PHMSA Announces Gas Pipeline Regulatory Reform to Reduce Regulatory Burdens

On May 28, the Pipeline and Hazardous Materials Safety Administration (PHMSA) announced a proposed role for gas pipeline regulatory reform.

PHMSA issued the Notice of Proposed Rulemaking (NPRM) aimed at reducing unnecessary regulatory burdens to align with recent executive orders (13771, 13777, and 13783) issued by the federal government.

After conducting a review of existing regulations, PHMSA identified areas where the agency could provide regulatory relief to gas operators “without adversely impacting public safety or environmental protection.”

On June 9, the NPRM was officially published to the federal register under docket no. PHMSA-2018-0046. PHMSA has provided valuable information to help pipeline operators form a response to the NPRM.

What is the Purpose of the Gas Pipeline Regulatory Reform?

In summary, PHMSA is proposing to amend pipeline safety regulations 49 CFR parts 191 and 192 to ease regulatory burdens in the following areas:

  • Construction, operation, and maintenance of gas transmission, distribution, and gathering pipeline systems.

PHMSA is proposing the following 10 amendments to CFR 191 and 192 to ease the regulatory burden on gas pipeline operators:

  1. Provide flexibility in the inspection requirements for farm taps.
  2. Repeal Distribution Integrity Management Program (DIMP) requirements for master meter operators.
  3. Repeal submission requirements for Mechanical Fitting Failure (MFF) reports.
  4. Adjust the monetary damage threshold for reporting incidents for inflation.
  5. Allow remote monitoring of rectifier stations.
  6. Revise the inspection interval for monitoring atmospheric corrosion on gas distribution service pipelines.
  7. Update the design standard for polyethylene (PE) pipe and raise the maximum diameter limit.
  8. Revise test requirements for pressure vessels consistent with ASME Boiler and Pressure Vessel Code (ASME BPVC).
  9. Revise welder requalification requirements to provide scheduling flexibility.
  10. Extend the allowance for pre-tested short segments of pipe and fabricated units to pipelines operating at a hoop stress less than 30 percent of the specified minimum yield strength (SMYS) and above 100 psi.

These proposed measures were the result of internal review, information gathering from stakeholders, and public comments.

The incorporation of public comments came from the response to two DOT infrastructure and regulatory reform notices, “Transportation Infrastructure: Notice of Review of Policy, Guidance, and Regulation” in June 2017 and “Notification of Regulatory Review” in October 2017.

Why is PHMSA Pursuing This Regulatory Burden Relief?

PHMSA is primarily seeking to modernize federal pipeline safety regulations to reduce unnecessary regulatory burdens that are consistent with recent Executive Orders 13771, 13777, and 13783.

  • EO 13771: Reducing Regulation and Controlling Regulatory Costs
  • EO 13777: Enforcing the Regulatory Reform Agenda
  • EO 13783: Promoting Energy Independence and Economic Growth

PHMSA also sees this as an opportunity to realize a positive economic result to benefit the industry. Specifically, PHMSA has estimated an annualized cost savings of approximately $129-132 million. The cost savings are primarily related to farm taps provisions and assessments of atmospheric corrosion of distribution service lines.

PHMSA conducted a preliminary regulatory impact analysis (PRIA) that determined there is an opportunity for incremental cost savings through this deregulatory measure to reduce unnecessary regulatory burdens, increase flexibility and efficiency, and add clarity to existing regulations.

Additionally, at a time when the industry is focused on pipeline safety and achieving zero incidents, PHMSA noted that the agency “does not anticipate that the revisions will result in an adverse impact on pipeline safety.”

What’s Next for Gas Pipeline Operators?

Now that the NPRM has been published to the federal register, stakeholders have 60 days to submit comments on the NPRM (the deadline to submit comments is August 10, 2020).

Should the proposed amendments to CFR 191 and 192 affect your operation in a material way, we recommend submitting comment to PHMSA.

We are also available to discuss the potential impact of the gas pipeline regulatory reform on your operation. Talk to our team today about the specific impact on your operation to strategize a response. We can be reached at 281-598-7100.