Power & Pipes

FERC, CFTC, and State Energy Law Developments

In response to President Donald Trump’s declaration of a national emergency due to the coronavirus (COVID-19) pandemic, the Pipeline Hazardous Materials Safety Administration (PHMSA) issued a notice that it does not intend to take enforcement action related to certain new gas pipeline safety regulations with which gas pipeline operators must comply by July 1, 2020.

PHMSA stated that it will resume its normal enforcement processes and sanctions after December 31, 2020, but retains the discretion to enforce the July 1, 2020 compliance deadlines in the event of a significant safety issue or if otherwise warranted. Similar to PHMSA’s prior notice of enforcement discretion (which we discussed in our March 27 posting), this notice recognizes that gas pipeline operators may be facing personnel resource constraints due to the COVID-19 pandemic.

The new gas pipeline safety regulations were codified in 49 CFR Parts 191 and 192 as a result of a final rule issued last October, Pipeline Safety: Safety of Gas Transmission Pipelines: MAOP Reconfirmation, Expansion of Assessment Requirements, and Other Related Amendments (the Final Rule).[1] Note, however, that PHMSA’s notice regarding enforcement discretion only applies to the July 1, 2020 compliance deadlines for the Part 192 requirements. Gas pipeline operators will still need to comply with the reporting requirements in Part 191 (e.g., reporting instances when a malfunction or operating error causes the pressure, plus the margin allowed for operation of pressure limiting or control devices, to exceed the maximum allowable operating pressure (MAOP)) by July 1, 2020. These new regulations were implemented in response to incidents that occurred on gas pipeline systems that resulted in serious risks to life and property.

The Part 192 regulations covered by PHMSA’s recent notice mandate that gas pipeline operators comply with the following requirements:

  • Verify records to ensure they accurately reflect the physical and operational characteristics of the pipeline and to confirm the established MAOP of the pipeline (49 CFR §§ 192.67 and 192.69)
  • For operators that do not have traceable, verifiable, and complete documentation for the physical pipeline characteristics and attributes of a pipeline segment, verify and document pipeline physical properties and attributes (49 CFR § 192.607)
  • For operators who do not have the necessary records to substantiate MAOP, reconfirm the pipeline segment’s MAOP (49 CFR § 192.607)
  • Comply with three specified in-line inspection standards when conducting in-line inspection of pipelines (49 CFR § 192.493)
  • Comply with minimum standards for performing spike hydrostatic pressure tests (49 CFR § 192.506)
  • Periodically assess pipelines in Medium Consequence Areas with MAOPs greater than or equal to 30% specified minimum yield strength that can accommodate an instrumented in-line inspection tool (49 CFR § 192.710)

PHMSA stated that it expects gas pipeline operators to continue to work towards meeting the July 1, 2020 compliance deadlines to the fullest extent practicable and that nothing in the notice prohibits PHMSA from rescinding the notice and enforcing the July 1, 2020 compliance deadlines in the event of a significant safety issue or if another circumstance warrants doing so.

We will continue monitoring guidance and notices that PHMSA issues in response to the national emergency and will report on further developments as they occur.

Coronavirus COVID-19 Task Force

 For our clients, we have formed a multidisciplinary Coronavirus COVID-19 Task Force to help guide you through the broad scope of legal issues brought on by this public health challenge. We also have launched a resource page to help keep you on top of developments as they unfold. If you would like to receive a daily digest of all new updates to the page, please subscribe now to receive our COVID-19 alerts.

[1] 84 Fed. Reg. 52,180 (Oct. 1, 2019).