Federal Pipeline Safety Regulator Proposes New Standards for State Programs

On April 2, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a Notice of Proposed Rulemaking to determine the adequacy of state pipeline damage prevention programs. PHMSA anticipates “[t]he … benefit of this rulemaking action is an increased deterrent to violations of One-Call requirements” by directing any excavation work to first use 811, the National Call Before You Dig Number, before a project begins. Many states have been criticized by industry and environmental groups in having weak damage prevention laws that have little effective enforcement. The move was hailed by the Association of Oil Pipe Lines CEO, Andy Black, "“Liquid pipeline operators support strong damage prevention plans to prevent others excavating near pipelines from exploiting loopholes that can lead to accident or injury.”

The purpose of the new proposed rule, according to PHMSA, is intended to revise existing federal pipeline safety regulations to:

  • Establish criteria and procedures for determining the adequacy of state pipeline excavation damage prevention law enforcement programs;
  • Establish an administrative process for making adequacy determinations;
  • Establish the Federal requirements PHMSA will enforce in states with inadequate excavation damage prevention law enforcement programs; and
  • Establish the adjudication process for administrative enforcement proceedings against excavators where federal authority is exercised.
In 2006, Congress passed the Pipeline Inspection, Protection, Enforcement and Safety (PIPES) Act which contained several provisions outlining the requirements of state damage prevention and One-Call programs. Specifically, Congress cited nine specific elements of an effective state damage prevention program that PHMSA would be required to evaluate when issuing damage prevention grants.  Those elements include:
  • Enhanced communication between pipeline operators and excavators;
  • Fostering support and partnership of all stakeholders;
  • Requiring pipeline operators to use underground facility locators;
  • Partnership in employee training;
  • Partnership in public education;
  • Enforcement agencies involvement to resolve disputes;
  • Fair and consistent enforcement of the law;
  • Use of technology to improve underground facility location; and
  • Data analysis to continually improve program effectiveness
The PIPES Act gave new authority to the Secretary of Transportation to conduct enforcement proceedings for a violation if the Secretary “has determined that the State’s enforcement is inadequate to protect safety” after the Secretary “issues, through a rulemaking proceeding, the procedures for determining inadequate State enforcement of penalties.”  Section 2 of the PIPES Act also allows the Secretary to make a grant to a state authority to assist in improving damage prevention programs. The Secretary is to “take into consideration the commitment of each State to ensuring the effectiveness of its damage prevention program, including legislative and regulatory actions taken by the state.”
PHMSA published an assessment in 2010 that evaluated each states’ program and its effectiveness in utilizing the nine elements outlined in the 2006 PIPES Act. Many in the pipeline industry and public safety organizations like the Pipeline Safety Trust have expressed concern that too many states have weak or ineffective programs  because of numerous exemptions built into state laws or regulations. Although PHMSA noted that its survey results should not be construed as conclusive, the review did highlight that only eight states (Arizona, Georgia, Louisiana, Maine, Minnesota, New Hampshire, Vermont, and Virginia) were viewed as having fully implemented the nine recommendations of an effective damage prevention program.
Congress recently added several significant provisions in its recent reauthorization of pipeline safety laws (the Pipeline Safety, Regulatory Certainty, and Job Creation - HR 2845) that would have major implications for state damage prevention programs. Under the new statute, which was signed into law on January 3, 2012, states may not receive federal One-Call or State Damage prevention grants if they exempt state agencies, municipalities, or their contractors from the requirements to use 811. 
In meeting the regulatory requirement issued by Congress PHMSA  expects the total cost of the new proposed rulemaking to be $1.2 million, while the benefits are expected to be $23 million as the average cost for property damage alone in an excavation incident is nearly $275,000. Those wishing to submit public comments on proposed rule must do so by June 1, 2012.