# Pipeline Safety: Gas Pipeline Regulatory Reform

- **operation:** document
- **citation:** 85 FR 35240
- **title:** Pipeline Safety: Gas Pipeline Regulatory Reform
- **source type:** rulemaking
- **agency:** Pipeline and Hazardous Materials Safety Administration
- **status:** proposed
- **official:** true
- **published on:** 2020-06-09
- **effective on:** Not available
- **summary:** PHMSA is seeking comments on proposed amendments to the Federal Pipeline Safety Regulations that are intended to ease regulatory burdens on the construction, maintenance and operation of gas transmission, distribution, and gathering pipeline systems. The amendments in this proposal are based on PHMSA's considered review of public comments, petitions for rulemaking, and an agency initiative to identify appropriate areas where regulations might be repealed, replaced, or modified.
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- **source url:** https://www.federalregister.gov/documents/2020/06/09/2020-11843/pipeline-safety-gas-pipeline-regulatory-reform
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Federal Register, Volume 85 Issue 111 (Tuesday, June 9, 2020) [Federal Register Volume 85, Number 111 (Tuesday, June 9, 2020)] [Proposed Rules] [Pages 35240-35254] From the Federal Register Online via the Government Publishing Office [ www.gpo.gov ] [FR Doc No: 2020-11843] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF TRANSPORTATION Pipeline and Hazardous Materials Safety Administration 49 CFR Parts 191 and 192 [Docket No. PHMSA-2018-0046] RIN 2137-AF36 Pipeline Safety: Gas Pipeline Regulatory Reform AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), DOT. ACTION: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: PHMSA is seeking comments on proposed amendments to the Federal Pipeline Safety Regulations that are intended to ease regulatory burdens on the construction, maintenance and operation of gas transmission, distribution, and gathering pipeline systems. The amendments in this proposal are based on PHMSA's considered review of public comments, petitions for rulemaking, and an agency initiative to identify appropriate areas where regulations might be repealed, replaced, or modified. DATES: Submit comments by August 10, 2020. ADDRESS: Submit comments, identified by Docket No. PHMSA-2018-0046, using any of the following methods: Federal eRulemaking Portal: https://www.regulations.gov . Follow the online instructions for submitting comments. Fax: 1-202-493-2251. Mail: U.S. DOT Docket Management System, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590-0001. Hand-deliver/courier: Available between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. Instructions: All submissions must include the agency name and docket number for this notice of proposed rulemaking. If you submit your comments by mail, submit two copies. If you wish to receive confirmation that PHMSA has received your comments by mail, include a self-addressed stamped postcard. Privacy Act: In accordance with 5 U.S.C. 553(c), the DOT solicits comments from the public. The DOT posts these comments, without edit, including any personal information the commenter provides, to http://www.regulations.gov . The complete privacy statement can be reviewed at http://www.dot.gov/privacy . Confidential Business Information Confidential Business Information (CBI) is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this notice contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this notice, it is important that you clearly designate the submitted comments as CBI. Pursuant to 49 CFR 190.343, you may ask PHMSA to give confidential treatment to information you give to the agency by taking the following steps: (1) Mark each page of the original document submission containing CBI as ``Confidential''; (2) send PHMSA, along with the original document, a second copy of the original document with the CBI deleted; and (3) explain why the information you are submitting is CBI. Unless you are notified otherwise, PHMSA will treat such marked submissions as confidential under the Freedom of Information Act, and they will not be placed in the public docket of this notice. Submissions containing CBI should be sent to Sayler Palabrica at DOT, PHMSA, PHP-30, 1200 New Jersey Avenue SE, PHP-30, Washington, DC 20590-0001. Any commentary PHMSA receives that is not specifically designated as CBI will be placed in the public docket for this matter. FOR FURTHER INFORMATION CONTACT: Sayler Palabrica, Transportation Specialist, by telephone at 202-366-0559. SUPPLEMENTARY INFORMATION: I. Executive Summary II. Background III. Request for Input IV. Proposed Amendments [[Page 35241]] V. Availability of Standards Incorporated by Reference VI. Regulatory Analyses and Notices I. Executive Summary A. Purpose of This Deregulatory Action PHMSA is proposing to amend the Federal Pipeline Safety Regulations (PSR) at 49 CFR parts 191 and 192 to adopt several actions that ease regulatory burdens on the construction, operation, and maintenance of gas