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PHMSA Proposes Significant New Regulations Regarding Transmission and Gathering Pipelines

On March 17, 2016 Pipeline and Hazardous Materials Safety Administration (PHMSA) released a 549 page Notice of Proposed Rulemaking (NPRM) that significantly changes regulations for transmission lines and imposes regulations on previously unregulated gathering lines carrying, inter alia, natural gas and petroleum products.

Key changes for transmission pipelines include: establishing new materials verification requirements, modifying maximum allowable operating pressure requirements (MAOP), and imposing requirements for verifying MAOP.  PHMSA is also proposing a new classification area, a Moderate Consequence area, which would impose corrosion control, integrity management and assessment, and repair requirements on pipelines outside of High Consequence Areas.  The NPRM also subjects certain in-service natural gas pipelines built prior to 1970 to pressure testing.

All gathering pipelines (determined per a new definition that no longer references American Petroleum Institute Standards) will now face reporting requirements per 49 CFR Part 191 with certain limited reporting process exceptions.  PHMSA has also significantly expanded “regulated gathering lines” to include lines with 8 inch or greater nominal diameter in Class 1 areas (areas with 10 or fewer buildings meant for human occupancy) that have an MAOP that produces a hoop stress of 20 percent or more of specified minimum yield strength (SMYS) for metallic lines, or more than 125 psig for non-metallic lines.  These lines will be classified as Type A, Area 2 lines and regulations will include design and construction specifications for new lines and safety standards and emergency response requirements in Part 192, and drug and alcohol requirements in Part 199 for new and existing lines.  To put the scope of this regulation in perspective, PHMSA officials have stated that an additional 68,749 miles of gathering lines would be “regulated gathering lines” per the new Type A, Area 2 classification, and an additional 275,337 miles of gathering lines would be subject to additional reporting requirements.  See PHMSA Proposes Expanding Regulatory Scope of Gathering Lines, Natural Gas Intelligence, March 21, 2016.

The NPRM is in response to the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011.  Section 21 of the Act requires PHMSA to conduct a study of the existing gathering line regulations, report to Congress, and recommend whether any additional laws are needed, analyzing economic impacts, risks, and whether the current exemption from regulation for certain gathering lines should be revoked.  PHMSA completed this study in May of 2015.

In 2011 PHMSA issued an advanced notice of proposed rulemaking with many of the same features regarding regulation of transmission and gathering lines, which did not result in a final rule.  PHMSA has responded to comments on the 2011 ANPRM in the NPRM.  The increased regulation of the NPRM was spurred by the congressional mandates in the Act in response to the San Bruno pipeline explosion in 2011 and the increased use of higher pressure and size gathering lines due to hydraulic fracturing and increased shale production, especially in the Marcellus Shale region.

In Pennsylvania, the Pennsylvania Public Utility Commission regulates PHMSA regulated lines and has incorporated 49 CFR Parts 191-193 and 199, including any future amendments at 52 Pa. Code Chapter 59.

Once the NPRM is published in the Federal Register, interested parties will have 60 days to submit comments.

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