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In recent years, there have been significant hazardous liquid pipeline accidents, most notably the 2010 crude oil spill near Marshall, Michigan, during which almost one million gallons of crude oil were spilled into the Kalamazoo River. In response to accident investigation findings, incident report data and trends, and stakeholder input, PHMSA published a Notice of Proposed Rulemaking (NPRM) in the Federal Register on October 13, 2015. Previously, Congress had enacted the Pipeline Safety, Regulatory Certainty, and Job Creation Act that included several provisions that are relevant to the regulation of hazardous liquid pipelines. Shortly after the Pipeline Safety, Regulatory Certainty, and Job Creation Act was passed, the National Transportation Safety Board (NTSB) issued its accident investigation report on the Marshall, Michigan accident. In this rulemaking action, PHMSA is amending the Pipeline Safety Regulations to improve protection of the public, property, and the environment by closing regulatory gaps where appropriate, and ensuring that operators are increasing the detection and remediation of unsafe conditions, and mitigating the adverse effects of hazardous liquid pipeline failures.

Statement of Need:

PHMSA is proposing to make the following changes to the hazardous liquid pipeline safety regulations: (1) Repeal the exception for gravity lines; (2) Extend certain reporting requirements to all hazardous liquid gathering lines; (3) Require inspections of pipelines in areas affected by extreme weather, natural disasters, and other similar events; (4) Require periodic assessments of pipelines that are not already covered under the integrity management (IM) program requirements; (5) Expand the use of leak detection systems on hazardous liquid pipelines to mitigate the effects of failures that occur outside of high consequence areas; (6) Modify the IM repair criteria, both by expanding the list of conditions that require immediate remediation and consolidating the time frames for re-mediating all other conditions, and apply those same criteria to pipelines that are not subject to the IM requirements, with an adjusted schedule for performing non-immediate repairs; (7) Increase the use of inline inspection tools by requiring that any pipeline that could affect a high consequence area be capable of accommodating these devices within 20 years, unless its basic construction will not permit that accommodation; and (8) Other regulations will also be clarified to improve compliance and enforcement. These changes will protect the public, property, and the environment by ensuring that additional pipelines are subject to regulation, increasing the detection and remediation of unsafe conditions, and mitigating the adverse effects of pipeline failures. This rule responds to a Congressional mandate in the 2011 Pipeline Reauthorization Act (sections 5, 8, 21, 29, 14); NTSB recommendation P-12-03 and P-12-04; and GAO recommendation 12-388.

Summary of the Legal Basis:

Congress established the current framework for regulating the safety of hazardous liquid pipelines in the Hazardous Liquid Pipeline Safety Act (HLPSA) of 1979 (Pub. L. 96-129). Like its predecessor, the Natural Gas Pipeline Safety Act of 1968 (Pub. L. 90-481), the HLPSA provided the Secretary of Transportation (Secretary) with the authority to prescribe minimum Federal safety standards for hazardous liquid pipeline facilities. That authority, as amended in subsequent reauthorizations, is currently codified in the Pipeline Safety Laws (49 U.S.C. sections 60101 et seq.).

Alternatives:

The various alternatives analyzed included no action "status quo" and individualized alternatives based on the proposed amendments.

Anticipated Costs and Benefits:

PHMSA cannot estimate costs or benefits precisely, but based on the information, the present value of costs and benefits over a 20-year period is approximately $56 million and $98 million, respectively at 7 percent. Thus, net benefits are approximately $46 million ($102 million - $56 million) over 20 years.

Risks:

The proposed rule will provide increased safety for the regulated entities and reduce pipeline safety risks.