transmission, distribution, and gathering pipeline systems. These proposed amendments include regulatory relief actions identified by internal agency review, petitions for rulemaking, and public comments submitted in response to the Department of Transportation (DOT) infrastructure and regulatory reform notices: ``Transportation Infrastructure: Notice of Review of Policy, Guidance, and Regulation'' (82 FR 26734; June 8, 2017), and ``Notification of Regulatory Review'' (82 FR 45750; Oct. 2, 2017). PHMSA is requesting input from the public on the proposed amendments. B. Proposed Amendments PHMSA is proposing the following amendments to parts 191 and 192: A. Provide flexibility in the inspection requirements for farm taps; B. Repeal distribution integrity management program (DIMP) requirements for master meter operators; C. Repeal submission requirements for the mechanical fitting failure (MFF) reports; D. Adjust the monetary damage threshold for reporting incidents for inflation; E. Allow remote monitoring of rectifier stations; F. Revise the inspection interval for monitoring atmospheric corrosion on gas distribution service pipelines; G. Update the design standard for polyethylene (PE) pipe and raise the maximum diameter limit; H. Revise test requirements for pressure vessels consistent with American Society of Mechanical Engineers Boiler and Pressure Vessel Code (ASME BPVC); I. Revise welder requalification requirements to provide scheduling flexibility; and J. Extend the allowance for pre-tested short segments of pipe and fabricated units to pipelines operating at a hoop stress less than 30 percent of the specified minimum yield strength (SMYS) and above 100 pounds per square inch (psi). C. Costs and Benefits In accordance with 49 U.S.C. 60102, Executive Order (E.O.) 12866, and DOT policy, PHMSA has prepared an initial assessment of the costs and benefits of these proposed changes as well as reasonable alternatives. PHMSA has released the preliminary regulatory impact analysis (PRIA) concurrent with this NPRM for public review and comment, and it is available in the docket. The PRIA uses an analysis period of twenty years and the incremental cost savings are assumed to accrue on an ongoing basis. Most of the proposed revisions are deregulatory that are expected to reduce unnecessary regulatory burdens, increaseflexibility and efficiency, and add clarity to existing regulations. PHMSA estimates the value of the total quantified annualized cost savings is approximately $129 million (at a discount rate of 7 percent) or approximately $132 million (at a discount rate of 3 percent).\1\ PHMSA describes the benefits of this proposed rule qualitatively and does not anticipate that the revisions will result in an adverse impact on pipeline safety. --------------------------------------------------------------------------- \1\ Both values are in 2018 dollars. --------------------------------------------------------------------------- The primary economic consequences of the proposed deregulatory actions in this rule are cost savings. The largest quantified cost savings are due to the amendments related to farm taps and atmospheric corrosion (AC). The remaining amendments provide benefits largely of convenience, clarity and simplicity. The total estimated economic effects of the proposed rule are summarized in the table below (Table 1). PHMSA provided annualized estimates of cost savings where available. Table 1--Total Estimated Discounted Cost Savings ------------------------------------------------------------------------ Estimated cost Category savings (millions) ------------------------------------------------------------------------ Total (20 years; discounted at 7 percent)............... $1,371.4 Total (20 years; discounted at 3 percent)............... 1,965.3 Annualized (discounted at 7 percent).................... 129.45 Annualized (discounted at 3 percent).................... 132.101 ------------------------------------------------------------------------ II. Background On January 30, 2017, the President issued E.O. 13771, ``Reducing Regulation and Controlling Regulatory Costs.'' E.O. 13771 explained the executive branch's regulatory policy to be prudent and financially responsible in the expenditure of funds, from both public and private sources, and to manage the compliance burdens from federal regulations. On February 24, 2017, the President issued E.O. 13777, ``Enforcing the Regulatory Reform Agenda'' (82 FR 12285), which established a federal policy to ``alleviate unnecessary regulatory burdens placed on the American people.'' E.O. 13777 required that each federal agency establish a Regulatory Reform Task Force (RRTF) to evaluate existing regulations and ``make recommendations to the agency head regarding their repeal, replacement, or modification.'' Each RRTF must identify unnecessary, outdated, inneffective regulations and those that impose costs that exceed benefits. On March 28, 2017, the President issued E.O. 13783, ``Promoting Energy Independence and Economic Growth'' (82 FR 16093; Mar. 