{"operation":"document","citation":"PI-07-0104","title":"Sutherland Asbill &amp; Brennan LLP — Pipeline Safety Interpretation","source_type":"guidance","agency":"Pipeline and Hazardous Materials Safety Administration","status":"guidance","official":true,"published_on":"2007-06-04","effective_on":null,"summary":"PI-07-0104 response to Sutherland Asbill &amp; Brennan LLP concerning 195.1.","machine_formats":{"json":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-07-0104.json","markdown":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-07-0104.md"},"app_url":"https://regulus.evalyn.ai/document/phmsa-interpretation-pi-07-0104","source_url":"https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/legacy/interpretations/Interpretation%20Files/Pipeline/2007/g07-06-04_Soto_195.1-lmxs.pdf","body":"<<<PAGE 1>>>\n\nPI-07-0104\nU.S. Department of Transportation\nPipeline and Hazardous Materials Safety Administration\n1200 New Jersey Avenue, SE\nWashington, D.C. 20590\nJune 4 2001\nMr. Andrew K. Soto\nSutherland Asbill & Brennan LLP\n1275 Pennsylvania Avenue, NW\nWashington, DC 20004\nDear Mr. Soto:\nOn December 27, 2006 you wrote to the Pipeline and Hazardous Materials Safety Administration (PHMSA)\nrequesting a determination as to the jurisdiction of the Federal pipeline safety regulations to a Questar Gas\nManagement Company (QGM) pipeline in Wyoming.\nIn your letter you state that QGM owns and operates a system of flow lines that separately carry condensates,\nnatural gas, and water from well pads to the Gobbler's Knob Station in Sublette County, Wyoming. At Cobbler's Knob,\nQGM operates stabilization facilities that, in part, stabilize the condensate to a 10.5 pounds per square inch absolute\n(psia) true vapor pressure product. This stabilized condensate product then moves directly into QGM's No. 611 pipeline\nor a temporary holding tank, which is an integral part of the stabilization facilities used to ensure a consistent flow of\ncondensate into the No. 611 pipeline.\nIn your letter you describe the No. 611 pipeline as a nominal 6-inch, 61-mile pipeline that transports the stabilized\ncondensate from Gobbler's Knob Station to an interconnection with Rocky Mountain Pipeline Company at Labarge\nStation near Labarge, Wyoming. You add that the pipeline lies entirely within rural areas and does not pass through any\ncities, towns, villages or other designated residential or commercial areas.\nThe PHMSA's Federal pipeline safety regulations in 49 CFR Part 195 prescribe the minimum safety standards and\nreporting requirements for pipeline facilities used to transport hazardous liquids and carbon dioxide. According to §\n195.1(b)(4), the regulations do not apply to the \"Transportation of petroleum in onshore gathering lines in rural areas\nexcept for gathering lines in the inlets of the Gulf of Mexico subject to § 195.413.\" (See § 195.1(b)(4)). The Federal\npipeline safety regulations in § 195.2 contain the following definitions:\n\"Gathering line means a pipeline 219.1 mm (8 5/8 in) or less nominal outside diameter that transports petroleum\nfrom a production facility.\n\"Petroleum means crude oil, condensate, natural gasoline, natural gas liquids, and liquefied petroleum gas.\n\"Production facility means piping or equipment used in the production, extraction, recovery, lifting, stabilization,\nseparation or treating of petroleum or carbon dioxide, or associated storage or measurement.\n\"Rural area means outside the limits of any incorporated or unincorporated city, town, village, or any other\ndesignated residential or commercial area such as a subdivision, a business or shopping center, or community\ndevelopment.\"\nQGM's No. 611 pipeline as described in your letter of December 27, 2006 is less than 8 5/8-inches in nominal\noutside diameter, lies entirely within rural areas, and transports condensate (petroleum) from Gobbler's Knob Station\n(production facility). Accordingly, it is not regulated by PHMSA under 49 CFR Part 195. This determination is based\nupon the facts given to PHMSA in your letter. Should those facts be in error or change with time, such as residential or\ncommercial encroachment along the pipeline, this decision could be rescinded.