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PHMSA Issues Interim Final Rule on Emergency Orders

The Pipeline and Hazardous Materials Safety Administration (PHMSA) on Monday issued an interim final rule that will allow it to issue emergency orders on oil and natural gas pipelines, satisfying a requirement from a comprehensive pipeline safety bill enacted last summer.

President Obama signed S 2276, also known as PIPES Act of 2016, into law on June 22 (see Daily GPIJune 22). The new law grants the Department of Transportation (DOT) secretary new powers to issue emergency orders in the event a pipeline poses an imminent hazard to public health, safety or the environment.

"Pipeline incidents can have devastating impacts on local communities and the environment," said DOT Secretary Anthony Foxx. "The new regulations carry out DOT's enhanced authority to compel industry to take immediate action to address problems that put people, property, or the environment at risk. We hope we never have to use it, but it is an important safety tool that will result in greater protection for the American public."

PHMSA Administrator Marie Therese Dominguez added that the new authority "gives PHMSA the ability to act quickly to address urgent safety concerns, and to protect people and the environment."

The interim final rule will become effective after it is published in the Federal Register. Comments must be received within 60 days of publication. PHMSA said Monday the rule was expected to be published within seven-10 days. PHMSA oversees 2.6 million miles of pipeline across the United States.

According to the 30-page rule, an emergency order is defined as "a written requirement imposing an emergency restriction, prohibition, or safety measure on owners and operators of gas or hazardous liquid pipeline facilities without prior notice or an opportunity for a hearing."

Before the PIPES Act was enacted into law, PHMSA was authorized to issue both corrective action orders (CAO) and notice of proposed safety orders (NOPSO). CAOs are issued to a single pipeline owner, operator or facility after notice and an opportunity for a hearing, while NOPSOs allow PHMSA to notify a single operator that a specific pipeline facility has one or more conditions that pose a threat to the public or the environment.

The DOT secretary was also given enhanced inspection authority for transporting hazardous materials under the Hazardous Materials Transportation Safety and Reauthorization Act of 2005.

"While CAOs are an effective tool for the prompt evaluation and correction of a particular operator's facilities or procedures and advisory bulletins provide recommendations -- but not enforceable requirements -- to a wider audience, no enforcement vehicle existed, prior to adoption of the PIPES Act, that would allow PHMSA to address immediate safety threats facing the wider industry," PHMSA said.

"This new enforcement tool will allow the administrator to issue an emergency order either prohibiting an unsafe condition or practice or imposing an affirmative requirement when an unsafe condition, practice, or other activity in the transportation of natural gas or hazardous liquids poses a threat to life or significant harm to property or the environment."

According to PHMSA, a variety of circumstances could warrant issuing an emergency rule, such as a natural disaster affecting pipelines in a specific geographic location; discovering a serious flaw in pipe, equipment manufacturing or supplier materials; and when an accident reveals a specific industry practice that is unsafe and needs an immediate or temporary fix.

There is not an "exhaustive list" of such conditions. "PHMSA will examine the specific facts in each situation to determine if an imminent hazard exists and will tailor each emergency order to address the specific imminent hazard under each circumstance presented, while observing the statutorily-mandated due process procedures," the agency said.

It was unclear if DOT missed a key deadline over the rule. The SAFE PIPES Act required the DOT secretary to issue temporary regulations within 60 days of the date of enactment, and final regulations within 270 days. Monday's date is 104 days after the date the law took effect.

House lawmakers have had PHMSA in their crosshairs for more than a year, taking the agency to task for failing to implement all sections of a 2011 pipeline safety law (see Daily GPI, July 14, 2015; Jan. 4, 2012). During a House subcommittee hearing last July, PHMSA interim Executive Director Stacy Cummings said the agency had made progress in completing 26 of 42 total mandates required by the 2011 law.

PHMSA also attracted the ire of the DOT's Office of Inspector General (IG), which said in 2014 that the agency has done a lackluster job to ensure state regulators enforced operators' compliance with federal pipeline safety regulations (see Daily GPI, May 9, 2014). The IG probe was prompted by the September 2010 natural gas transmission pipeline rupture and explosion in San Bruno, CA, which killed eight people and injured dozens more (see Daily GPI, Sept. 13, 2010).

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