The U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) (Washington, DC) recently signed a final rule aimed at strengthening the operations, maintenance, and inspection of onshore hazardous liquid pipelines in the United States.
The final rule, “Pipeline Safety: Safety of Onshore Hazardous Liquid Pipelines” (RIN 2137-AE66),1 was signed on January 13, 2017, by then PHMSA Administrator Marie Therese Dominguez, who says the signing completed one of the agency's top priority rulemakings over the past year. In all, ~200,000 miles of hazardous liquid pipelines currently operate in the United States, the agency says.
“The changing energy environment in the United States requires that we all become increasingly anticipatory, predictive, and prepared for emerging risks,” Dominguez says. “This is a forward looking rule—it pushes operators to invest in increased data capabilities, to continuously improve their processes to assess and mitigate risk, and strengthens our framework for strong prescriptive regulations.”
According to the agency, the rule is designed to strengthen the standards that determine how operators repair aging and high-risk infrastructure; increase the quality and frequency of tests that assess the condition of pipelines; and extend leak detection requirements to onshore, transmission hazardous liquid pipelines that are not in high consequence areas (HCAs).
“As the use of hazardous liquid pipelines to transport the nation’s energy supply grows, communities around the country have demanded regulatory certainty around the safe operation of these lines and facilities,” says former U.S. Transportation Secretary Anthony Foxx. “This rule gives operators clear direction on the design, construction, and operation of hazardous liquid pipelines lines and holds them accountable for the safety of the communities they serve. Its full implementation will be a vital step in driving our pipeline safety mission.”
Both Foxx and Dominguez, nominated to their posts by former U.S. President Barack Obama, were serving in those roles at the time of the January signing.
Six Years in the Making
As justification for the rule, PHMSA cited a crude oil spill in 2010 near Marshall, Michigan, in which at least 843,000 gal (3,191,102 L) of crude were released—significantly affecting the Kalamazoo River. In response to the accident investigation, PHMSA sought to amend existing regulations for hazardous liquid pipelines by closing regulatory gaps and ensuring that operators increase the detection and remediation of pipeline integrity threats, as well as mitigate any adverse effects of pipeline failures.
The final rule, signed in January 2017, was the culmination of a multi-year process. As the new rule was being developed, public input and comments were solicited for several aspects of the rule through an advanced notice of proposed rulemaking (ANPRM) published by PHMSA on October 18, 2010 in in the Federal Register.
The final rule also addresses elements of the U.S. Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, a broad mandate that asked PHMSA to complete studies on topics including existing federal and state regulations on gathering lines; on automatic shutdown and remote control valves; expanding integrity management requirements beyond HCAs; and on the leak detection systems used by hazardous liquid operators. PHMSA submitted results of the valve and leak detection studies to Congress in December 2012, the gathering line study in May 2015, and the integrity management study in April 2016.
In addition to the Congressional mandates, the U.S. National Transportation Safety Board (NTSB) (Washington, DC) issued its own recommendations in a final report in July 2012 related to the accident in Marshall, Michigan. Specifically, the NTSB called for a “discovery of condition” recommendation. In cases where a determination about pipeline threats had not been obtained within 180 days following the date of inspection, it would require pipeline operators to notify PHMSA and provide an expected date when adequate information would become available.
Also in 2012, the U.S. Government Accounting Office (GAO) issued a recommendation that the U.S. transportation secretary direct PHMSA to collect data from operators of federally unregulated onshore hazardous liquid and gas gathering pipelines, subsequent to an analysis of the benefits and industry burdens associated with data collection.
In October 2015, PHMSA published its notice of proposed rulemaking (NPRM), which incorporated those advisements, and in the following months sought public comments on the proposed changes.
Summary of the New Rules
In response to that process, PHMSA developed seven amendments to prior U.S. regulations for hazardous liquid pipelines. The first two amendments extend reporting requirements to certain liquid gravity and rural gathering lines that were not previously regulated by PHMSA, thereby allowing the agency to determine whether existing federal and state rules are sufficient.
The third amendment requires inspections of pipelines in areas affected by extreme weather, natural disasters, and other similar events—whether they be onshore or offshore, or in an HCA or outside an HCA.
The fourth amendment calls for integrity assessments to be conducted at least once every 10 years, using inline inspection (ILI) tools or other technologies on onshore, piggable, transmission segments located outside of HCAs. Prior regulations required operators to only assess segments inside HCAs.
“These assessments will provide important information to operators about the condition of these pipelines, including the existence of internal and external corrosion and deformation anomalies,” PHMSA writes.
The final amendments mandate an expanded list of conditions that require immediate repair in HCAs; an extension to the required use of leak detection systems beyond HCAs to all regulated transmission pipelines; and a requirement that all pipelines in or affecting HCAs be capable of accommodating ILI tools within 20 years, unless the basic construction of the line cannot be modified to permit that. “[ILI] tools are an effective means of assessing the integrity of a pipeline, and broadening their use will improve the detection of anomalies and prevent or mitigate future accidents in high-risk areas,” PHMSA writes.
Finally, the rule also aims to clarify other regulations and improve regulatory certainty and compliance, according to the agency.
Costs, Benefits of Compliance
In its cost analysis, PHMSA estimates that up to 471 hazardous liquid operators could incur costs to comply with the proposed rule, with annual costs for individual mandates ranging from between $5,000 and $9.5 million, with an aggregate cost of ~$17.6 million for all requirements.
“These wide ranges exist because the requirements vary in scope, in addition to compliance cost,” PHMSA explains. “For example, some requirements apply only to pipelines within HCAs, others only to those outside HCAs, or some to both. Other requirements apply only to onshore pipelines, while others to both onshore and offshore. Accordingly, the length of pipeline, and the number of operators affected both vary for the different requirements.”
PHMSA says the information reporting requirements will provide the agency with more information to better inform regulators. Moreover, prevention benefits should include reduced injuries and fatalities, cleanup and response costs, property damage, product losses, and environmental impacts.
The final rulemaking was transmitted to the U.S. Federal Register for publication, but it was withdrawn on January 24, 2017, following the inauguration of President Donald Trump. Before its publication in the Federal Register, the final rule must also be reviewed by a member of the Trump administration.2 This applies to all regulations that had been sent to the Federal Register but not yet published.
The effective date of the amendments would be six months after the Federal Register publication.
Source: Pipeline and Hazardous Materials Safety Administration, phmsa.dot.gov.
References
1 Department of Transportation, Pipeline and Hazardous Materials Safety Administration, “Pipeline Safety: Safety of Hazardous Liquid Pipelines,” Docket No. PHMSA-2010-0229, January 2017.
2 Office of Management and Budget, “Memorandum for the Heads of Executive Departments and Agencies; Regulatory Freeze Pending Review,” Federal Register 82, 14 (2017): p. 8346.