statutory cap if it requires proof of an additional fact or has its own evidentiary basis.
Recent scrutiny of the enforcement process
PHMSA’s enforcement process has come under increased scrutiny in recent years. Pursuant to a congressional mandate in the Pipeline Safety Improvement Act of 2002, the Government Accountability Office (GAO) issued a report in 2004 on the effectiveness of PHMSA’s enforcement process and its use of civil penalties in enforcement cases. GAO recommended that PHMSA strengthen its enforcement process by establishing clear program goals, a well-defined strategy for achieving those goals and appropriate performance measures. GAO also recommended that PHMSA take certain actions to improve the management and collection of civil penalties and increase the public availability of information about PHMSA’s enforcement actions. In the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011 (2011 Act), Congress required PHMSA to make further reforms to its enforcement process. Responding to fairness concerns, Congress required that PHMSA convene enforcement hearings before a dedicated “presiding official,” expedite review of corrective action orders, maintain a separation of functions between PHMSA enforcement personnel and employees responsible for deciding enforcement cases, and prohibit ex parte communications in such proceedings. PHMSA implemented these important fairness changes in a 2011 policy statement and a 2013 rule.
The policy statement
PHMSA’s policy statement on civil penalties is the latest step in the evolution of its enforcement process. Unlike many other federal agencies, PHMSA has not traditionally provided detailed information on the methodology used to calculate civil penalties in pipeline safety enforcement proceedings. The absence of that information served as an obstacle for respondents in individual cases and raised questions about PHMSA’s enforcement priorities within the regulated community. The policy statement seeks to address these concerns by offering a general overview of PHMSA’s civil penalty process, and acknowledging that PHMSA will provide pipeline operators with “a more detailed proposed civil penalty calculation upon request” in individual enforcement cases. The policy statement further notes that “PHMSA will give greater weight to certain factors when assessing civil penalties, specifically for violations that: (1) are causal to incidents or that increase the severity of incidents, including those involving smaller hazardous liquid spills or resulting in methane releases; (2) are ‘repeat offenses’ or violations of the same safety standard in the past five years; and (3) involve multiple instances of the same violation.”
Other related developments
PHMSA’s decision to permit greater access to civil penalty calculations is particularly relevant as the agency continues to increase penalty amounts. According to the agency’s most recent enforcement statistics, PHMSA proposed a total of $2,671,200 and $3,074,600 in civil penalties in 2014 and 2015, ranging from $4,500 to $270,600 per case and $5,600 to $364,200, respectively. By comparison, PHMSA has proposed $7,752,500 in total civil penalties in 2016, ranging from $11,500 to $1,600,000 in 2016. PHMSA has also shown a greater willingness to assess large civil penalty amounts in specific cases this year. The agency has proposed civil penalties that exceed $1 million in three proceedings, the same number that PHMSA initiated over the entire preceding four-year period from 2012 to 2015. While not discussed in the policy statement, PHMSA has made several noteworthy changes to the Civil Penalty Framework in recent years. PHMSA modified the culpability factors to account for corrective actions taken by operators prior to the agency’s discovery of the violation. PHMSA may also apply a credit if the company fails to comply with a procedure that otherwise exceeds the applicable regulatory requirements. These changes should have a positive long-term impact on the regulated community from a compliance perspective, creating an incentive to initiate corrective measures at the earliest possible opportunity and encouraging companies to adopt practices and procedures that go above and beyond PHMSA’s threshold requirements.
Looking ahead
In considering these important policy changes, companies may wish to consider whether they can request a copy of the detailed calculation in an individual case if (1) a hearing has occurred, but the agency has yet to issue a final order; (2) a final order has been issued, but the agency is still considering a petition for reconsideration; or (3) the enforcement matter is closed, but the company had requested and was denied access to the agency’s calculation in the course of the enforcement proceeding.
Click here for PDF.
Administrative Watch
On November 15, 2016, the Supreme Court of Appeals of West Virginia in Mountain Valley Pipeline, LLC v. McCurdy (W. Va. No. 15-0919, Nov. 15, 2016), held that a private company may not enter private land for the purposes of surveying in preparation for an eminent domain action unless that company establishes that it is entitled to assert eminent domain over the private property.
Mountain Valley Pipeline retained surveyors to survey certain private property in Monroe County, West Virginia, over which it intended to build a natural gas pipeline to transport natural gas from Wetzel County, West Virginia, to Pittsylvania County, Virginia. Mountain Valley Pipeline intended to condemn the private property pursuant to West Virginia’s eminent domain statute, which allows condemnation by a private company if the land is going to be used for a “public use,” and claimed that the surveying work was necessary to prepare for the construction of the pipeline. The McCurdys, who owned some of the property, sought an injunction to prevent the surveyors from entering their land, which the Circuit Court of Monroe County, West Virginia, granted.
Writing for the West Virginia Supreme Court, Justice Robin Davis found that an individual may not enter onto private property to survey for the purpose of eminent domain unless the condemned property was going to be put to a “public use” as defined by West Virginia law. As used in the eminent domain context, West Virginia law requires that the “public use” be “use” by residents and entities inside West Virginia’s boundaries. As Mountain Valley Pipeline had not presented any evidence indicating that any residents or entities (other than itself and associated affiliates) would benefit from the construction of the pipeline to be constructed, representatives of Mountain Valley Pipeline were not permitted to enter the McCurdys’ land for the purpose of surveying that land in preparation for condemnation.
Justice Allen H. Loughry II agreed with the majority in a concurring opinion and indicated that, although Mountain Valley “promised the possible opportunity for West Virginia citizens to have access to potential tap-in points,” absent a “fixed and definite right to the gas in the Pipeline[,]” the proposed pipeline was not for “public use.” Justice Loughry clearly indicated, however, that his opinion would change in the event that West Virginia residents were given the opportunity to tap into and purchase gas from the pipeline.
