Like San Bruno, Aliso Canyon Prompts Enhanced Pipeline Safety Act with Few Meaningful Deadlines

June 27, 2016

On June 22, President Obama signed into law a new pipeline safety bill — the “Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016,” known as the PIPES Act of 2016. The law reauthorizes and funds the Pipeline and Hazardous Materials Safety Administration (PHMSA) through fiscal year 2019.

The PIPES Act’s most noteworthy provision, which was inspired in part by the recent Aliso Canyon gas leak, directs PHMSA to issue minimum safety standards applicable to gas storage fields. Otherwise, the law does little more than require studies and encourage PHMSA — through the creation of yet another layer of bureaucracy — to move faster on pipeline safety overhauls that were originally mandated by the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011. The 2011 legislation, in turn, was passed partly as a response to the devastating 2010 explosion in San Bruno, California, of a gas transmission line.

The latest pipeline safety law includes various provisions aimed at enhancing information sharing, data compilation, and industrywide collaboration. In its more significant provisions, the act:

Applies pressure to the U.S. Department of Transportation (DOT) to issue new pipeline safety rules that were mandated years ago. The PIPES Act requires DOT to make public, at regular 90-day intervals, the status of (and considerable details regarding work on) any outstanding final rules, including those required by the PIPES Act and the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011. Of the 42 rulemakings and studies required by the 2011 legislation, roughly half are outstanding. And although PHMSA issued an extensive notice of proposed rulemaking (NPRM) in March 2016 addressing such significant gas pipeline issues as corrosion control and longitudinal weld seams, other key issues — including quality management systems and the required installation of automatic or remote-controlled shutoff valves — have once again been held over.  

Establishes a task force charged with reporting on the Aliso Canyon leak. The PIPES Act requires the Secretary of Energy, within 15 days of its enactment, to establish and lead a task force on the Aliso Canyon natural gas leak. The task force will include representatives from DOT, the Department of Health and Human Services, the Environmental Protection Agency (EPA), the Department of the Interior, the Department of Commerce, the Federal Energy Regulatory Commission (FERC), and state and local governments. It is required to produce a final report within 180 days of the PIPE Act’s enactment. Among other things, the report must address the leak’s cause; the propriety of the response of federal, state, and local actors; the effect of the leak on health, safety, and electricity prices; the potential for future leaks; and recommendations regarding effective, coordinated responses to future leaks.

Directs the Secretary to regulate gas storage facilities like those at Aliso Canyon. The new legislation also requires, within two years, the issuance of minimum safety standards for “underground natural gas storage facilities,” which it newly defines. In developing the standards, the Secretary of Transportation is to consider the economic effect on end users (which should not be “significant”) and the recommendations of the Aliso Canyon task force. The PIPES Act also imposes a user fee on storage facility operators, which will be used to offset the cost of establishing and implementing the new standards.  

Provides the Secretary with authority to issue “emergency orders” without notice or an opportunity to be heard. The new law also gives the Secretary of Transportation authority to enter emergency orders imposing “restrictions, prohibitions, and safety measures” on pipeline operators without prior notice or an opportunity for a hearing, “but only to the extent necessary to abate the imminent hazard.” “Imminent hazard” is defined as a substantial likelihood that death, serious illness, severe personal injury, or a substantial endangerment to health, property, or the environment may occur. The entity subject to the order may subsequently petition the Secretary for review; if PHMSA does not make written findings within 30 days of the petition’s filing, the emergency order expires automatically. If, on the other hand, PHMSA concludes in writing that the hazard still exists, the operator may seek expedited judicial review in a U.S. district court. 

Many industry users expect PHMSA to issue such orders only sparingly. There is no question, however, that the new provision marks a significant expansion of its powers.

Obligates inspectors to communicate with owners and operators. The PIPES Act requires regulators conducting PHMSA pipeline safety inspections (whether state or federal) to advise operators of the results of those inspections informally within 30 days. Within 90 days, “to the extent practicable,” the inspecting authority must also provide its preliminary findings in writing.

Requires PHMSA to clarify pipeline retirement rules. The new legislation requires PHMSA, within 90 days of enactment, to issue an advisory bulletin regarding precisely what pipeline owners and operators must do to effect a change in the status of a facility from active to abandoned.

Designates the Great Lakes and coastal beaches and waters as areas “unusually sensitive to environmental damage.” The PIPES Act amends 49 U.S.C. § 60109(b)(2) to explicitly include the Great Lakes, coastal beaches, and marine coastal waters among the locations that the Secretary should consider classifying as unusually sensitive to environmental damage, and it directs PHMSA to revise the regulatory definition in 49 CFR § 195.6(b) accordingly. Known as “USAs,” such unusually sensitive areas are automatically afforded the status of a “high consequence area” by 49 C.F.R. § 195.450(4).

