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Power & Pipes

FERC, CFTC, and State Energy Law Developments

The Pipeline and Hazardous Materials Safety Administration (PHMSA) will hold a two-day public meeting on February 26–27, 2020, to discuss with pipeline safety stakeholders the implementation of two final rules published in the Federal Register on October 1, 2019: the Safety of Gas Transmission Pipelines final rule (published at 49 CFR Parts 191–192) and the Safety of Hazardous Liquid Pipelines final rule (published at 49 CFR Part 195). PHMSA has made available for comment and discussion in Docket PHMSA-2019-0225 the meeting agenda draft, frequently asked questions (FAQs), and answers for both rules.

According to PHMSA, “the FAQs are intended to assist in the implementation of these final rules by providing clarification, guidance, information sources, and affirmation to operators as they strive to comply with the new safety regulations.” During the first day of the meeting, PHMSA also is planning to discuss the benefits of pipeline operators developing an effective safety culture. The agenda, however, is less clear on this portion of the meeting.

Around this time last year, PHMSA Administrator Howard “Skip” Elliott provided testimony to the US House of Representatives Subcommittee on Railroads, Pipelines, and Hazardous Materials, and described encouraging and expecting operators to “continuously build a strong safety culture” as one of the “fundamental tenets” of PHMSA’s zero pipeline accident safety goal. Nevertheless, important questions remain regarding PHMSA’s emphasis on safety culture, including whether PHMSA plans on issuing its own policy statement on safety culture, similar to the policy statement issued by the Bureau of Safety and Environmental Enforcement for the offshore oil and gas industry, or whether it will expect pipeline operators to develop their own policies, perhaps relying on the policy statement and guidance already developed by the American Gas Association.

In either case, working from a common set of definitions and an understanding of what safety culture means, the traits that make up an effective safety culture, and how to measure the culture would offer operators clearer guidance and make it easier to share information and operator experience.

Additional questions remain regarding whether PHMSA intends to integrate safety culture into its inspection and enforcement programs. In the commercial nuclear industry, for example, the US Nuclear Regulatory Commission, even without rule change, has developed inspection procedures covering the key traits of an effective safety culture, including whether licensees have established a work environment in which workers feel comfortable raising safety concerns without fear of retaliation (i.e., the strength of their “speak up” culture). It remains to be seen what mechanisms of oversight and enforcement, if any, PHMSA is considering.

PHMSA’s upcoming meeting will hopefully shed light on these and other questions on the topic of safety culture. We will continue to monitor these developments and provide updates.