Finally, Chief Justice Menis E. Ketchum II issued a dissenting opinion indicating that the majority’s constrained definition of “public use” as only referring to West Virginia residents failed to consider that the pipeline also actually benefitted West Virginia landowners, from whose property the gas travelling through the pipeline was extracted in the northern part of the state. Specifically, Chief Justice Ketchum reasoned that the proposed pipeline would offer numerous benefits to the general public of West Virginia, including but not limited to: (a) royalties paid to landowners for gas extracted from their property; (b) enhancing the West Virginia economy which is largely dependent on gas production by creating jobs for producers and residents of the state; and (c) the ability for West Virginia to realize large amounts of money by way of severance tax on the natural gas extracted from West Virginia properties. Chief Justice Ketchum concluded that although he personally does not believe that private companies should be permitted to take private property for public use, it is clear the West Virginia Legislature, through W. Va. Code §§§ 54-1-1, 2(a)(3) and 3, has provided for such a taking in Mountain Valley Pipeline’s case.
It is important to note that in the Opinion, Justice Robin Davis recognized that although the interpretation of state law favored the McCurdys in this case, Mountain Valley Pipeline had recourse to use Federal Eminent Domain laws to achieve its goals related to the pipeline as soon as its application for a Federal Energy Regulatory Commission (FERC) Certificate of Public Convenience and Necessity is approved and delivered to Mountain Valley Pipeline by the Commission.
If you would like additional information about this important development, please contact Mychal S. Schulz at (681) 265-1363 or mschulz@babstcalland.com or W. Brian Nickerson at (681) 205-8957 or bnickerson@babstcalland.com.
Click here for PDF.
Administrative Watch
On October 27, 2016, the United States Environmental Protection Agency (EPA) released the Environmental Justice 2020 Action Agenda (EJ 2020), which outlines the EPA’s environmental justice strategic plan for 2016 to 2020. This most recent publication builds off the EPA’s previous environmental justice strategic plan for 2010 to 2014 (EJ 2014), which developed basic guidance and tools for integrating environmental justice into EPA’s programs and policies. EJ 2020 is the agency’s latest effort to focus on environmental and public health issues confronting the country’s minority, low-income, tribal, and indigenous populations.
EPA defines “environmental justice” as “the fair and meaningful treatment of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” The vision of EJ 2020 is to integrate environmental justice into the agency’s actions, cultivate partnerships to improve on-the-ground results, and create a path of achieving better environmental outcomes and reducing disparities in overburdened communities.
EJ 2020 has three primary goals. The first goal of EJ 2020 is to deepen environmental justice practices within EPA programs to improve the health and environment of overburdened communities. This will involve further integrating environmental justice into EPA’s rulemaking, permitting, compliance and enforcement, and scientific efforts. EJ 2020’s second goal is to work with partners to expand its positive impact within overburdened communities. This includes working with state and local governments, collaborating with federal agencies, deploying community-based resources, and partnering with tribes and indigenous peoples. The third goal of EJ 2020 is to demonstrate progress on significant national environmental justice challenges. EPA has identified lead disparities, drinking water, air quality, and hazardous waste sites as the four major national environmental justice challenges to be addressed by EJ 2020.
EPA intends EJ 2020 to be an action document, providing the basis to advance environmental justice for the next five years. EPA will produce annual reports on its EJ 2020 progress starting at the end of 2017.
Babst Calland attorneys will be monitoring EPA’s implementation of EJ 2020 and its ongoing environmental justice efforts. If you have any questions regarding EJ 2020 or its potential impact on EPA actions, please contact Angela M. Kilbert at (412) 394-6498 or akilbert@babstcalland.com, Lindsay P. Howard at (412) 394-5444 or lhoward@babstcalland.com, or any of our other environmental attorneys.
Click here for PDF.
Pipeline Safety Alert
On October 17, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a General Policy Statement on Civil Penalties (Policy Statement) in the Federal Register. Representing the most recent step in the evolution of PHMSA’s enforcement process, the Policy Statement is significant for several reasons. First, PHMSA is making a public commitment to release its proposed civil penalty calculation for individual enforcement cases. While standard practice for many other federal agencies, PHMSA has not historically provided the regulated community with its methodology for calculating proposed civil penalty amounts. Second, PHMSA is acknowledging the adoption of a Civil Penalty Framework as the agency’s policy for calculating proposed penalties, and will publish that Civil Penalty Framework on its website. Under PHMSA’s previous policy, operators only received that document upon request. Finally, and perhaps most significantly, the Policy Statement confirms that PHMSA will be assessing higher civil penalties (within the statutory maximums) in future enforcement cases, and that greater weight will be afforded to certain factors in determining penalty amounts.
The Statutory Framework
The pipeline safety laws require PHMSA to consider several factors in determining the amount of any civil penalty assessed for a particular violation. Three mandatory factors must be considered in all cases, i.e., (1) the nature, circumstances, and gravity of the violation, including adverse impact on the environment; (2) the degree of the violator’s culpability, any history of prior violations, and any effect on ability to continue doing business; and (3) the violator’s good faith in attempting to comply. Two other factors may be considered as a matter of discretion, i.e., (1) the economic benefit gained from the violation without any reduction because of subsequent damages, and (2) any other matters that justice requires. As recently adjusted for inflation under the Federal Civil Penalties Inflation Adjustment Act of 2015, PHMSA’s administrative civil penalties are capped at $205,638 per violation per day, not to exceed $2,056,380 million for any related series of violations. PHMSA has repeatedly held that a violation is not part of a related series for purposes of the statutory cap if it requires proof of an additional fact or has its own evidentiary basis.
