On June 22, 2016, the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act) was signed into law.  The new law reauthorizes the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) for four years (and authorizes the appropriation of roughly half a billion dollars in support of PHMSA activities through 2019), but more importantly, it identifies new priorities for the agency, grants more extensive authority to act quickly to address imminent hazards, mandates increased stakeholder engagement, and requires more frequent reporting to facilitate Congressional oversight.

Emergency Orders

Under Section 16 of the PIPES Act, if an unsafe condition or practice presents an “imminent hazard,” the Secretary of Transportation may now issue an emergency order without prior notice or the opportunity for a hearing.  The Act defines an “imminent hazard” as a condition that (a) “presents a substantial likelihood that death, serious illness, severe personal injury, or a substantial endangerment to health, property or the environment,” and (b) cannot be addressed quickly enough under a “formal proceeding.”  Thus, the PIPES Act aims to make PHMSA more nimble if circumstances require emergency action.  An operator or owner who receives an emergency order may petition for its review, triggering a 30-day deadline for PHMSA to substantiate the continuing existence of the imminent hazard.  However, the filing of a petition does not stay the order. Stakeholders will watch PHMSA’s implementation of this expanded authority with interest, particularly if the agency issues an order that covers multiple operators or entire sectors of the industry.

Underground Natural Gas Storage

In the wake of the Aliso Canyon gas storage facility leak, the PIPES Act establishes additional priorities for PHMSA.  The agency must issue regulations that will overlay minimum safety standards on a regulatory regime previously managed by the States.  As it already does for gas and hazardous liquid pipelines, PHMSA may authorize individual States to undertake underground natural gas storage regulation, and such regulation may be more stringent that the federal standards.  The PIPES Act also directs PHMSA to set procedures for collecting fees to administer the new program.

Inspections

The new law sets deadlines for engagement with owners and operators after PHMSA or an authorized state completes a pipeline safety inspection.  A post-inspection briefing must occur with 30 days after the inspection.  No later than 90 days after the inspection, the inspecting agency must, “to the extent practicable,” issue written preliminary findings.

Deadlines

The PIPES Act recognizes that PHMSA has not yet addressed all of the priorities set in an earlier 2011 authorization law, including the anticipated finalization of PHMSA’s pipeline safety rule modernization proposal and potentially additional rules governing leak detection and automatic shutoff valves.  Nonetheless, the new law imposes a lengthy list of additional deadlines for rulemaking, studies or reports to Congress:

August 2016 – Issue temporary rules governing emergency order authority

October 2016 (and every 90 days until completion of applicable rules) – Publish on its website a status update on “each outstanding regulation” under either PIPES or the 2011 authorization law

December 2016 – Convene workgroup on voluntary information-sharing system development

March 2017 – Issue final emergency order regulations

June 2017 – 

• Complete study on technological improvements to prevent excavation damage and enhance damage prevention programs, and report to Congress on study findings
• Report to Congress on options for establishing a national database for pipeline safety inspections
• Report on metrics for “lost and unaccounted for natural gas”  (i.e., leaks) from distribution systems
• Conduct state-by-state review of natural gas pipeline and system leak policies

October 2017 – Issue the first of three annual reports to Congress on missed deadlines

June 2018 – 

• Issue final minimum safety standards for underground natural gas storage facilities
• If the natural gas leak reporting study determines that revision to the reporting system will significantly improve accountability and safety, issue regulations for system revisions
• If leak policy study identifies options that will significantly improve pipeline safety, issue rules to implement study recommendations
• Complete study of corrosion protection technologies for gas and hazardous liquid pipelines, and report to Congress on findings
• Complete study of small petroleum gas pipeline facilities best practices, and report to Congress on findings
• Complete study of options for odorization of all combustible gas in pipeline transportation, and report to Congress on findings

Congress also included deadlines for reporting on integrity management programs 18 months after completion of related rulemakings already underway.  PHMSA must also update its minimum safety standards for “permanent, small scale” LNG facilities.  Woven throughout the new list of studies, regulations and workgroups are mandates to include stakeholders, including industry representatives.

Even if PHMSA did not already have a full plate of unfinished 2011 priorities, the PIPES Act deadlines would present an ambitious agenda.  Slippage seems almost inevitable, making it likely that agency leadership will spend even more quality time with Congressional committees over the next several years.