28, 2017), to promote the clean and safe development of the Nation's energy resources by eliminating unnecessary regulatory burdens on energy production, economic growth, and job creation. E.O. 13783 tasked agencies to review existing regulations, guidance, and orders that potentially burden the development or use of domestically produced energy resources. Specifically, agencies must look for impacts on siting, permitting, production, utilization, transmission, or delivery of energy resources and encourage the development of recommendations to reduce or eliminate potential burdens. DOT issued two notices in response to the three executive orders soliciting regulatory reform ideas from the public. The first notice (82 FR 26734; June 8, 2017) requested public comment on existing regulations that may be obstacles to transportation infrastructure projects. DOT received more than 200 comments in the transportation infrastructure docket, including 6 comments that are relevant to the PSR.\2\ The second notice (82 FR 45750; Oct. 2, 2017) requested comment on existing rules and other agency actions that may be eligible for repeal, replacement, suspension, or modification without compromising safety. DOT asked the public to identify agency actions that eliminate jobs or inhibit job creation; are outdated, unnecessary, or ineffective; impose costs that exceed benefits; create a serious inconsistency or otherwise interferes with regulatory reform initiatives and policies; could be revised [[Page 35242]] to use performance standards in lieu of design standards; or that potentially unnecessarily encumber energy production. After a 30-day comment period, DOT re-opened the comment period until December 1, 2017, (82 FR 51178; Nov. 3, 2017). Of the nearly 3,000 public comments received, approximately 30 were related to the federal PSR.\3\ --------------------------------------------------------------------------- \2\ Docket No. DOT-OST-2017-0057. \3\ Docket No. DOT-OST-2017-0069. --------------------------------------------------------------------------- To support DOT's regulatory reform efforts, PHMSA's Office of Pipeline Safety (OPS) reviewed, considered, and identified existing regulations that could be improved, revised, repealed, or streamlined. OPS also considered the public comments submitted in response to DOT's June 8, 2017, notice soliciting comments about transportation infrastructure, DOT's October 2, 2017, public notice soliciting comments on regulatory reform, and petitions for rulemakings. Some of the comments submitted in response to these notices are addressed in this proposed rule, such as the proposed amendments to reporting requirements, farm tap maintenance, atmospheric corrosion monitoring. Other comments will be addressed in other rulemaking projects, or through revised policy and guidance. Finally, some ideas proposed in comments are under longer-term technical review or have been rejected due to safety concerns. III. Request for Input PHMSA is seeking public comments on the regulatory reform actions proposed in this notice. PHMSA will consider all relevant, substantive comments but encourages interested parties to submit comments that: (1) Identify the proposed amendments being commented on and the appropriate section numbers; (2) provide justification for their support or opposition to the proposed amendments, especially data on safety risks and cost burdens; and (3) provide specific alternatives if appropriate. IV. Proposed Amendments Distribution Integrity Management Program (DIMP) On December 4, 2009, PHMSA issued a final rule, titled ``Pipeline Safety: Integrity Management Program for Gas Distribution Pipelines'' (74 FR 63905), creating 49 CFR part 192, subpart P. The scope of subpart P, defined at Sec. 192.1003, requires certain gas distribution operators to develop and implement integrity management (IM) programs. PHMSA is proposing two revisions to DIMP requirements to ease or eliminate regulatory burdens on certain gas distribution operators. The first revision is to allow operators of individual service lines directly connected to transmission or regulated gathering lines (commonly known as ``farm taps'') the option of managing the maintenance of pressure regulating devices under either Sec. 192.740 or their DIMP plan in accordance with subpart P. As part of this amendment, the proposed rule would also exempt farm taps originating from unregulated gathering and production pipelines from DIMP, Sec. 192.740, and incident and annual reporting requirements in part 191. Second, PHMSA is also proposing to exempt master meter operators from DIMP requirements due to their simplicity. A. Farm Taps (Sections 191.11, 192.740, 192.1003) PHMSA proposes to revise Sec. Sec. 192.740 and 192.1003 to give operators the choice to manage inspections of pressure regulators serving farm taps under either their DIMP or by following the inspection requirements at Sec. 192.740. A ``farm tap'' is the common name for an individual gas service line directly connected to a gas transmission, production, or