Recent Scrutiny of the Enforcement Process
PHMSA’s enforcement process has come under increased scrutiny in recent years. Pursuant to a congressional mandate in the Pipeline Safety Improvement Act of 2002, the Government Accountability Office (GAO) issued a report in 2004 on the effectiveness of PHMSA’s enforcement process and its use of civil penalties in enforcement cases. GAO recommended that PHMSA strengthen its enforcement process by establishing clear program goals, a welldefined strategy for achieving those goals, and appropriate performance measures. GAO also recommended that PHMSA take certain actions to improve the management and collection of civil penalties and increase the public availability of information about PHMSA’s enforcement actions. In the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (2011 Act), Congress required PHMSA to make further reforms to its enforcement process. Responding to fairness concerns, Congress required that PHMSA convene enforcement hearings before a dedicated “presiding official,” expedite review of corrective action orders, maintain a separation of functions between PHMSA enforcement personnel and employees responsible for deciding enforcement cases, and prohibit ex parte communications in such proceedings. PHMSA implemented these important fairness changes in a 2011 policy statement and a 2013 rule.
The Policy Statement
PHMSA’s Policy Statement on civil penalties is the latest step in the evolution of its enforcement process. Unlike many other federal agencies, PHMSA has not traditionally provided detailed information on the methodology used to calculate civil penalties in pipeline safety enforcement proceedings. The absence of that information served as an obstacle for respondents in individual cases and raised questions about PHMSA’s enforcement priorities within the regulated community. The Policy Statement seeks to address these concerns by offering a general overview of PHMSA’s civil penalty process, and acknowledging that PHMSA will provide pipeline operators with “a more detailed proposed civil penalty calculation upon request” in individual enforcement cases. The Policy Statement further notes that “PHMSA will give greater weight to certain factors when assessing civil penalties, specifically for violations that: (1) are causal to incidents or that increase the severity of incidents, including those involving smaller hazardous liquid spills or resulting in methane releases; (2) are ‘repeat offenses’ or violations of the same safety standard in the past five years; and (3) involve multiple instances of the same violation.”
Other Related Developments
PHMSA’s decision to permit greater access to civil penalty calculations is particularly relevant as the agency continues to increase penalty amounts. According to the agency’s most recent enforcement statistics, PHMSA proposed a total of $2,671,200 and $3,074,600 in civil penalties in 2014 and 2015, ranging from $4,500 – $270,600 per case and $5,600 – $364,200, respectively. By comparison, PHMSA has proposed $7,752,500 in total civil penalties in 2016, ranging from $11,500 – $1,600,000 in 2016. PHMSA has also shown a greater willingness to assess large civil penalty amounts in specific cases this year. The agency has proposed civil penalties that exceed $1 million in three proceedings, the same number that PHMSA initiated over the entire preceding four-year period from 2012 to 2015.
While not discussed in the Policy Statement, PHMSA has made several noteworthy changes to the Civil Penalty Framework in recent years. PHMSA modified the culpability factors to account for corrective actions taken by operators prior to the agency’s discovery of the violation. PHMSA may also apply a credit if the company fails to comply with a procedure that otherwise exceeds the applicable regulatory requirements. These changes should have a positive long-term impact on the regulated community from a compliance perspective, creating an incentive to initiate corrective measures at the earliest possible opportunity and encouraging companies to adopt practices and procedures that go above and beyond PHMSA’s threshold requirements.
Looking Ahead
In considering these important policy changes, companies may wish to consider whether they can request a copy of the detailed calculation in an individual case if (1) a hearing has occurred, but the agency has yet to issue a Final Order; (2) a Final Order has been issued, but the agency is still considering a petition for reconsideration; or (3) the enforcement matter is closed, but the company had requested and was denied access to the agency’s calculation in the course of the enforcement proceeding.
For more information on the potential implications of PHMSA’s Policy Statement, please contact Keith Coyle at 202.853.3460 or kcoyle@babstcalland.com, Brianne Kurdock at 202.853.3462 or bkurdock@babstcalland.com, or James Curry at 202.853.3461 or jcurry@babstcalland.com.
Click here for PDF.
On October 14, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published its Interim Final Rule (IFR) entitled “Pipeline Safety: Enhanced Emergency Order Procedures” in the Federal Register. The agency had previously issued a pre-publication version of this rule on October 4. See Babst Calland’s Pipeline Safety Alert. PHMSA will use these new regulations to implement its emergency order authority conferred by Congress in the “Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016” (PIPES Act). PHMSA may issue an emergency order to address an unsafe condition or practice, or a combination of unsafe conditions or practices that pose an imminent hazard to public health and safety or the environment. The IFR contains administrative procedures that PHMSA must follow in determining if an imminent hazard exists, the factors that must be considered before PHMSA issues an emergency order, and the content of those orders, including a description of the persons subject to the restrictions, prohibitions, or safety measures and the standards and procedures for obtaining relief. The IFR also creates a process for administrative review of an emergency order that is largely patterned on the statutory text in 49 U.S.C. § 60117(o), including the referenced procedural rules for HazMat emergency orders in 49 C.F.R. § 109.19.
PHMSA may use this authority starting today, October 14. Interested parties may file comments on this final rule until December 13, 2016.
Administrative Watch
On Saturday October 8, 2016, the Pennsylvania Department of Environmental Protection’s new Chapter 78a regulations associated with unconventional wells went into effect when they were published in the Pennsylvania Bulletin. For unconventional well operators, there are substantial changes from prior law affecting operations over the entire life of the well, from permitting to site construction, waste handling, impoundments, pipelines, site restoration and spill remediation.
Critical New Provisions in Chapter 78a
One major revision to the rules arises in sections 78a.15(f) and (g), which set out the pre-application requirements for a well permit at a location that “may impact a public resource.” This provision requires operators who propose to drill a well in such locations to notify the public resource agency, which now by definition includes schools, municipalities, and owners of playgrounds or water supplies, and provide additional information to DEP. The regulation applies if the limit of disturbance of the well site is located in any of eight specified areas, including “in a location that will impact other critical communities” and “within 200 feet of . . . a playground.” The public resource agency must be notified at least 30 days prior to the submission of the well permit application to DEP to allow the agency to provide written comments to DEP and the applicant. The applicant may provide a response to the comments. DEP will then consider various factors, including the comments submitted by both the public resource agency and the applicant, before setting conditions for the well permit based on impacts to public resources.
