New pipeline-safety legislation signals hike in federal, state regulation

Nov. 11, 2002
With the first major rewrite of US safety legislation in more than 2 decades, Congressional conferees have agreed on major changes to existing pipeline safety laws. As a result, federal and state oversight of interstate and intrastate pipeline safety operations will materially increase with passage of the Pipeline Safety Improvement Act of 2002.

With the first major rewrite of US safety legislation in more than 2 decades, Congressional conferees have agreed on major changes to existing pipeline safety laws. As a result, federal and state oversight of interstate and intrastate pipeline safety operations will materially increase with passage of the Pipeline Safety Improvement Act of 2002.

Legislation

Two statutes generally govern pipeline safety; both were written as far back as 1968 and 1979.

The first, the Natural Gas Pipeline Safety Act, concerns safety regulation of natural gas pipelines. The other, the Hazardous Liquid Pipeline Safety Act, specifies safety requirements for crude oil and product pipelines and LNG facilities.

The new legislation, entitled the Pipeline Safety Improvement Act of 2002, grants federal and state agencies broad new powers to regulate and enforce safety standards for pipeline transportation facilities operating in interstate and intrastate commerce.

The lead federal agency that handles pipeline safety regulation is the Department of Transportation (DOT), although other agencies, such as the Federal Energy Regulatory Commission (FERC), Environmental Protection Agency (EPA), or the Department of Interior and its Minerals Management Service (MMS) share some oversight responsibilities.

For example, Interior exercises jurisdiction over producer pipelines, and DOT regulates safety aspects of transportation pipelines on the Outer Continental Shelf.

Within DOT, the Research and Special Programs Administration (RSPA) and the Office of Pipeline Safety (OPS) are responsible for enforcement and regulation of safety laws.

Among the states, pipeline safety regulations usually are prescribed and enforced by the public service commissions and, in Texas, by the Texas Railroad Commission.

Major changes

Under the new legislation, states no longer are preempted from enforcing requirements of a One-Call notification program, provided they are properly certified by DOT.

States also can participate in the oversight of interstate pipeline transportation, including special investigations involving safety-related incidents or new construction of pipeline facilities.

The legislation also expands protection for employees with a whistleblower provision that broadly protects anyone who provides information to an employer or the federal government concerning violations of orders, regulations, or any federal law relating to pipeline safety.

The secretary of transportation is newly empowered to issue safety orders requiring pipeline operators to undertake corrective actions and, in the event the secretary finds that pipeline facilities have been operated in a manner that is hazardous to life, property, or the environment, the secretary may issue additional corrective action orders that contain penalties up to $100,000/incident and $1 million in aggregate.

In addition, the US attorney general may seek injunctions, punitive damages, and civil penalties, or criminal penalties for damage to or destruction of a gas or liquid pipeline facility.

Pipeline operators

Pipeline operators must shoulder new responsibilities under the legislation.

For example, operators of gas or hazardous liquid pipeline facilities must establish continuing public education programs, subject to state or federal agency review, regarding use of the One-Call notification systems and other damage prevention activities.

Operators of both interstate and intrastate pipelines must develop and adopt qualification training programs for employees performing specific covered tasks.

Perhaps more far reaching is a requirement that operators expand pipeline integrity-management programs.

Each operator of a gas pipeline facility must undertake an integrity risk analysis and thereafter complete a baseline assessment of the entire pipeline system within 10 years, including assessment of the riskiest 50% of the high-consequence areas in the first 5 years and the remainder over the next 5 years. Thereafter, reassessments must be undertaken every 7 years.

DOT already has prescribed regulations requiring baseline assessments for hazardous liquid pipelines. Those regulations originally applied to operators of hazardous liquid pipeline facilities that were longer than 500 miles. DOT recently eliminated the mileage test, however, and now all operators in high-consequence areas are subject to the regulations.

The new legislation makes further provision for a National Pipeline Mapping System that will identify and make available information on the location of hazardous pipelines to operators, governmental officials, and the public. Each operator of a pipeline must provide the secretary of transportation with geospatial data appropriate for use in the mapping system within 6 months of date of enactment of the new laws.

Finally, the safety legislation provides for establishment and implementation of:

  1. An interagency task force designed to coordinate environmental review and streamline the permitting process for constructing and repairing pipelines.
  2. A nationwide toll-free telephone number system.
  3. Recommendations from the inspector general and the National Transportation Safety Board regarding adoption of future safety standards.
  4. Pipeline inspections by direct assessment.

The author

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Mike Manning is a partner in the Washington, DC, offices of Fulbright & Jaworski LLP. He joined the firm in 1973. From 1969-73, he served as attorney advisor to the vice-chairman of the Federal Power Commission. Manning received his BA (1966) from the University of Kansas and a JD (1969) from Washburn University School of Law. He has served on the board of directors of the Energy Bar Association and is a member of both the American Bar Association and DC Bar.