August 5, 2020

Volume X, Number 218

August 04, 2020

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August 03, 2020

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PHMSA Issues Proposed Rules for Gas Pipeline Regulatory Reform

On June 9, 2020, the Pipeline and Hazardous Materials Safety Administration ("PHMSA") issued a Notice of Proposed Rulemaking (“NOPR”) to revise the Federal Pipeline Safety Regulations (“Regulations”) to reduce regulatory burdens associated with construction, operation, and maintenance of the gas pipeline systems. Key reformations include reducing the burden on distribution pipelines associated with the Distribution Integrity Management Program (“DIMP”), streamlining reporting obligations, and easing certain monitoring requirements.

Through the NOPR, the PHMSA proposed two revisions to DIMP requirements to ease the regulatory burden on gas distribution operators: (i) the exemption of farm taps originating from unregulated gathering and production pipelines from both DIMP and incident and annual reporting requirements; and (ii) the exemption of master meter operators from DIMP requirements. 

The PHMSA also proposed two revisions to the reporting requirements for distribution operators: (i) eliminating the requirement for operators to submit mechanical fitting failure (“MFF”) reports through DOT Form PHMSA F-7100.1-2, and instead, collecting all necessary information by adding a MFF count to the gas distribution annual report form; and (ii) raising the threshold for reporting incidents that result in property damage from $50,000 to $122,000. 

Regarding monitoring requirements, the PHMSA proposed amendments related to corrosion control. Specifically, the PHMSA proposed to revise the requirement of regular inspection of rectifiers on gas pipelines under Section 192.485(b) of the Regulations. Currently, all onshore gas pipelines exposed to the atmosphere must be inspected once every three (3) years. However, the PHMSA proposed to extend the maximum inspection interval for distribution service lines to five (5) years (unless atmospheric corrosion was identified on the last inspection). 

In response to the NOPR, the West Virginia Independent Oil & Gas Association, the Pennsylvania Independent Oil & Gas Association, the Independent Petroleum Association of America, and many oil and gas producers have filed comments discussing the positive and negative attributes of the NOPR.

© Steptoe & Johnson PLLC. All Rights Reserved.National Law Review, Volume X, Number 198

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About this Author

Kurt Kreiger, Energy Attorney, Steptoe Johnson Law Firm
Member

Kurt Krieger focuses his practice in the areas of utility regulation and energy law. He has experience representing interstate natural gas pipeline companies, midstream companies, and gas and electric utilities before the Federal Energy Regulatory Commission (FERC), and state and commonwealth public service (or utility) commissions.  His experience includes counseling gas and electric companies on economic, safety and facility siting regulation, and counseling and drafting commercial agreements pertaining to energy-related transactions.

Mr....

(304) 353-8124
Nash Bowen Energy & Corporate Transactional Attorney Steptoe and Johnson The Woodlands, TX
Associate

At a young age, Nash Bowen was exposed to lawyers involved with complex business transactions in his family’s business. From those experiences, his passion for finance and transactional law were ignited.  Nash now specializes in energy and corporate transactional law where he works with clients as they make important decisions regarding acquisitions and divestitures of assets. His primary areas of practice include mergers and acquisitions and structuring commercial loans ($1MM-$100MM+). Nash is also an active member of the firm's cannabis counsel and has extensive experience representing cannabis companies across the nation.

Nash holds a Bachelor’s degree in finance with a specialization in investment management and embodies extensive knowledge of the inner-workings of finance. He prides himself as being an attorney that understands transactions from the viewpoint of both the principle and the agent.

281-203-5739