Pipeline operators are for the first time within the scope of oil and gas regulations promulgated under Act 13. Under section 78a.68a, pipeline operators conducting horizontal directional drilling (HDD) beneath a body of water or a watercourse are subject to notification requirements. The rule requires such operators to notify PADEP at least 24 hours prior to beginning HDD beneath a body of water or watercourse and, in the case of a water supply complaint, to report the complaint to PADEP within 24 hours of receipt.
New obligations for operators have been created in the Area of Review provision in section 78a.52a, which requires operators to submit a report identifying the surface and bottom hole locations of active, inactive, orphan, abandoned and plugged and abandoned wells within 1,000 feet of both the vertical and horizontal wellbores. Operators must create a monitoring plan and provide notice, now required in section 78a.73, to owners and operators of nearby wells that may penetrate the same formation being stimulated in the new well. Operators must cease operations if communication occurs and may not resume operations without PADEP authorization.
PADEP has altered the water replacement/restoration standard in section 78a.51(d)(2) to require replacement water supplies to meet or exceed Safe Drinking Water Act (SDWA) standards, where the prior regulation required replacement water supplies to meet SDWA standards or be comparable to the water quality prior to impact if those supplies did not meet that standard. In effect, the SDWA standard is now the floor, rather than the ceiling, for the water quality standard of replacement water supplies.
Revised section 78a.58 allows operators to process fluids (including mine influenced water) and drill cuttings on the well site with PADEP approval, using the existing OG-71 approval process, but the forms have been revised. In addition, operators may mix fluids with freshwater, aerate fluids, and filter solids from fluids without PADEP approval, provided that the activities are conducted within secondary containment. The onsite processing of any residual waste other than these fluids and drill cuttings now requires a permit under the Solid Waste Management Act. For any onsite processing activities, the operator must develop an action plan for monitoring and responding to radioactive materials.
The new rules overhaul the requirements for reporting and remediating spills. Section 78a.66 requires immediate reporting of spills that cause or threaten to pollute waters of the Commonwealth and requires reports within two hours for any release of five gallons or more over a 24-hour period that is not completely contained on secondary containment. Remediation procedures for spills of at least 42 gallons (or spills that threaten to pollute waters of the Commonwealth) require attainment of Act 2 standards, with new reporting and time limits developed specifically for the unconventional oil and gas industry.
Finally, the use of pits for temporary storage on unconventional well sites is entirely prohibited under section 78a.56, and three new provisions establish rules for off-site impoundments. Section 78a.59a sets requirements for impoundment embankments. Section 78a.59b requires the registration of new and existing well development impoundments (freshwater impoundments), and sets standards for the location and construction of these impoundments. The bottom of well development impoundments must be at least 20 inches above the seasonal high groundwater table, as certified by a soil scientist or similarly trained person. Section 78a.59c requires the closure of all centralized impoundments within three years, unless a permit is obtained under the Solid Waste Management Act. Closure plans must be submitted within six months of publication of the rule.
Forms and Technical Guidance Documents
To implement Chapter 78a, PADEP has prepared or updated more than 20 forms for unconventional operations. Many provisions of the new rules allow the agency to request information in addition to what is specified in the regulations, making the forms themselves a critical part of rule implementation. The new forms include a monthly tank maintenance checklist, well site restoration reporting forms, requests for approval of alternative waste management practices and well site restoration extensions, and a variety of forms related to the Area of Review requirements in section 78a.52a. All new forms are available on PADEP’s eLibrary.
PADEP also announced the availability of two interim final technical guidance documents (TGDs) on October 8. Both documents are available on eLibrary under “Technical Guidance Draft Documents.” One TGD describes implementation of the Area of Review provision, and the second sets out PADEP’s new policy on replacing and restoring private water supplies. PADEP is accepting public comments on the interim final TGDs until December 7, 2016.
Training Resources
In August and September 2016, PADEP presented training webinars on topics associated with the final Chapter 78a rulemaking for operators, contractors, and any other interested parties. Training topics included pipelines and horizontal directional drilling, waste management, emergency response, secondary containment, spills and releases, well permits and reporting, water management plans, area of review, erosion control and site restoration. Audio recordings of the webinars, along with PADEP’s slideshows, are available on the PADEP’s website.
Almost all unconventional operator submissions, including notifications, requests, well permits and reports, are now required to be electronic. PADEP announced updates to its Greenport system to accept these submissions, and held webinars about the new eWell, PADEP Notifications and eSubmission applications. The recorded webinars are expected to be available on PADEP’s website soon.
This summary is not an exhaustive list of changes in Chapter 78a, and there are many open questions about how PADEP will implement and enforce these changes. And on the horizon in the coming months, there is an additional rulemaking related to Subchapter D standards for well construction, operations and plugging. Stay tuned.
For additional information about Chapter 78a implementation or compliance, contact Kevin J. Garber at (412) 394-5404 or kgarber@babstcalland.com or Jean M. Mosites at (412) 394-6468 or jmosites@babstcalland.com.
Click here for PDF.
Pipeline Safety Alert
On October 7, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released a pre-publication version of its Final Rule entitled “Expanding the Use of Excess Flow Valves in Gas Distribution Systems to Applications Other Than Single-Family Residences” (EFV Final Rule). In response to statutory changes and a National Transportation Safety Board recommendation, PHMSA is expanding the existing requirement that operators install an excess flow valve (EFV) on certain natural gas distribution pipelines to additional types of new or replaced service lines. The agency is also requiring curb valves or other manual shut-off valves on new or replaced service lines with meter capacities above 1,000 standard cubic feet per hour (SCFH) and requiring operators to notify customers of their right to request the installation of an EFV on certain types of service lines. The EFV Final Rule will become effective six months after the date of publication in the Federal Register, which is expected within 7—10 days.