gathering pipeline. The term farm tap is not a regulatory definition used in the PSR, however a portion of a farm tap between the first aboveground point where downstream piping can be isolated from source piping (e.g. a valve or regulator inlet) and either the outlet of the customer's meter or the connection to a customer's piping, whichever is further downstream, may be a service line regulated under part 192 (see the definition of a ``service line'' in Sec. 192.3). On January 23, 2017, PHMSA published a final rule that added Sec. 192.740, ``Pressure regulating, limiting, and overpressure protection-- Individual service lines directly connected to production, gathering, or transmission pipelines'' (82 FR 7972). Section 192.740 includes maintenance requirements for regulators and overpressure protection equipment for an individual service line that originates from a transmission, gathering, or production pipeline (i.e., a farm tap). Such devices must currently be inspected and tested at least once every 3 calendar years, not to exceed 39 months. Further, PHMSA revised the DIMP applicability regulations at Sec. 192.1003 to exclude farm taps from DIMP requirements. PHMSA amended part 192 as such to create uniform compliance requirements for farm taps and decrease the burden of meeting the DIMP requirements. However, operators who historically had included farm taps in their DIMP plan found it burdensome to remove those facilities from their plan and reevaluate the risks under a new program. DOT received joint comments on its regulatory reform notice (82 FR 45750; Oct. 2, 2017) from the American Gas Association (AGA), the American Petroleum Institute (API), and Interstate Natural Gas Association of America (INGAA) (collectively, ``the Associations''), which recommended that PHMSA revise Sec. Sec. 192.740 and 192.1003 to allow operators the flexibility to address the maintenance of farm taps under either of these regulatory requirements. After considering those comments, PHMSA is proposing to revise Sec. Sec. 192.740 and 192.1003 to give operators of farm taps originating from regulated source pipelines the choice to include those farm taps in their DIMP or manage the maintenance of the associated pressure regulators under the requirements at Sec. 192.740. PHMSA has determined that compliance with either Sec. 192.740 or DIMP provides an equivalent level of safety. PHMSA, therefore anticipates that this action will maintain pipeline safety while reducing regulatory burden. As an alternative to the proposal submitted in public comments, PHMSA also evaluated the alternative of repealing Sec. 192.740 and reinstating DIMP requirements for farm taps. However, that alternative only shifts the problem onto transmission and gathering operators with no safety benefit. Finally, PHMSA proposes to exempt farm taps branching off of unregulated gathering or production pipelines from annual reporting (Sec. 191.11), farm tap regulator maintenance (Sec. 192.740), and DIMP (part 192, subpart P). Any portion of a farm tap that meets the definition of a service pipeline must still comply with all other requirements in parts 191 and 192 applicable to service pipelines, even if the source of the service pipeline is not regulated by PHMSA. For example, an entity that operates a production pipeline with an attached farm tap must have an operator identification number in accordance with Sec. 191.22 and must submit incident reports for incidents caused by failures on the service pipeline (Sec. 191.9). While the operator's production pipeline is exempt from part 191 (see Sec. 191.1(b)(4)), any facility that meets the definition of a service line is a regulated distribution pipeline and therefore does not fall within the exemption for unregulated gathering and production pipelines. [[Page 35243]] B. Master Meter Operators (Sections 192.1003, 192.1015) PHMSA is proposing to revise Sec. Sec. 192.1003 and 192.1015 to exempt master meter operators from DIMP requirements. A ``master meter system'' is defined at Sec. 191.3 as a pipeline system for distributing gas where the operator purchases metered gas from an outside source for resale through a gas distribution pipeline system. Examples of master meters include owners of apartment complexes or mobile home parks who sell gas to tenants. Unlike most gas distribution operators, delivering gas is typically not a master meter operator's primary business. As a result of the agency's internal review, PHMSA is proposing to exempt master meter operators from DIMP requirements by revising the applicability of subpart P at Sec. 192.1005 and revising Sec. 192.1015. When DIMP was first proposed in 2008 (73 FR 36015), PHMSA recognized that master meter systems tend to be operated by small entities with simple systems compared to normal gas distribution operators. Section 192.1015 was intended to provide a simplified set of requirements that master meter operators could easily implement and benefit from. Through inspections, PHMSA and its state partners have seen that master