Insights on Current Policy Issues
Summary of the House Republican Tax Reform Blueprint
FAA Releases Small UAS Final Rule (Part 107)
On June 21, the Federal Aviation Administration (FAA) finalized its long-awaited Small Unmanned Aircraft System (UAS) rule for routine commercial use of UAS (Part 107) and integration of UAS into the national airspace. The FAA expects the rule to be published in the Federal Register in five to seven days. The rule will be effective 60 days from the date of publication which will be the end of August.
Section-By-Section Summary of Final Pipeline Safety Bill
By Frank VlossakThe House and Senate have completed action on the “Protecting our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2016” (S. 2276), with the House approving it by voice vote on June 8, and the Senate passing it by unanimous consent on June 13. The White House received the legislation on Thursday, June 16, and it is awaiting the President’s signature. S. 2276 reauthorizes the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) pipeline safety functions through September 30, 2019.
Among the more significant provisions in the legislation are: a requirement for PHMSA to promulgate regulations governing the safety of underground natural gas storage facilities (Section 12); and a grant of new pipeline safety emergency order authority to PHMSA (Section 16). PHMSA is already working on underground natural gas storage regulations. As described in the most recent “Unified Agenda for Regulatory and Deregulatory Actions”, “PHMSA is planning to issue an interim final rule to require operators of underground storage facilities for natural gas to comply with minimum safety standards, including compliance with” existing American Petroleum Institute recommended practices.
In addition to the underground natural gas storage provision, new regulatory mandates directed by the legislation include:
- Requirements for hazardous liquid pipeline operators to provide safety data sheets (SDS) within six hours of an incident (Section 14);
- Requirements for operators, in developing response plans, to “consider the impact of a discharge into or on navigable waters or adjoining shorelines, including those that may be covered in whole or in part by ice, and include procedures and resources for responding to such discharges in” their plans (Section 18);
- Clarification of the requirements for abandoned pipelines (Section 23);
- An annual inline inspection requirement for inland pipelines located below 150 feet of water (Section 25); and
- A requirement for PHMSA to update the regulations governing “permanent, small scale liquefied natural gas pipeline facilities” (Section 27).
Department of Labor Releases Rule Updating the Regulations Defining and Delimiting the Exemptions for “White Collar” Employees
EPA Finalizes Requirements for Reducing Methane Emissions from the Oil and Gas Sector
By Frank VlossakOn May 12, the Environmental Protection Agency (EPA) released the final rule titled “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources”. The final rule is based on the Notice of Proposed Rulemaking (NPRM) that the EPA published on September 18, 2015. The final rule imposes significant new requirements for the oil and gas industry, including producers and natural gas pipeline operators, to identify and limit methane emissions.
Also on May 12, the EPA issued:
- A notice announcing the “Proposed Information Collection Request; Comment Request; Information Collection Effort for Oil and Gas Facilities”. The Information Collection Request (ICR) is the first step towards establishing emissions regulations for existing oil and gas sector sources. The Obama Administration committed to issuing the ICR in March in the U.S.-Canada Joint Statement on Climate, Energy and Arctic Leadership”. The draft ICR is subject to public comment for 60 days following its publication in the Federal Register. Once finalized, the ICR will be submitted to the industry, which must then provide the requested data to the EPA.
- The final rule on “Source Determination for Certain Emission Units in the Oil and Natural Gas Sector”.
- The final rule establishing a “Federal Implementation Plan for True Minor Sources in Indian Country in the Oil and Natural Gas Production and Natural Gas Processing Segments of the Oil and Natural Gas Sector”.
As described by an EPA fact sheet, the final rule on new source emissions reductions sets “emissions limits for methane, which is the principal greenhouse gas emitted by equipment and processes in the oil and gas sector.” The final rule includes required emissions reductions for: oil and gas wells; natural gas processing plants; natural gas storage; and natural gas pipelines. Owners and operators of hydraulically fractured wells will be required to implement reduced emissions completions, also known as “green completions”. Prior to implementing green completions, covered wells must “reduce emissions using combustion controls.” The compliance date for the final rule will be sixty days following publication in the Federal Register.
Summary of House Transportation and Infrastructure Committee Pipeline Safety Legislation
By Frank VlossakOn April 14, the House Transportation and Infrastructure Committee released the text of the draft “Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2016” (“PIPES Act”). Full Committee Chairman Bill Shuster (R-PA) and Ranking Member Peter DeFazio (D-OR), along with Railroads, Pipelines, and Hazardous Materials Subcommittee Chairman Jeff Denham (R-CA) and Ranking Member Mike Capuano (D-MA) are sponsors of the legislation, which the Committee is scheduled to vote on during a markup on Wednesday, April 20.