An EFV is a safety device installed inside a distribution service line between the main and the meter which can reduce the risk of an incident in the event of damage to the line by shutting off excessive gas flows. Since 2010, PHMSA has required operators to install EFVs on new or replaced gas service lines servicing single-family residences (SFRs) unless the service line meets certain exceptions.
EFVs must now be installed on the following service lines:
- Branched service lines to a SFR installed concurrently with the primary SFR service line (a single EFV may be installed to protect both lines);
- Branched service lines to a SFR installed off a previously installed SFR service line that does not contain an EFV;
- Multi-family installations, including duplexes, triplexes, fourplexes, and other small multifamily buildings (e.g., apartments, condominiums) with known customer loads at time of service installation, based on installed meter capacity, up to 1,000 SCFH per service; and
- A single, small commercial customer served by a single service line, with a known customer load at time of service installation, based on installed meter capacity, of up to 1,000 SCFH per service.
Curb or Shut-off Valves
PHMSA is also amending the pipeline safety regulations to require the use of either a curb valve, a valve installed below grade on a service line in a protective box, or another manually operated shut-off valve for new or replaced service lines with meter capacities exceeding 1,000 SCFH. Operators can choose to install an EFV in lieu of a curb valve on lines with capacities over 1,000 SCFH, but one is not required.
In response to the recommendation of the Gas Pipeline Advisory Committee (GPAC), PHMSA modified its proposal that curb valves must be accessible to first responders. Members of the GPAC expressed concern that first responders may operate the wrong valve, which could create additional damage or impacts to service. As a result, PHMSA is requiring operators to ensure that curb valves are accessible to “other personnel authorized by the operator”. Operators could then train first responders on proper operation of the valve.
PHMSA also modified its language covering maintenance of the curb valve. Many commenters were concerned that PHMSA’s proposal would require operators to inspect and maintain curb valves annually. In the final rule, PHMSA modified the rule text to allow for operators to conduct regularly scheduled maintenance of the curb valves in accordance with the manufacturer’s specifications.
Customer Notification of Right to Request EFV
Finally, PHMSA is requiring operators to notify customers of their right to request the installation of an EFV on service lines that are not new or replaced and not otherwise exempted from EFV installation. PHMSA agreed to allow operators to use a combination of means to notify customers including internet postings, billing materials, and new customer packets. PHMSA also agreed that operators could keep a single copy of the communication to comply with the documentation requirements. PHMSA deferred the question of who will bear the cost of installing an EFV requested by a customer to the operator’s economic regulator.
For more information on the potential implications of this Final Rule, please contact Brianne Kurdock at 202.853.3462 or bkurdock@babstcalland.com, James Curry at 202.853.3461 or jcurry@babstcalland.com, or Keith Coyle at 202.853.3460 or kcoyle@babstcalland.com.
Click here for PDF.
Pipeline Safety Alert
On October 4, the Pipeline & Hazardous Materials Safety Administration (PHMSA) issued a pre-publication Interim Final Rule (IFR) implementing the new emergency order authority that PHMSA received in the PIPES Act of 2016. The IFR will become effective on the date of its publication in the Federal Register, which is expected within days. PHMSA has provided a 60-day public comment period.
Federal agencies may issue IFRs without providing prior notice and comment under the good cause exception in the Administrative Procedure Act. The courts have emphasized that the good cause exception is to be narrowly construed, and that the existence of a statutory deadline does not, in and of itself, constitute good cause unless a delay would threaten real harm. PHMSA’s justification for issuing the IFR is that the PIPES Act contains a 60-day deadline for establishing temporary emergency order regulations, making compliance with the notice and comment requirements in the APA impracticable and not in the public interest.
As required by the PIPES Act, the IFR contains administrative procedures that PHMSA must follow in determining if an imminent hazard exists, the factors that must be considered by PHMSA before issuing an emergency order, and the content of those orders, including a description of the persons subject to the restrictions, prohibitions, or safety measures and the standards and procedures for obtaining relief. The IFR also creates a process for administrative review of an emergency order that is largely patterned on the statutory text in 49 U.S.C. § 60117(o), including the referenced procedural rules for HazMat emergency orders in 49 C.F.R. § 109.19.
The process allows for the filing of a petition for review seeking a formal hearing before an Administrative Law Judge (ALJ), or an informal hearing before the Associate Administrator. In either scenario, the Associate Administrator is authorized to issue a final decision on PHMSA’s behalf, and that decision must be issued within 30 days of receiving a petition or the emergency order automatically expires. The Administrator is allowed to extend the terms of an emergency order if the 30-day deadline is not met by determining, in writing, that the imminent hazard still exists. Expedited judicial review of an emergency order can be sought in federal district court.
Babst Calland’s pipeline safety team has reviewed the IFR and has the following preliminary observations.
- The IFR provides the Associate Administrator with the authority to deny a request for a formal hearing and decide the matter without the participation of an ALJ if a petition for review fails to identify “material facts” that are in dispute. What is a material fact in the context of an emergency order? What about purely legal questions? Should a petitioner who seeks a formal hearing be denied that right based solely on a determination by the Associate Administrator?
- One of the predicate findings for an emergency order is the existence of a violation. Would PHMSA need to find that a violation exists in the context of a specific enforcement proceeding before using that as the basis for issuing an emergency order? If not, what effect could a finding of violation in an emergency order have in a subsequent judicial or administrative proceedings?
- Under the IFR, the Administrator would issue emergency orders in the first instance and the Associate Administrator would have interim and final decision making authority on a petition for review. Does this raise separation of function concerns?