meter operators have had significant difficulties implementing these simplified DIMP requirements effectively. PHMSA's state-federal DIMP team has noted that a significant amount of inspection and maintenance effort was being used to improve DIMP compliance among master meter operators. Despite these efforts, inspection data voluntarily submitted by some states shows that approximately half of master meter operators inspected between 2014 and 2017 did not have an acceptable DIMP in place before the compliance deadline of August 2, 2011, and for any given requirement 10-20% of master meter operators were not in compliance. PHMSA believes that this effort would be better used to effectively implement other basic requirements. Even when properly implemented, DIMP principles that are effective for larger operators do not have the same value for comparatively simple master meter systems within a limited geographical area. The proposed DIMP rule noted that master meter systems often include only one type of pipe, a single operating pressure, and no equipment other than pipe, meters, regulators, and valves. For these small and simple systems, a management system is not required to integrate data and information in order to identify risk mitigation strategies and actions. PHMSA's experience indicates that the analysis and documentation requirements of DIMP has had little safety benefit for this type of operator. PHMSA, state inspectors and subject matter experts agree that focusing on more fundamental risk mitigation activities (e.g., Sec. 192.605 Procedural manual for operations, maintenance, and emergencies, Sec. 192.613 continuing surveillance, and Sec. 192.617 investigations of failures) has more safety benefits than implementing a DIMP for this class of operators. Due to the implementation issues identified by PHMSA and state inspectors, PHMSA expects that exempting master meter operators from subpart P would result in cost savings for master meter operators without negatively impacting safety. PHMSA believes there are even potential safety benefits to allowing operators and inspectors to instead prioritize the most pertinent compliance activities specific to master meter systems. Master meter operators would still be subject to the rest of the pipeline safety regulations at part 192, such as the operations and maintenance requirements at subpart L and subpart M, the continuing surveillance requirements at Sec. 192.613 and the failure investigation requirement at Sec. 192.617. PHMSA believes those regulations adequately manage pipeline integrity risks for master meter operators with less burden. In consideration of the proposed DIMP exemption, PHMSA also requests public comment on whether PHMSA should repeal the incident reporting exception for master meter operators (Sec. 191.9 (c)), including specific safety issues that would merit monitoring through incident reporting requirements for such facilities. Reporting and Information Collections C. Mechanical Fitting Failure Reporting (Sections 191.12, 192.1009) PHMSA is proposing to remove Sec. Sec. 191.12 and 192.1009, eliminating the requirement for operators to submit mechanical fitting failure (MFF) reports through DOT Form PHMSA F-7100.1-2. Operators would still be required to submit incident reports, which include almost all of the information on the MFF form, for releases from mechanical fittings that meet the definition of an incident at Sec. 191.3. PHMSA also proposes to revise the gas distribution annual report form (DOT Form PHMSA F 7100.1) to include a count of MFFs. This issue was raised in comments submitted in response to the notice of regulatory reform from the Associations, the Gas Piping Technology Committee (GPTC), and the West Virginia Oil and Natural Gas Association (WVONGA), identifying this reporting requirement as an unnecessary and burdensome information collection. On February 1, 2011, PHMSA issued the final rule, ``Pipeline Safety: Mechanical Fitting Failure Reporting Requirements,'' (76 FR 5499), adding Sec. Sec. 191.12, 192.1001, and 192.1009 to the regulations. Section 191.12 sets forth the requirement for operators to report MFFs through DOT Form PHMSA F-7100.1-2. Section 192.1001 defines a ``mechanical fitting.'' Section 192.1009 requires distribution pipeline operators to submit a MFF report to PHMSA almost every time there is a release from a mechanical fitting, the vast majority of which are low-consequence events that do not meet the definition of an incident at Sec. 191.3. These changes were initially proposed as a result of investigations of incidents caused by improperly designed or installed mechanical fittings. The intent of collecting this data was to determine the frequency of mechanical fitting failures and identify the most common characteristics of those failures. Similar to the incident report form, the MFF form \4\ requires operators submit information on the design and installation of the failed fitting and the apparent cause of the leak. The form also includes manufacturing information; however, this is commonly not known by the operator. Unlike incident reports, which are required for events that meet the criteria defined in Sec. 191.3, MFF reports are required for each MFF that results in a ``hazardous leak'', defined at Sec. 192.1001, a much broader category of events. As a result, PHMSA currently collects approximately 15,000 MFF reports each year, compared to approximately 100 gas distribution incidents due to all causes. This has allowed PHMSA to collect and analyze a much larger volume of detailed information regarding MFFs than would be possible from incident reports alone. PHMSA publishes a report on the information collected and its analysis of the information received annually, which is available online.