Mandates additional integrity assessments of selected pipelines. The new legislation amends 49 U.S.C. § 60109 to require the operators of hazardous liquid pipelines to conduct integrity assessments on pipelines in high consequence areas using 1) internal inspection technology, at least once every 12 months, and 2) other methods, such as direct assessments and pressure tests, as often as is warranted by the pipeline’s risk profile. The requirement applies only to underwater hazardous liquid pipelines any part of which is at a depth greater than 150 feet but which is not offshore.

Directs changes for liquefied natural gas pipelines. The PIPES Act requires an update to the minimum safety standards prescribed by 49 U.S.C. § 60103 applicable to permanent, small-scale liquefied natural gas pipeline facilities. It also amends 49 U.S.C. § 60103(a) to obligate the Secretary of Transportation to consider national security when deciding on the location of new liquefied natural gas pipelines.

Affects hazardous liquid spill response. The PIPES Act also requires operators of hazardous liquid pipeline facilities, following a spill, to provide safety data sheets to federal and emergency responders within six hours of giving notice of the spill to the U.S. Coast Guard National Response Center. In addition, the law requires onshore oil pipeline operators to include, in the response plans required by 49 CFR Part 194, procedures for responding to discharges into navigable waters and onto their adjoining shorelines, including waters and shorelines that may be covered by ice. 

Requires studies and reports — lots of them. The PIPES Act requires the delivery to Congress of the following studies and reports, most on a 12- or 24-month timeline. Though in a few instances Congress directs the Secretary of Transportation to implement new procedures depending upon the results, in most cases the mandated studies seek knowledge for knowledge’s sake, and foreshadow future legislative and regulatory activity.

  • A report by the Government Accountability Office (GAO) on the costs and benefits of various changes to the regulations applicable to gas transmission and gathering lines. Those changes were proposed in PHMSA’s March 2016 NPRM and are now in the public comment period. They include modifications to 49 U.S.C. § 60109’s integrity management program and were prompted by the San Bruno incident in September 2010, as well as various mandates in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011. The GAO’s report is not required until 18 months after publication of a final rule.  
  • A report by the GAO regarding integrity management plans for hazardous liquid pipelines, revisions to which — like the proposed changes to safety laws applicable to gas transmission and gathering lines —were proposed in a PHMSA NPRM dated October 1, 2015. The changes under consideration include an expanded definition of high consequence area.
  • A study by the Secretary of Transportation (and, within one year of the PIPES Act’s enactment, a report) regarding how technology might improve one-call systems and other programs aimed at preventing excavation damage to pipelines and pipeline coatings. The study is to focus on improved location, mapping, excavation, and communications practices; for example, it should address how GPS and mobile devices could be used to minimize the risk of excavation damage.
  • Also within one year of enactment, a review by DOT’s inspector general of PHMSA’s staffing needs and hiring practices, as well as recommendations for ameliorating hiring and retention challenges.
  • A study, within one year of enactment, by the Secretary of Transportation of the feasibility of a national pipeline safety regulatory inspection database. The PIPES Act also authorizes the establishment of such a database, if the Secretary determines that one is warranted.
  • A report by the DOT’s inspector general on the issuance of grants, authorized by 49 U.S.C. § 60130, to local communities and nonprofits for engineering and other scientific analysis of pipeline safety issues between 2010 and 2015. The report is due within 180 days of the PIPES Act’s enactment.
  • A report by the Comptroller General on materials, training, and corrosion prevention technologies for gas and hazardous liquid pipelines, not later than two years after enactment.
  • Within 18 months, a study by DOT’s inspector general regarding interagency and public-private research and development efforts regarding pipeline integrity. The PIPES Act also 1) amends Section 12 of the Pipeline Safety Improvement Act of 2002 to refine federal-nonfederal ratios of the monies funding such research and 2) directs the Secretary of Transportation to take certain steps aimed at preventing conflicts of interest and securing peer review of study results.
  • Within two years, a study by the Comptroller General of the state pipeline safety agreements authorized by 49 U.S.C. § 60106, with an emphasis on relative staffing and costs.
  • A study by the Transportation Research Board of the National Academies, to be delivered within two years of enactment, of the safety and best practices (among other things) applicable to pipelines that transport or store only propane gas or mixtures of propane and air to 100 or fewer customers.
  • Within two years, a report by the Comptroller General on the feasibility, costs, and benefits of odorizing all combustible gas in pipelines.
  • Within one year, a report by PHMSA on the metrics provided to it related to lost and unaccounted for natural gas from distribution pipelines, and an analysis of whether different reporting and measures would resolve safety issues or reduce end users’ costs. If PHMSA concludes that such different measures would “significantly improve” reporting and measurement, the 2016 PIPES Act requires it to implement those recommendations, via regulation, with one year of making the determination. 
  • A report by PHMSA on state-level policies that encourage or discourage the repair of leaking natural gas pipelines and recommendations for accelerating the repair and replacement of such pipelines. The report must consider the economic impact on end users of implementing PHMSA’s recommendations. If PHMSA concludes that those recommendations would “significantly improve” pipeline safety, it has one year in which to implement them.