- PHMSA states that the IFR satisfies the good cause exception to the notice-and-comment requirements in the APA. Did Congress intend that result by including the 60-day deadline for issuing temporary regulations in the PIPES Act? What harm would result from allowing stakeholders to comment on the IFR before the temporary regulations become effective?
- Would the terms of an emergency order apply to intrastate pipelines subject to safety regulation by a state regulator? If so, would that raise federalism issues?
- Would the emergency order authority apply to pipelines and substances currently exempt from PHMSA’s regulations?
For more information on the potential implications of the Interim Final Rule, please contact James Curry 202.853.3461 or jcurry@babstcalland.com, Keith Coyle at 202.853.3460 or kcoyle@babstcaland.com, or Brianne Kurdock at 202.853.3462 or bkurdok@babstcalland.com.
Click here for PDF.
Pipeline Safety Alert
The Federal Aviation Administration (FAA) recently issued its Performance-Based Standards highlighting information that an applicant must include in order to seek a waiver of Part 107, the rules that apply to the operation of a small unmanned aircraft system (small UAS or drones). (See previous Babst Calland pipeline safety alerts for more information on the Small UAS Final Rule and the waiver process.)
Applicants may seek a waiver from many of the Part 107 regulations. However, the line-of-sight restriction (14 C.F.R. § 107.31) is of particular interest to the energy industry who may want to use a small UAS to conduct inspections of linear infrastructure. Applicants seeking a waiver of the line-of-sight requirement must demonstrate the method or means by which it will be able to:
• continuously know and determine the position, altitude, attitude, and movement of the small UAS to ensure the aircraft remains in the area of intended operation;
• avoid other aircraft, people on the ground, and ground-based structures and obstacles at all times;
• increase the visibility of the small UAS in order to be seen at a distance of three statute miles unless a system is in place that can avoid all non-participating aircraft;
• be alerted of any malfunction affecting the operation of the small UAS; and
• ensure that all persons participating in the operation have relevant knowledge of all aspects of operating a small UAS that is not within the visual line of sight of the remote pilot.
Since the effective date of the small UAS Final Rule, the FAA has granted 76 waivers of various sections of Part 107. The majority of these applications sought a waiver of the daytime operation limitation but at least two waivers were focused on line of sight. The FAA granted an application from a railroad company allowing a waiver of the line-of- sight requirements as long as the company does not fly the drone higher than 200 feet above ground (or within 400 feet of the radius of a structure) and uses a visual observer at all times. A visual observer is a person who assists the remote pilot with maintaining visual line of sight. The visual observer must be in constant contact with the remote pilot.
The FAA also granted a line-of-sight waiver to a company that is currently conducting research for the agency on small UAS operations. The FAA permitted this applicant to conduct small UAS operations outside of the visual line of sight of the remote pilot and the visual observer as long as the operation occurs in a pre-planned area free of structures and non-participating human beings. In addition, the altitude of the aircraft cannot exceed 400 feet above ground, and the small UAS must be semi-autonomous. The applicant must use a visual observer if the operations extend beyond the range by which the remote pilot can see intruding traffic.
Finally, the FAA has created a Drone Advisory Committee. It consists of a chairman and 34 members and will meet three times a year starting on September 16, 2016. The committee will discuss challenges associated with integrating unmanned aircraft into the National Airspace System.
Babst Calland is assisting energy industry clients with rule implementation and strategy involving the use of a small UAS. Please contact Brianne Kurdock at (202) 853-3462 or bkurdock@babstcalland.com, James Curry at (202) 853-3461 or jcurry@babstcalland.com, or Keith Coyle at (202) 853-3460 or kcoyle@babstcalland.com for more information.
Click here for PDF.
Pipeline Safety Alert
On August 29, 2016, the Federal Aviation Administration (FAA) released the form and instructions on how to apply for a waiver from certain requirements included in the “Operation and Certification of Small Unmanned Aircraft Systems” Final Rule. This final rule went into effect on August 29, 2016, and permits the use, with certain limitations, of small unmanned aircraft systems (small drones) for non-hobby and non-recreational purposes. See Babst Calland’s previous Pipeline Safety Alert on small drones for more information. This new waiver process will be of interest to the energy industry.
The FAA will allow operators of small drones to apply for a waiver from the following requirements:
- Operation from a moving vehicle or aircraft (§ 107.25)
- Daylight operation (§ 107.29)
- Visual line of sight aircraft operation (§ 107.31)
- Visual observer (§ 107.33)
- Operation of multiple small unmanned aircraft systems (§ 107.35)
- Yielding the right of way (§ 107.37(a))
- Operation over people (§ 107.39)
- Operation in certain airspace (§ 107.41)
- Operating limitations for small unmanned aircraft (§ 107.51)
The FAA will not consider waivers for the carriage of property of another by aircraft for compensation or hire. An applicant must describe the risks of the waivered operation and identify appropriate risk-mitigation strategies to ensure that the proposed operation can be safely conducted.
The ability to seek a waiver is particularly important to the energy industry which may choose to use small drones for inspections of infrastructure. For example, a waiver of the line-of-sight requirements may make the use of small drones for pipeline right-of-way patrols more practical.
The FAA is encouraging applicants to submit waiver requests at least 90 days prior to the desired commencement of the drone operation. The agency hopes to respond to each waiver request within 90 days but notes it could take longer depending on the complexity of the application or if information is missing. If the FAA seeks additional information, waiver applicants must respond within 30 days or risk the withdrawal of their application.
The agency has also stated that it is working to issue proposed rules by the end of 2016 for certain operations without the need for a waiver including the use of small drones over people, operations beyond the line of sight, flight in urban areas, and flight at night. See FAA press release.