\5\ --------------------------------------------------------------------------- \4\ PHMSA F-7100.1-2. \5\ https://www.phmsa.dot.gov/pipeline/gas-distribution-integrity-management/dimp-performance-measures-data-analysis-procedure-report . --------------------------------------------------------------------------- After over 8 years of collecting and analyzing MFF information, PHMSA has determined that further collection of [[Page 35244]] MFF reports is no longer necessary. PHMSA's past analysis of the MFF data has confirmed the Agency's initial expectations regarding the frequency and characteristics of MFFs when the information collection activity was initiated. Further, PHMSA has not identified any statistically significant trends in the MFF report data over this time period. Finally, improvements in fitting design and operator practices have reduced the risks of these devices on newer installations. PHMSA, therefore, has determined it no longer needs to collect detailed information on thousands of MFFs that do not result in incidents. In the future, a combination of gas distribution incident reports and PHMSA's proposal to add a count of MFFs on gas distribution annual reports will adequately meet PHMSA's information needs with regards to the safety of mechanical fittings. PHMSA's proposal to replace the requirement to submit a full MFF report with a count of MFFs on the gas distribution annual report \6\ results in a net reduction in reporting burden for each event, without a significant loss of useful information to PHMSA. In the future, a combination of incident reports and a count of MFFs on annual reports will continue to provide PHMSA with adequate information regarding the safety of mechanical fittings. If a MFF results in an incident, then the operator must submit a gas distribution incident report form,\7\ which currently collects almost all of the data fields on the MFF form.\8\ A count of MFF on operators' annual reports allows PHMSA to continue to collect information on trends in the number of MFFs nationally and compare failure rates among operators, which is useful information for PHMSA and state pipeline safety programs. --------------------------------------------------------------------------- \6\ DOT Form PHMSA F 7100.1-1 (rev 1/30/2017). \7\ DOT Form PHMSA F 7100.1 (rev 10/2014)). \8\ DOT Form PHMSA F 7100.1-2 (rev 10/2014). --------------------------------------------------------------------------- PHMSA has determined that requiring a detailed MFF report for each MFF is no longer necessary. PHMSA can meet its information needs with substantially less burden through existing incident reporting requirements and PHMSA's proposal to revise the gas distribution annual report form to include a count of MFFs that result in hazardous leaks. Since PHMSA no longer requires the information on the MFF form for failures that do not lead to incidents, the proposed change eliminates an unnecessary reporting burden and would have no impact on safety. D. Monetary Threshold for Incident Reporting (Section 191.3) PHMSA is proposing to revise the definition of an ``incident'' at Sec. 191.3 to adjust the monetary damage threshold for inflation. PHMSA is proposing to raise the reporting threshold for incidents that result in property damage to $122,000, consistent with inflation since 1984. The property damage criterion includes losses to the operator and others but excludes the cost of lost gas. Any incident that results in one or more of the other criteria (a fatality, an injury that requires in-patient hospitalization, releases over three million cubic feet of gas, or is significant in the judgment of the operator) would still be defined as an incident that must be reported regardless of how much property damage occurs. PHMSA intends to base any finalized version of this provision on the price level at the time of publication of the final rule. On May 3, 1984, PHMSA's predecessor agency, the Research and Special Programs Administration, added a definition for an ``incident'' at Sec. 191.3 (49 FR 18960). The definition provides criteria that requires operators to report specific events to PHMSA. The 1984 definition of an incident included, among other things, a release of gas that results in estimated property damage of $50,000 or more. Today, over 30 years