On January 23, 2017, the Pipeline and Hazardous Material Safety Administration (“PHMSA”) issued several revisions to its pipeline safety regulations, focusing in particular on reporting requirements for incident response.^[1] PHMSA also imposed cost-recovery provisions for large pipeline projects, and updated requirements for operator training and post-incident drug and alcohol testing. Requirements under the new rule take effect on March 24, 2017.

Incident Reporting

PHMSA has been under a statutory directive since 2011 to issue rules requiring incident reporting within one hour of confirmed discovery of an incident.^[2] The January 23 final rule “limits the timeframe within which the operator must electronically or telephonically report notice of an accident or incident to within one hour of confirmed discovery.”^[3] A supplemental report must also be filed no later than 48 hours. Stakeholders had offered a variety of suggested modifications to the proposed reporting requirements, but PHMSA generally declined to make substantive changes. However, PHMSA clarified that “confirmed discovery” occurs when “it can be reasonably determined, based on information available to the operator at the time a reportable event has occurred, even if only based on a preliminary evaluation.”^[4] Given that incidents may occur at locations distant from an operator’s decision-makers, establishing effective internal compliance processes will be both challenging and critical.

Reimbursement of PHMSA Oversight Costs for Large or Innovative Projects

The final rule also requires project proponents to cover PHMSA’s costs for reviewing projects costing at least $2.5 billion or those that “contain new and novel technologies.”^[5] The underlying objective of these provisions is to ensure that PHMSA’s limited resources are not disproportionately spent on projects that require substantially more attention.

Other Provisions

PHMSA clarified additional requirements in the final rule. In one provision, it narrowed the conditions under which drug and alcohol testing are not required after an incident, requiring such testing unless the operator can show that the employee in question could not have been involved in the incident.^[6] A second provision outlined requirements for control operator training.^[7] Other elements of the final rule articulate procedures for renewing special permits and justifying protection of confidential information at the time of submittal.^[8] Lastly, the rule incorporated by reference consensus standards for inline inspection and stress corrosion cracking assessment.^[9] These and other provisions in the new rule merit careful review and assimilation into pipeline operations.