ATLP Highlights – Hazmat

In a year like no other, 2020 saw the advancement of numerous pipeline safety initiatives at the Pipeline and Hazardous Materials Safety Administration (PHMSA).  In early 2020, PHMSA issued a Final Rule adopting safety standards applicable to underground natural gas storage facilities, which was required by the PIPES Act of 2016.  Among other things, the Final Rule requires operators to apply integrity and risk management principles to storage facilities, narrows certain reporting requirements, and clarifies compliance with respect to non-mandatory industry practices.  In 2020, PHMSA also published four major Notices of Proposed Rulemaking (NPRM): Liquid Pipeline Regulatory Reform, which would modify the agency’s enforcement and regulatory procedures, regulations governing facility response plans for oil pipelines, and safety regulations applicable to hazardous liquid pipelines; Gas Pipeline Regulatory Reform, which would modify a number of reporting and safety regulations applicable to gas pipelines; Requirements for Valves and Rupture Identification and Mitigation, which proposes new requirements to install remote-control valves, automatic shutoff valves, or equivalent technology on newly-constructed or entirely-replaced onshore gas transmission and certain hazardous liquid pipelines, and would impose new rupture and mitigation standards; and Class Location Requirements, which would permit an alternative approach to managing the safety of certain gas transmission pipelines whose class locations change from Class 1 to Class 3.  The comment deadline has closed for each proposed rule.  

Several regulatory initiatives remain pending as the close of 2020 draws near.  PHMSA currently has five pending Final Rules, including the second and third parts of the agency’s Gas Transmission Rule.  According to the Spring 2020 Unified Agenda maintained by the Office of Information and Regulatory Affairs (OIRA), the Final Rules for Liquid Pipeline Regulatory Reform, Requirements for Valves and Rupture Identification and Mitigation, as well as the remainder of the Gas Mega Rule, may be published in April 2021.  The Gas Pipeline Regulatory Reform Final Rule could possibly be published later this month, according to OIRA. It is uncertain whether the transition to a new presidential administration will affect the issuance of these pending rules.

Another item to watch is legislation to reauthorize the Pipeline Safety Act, which many hope could be passed in early 2021, or possibly sooner.  This past weekend, the respective House and Senate committees reached an agreement on the final text of the proposed “PIPES Act of 2020.”  The bill authorizes funding of PHMSA’s pipeline safety program through the year 2023.  The bill contains a number of provisions designed to minimize the risk of overpressurization of distribution facilities and contains provisions that are intended to reduce natural gas emissions from pipelines.  The bill also would require PHMSA to review its safety regulations applicable to LNG facilities and would adopt a number of procedural requirements applicable to enforcement proceedings.  Some of the other more controversial proposals—such as raising the daily civil penalty limit from $218,647 to $2 million per day/per violation, reducing the standard for criminal liability, and authorizing civil actions against PHMSA to compel performance of nondiscretionary duties—were not included in the final text of the bill.  The legislation still needs to be passed by both houses of Congress and signed by the President, but prospects for passage look optimistic.

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