later, operators must still submit an incident report for any release that results in estimated property damage of $50,000 or more. One of the most frequent comments submitted in response to the notice of regulatory reform addressed the $50,000 monetary damage threshold for reporting gas pipeline incidents and hazardous liquid pipeline accidents. The Associations, GPTC, and the GPA Midstream Association \9\ submitted comments in response to the notice of regulatory reform that recommended an increase in the monetary damage threshold for reporting gas pipeline incidents and hazardous liquid pipeline accidents. Based on the average annual Consumer Price Index (CPI) from the Bureau of Labor Statistics of the U.S. Department of Labor, $50,000 in 1984 is $122,000 in 2019 dollars.\10\ The current damage threshold requires incidents that would not have been reported in 1984 to be reported to PHMSA due to inflation in property, equipment, and repair costs. --------------------------------------------------------------------------- \9\ GPA, formerly the Gas Processors Association. \10\ This analysis is based on the CPI for All Urban Consumers (CPI-U) from the Bureau of Labor Statistics, accessed via https://data.bls.gov/cgi-bin/cpicalc.pl . --------------------------------------------------------------------------- The proposed revision to the monetary damage threshold brings the incident reporting criteria in-line with the 1984 threshold in inflation-adjusted terms. Based on a review of previous incident reports, adjusting the figure for inflation would decrease the number of events reportable as incidents by approximately one fourth, and reduce those reportable due to only the property-damage criterion by almost half. This rulemaking assumes the threshold set 35 years ago is still appropriate for today once it is adjusted for inflation; however, since the original rulemaking 35 years ago, an improved safety record has decreased the number of significant events, and the safety information needs may have changed. PHMSA seeks comment on whether the level of safety information needed from property damage only incident reporting should be updated to align with inflation, and the extent to which retaining a defacto lower threshold after inflation would provide beneficial information on contributing risk factors and incident trends. PHMSA intends to periodically update the monetary damage threshold on a regular basis in the future, potentially biennially. Future updates would be based on the same formula used for this adjustment: [GRAPHIC] [TIFF OMITTED] TP09JN20.002 Where Tn is the revised damage threshold, Tp is the previous damage threshold, CPIn is the average CPI-U for the past calendar year, and CPIp is the average CPI-U used for the previous damage threshold. PHMSA could subsequently update the monetary damage threshold in accordance with this formula either through notice and comment rulemaking, a direct final rule, notice on the PHMSA public website, or other means. This method is similar to the method that the Federal Railroad Administration uses to update the criteria for reporting accidents/ incidents at 49 CFR 225.19 and Appendix B to part 225. PHMSA seeks comments on the appropriate method and frequency for future updates to the monetary damage threshold. PHMSA also considered revising the monetary damage threshold by eliminating the monetary damage threshold entirely and only require reporting incidents that meet one of the other criteria. Ultimately, PHMSA chose to propose a monetary damage threshold derived by adjusting the current value for inflation since 1984. This approach aligns with the intent of the 1984 monetary damage threshold and was [[Page 35245]] supported in public comments submitted in response to the notice of regulatory reform. PHMSA determined that eliminating the monetary threshold was not appropriate. Repealing that criterion would eliminate approximately half of all incident reports, significantly reducing the amount of safety data available to PHMSA, state pipeline safety programs, operators, and the public. Corrosion Control Virtually all hazardous liquid and most natural gas transmission pipe in service today is made of steel. This steel, when not otherwise protected, reacts with its environment and can deteriorate over time. Under certain conditions, unprotected metal can corrode, causing gas leaks that can threaten public safety. To guard against this, the PSR requires, with some exceptions, cathodic protection and protective coatings to mitigate corrosion risks on pipelines. Cathodic protection works like a battery, running an electrical current across the buried pipeline using devices called rectifiers. The electrical current prevents the metal surface of the pipe from reacting with its environment. If the current is sufficient, cathodic protection can control corrosion threats. Subpart I of part 192 establishes requirements for corrosion control and remediation for natural gas pipelines. This subpart also establishes inspection intervals for testing and