PHMSA Issues New Advisory Bulletin Covering “Purged but Active” Pipelines

Today, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published an Advisory Bulletin entitled  “Clarification of Terms Relating to Pipeline Operational Status.”  Section 23 of the PIPES Act required PHMSA to issue an ADB within 90 days of enactment summarizing the procedures for changing the status of a pipeline facility from “active” to “abandoned”.  Historically, PHMSA has stated that it does not recognize “idle” status for pipelines (only active or abandoned).  PHMSA’s ADB introduces the concept of “purged but active” status, arguably a new category for operational status.  The ADB states that PHMSA is considering a future rulemaking requiring operators to notify the agency of “purged but active” pipelines, but that in the meantime “owners or operators planning to defer certain activities for purged pipelines should coordinate the deferral in advance with regulators.”  PHMSA’s guidance on integrity management currently allows deferral of certain inspection activities for out-of-service pipe.

Pipeline Safety Alert: Congress and the FAA Ease the Way for Use of Drones by the Energy Industry

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.  Babst Calland’s Pipeline and HazMat Safety team has prepared a Pipeline Safety Alert noting observations on some of the key provisions in the FAA Extension, Safety, and Security Act of 2016.

PHMSA Releases New Crude By Rail Rulemaking Proposal

On July 13, 2016, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) released an advance copy of a rulemaking proposal that would amend the oil spill response plan requirements in 49 C.F.R. Part 130 and establish new information sharing requirements for high-hazard flammable trains in 49 C.F.R. Part 174.  The proposal would also incorporate by reference a new test method for determining the initial boiling point of crude oil and other flammable liquids to ensure consistency with the American National Standards Institute/American Petroleum Institute Recommend Practice 3000, “Classifying and Loading of Crude Oil into Rail Tank Cars,” First Edition, September 2014.  PHMSA is providing a 60-day period for submitting comments on the proposal, which runs from the date of its publication in the Federal Register.

PHMSA Increases Maximum Civil Penalties for Violations of Pipeline Safety Laws and Regulations

On June 30, 2016, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued an interim final rule, effective August 1, 2016, titled “Pipeline Safety:  Inflation Adjustment of Maximum Civil Penalties.”  This interim rule increases the maximum administrative civil penalties that may be issued for a violation of the pipeline safety laws and regulations from $200,000.00 per violation per day up to $205,638.00, and from $2 million for a related series of violations up to $2,056,380.00.  The interim rule also increases the maximum for the additional civil penalties applicable to violations of PHMSA’s LNG regulations from $50,000.00 to $75,123.00 and increases the maximums for violations of the pipeline safety whistle blower protection laws from $1,000.00 to $1,194.00.  PHMSA issued the rule pursuant to the “Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015” and used a multiplier of 1.02819 pursuant to guidance provided by the Office of Management and Budget in order to calculate the increase.

Pipeline Safety Alert: Reauthorization Bill Provides PHMSA with Significant New Authority

On June 22, 2016, the President signed into law the PIPES Act, reauthorizing the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) federal pipeline safety program through fiscal year 2019.  Among several amendments to the Pipeline Safety Laws, the PIPES Act provides PHMSA with significant new authority to issue industry-wide emergency orders and requires PHMSA to develop underground gas storage standards.  Babst Calland’s Pipeline and HazMat Safety team has prepared a Pipeline Safety Alert offering observations on some of the key provisions in the PIPES Act.

Issuance of PHMSA Corrosion Control Advisory Bulletin (ADB-2016-04) (PHMSA-2016-0071)

On June 15, 2016, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued an advisory bulletin to pipeline operators related to the effectiveness of coating and corrosion control measures on buried, insulated pipelines. PHMSA’s advisory bulletin responds to a recent pipeline failure and oil spill in California. The failure involved a buried oil pipeline coated with coal tar urethane and covered with tape wrapped foam insulation. The pipeline was insulated because it carried high-viscosity crude that required heat in order to transport. PHMSA found that the pipeline ruptured because of external corrosion that occurred under the pipeline’s coating system. PHMSA also found that this corrosion was facilitated by wet dry cycling. PHMSA’s Failure Investigation Report is here.