Babst Calland is assisting energy industry clients with FAA rule implementation issues and strategy involving the use of small drones. Please contact Brianne Kurdock at (202) 853-3462 or by email at bkurdock@babstcalland.com, James Curry at (202) 853-3461 or jcurry@babstcalland.com, or Keith Coyle at (202) 853-3460 or kcoyle@babstcalland.com
Click here for PDF.
Pipeline Safety Alert
The Federal Aviation Administration (FAA) recently issued regulations permitting the use, with certain limitations, of small unmanned aircraft systems (small drones) for non-hobby and non-recreational purposes. On July 13, 2016, Congress passed several provisions specific to drone use by the energy industry as part of the reauthorization bill for the FAA.
FAA Reauthorization
On July 13, 2016, Congress passed the “FAA Extension, Safety, and Security Act of 2016 (the Bill)”. The Bill, which authorizes a short-term extension of the funding for the FAA, includes several provisions covering the operation of unmanned aircraft systems (i.e., drones). Of particular interest to the energy industry, Congress–
• Amends section 331 of the FAA Modernization and Reform Act of 2012. This particular statute previously defined “small unmanned aircraft” as weighing less than 55 pounds. The Bill amends this definition to clarify that the 55-pound limit “includ[es] everything that is on board or otherwise attached to the aircraft. ”
• Requires the Secretary of Transportation to establish a process within 180 days to allow applicants to petition the FAA to prohibit or restrict the operation of an unmanned aircraft “in close proximity to a fixed site facility.” A “fixed site facility” includes energy production, transmission, and distribution facilities and equipment, oil refineries, and chemical facilities.
• Requires the FAA to allow a person to apply to operate an unmanned aircraft system during the day or at night beyond the visual line of sight of the individual operating the aircraft as long as the operator is conducting the unmanned aircraft operation to ensure compliance with (1) federal or state regulatory requirements including surveys associated with permit applications for new pipelines; (2) the pipeline safety regulations (49 C.F.R. Parts 192 and 195); or (3) the requirement of any federal, state, or local regulatory body or industry standard related to the construction, ownership, operation, maintenance, repair, or replacement of “covered facilities.” Operators may also apply to operate the unmanned aircraft without visual line of sight if the operation is related to inspection, construction, maintenance or repair activities after a pipeline or electric energy infrastructure incident or the response or preparation for a natural disaster or severe weather event. Congress required the FAA to submit a certification within 90 days of enactment of the Bill demonstrating that a process has been established to facilitate these types of applications.
• Directs the FAA, Radio Technical Commission for Aeronautics (RTCA), and the National
Institute of Standards and Technology to develop consensus standards for identifying operators and owners of unmanned aircraft systems. Ultimately, the stakeholders should determine if it is feasible to create a publicly accessible online database of unmanned aircraft and their associated operators. The FAA has one year to report the status of these efforts to Congress and another year to develop guidance or regulations introducing these identification standards.
The Bill has been sent to President Barack Obama to be signed into law.
FAA Rule
On June 28, 2016, the FAA published a Final Rule permitting the operation of small drones in the National Airspace System (49 C.F.R. Part 107). The FAA defined a small drone as a “small unmanned aircraft (which, as defined by statute, is an unmanned aircraft weighing less than 55 pounds).”
In this Final Rule, FAA allows small drone operations for many non-hobby, non-recreational uses without requiring an airworthiness certificate, exemption, or certificate of waiver or authorization (COAs), as previously required. This Final Rule is critical for the energy industry because it provides an opportunity to use drones to conduct inspection and maintenance activities more safely and efficiently. The new regulations take effect on August 29, 2016.
Possible Uses
FAA envisions that operators could use small drones to monitor crops; inspect pipelines, power-lines, bridges, or antennas; aid certain rescue operations; or conduct aerial photography and wildlife nesting evaluations.
Applicability
Part 107 sets forth personnel, equipment, and operational safety requirements for small drones.
Operator Standards
The regulations set forth specific operating limitations and responsibilities of the “remote pilot in command,” “person manipulating the flight controls,” “visual observer,” and anyone else that may be directly participating in the operation. A small drone may be operated, in unregulated airspace and in certain regulated airspaces with prior authorization from Air Traffic Control, by a remote pilot in command duly licensed and trained pursuant to Part 107 certification requirements. A small drone may also be operated by an unlicensed person manipulating the controls with the direct supervision of a remote pilot in command.
Visual Line of Sight
A key requirement that raised considerable public comment to the Notice of Proposed Rulemaking was the “visual line of sight” requirement, which dictates that the remote pilot in command or person manipulating the controls must be able to see, without the aid of any device, the small drone at all times during flight. This requirement addresses FAA’s main safety concern, which is whether a person operating a drone would be able to “see and avoid” other aircraft. As a result, the small drone must be close enough to the remote pilot in command or person manipulating the controls to ensure the Part 107 visibility requirements are met. The regulations anticipate the use of a visual observer used to assist the pilot in command or person manipulating the controls to ensure that the small drone has a safe flight path. The visual line of sight requirements apply to the visual observer as well. There is a minimum weather visibility requirement of three miles from the control station.
Many commenters argued that current technologies, such as first-person-view technology, obviate the need for the visual line of sight requirement. Essentially, these commenters contend that a remote pilot in command or person manipulating the controls does not need to physically see the small drone to safely operate that device with the advent of navigation and control technologies such as onboard geo-fencing and autonomous flight technology. Accordingly, commenters supported relaxed visual line of sight requirements if the flight is conducted in a pre-defined area, such as a pipeline right-of-way, and the remote pilot in command is able to safely operate the small drone. In response, FAA stated that it does not currently have sufficient data to ensure such technologies would enable safe operation of a small drone without visual line of sight. However, an operator can apply for a certificate of waiver to permit operations without visual line of sight. FAA would review the use of geo-fencing or other technology during the waiver process to determine if a consistent level of safety exists.