repairing systems as necessary to bring them into compliance. PHMSA is proposing two amendments related to corrosion control. PHMSA is proposing to clarify that cathodic protection rectifiers can be monitored remotely and to revise the requirements for assessing atmospheric corrosion on distribution service pipelines. E. External Corrosion Control: Monitoring (Section 192.465) PHMSA is proposing to revise Sec. 192.465(b), ``External corrosion control: Monitoring,'' to clarify that operators may monitor rectifier stations remotely. As discussed earlier, rectifiers are devices that direct an electrical current on a pipeline to prevent external corrosion. Section 192.465(b) requires regular inspection of rectifiers on gas pipelines to ensure that they are working correctly. Advances in technology make it possible to monitor the proper operation of these electrical systems remotely, but it is not clear in the regulations if this is permissible. PHMSA is proposing to revise Sec. 192.465(b) to clarify that operators may inspect rectifier stations directly onsite or by way of remote monitoring technologies. This proposed rule also clarifies that, at a minimum, such an inspection consists of recording amperage and voltage measurements. PHMSA is considering a similar revision for monitoring rectifier stations on hazardous liquid pipelines in a separate rulemaking. Remote monitoring equipment must be properly maintained in order to function safely and as intended. PHMSA's experience has shown that rectifiers, often located in remote areas, can be subject to damage from a variety of sources, including natural forces and vandalism. If an operator chooses to monitor a rectifier remotely, PHMSA proposes to require operators to physically inspect that station whenever they conduct a cathodic protection test pursuant to Sec. 192.465(a). For transmission pipelines and distribution mains, this will occur once each calendar year, concurrent with existing inspection activities required at Sec. 192.465(a). F. Atmospheric Corrosion: Monitoring (Sections 192.481, 192.1007, 192.1015) PHMSA is proposing to revise Sec. 192.481 to establish a separate atmospheric corrosion reassessment interval for gas distribution service pipelines. Currently, all onshore gas pipelines that are exposed to the atmosphere must be inspected once every 3 years, not to exceed 39 months. PHMSA proposes a maximum inspection interval for service lines of once every 5 calendar years, not to exceed 63 months, unless atmospheric corrosion was identified on the last inspection. PHMSA also proposes to keep the current inspection interval on service lines with observed corrosion; if an operator identifies atmospheric corrosion on a service line during an inspection, then the interval for the subsequent inspection would be once every 3 years, not to exceed 39 months. If no atmospheric corrosion is identified on a subsequent inspection, then operators would be permitted to revert to the 5-year inspection interval. PHMSA is not aware of any incidents caused by atmospheric corrosion on distribution service lines since at least 1986 \11\ and does not anticipate a decrease in safety from this change. --------------------------------------------------------------------------- \11\ 1986 is the earliest year available in the ``Pipeline Incident Flagged Files'' dataset. https://www.phmsa.dot.gov/data-and-statistics/pipeline/pipeline-incident-flagged-files . --------------------------------------------------------------------------- Also with regard to atmospheric corrosion, consistent with comments on the notice of regulatory reform, PHMSA proposes to clarify that existing requirements to consider corrosion under DIMP include the consideration of atmospheric corrosion risks. PHMSA would expect operators of service lines in high-corrosion environments to consider atmospheric corrosion in their evaluation of risks under DIMP and conduct atmospheric corrosion inspections more frequently than the minimum requirements in this section. Comments on the notice of regulatory reform from the Associations, APGA, GPTC, and WVONGA recommended that PHMSA revise the atmospheric corrosion inspection requirements for distribution pipelines. The Associations commented that PHMSA should allow operators of distribution pipelines to manage atmospheric corrosion based on the operator's assessment of the risks in accordance with their DIMP plans. Alternatively, APGA recommended simply establishing an inspection interval of 5 years, not to exceed 63 months for all distribution pipelines, which would allow operators to coordinate atmospheric corrosion assessments with leakage surveys (Sec. 192.723), which also occur at an interval of 5 years, not to exceed 63 months. PHMSA considered each of those suggestions as alternatives, and the proposed rule integrates aspects of each. The proposed rule establishes a maximum inspection interval of 5 years for distribution service lines without observed corrosion. PHMSA agreed with the ra
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