A Late-Term Rollback on Pipeline Reporting Requirements Finalized

In the final days of the Trump Administration, the federal Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has adopted revised regulations on mandatory reporting requirements for pipelines, along with several other rule changes. According to the Federal Register, the rule change is to “ease regulatory burdens on the construction, operation, and maintenance of gas transmission, distribution and gathering pipeline systems without adversely affecting safety”.

As it stands, the existing regulations require the PHMSA to be notified when issues occur on a pipeline, such as leaks that cause injury, death, or $50,000 or more in property damage. Additionally, inspections must occur every three years of all steel pipelines. Under the new regulations, certain aspects of these rules become less stringent.

The new regulations adopted this week ease the monetary threshold for property damage, as well as lengthening the time period in which steel pipelines must be inspected. Like the previous rule, if a pipeline incident causes death or injury, it must be reported. However, if no injury or death occurs, property damage must surpass $122,000 to require reporting to PHMSA. This new figure will go up over time, as it has been liked to inflation using the Consumer Price Index (CPI). Inspections of steel pipelines will now be mandatory every five years instead of every three.

According to the Federal Register, the purpose of these rule changes is to ease regulatory burden while also saving money. A passage from the Register states “PHMSA does not anticipate that the amendments will have an adverse impact on safety or a significant effect on the environment.” They further explain that they expect an annual savings of approximately $132.5 million, and a total savings of $1.37 billion in the next 20 years.

This move is likely among the last to be made by the Trump Administration before the transition of power to President-elect Joe Biden. There is uncertainty as to whether these rules will exist long into a Biden Administration, as there are calls to overturn this, and many other regulatory changes made by the Trump Administration related to the energy industry, especially in natural gas.

The rules could have significance in the Appalachian region, where a number of gathering and transmission pipelines crisscross the landscape, taking natural gas from the Marcellus and Utica plays to processing facilities and other destinations. Midstream companies will likely be watching the issue closely.