Pipeline and Hazardous Materials Safety Administration Reauthorized

by Morgan Lewis
Contact

Morgan Lewis

The newly enacted legislation further bolsters PHMSA’s growing oversight of storage and pipeline transport facilities.

On June 22, US President Barack Obama signed the Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (PIPES Act) into law.[1] As enacted, the PIPES Act reauthorizes the Pipeline and Hazardous Materials Safety Administration’s (PHMSA’s) administrative oversight of the transportation of hazardous materials, including the operation, maintenance, and spill response planning of US natural gas and hazardous liquid transportation pipelines. The PIPES Act reauthorizes PHMSA for four additional years (until 2019) and also seeks to enhance product transportation safety by improving communication and collaboration among PHMSA, pipeline regulators, and nonfederal stakeholders. The PIPES Act also expands PHMSA’s authority to include underground storage of natural gas.

Background 

In September 2015, funding for PHMSA’s authority under the Pipeline Safety Act expired, thereby necessitating congressional action that would reauthorize funding for PHMSA’s operations. At the time, several mandates that Congress issued to PHMSA in the 2011 Pipeline Safety, Regulatory Certainty, and Job Creation Act had yet to be addressed, and events preceding expiration of PHMSA’s funding authorization indicated that Congress might consider imposing new directives on PHMSA designed to ensure that it fulfilled its statutory role. Between June 9 and July 7, 2015, (i) the US House of Representatives passed legislation containing funds specifically reserved for PHMSA to use to address long overdue mandates, (ii) members of the House and US Senate requested oversight hearings into PHMSA’s reauthorization and requested information from PHMSA officials concerning the status of overdue gas and hazardous liquid safety rules, and (iii) the House Subcommittee on Energy and Power held a pipeline safety hearing to discuss PHMSA’s progress in implementing reforms required in the 2011 legislation.

In addition, several incidents involving the transport and storage of products received widespread attention and became subject to public debate while Congress was simultaneously considering new funding for PHMSA following the September 2015 expiration.

PIPES Act

The PIPES Act represents financial reauthorization for PHMSA to enable PHMSA to continue operating while also expanding its authority and requiring it to comply with several new directives. The PIPES Act contains several policy initiatives implemented through directives to PHMSA in addition to the congressional funding reauthorization.

First, the PIPES Act seeks to reduce or eliminate the need for congressional information requests or oversight hearings by requiring that PHMSA provide certain congressional committees with updates concerning rulemaking timelines, constraints affecting the rulemaking process, and any other details affecting the progress of the rulemaking process with respect to outstanding regulations.

Second, under the PIPES Act, PHMSA is required to comply with various directives that are either new or were unaddressed following the 2011 Pipeline Safety, Regulatory Certainty, and Job Creation Act. Key mandates include the following:

  • Section 60141 of the PIPES Act specifically directs PHMSA to issue minimum safety standards for underground natural gas storage facilities within two years of the PIPES Act’s enactment date. The PIPES Act provides that an entity operating a facility subject to those standards may be assessed a user fee on an annual basis, to be deposited into an underground storage facility safety fund.
  • PHMSA is required to create a research and development program for pipeline facility integrity that permits collaborative research and development projects between the PHMSA and nonfederal entities.
  • PHMSA must convene a working group to consider the development of a voluntary no-fault information-sharing system to encourage collaborative efforts to improve inspection information feedback and information sharing regarding natural gas transmission and hazardous liquid pipeline integrity risk analysis.
  • PHMSA must establish a database that will improve communication and collaboration between PHMSA and pipeline regulators.

Third, the PIPES Act mandates that PHMSA establish a task force composed of one representative from each of the US Department of Transportation, US Department of Health and Human Services, US Environmental Protection Agency, US Department of Interior, US Department of Commerce, and the Federal Energy Regulatory Commission. The task force must submit a report to various congressional committees that includes, among other information, an analysis of factors concerning natural gas storage leaks, mitigation measures to stop such leaks, and an assessment on a leak’s effect on the environment, wholesale and electricity prices, and reliability of the bulk-power system.

With respect to funding, the PIPES Act substantially increases PHMSA’s funding and authorizes the allocation of between $124 million and $134 million for fiscal years 2016 through 2019. In addition, the PIPES Act authorizes operational expenses that exceed $20 million in each fiscal year between 2016 and 2019 and earmarks certain funding for stated purposes, such as making grants (approximately $8 million per fiscal year) or carrying out a new mandate concerning underground natural gas storage facilities (approximately $8 million, as discussed further below).

Implications

The PIPES Act is a clear effort by Congress to expand and strengthen PHMSA’s oversight authority and put in place measures that enable PHMSA to provide timely information about the status of its efforts required by federal statute. The PIPES Act’s provisions that require PHMSA to create minimum standards for underground natural gas storage are particularly instructive because they reflect congressional concern for the number and magnitude of transportation (and storage) incidents that have occurred in recent years.

In March 2016, PHMSA itself reacted to these incidents when it addressed a 2011 congressional directive by issuing a Notice of Proposed Rulemaking that proposed significant, far-reaching changes to natural gas pipeline safety regulations. Among the many reforms PHMSA proposed, it proposed to (i) regulate pipelines constructed prior to 1970, which PHMSA had previously exempted; (ii) impose additional requirements for regulated pipelines; (iii) implement several nonintegrity management-related changes, including adding requirements for monitoring gas quality, mitigating internal corrosion, and creating external corrosion management programs; and (iv) fundamentally alter its gas-gathering regulatory scheme so that previously unregulated pipelines (such as gathering lines) would potentially be subject to PHMSA regulation. But PHMSA’s authority in these endeavors was limited—Congress has resolved much of that limitation with this new legislation.

Thus, going forward, we expect that PHMSA will continue to assert a more active role concerning pipeline and hazardous material transportation (and now storage, as well) oversight. In turn, PHMSA’s regulations are now relevant to some industry participants that previously were not subject to PHMSA’s authority.


[1] Protecting our Infrastructure of Pipelines Enhancing Safety Act of 2016, S.2276 (2016).

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morgan Lewis | Attorney Advertising

Written by:

Morgan Lewis
Contact
more
less

Morgan Lewis on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.