Release of the bill follows Senate passage of the “Securing America’s Future Energy: Protecting our Infrastructure of Pipelines and Enhancing Safety Act” (S. 2276) on March 3, 2016, and the Energy and Commerce Committee’s Energy and Power Subcommittee’s approval of the “Pipeline Safety Act of 2016” (discussion draft) on March 16.
New Proposed Rules for Natural Gas Pipeline Safety
By Frank VlossakOn March 17, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released the Notice of Proposed Rulemaking (NPRM) titled “Pipeline Safety: Safety of Gas Transmission and Gathering Pipelines”. The Obama Administration has been developing this significant rulemaking over the last several years. It will establish new requirements for: how operators inspect natural gas transmission pipelines, including in-line inspections (ILI); what actions they take in response to those inspections; and how they verify the maximum allowable operating pressure (MAOP) of pipelines. In developing the MAOP requirements, PHMSA is implementing Section 23(a) of the “Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011” (P.L. 112-90), which directed the agency to implement requirements for verifying the MAOP for older “grandfathered” natural gas pipelines. On August 7, 2013, PHMSA held a “Public Workshop on Integrity Verification Process”, which was one of the first steps in developing the MAOP provisions included in this proposed rule. The NPRM imposes new regulatory requirements on certain gas gathering lines, and includes other new requirements that implement provisions of the “Pipeline Safety, Regulatory Certainty, and Job Creation Act.”
PHMSA began the process of developing this NPRM in 2011, with publication of an Advanced Notice of Proposed Rulemaking (ANPRM) titled “Pipeline Safety: Safety of Gas Transmission Pipelines”. This gas pipeline safety NPRM parallels the “Safety of Hazardous Liquid Pipelines” NPRM, which PHMSA published on October 13, 2015.
Once the proposed rule is published in the Federal Register, it will be subject to a 60-day public comment period. It is also expected that PHMSA will convene its Gas Pipeline Technical Advisory Committee to provide input which will be considered in developing the final rule. Following the comment period and meeting of the Gas Pipeline Technical Advisory Committee, it will likely take PHMSA six months or more to draft and promulgate the final rule.
U.S.-Canada Joint Statement on Climate, Energy and Arctic Leadership
By Frank VlossakOn March 10, President Obama and Canadian Prime Minister Trudeau unveiled a series of initiatives on greenhouse gas (GHG) emissions reductions, climate change, and protection of the Arctic. One of the key announcements included in the “U.S.-Canada Joint Statement on Climate, Energy and Arctic Leadership” is a commitment by the two countries to reduce methane emissions from the oil and gas sector.
Pipeline Safety: Senate Passes Legislation; House Committees Hold Hearings
By Frank Vlossak
The House and Senate are actively working to enact pipeline safety legislation. Proposed bills in both chambers would reauthorize the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) Office of Pipeline Safety (OPS) and provide direction to the agency on its regulatory initiatives and activities. The Senate approved the “Securing America’s Future Energy: Protecting Our Infrastructure of Pipelines and Enhancing Safety (SAFE PIPES) Act” (S. 2276) by unanimous consent on March 3. The House Transportation and Infrastructure Committee’s Railroads, Pipelines, and Hazardous Materials Subcommittee held a hearing on pipeline safety on February 25, and the House Energy and Commerce Committee’s Energy and Power Subcommittee held a hearing on a draft reauthorization bill on March 1. On the regulatory front, PHMSA is poised to publish a long-awaited and significant proposed rule on gas transmission pipeline safety within the next two weeks.
Pipeline Safety Legislative and Regulatory Developments
By Frank Vlossak
The last several months have seen significant congressional and regulatory action targeting pipeline safety. The rapid pace of work on this issue is expected to continue through the remainder of 2016.
The Senate is preparing to pass a bill that would reauthorize pipeline safety programs, providing direction to PHMSA on ongoing regulatory efforts and directing the agency to establish safety standards for natural gas storage facilities. The Senate Commerce Committee approved this legislation in December. The House of Representatives has two committees with jurisdiction over pipeline safety issues. The Transportation and Infrastructure Committee has announced a hearing on pipeline safety on February 25, and the Energy and Commerce Committee is expected to hold its own hearing the following week.
PHMSA is advancing significant new regulations through the rulemaking process. The agency published the proposed rule on “Safety of Hazardous Liquid Pipelines” last October, receiving public comments on it through January 8. PHMSA is also expected to release a parallel proposed rule on interstate natural gas pipelines.