\nIf I can further assist you with this, or any other regulatory matter, please contact me at (202) 366-4595.\nSincerely,\nFlorence L. Hamn\nDirector, Office of Regulations\n\n<<<PAGE 2>>>\n\nSutherland, Asbill & Brennan LLP\n1275 Pennsylvania Avenue, NW\nWashington, DC 20004-2415\nDecember 27, 2006\nTheodore L. Wilke\nActing Associate Administrator Pipeline Safety\nPipeline and Hazardous Materials\nSafety Administration\nU.S. Department of Transportation\n400 Seventh Street, SW\nWashington, DC 20590\nRE: Determination as to the jurisdiction of Questar Gas Management Company's No. 611 gathering line.\nDear Mr. Wilke:\nPursuant to Section 190.11(b) of the regulations of the Pipeline and Hazardous Materials Safety Administration\n(\"PHMSA\"), 49 C.F.R. § 190.11 (2005), Questar Gas Management Company (\"QGM\") respectfully requests a written\ninterpretation as to whether QGM's No. 611 line is a rural gathering line within the meaning of 49 C.F.R. § 195.2 and\nthus not subject to the safety standards and reporting requirements of 49 C.F.R. Part 195 in accordance with 49 C.F.R. §\n195.1(b)(4). QGM believes that its No. 611 line is an exempt rural gathering line because it has a nominal diameter of 6\ninches; it carries petroleum (natural gas condensate liquids) onshore, from production facilities at and upstream of\nGobblers Knob Station (located in the Pinedale Anticline Producing Area in Sublette County, Wyoming) to an\ninterconnection with Rocky Mountain Pipeline Company at Labarge Station, near Labarge, Wyoming; and, it does not\npass through any cities, towns, villages or other designated residential or commercial areas.\nBackground\nQuestar Exploration and Production Company (\"QEP\") owns and operates wells in the Pinedale Anticline\nProduction Area in Southwest Wyoming that produce natural gas and associated liquid hydrocarbons. For purposes of\n49 C.F.R. Part 195, the liquid hydrocarbons recovered during the natural gas production process constitute \"petroleum.\"\nThe liquids are petroleum in the form of \"condensates.\" They exist in the reservoir and are recovered at the surface\nwithout resorting to processing (see Williams and Myers, Manual of Oil & Gas Terms, 9th ed.). They are sometimes\nreferred as \"natural gas liquids.\" Condensates produced at natural gas wells located in the Pinedale Anticline Production\nArea are collected on well pads and carried via flow lines to Gobbler's Knob Station in Sublette County, Wyoming, where\nthey are stabilized and prepared for transportation and delivery to Rocky Mountain Pipeline Company at Labarge\nStation, near Labarge, Wyoming.\nQGM owns and operates the system of flow lines that separately carry condensates, natural gas and water from\nthe well pads to Gobbler's Knob Station. At the wellhead and at various points at and upstream of Gobbler's Knob\nStation, separation equipment removes water and natural gas from the condensate flow lines. At Gobbler's Knob\nStation, which is located midway in the production and gathering process, QGM operates stabilization facilities for the\ncondensates. The stabilization facilities include a low pressure separator to remove any remaining water as well as\nstrainers and filters to remove other impurities. The condensates are stabilized to a 10.5 psia true vapor pressure\nproduct. The stabilized condensates move directly into QGM's No. 611 line, or are temporarily held in the condensate\nstorage tank. QGM operates the condensate storage tank in an integrated manner with the stabilization facilities to\nensure a consistent flow of condensates into QGM's No. 611 line. A site plan and general arrangement drawing of\nQGM's stabilization facilities at Gobbler's Knob Station is included as Attachment A.\nQGM's No. 611 line is a nominal 6-inch line approximately 61 miles long that continues the gathering process by\nmoving the stabilized condensate (crude petroleum) from the production facilities at Gobbler's Knob Station to an\ninterconnection with Rocky Mountain Pipeline Company at Labarge Station near Labarge, Wyoming. A series of nine (9)\nroute maps for the No. 611 line are included as Attachment B.