GAO Releases Report on Mega Rule Regulatory Recommendations

April 9, 2024

On April 3, 2024, the U.S. Government Accountability Office (GAO) released a report titled “Gas Pipeline Safety: Better Data and Planning Would Improve Implementation of Regulatory Changes.” The report, GAO-24-106690, concerned the Pipeline and Hazardous Materials Safety Administration’s (PHMSA’s) Mega Rule — a rulemaking trilogy intended to improve the safety of onshore gas transmission pipelines.

The report analyzed two of PHMSA’s three final rules: Part I, promulgated in October 2019, with an effective date of July 1, 2020; and Part III promulgated in August 2022, with an effective date of May 24, 2023. Among other things, the rules require operators to improve their data and records of pipeline characteristics and reconfirm the maximum allowable operating pressure of certain pipelines, including new moderate consequence areas. The rules also require operators to assess their integrity management practices and adjusted repair criteria for addressing pipeline defects. The GAO report found, however, that PHMSA did not have an implementation plan for Mega Rule Part III, which could help operators improve incident assessment and mitigation.

According to the GAO report, PHMSA has largely implemented Mega Rule Part I — the 2019 rule. PHMSA did so by providing training to federal and state pipeline inspectors, as well as guidance to the pipeline industry. PHMSA hosted in-person trainings, workshops and virtual webinars, among other things. It also established final rule implementation web pages to improve access to related resources. However, some stakeholders commented that PHMSA’s Mega Rule Part I guidance was not timely or clear, making compliance difficult to assess.

PHMSA is in the process of implementing Mega Rule Part III — the 2022 rule. While PHMSA has formed a new implementation division, it has not created an implementation plan providing clear objectives, timelines or communication strategies to help operators achieve compliance. Therefore, the GAO report has made the following recommendations to increase accessibility to information and guidance pertaining to Mega Rule Parts I and III:

  1. The Administrator of PHMSA should, as PHMSA considers possible changes to the potential impact radius calculation, evaluate what additional data are needed from operators to better understand the actual impact of pipeline incidents.
  2. The Administrator of PHMSA should develop an implementation plan for the remaining activities for the 2022 final rule that includes clear objectives, timelines and an outreach strategy.
  3. The Administrator of PHMSA should update the 2019 and 2022 Gas Transmission Final Rule Implementation web pages to increase accessibility to rule implementation information.

According to the report, the Department of Transportation concurred with the GAO’s recommendations. Even so, only time will tell if the GAO report has any practical effect on PHMSA and the implementation of the Mega Rule. If properly considered, the GAO’s report could help pipeline operators achieve Mega Rule compliance sooner and improve incident assessment and mitigation, which is the point of the new administrative regime.