As noted above, in the Bill, Congress requires the FAA to create a process by which operators of pipelines and other critical infrastructure could apply to use unmanned aircraft for the purposes of complying with federal or state regulations or responding to an incident without the visual line of sight requirement.
Daylight Use
A small drone cannot be operated at night, which is defined as the time between the end of evening civil twilight and the beginning of morning civil twilight. In response to the concern that much of Alaska could not conduct small drone flights for a large portion of the year, FAA has authorized twilight operations. When twilight operations, as defined in the Air Almanac, are conducted the small drone must be equipped with anti-collision lights capable of being visible for at least three miles. Like the visual line of sight requirements, FAA holds the authority to waive or relax these Part 107 limitations through the waiver process. As noted above, in the Bill, Congress requires the FAA to create a process by which operators of pipelines and other critical infrastructure could apply to use unmanned aircraft at night for the purposes of complying with federal or state regulations or responding to an incident.
Flight Limitations
Part 107 sets forth flight speed, height, and visibility limitations. Importantly, a small drone cannot be flown higher than 400 feet above ground level (or 400 feet above and in radius of a structure). Part 107 also prohibits the use of a small drone directly over a person not involved in the flight who is not under a safe cover, such as a structure or stationary vehicle. This requirement may result in a severe limitation on operations. The small drone must yield the right of way or “see and avoid” all other aircraft. Part 107 prohibits operation of a small drone from a moving vehicle whether on land or in water. However, there is one notable exception. FAA will allow use of a small drone in sparsely-populated areas. FAA holds the authority to waive or relax these Part 107 prohibitions through the waiver process.
Maintenance, Registration, Inspection, and Accident Reporting
All small drones must be properly maintained and registered as specified in Part 107. Prior to flight, the regulations require the remote pilot in command conduct an assessment of the operating environment, assess local weather conditions, perform equipment inspections, and hold crewmember briefings. All small drones are subject to FAA inspection, and certain defined accidents must be reported to FAA.
Waivers
FAA has concluded that the agency does not have sufficient data related to navigation and control technologies to justify across-the board use of small drones without visual line of sight and other operational limitations. Instead, FAA will rely upon waiver applications to evaluate potential operations outside of the requirements of the Final Rule.
To date, FAA has not specified the data needed to qualify for a particular waiver exemption but the agency has stated that it will post the Certificate of Waiver application on its website. FAA has indicated that it will strive to adjudicate all waiver submittals in 90 days, but anticipates that the time required for a determination will vary depending upon the complexity of the waiver request. It is also important to note that FAA has stated that a waiver may be conditionally granted or granted with limitations.
What’s Next?
According to the FAA, the Final Rule is only one step in a broader approach to integrate drones into the National Airspace System. For example, FAA has indicated that it will initiate a separate rulemaking to consider a performance-based standard that would allow certain drone operation over people. Prior to the issuance of additional regulations enabling widespread drone use, FAA anticipates the waiver process to serve as a bridging mechanism for new or advanced technologies. The waiver process will enable FAA to test emerging technologies on a case-by-case basis prior to future rulemakings.
Please contact us for further information about the application of these regulations to your operations.
Click here for PDF.
Administrative Watch
The United States Environmental Protection Agency’s (“EPA’s”) latest publication demonstrates that issues relating to environmental justice will have a significant impact on regulatory actions in the near future and will be an important topic during the public comment period for proposed rules. On June 7, 2016, EPA issued the publication Technical Guidance for Assessing Environmental Justice in Regulatory Analysis (“Guidance”), which recommends technical approaches that EPA analysts can use to incorporate environmental justice concerns during the rulemaking process.
EPA defines “environmental justice” as “the fair and meaningful treatment of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” When evaluating proposed regulatory actions, EPA recommends analysts conduct an initial screening of environmental justice concerns to determine the appropriate level of analysis through the rulemaking process. Specific consideration should be given to “proximity of sources to low-income populations, minority populations, and/or indigenous peoples, unique exposure pathways, and a history of environmental justice concerns associated with the pollutant being regulated.”
With respect to evaluating the environmental justice issues in Human Health Risk Assessments that are conducted to support a regulatory action, EPA’s new Guidance provides factors to consider when designing various assessments during the planning, scoping, and problem formulation portions of the rulemaking process. These assessments stress the importance of considering disproportionate impacts on certain population groups or demographics due to a potential for increased vulnerability and susceptibility to environmental stressors.
This Guidance complements EPA’s existing Environmental Justice Action Development Process Guide and is a significant component of “EJ 2020,” which is a broader strategy to advance and address issues of environmental justice by the year 2020. EPA is currently seeking comments until July 7, 2016 on its draft EJ 2020 Action Agenda, which proposes integrating environmental justice concerns to all EPA actions, including the rulemaking considerations found in the Guidance, as well as permitting and enforcement actions.
Babst Calland attorneys will be monitoring EPA’s use of the Guidance during the development of regulatory actions as well as EPA’s implementation of the EJ 2020 strategy in general. If you have any questions regarding the Guidance or its potential impact on future EPA rules and regulations, please contact Hetal Dhagat at 412-394-5423 or hdhagat@babstcalland.com, Amie Courtney at 412-394-6981 or acourtney@babstcalland.com or any of our other environmental attorneys.
Click here for PDF.
Pipeline Safety Alert
On June 22, 2016, President Obama signed into law the “Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016” (PIPES Act, S.2276). The PIPES Act reauthorizes the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) federal pipeline safety program through fiscal year 2019, provides PHMSA with significant new authority, and requires the agency to prioritize the completion of outstanding mandates from the previous reauthorization in 2011. Of note, the PIPES Act requires PHMSA to develop underground gas storage standards, provides PHMSA with significant new authority to issue industry-wide emergency orders, and requires PHMSA to update its regulations for Liquefied Natural Gas (LNG) facilities. Babst Calland’s Pipeline and HazMat Safety team provides the following observations on these key provisions.
Click here for PDF.