February 2022, Vol. 249, No. 2
Government
PHMSA Announces Long Awaited, New Regulation of Gathering Lines
By Stephen Barlas, Contributing Editor, Washington, D.C.
After a decade of consideration, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a final rule that creates two new classes of onshore gathering lines — R and C. The rule imposes a series of regulations and compliance deadlines that the GPA Midstream Association (GPA) and American Petroleum Institute (API) say will be exceedingly difficult to meet, and expensive, too.
Those groups have asked PHMSA to reconsider provisions in the rule and delay some of its deadlines. Matt Hite, vice president of government affairs, GPA, said, “Our major issue is the extremely short deadlines that are in the rules. So, we support the rule, just not the deadlines; we are pushing PHMSA to reconsider.”
Those Type R and Type C gathering lines comprise about 90 percent of the 400,000-plus miles (600,000-plus km) of essentially unregulated Class 1 lines found in mostly deserted, rural areas in the United States. About 91,000 miles (150,000 km) will qualify as Type C lines. The Final Rule requires operators of Type R and Type C lines to comply with the incident reporting requirements, effective May 16, 2022, and to submit annual reports by March 15, 2023.
PHMSA said, “The information in the reports will help determine the need for future regulatory changes to address the risks to the public, property and the environment posed by all types of pipeline systems engaged in the transportation of gas.”
In terms of new safety requirements for Type C gathering lines, those with an outside diameter greater than 16 inches (406 mm), and certain other Type
C gathering lines that could directly affect homes and other structures, are required to comply with (1) existing requirements for Type B gas gathering lines and (2) requirements to develop and implement emergency plans.
Type B gathering lines are lower-stress pipelines in Class 3, Class 4 and certain Class 2 locations, which must abide by corrosion control, maximum allowable operating pressure (MAOP) establishment, leak surveys and repair requirements, all similar to requirements for transmission pipelines.
Type C gathering lines with smaller diameters that are still larger than 8.265 inches, which could not directly affect homes and other structures, have fewer requirements that are limited to damage prevention, emergency plans and public awareness. These requirements address known causes of pipeline failures, including excavation damage, corrosion and inadequate design and construction standards.
The Final Rule also requires Type C operators to submit safety-related condition reports starting on May 16, 2022, and it further stipulates that operators of existing, but previously unregulated, pipelines must determine whether these lines are Type R or Type C by Nov. 16, 2022. Finally, the Final Rule requires operators to treat new, replaced, relocated or otherwise changed incidental gathering lines that extend 10-plus miles (16-plus km) as regulated transmission lines, effective May 16, 2022.
PHMSA’s rationale for these new requirements is twofold. The agency argues that gathering lines, particularly in more recent shale areas, have dramatically grown to 24, 30 and 36 inches and are operating at high pressures, as much as 1,480 psig (102 bar) in Pennsylvania, for example. Second, the agency wants to work with other Biden administration agencies to reduce methane emissions from pipelines.
The GPA/API petition for a delay in implementation deadlines states the incident and safety-related condition reporting requirements that go into effect on May 16, 2022, create significant compliance obligations.
Its separate request that PHMSA reconsider the rule rests on its belief that gathering lines at 12.75 inches or less in diameter do not present a significant risk to public safety. The two groups also state the agency “ignored substantial cost information in concluding that the benefits of applying certain requirements to these pipelines justified the costs.”
The 2021 Final Rule estimates annual costs at $13.7 million per year.
George Wilkinson, Jr., an attorney with Vinson & Elkins in Houston, said, “We anticipate that the costs will be higher.”
In their petition for a “stay,” GPA and API argued, “…the unnecessarily short compliance deadlines that the Agency chose to adopt in the Final Rule (amid historic inflation and a global supply chain crisis resulting from the COVID-19 pandemic) will escalate the costs involved dramatically.”
They are particularly concerned with the requirement that operators of existing but previously unregulated incidental gas gathering lines that extend 10 or more miles will need to convert those pipelines to transmission service if any portion is repaired, replaced or otherwise changed on or after May 16, 2022.
The two associations are arguing a reasonable compliance deadline for pipelines greater than 12.75 inches in outside diameter is May 16, 2023, and a reasonable compliance deadline for pipelines 12.75 inches or less in outside diameter is May 16, 2026.
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