\n\n<<<PAGE 3>>>\n\nAnalysis\nThe safety standards and reporting requirements for pipeline facilities set forth in 49 C.F.R. Part 195 do not\napply to the \"[t]ransportation of petroleum in onshore gathering lines in rural areas . . , .\" 49 C.F.R. § 195.1(b)(4). The\nterm \"petroleum\" is defined to include \"crude oil, condensate, natural gasoline, natural gas liquids, and liquefied\npetroleum gas.\" 49 C.F.R. § 195.2. Consequently, the liquid hydrocarbons recovered during QEP's natural gas production\nactivities in the Pinedale Anticline Production Area are properly considered \"petroleum\" under the regulations.\nA \"gathering line\" is defined as \"a pipeline 219.1 mm (8 5/8 in.) or less nominal outside diameter that transports\npetroleum from a production facility.\" 49 C.F.R. § 195.2. QGM's No. 611 line — with a nominal diameter of 6 inches —\nclearly satisfies the size requirement of the regulations.\nQGM's No. 611 line \"transports petroleum from a production facility\" within the meaning of the regulations. (It\ndoes not carry \"highly volatile liquids\" as that term is defined in 49 C.F.R. § 195.2.). Under § 195.2, a \"production facility\"\nmeans \"piping or equipment used in the production, extraction, recovery, lifting, stabilization, separation or treating of\npetroleum or carbon dioxide or associated storage or measurement.\" When this definition was promulgated, the\nDepartment made clear that the concept of \"production\" included both the process of extracting petroleum from the\nground \"and preparing it for transportation by pipeline.\"1 Accordingly, the Department concluded that production\nfacilities are those facilities necessary to prepare the petroleum for transportation by pipeline, including stabilization,\nseparation, treating, storage, and measurement.2 QGM owns and operates stabilization equipment and associated\nstorage facilities at Gobbler's Knob Station. These facilities at Gobbler's Knob Station qualify as \"production facilities\"\nunder § 195.2 because they are necessary to prepare the condensates for transportation by pipeline. Thus, QGM's No.\n611 line is a gathering line that transports petroleum from production facilities to Rocky Mountain Pipeline Company's\noil pipeline at Labarge Station.\nQGM's No. 611 line transports petroleum exclusively in rural areas. A \"rural area\" is defined in the regulations as\nan area \"outside the limits of any incorporated or unincorporated city, town, village, or any other designated residential\nor commercial area such as a subdivision, a business or shopping center, or community development.\" 49 C.F.R. § 195.2.\nNo part of QGM's No. 611 pipeline passes through a city, town, village, or other designated residential or commercial\narea. Thus, under § 195.2, QGM's No. 611 pipeline transports petroleum exclusively in rural areas.\nApplying the regulations to the particular facts, QGM's No. 611 line is a gathering line within the meaning of Part\n195. It has a nominal diameter of 6 inches; it gathers petroleum from production facilities at Gobbler's Knob Station; it is\nlocated entirely in rural areas. It does not transport highly volatile liquids.\nAccordingly, QGM submits that its No. 611 line is a rural gathering line within the meaning of 49 C.F.R. § 195.2\nand is thus not subject to the safety standards and reporting requirements of 49 C.F.R. Part 195.\nConclusion\nBased on the foregoing, QGM requests an interpretive letter confirming QGM's belief that its No. 611 line is a\ngathering line not subject to the safety standards and reporting requirements of Part 195. If you have further questions\nor any disagreement with that interpretation, QGM respectfully requests an opportunity to meet and discuss your\nanalysis prior to your issuing your letter.\nThank you for your prompt attention to this matter.\nSincerely,\nAndrew K. Soto\nWilliam H. Penniman","truncated":false,"body_characters":11292}