PHMSA indicates that corrosion under insulation (CUI) is an integrity threat that is difficult to address through conventional cathodic protection systems and can lead to accelerated corrosion and stress corrosion cracking. PHMSA recommends that operators review their operating, maintenance, and integrity management activities to ensure that their buried, insulated pipelines have effective coating and corrosion control systems. PHMSA recommends that operator procedures consider the need for corrosion control systems that prevent moisture buildup, coatings that avoid cathodic protection “shielding,” advanced ILI data analysis to account for CUI, ILI data analysis and excavations to accurately assess corrosion as outlined in API Standard 1163, and additional or more frequent reassessment intervals for pipelines with known susceptibility to moisture retention.

For more information please contact Jim Curry, Keith Coyle or Brianne Kurdock of our Pipeline and HazMat Safety Practice.

PIPES Act Sent To President For Signature

On June 13, the U.S. Senate unanimously approved the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act) legislation that reauthorizes the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) federal pipeline safety program through fiscal year 2019 and contains a number of amendments to the Pipeline Safety Act.   The U.S. House of Representatives passed the PIPES Act last week, and the bill will now be sent to the President for his signature.

Among the more noteworthy provisions, Section 12 of the PIPES Act requires PHMSA to develop underground gas storage standards within two years and authorizes the collection of user fees from operators of these facilities.  Section 16 also provides PHMSA with significant new authority to issue industry-wide emergency orders if an unsafe condition or practice results in an imminent hazard, meaning a substantial likelihood that death, serious injury, severe personal injury, or a substantial endangerment to health, property or the environment may occur.  PHMSA may use emergency orders to impose operational restrictions, prohibitions or safety measures.  While PHMSA can issue these emergency orders without a prior hearing, the legislation provides for an expedited process of administrative and judicial review.

Stay tuned for further updates once the PIPES Act of 2016 is signed into law.

Pipeline Safety Alert: Five Questions About PHMSA’s Proposed Rules for Gas Transmission and Gathering Lines

On March 17, 2016, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a pre-publication version of its long-awaited notice of proposed rulemaking (NPRM) for gas transmission and gathering lines.  The 549-page NPRM has been issued in response to issues raised in National Transportation Safety Board recommendations, congressional mandates, and Government Accountability Office reports.  PHMSA has provided a short, 60-day comment period, which will be a challenge to those developing comments on a proposed rule of this complexity and length.  For more information, read our Pipeline Safety Alert.

Pennsylvania Governor Tom Wolf Creates Task Force on Pipeline Infrastructure Development

On May 27, 2015, Pennsylvania Governor Tom Wolf announced the formation of a task force to help the Commonwealth, the natural gas industry and communities partner for the development of new pipeline infrastructure to allow natural gas and related byproducts to more effectively reach the market.  The task force will focus on creating a series of best practices for the planning, siting and routing of pipelines.  It is projected that Pennsylvania may see the construction of up to 25,000 miles of gathering lines in the next decade, and possibly another 4,000 to 5,000 miles of midstream and transmission lines.  John Quigley, the acting Secretary of the Pennsylvania Department of Environmental Protection, will serve as chairman of the task force.  The Governor will seek representatives from state agencies, the legislature, federal and local governments, the pipeline and natural gas industries and environmental groups to join the task force.  Some of the goals of the task force are to plan construction practices that reduce environmental impact, establish a predictable and efficient permitting process, develop long-term operations and maintenance plans and engage in meaningful public participation.

National Transportation Safety Board Identifies Pipeline Safety as Key Issue

The National Transportation Safety Board (NTSB) has included “enhancing pipeline safety” on its 2014 Most Wanted List, which identifies its top 10 priorities for the year.  The NTSB warns that although “[p]ipelines remain one of the safest and most efficient means of transporting vital commodities . . . the consequences can be tragic when safe operational practices are not employed and standards are not implemented.”  Hydrostatic pressure testing, remote controlled and automatic shutoff valves and improved communications between pipeline operators  and emergency responders are among the suggested improvements to promote safe operation of pipelines.  Recent pipeline incidents like the rupture of a natural gas transmission pipeline near Interstate 77 in Sissonville, West Virginia, on December 11, 2012, have contributed to the NTSB naming pipeline safety as one of its top priorities for 2014.

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