{"operation":"document","citation":"0900006481b78740","title":"U.S. DOT/PHMSA - Regulatory Impact Analysis and Initial Regulatory Flexibility Act Analysis: Proposed Rule","source_type":"rulemaking","agency":"Pipeline and Hazardous Materials Safety Administration","status":"current","official":true,"published_on":null,"effective_on":null,"summary":"Regulatory Impact Analysis and Initial Regulatory Flexibility Act Analysis: Proposed Rule Pipeline Safety: Operator Qualification, Cost Recovery and other Pipeline Safety Proposed Changes PHMSA-2013-0163 Office of Pipeline Safety Pipeline and Hazardous Materials Safety Administration (PHMSA) U.S. Department of Transportation June 1, 2015 1 April 30, 2014 Executive Summary This package of proposed regulatory changes would address errors and inconsistencies in the current regulations, provide additional clarifications, incorporate industry standards, and update certain regulatory requirements. The proposed changes also address statutory requirements from...","machine_formats":{"json":"https://regulus.evalyn.ai/document/regulations-gov-attachment-0900006481b78740.json","markdown":"https://regulus.evalyn.ai/document/regulations-gov-attachment-0900006481b78740.md"},"app_url":"https://regulus.evalyn.ai/document/regulations-gov-attachment-0900006481b78740","source_url":"https://downloads.regulations.gov/PHMSA-2013-0163-0004/attachment_1.pdf","body":"<<<PAGE 1>>>\n\nRegulatory Impact Analysis\nand\nInitial Regulatory Flexibility Act Analysis: Proposed Rule\nPipeline Safety: Operator Qualification, Cost Recovery and other Pipeline Safety Proposed Changes\nPHMSA-2013-0163\nOffice of Pipeline Safety\nPipeline and Hazardous Materials Safety Administration (PHMSA)\nU.S. Department of Transportation\nJune 1, 2015\n1\n\n<<<PAGE 2>>>\n\nApril 30, 2014\nExecutive Summary\nThis package of proposed regulatory changes would address errors and inconsistencies in the\ncurrent regulations, provide additional clarifications, incorporate industry standards, and update\ncertain regulatory requirements. The proposed changes also address statutory requirements from\nthe Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (Public Law 112-90)\nand safety recommendations from the NTSB, as well as petitions for rulemaking. Many of the\nproposed revisions are small changes that would not lead to substantial changes in regulatory\nrequirements, operator practices, or overall costs and benefits.\nBenefit-Cost Analysis\nAnnual compliance costs are estimated at $3.1 million, less savings to be realized from the\nremoval of farm taps from the DIMP requirements. Annual safety benefits cannot be quantified\nas readily due to data limitations, but are in the range of $1.6 million per year in avoided incident\ncosts, plus numerous intangible benefits from the improved clarity and consistency of regulations\nand improved abilities to conduct post-incident investigations. Although the quantified benefits\ndo not exceed the estimated costs, PHMSA believes that these non-quantified benefits are\nsignificant enough to outweigh the costs of compliance. In particular, improvements to Operator\nQualification and post-incident investigation may prevent a future high-consequence event. At\nan annual compliance cost of $3.1 million, the proposed new Operator Qualification and post-\naccident testing requirements would be cost-effective if they prevented a single fatal incident\nover a 3-year period.\nRegulatory Flexibility Act Analysis\nThe Initial Regulatory Flexibility Analysis found that the proposed rule could affect a substantial\nnumber of small entities because of the market structure of the gas and hazardous liquids\npipeline industry, which includes many small entities. However, these impacts would not be\nsignificant. The Operator Qualification provision would entail new costs for small entities in the\nrange of $160 per employee per year, or about 0.3% of salary for a typical pipeline employee.\nThe post-accident drug testing provision would add $74 in documentation costs per reportable\nincident. The other provisions would not add appreciable costs, and at least one provision (Farm\nTaps) would yield compliance cost savings.\nUnfunded Mandates Act Analysis\nPHMSA determined that the rule would not impose annual expenditures on State, local, or tribal\ngovernments of the private sector in excess of $153 million, and thus does not require an\nUnfunded Mandates Act analysis.1\n1 The Unfunded Mandates Act threshold was $100 million in 1995. Using the non-seasonally adjusted CPI-U (Index\nseries CUUR000SA0), that number is $153 million in 2013 dollars.\n2\n\n<<<PAGE 3>>>\n\nApril 30, 2014\n1 Introduction\nThe Pipeline and Hazardous Materials Safety Administration (PHMSA) is proposing a package\nof changes to the pipeline safety regulations. On January 3, 2012, President Obama signed into\nlaw the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (“the Act”).\n2 The\nproposed changes would address Sections 9 and 13 of the Act, correct errors, address\ninconsistencies, and respond to rulemaking petitions.\nRequirements in several subject matter areas would be affected, including telephonic or\nelectronic notifications of accidents and incidents, cost recovery for design reviews, Operator\nQualification requirements, the renewal of expiring special permits, farm taps, reversal of flow or\nchange in product, control room team training, editorial changes, provide standards for\nassessment tools via incorporation by reference in Part 195, modify the criteria used to make\ndecisions about conducting post-accident drug and alcohol tests and additional testing in Part\n199, requiring electronic reporting of drug and alcohol testing results in Part 199, and requiring\npost-accident drug and alcohol testing in Part 199.\nThis report analyzes the benefits and costs of the proposed regulatory changes as required by\nSection 1 of Executive Order 12866 (as amended by E.O.’s 13258 (2002), 13422 (2007), and\n13497 (2009)) and Section 1 of Executive Order 13563. 3 Executive Orders 12866 and 13563\nrequire agencies regulate in the “most cost-effective manner” make a “reasoned determination\nthat the benefits of the intended regulation justify its costs,” and develop regulations that\n“impose the least burden on society.”\nAnalysis of the potential impacts on small entities is also required by the Regulatory Flexibility\nAct. The initial Regulatory Flexibility Act analysis is also included in this document (see\nSection 8).\n2 Background\nPHMSA, pipeline operators, and others have identified certain errors, inconsistencies, updates to\nstandards incorporated by reference, and other deficiencies in the Pipeline Safety Regulations.\nAs such, PHMSA is proposing to make a set of miscellaneous changes to the Pipeline Safety\nregulations concerning the following subjects, which are described in more detail in sections 3.1\nto 3.12 below:\n Accident and Incident Notification\n Cost Recovery for Design Reviews\n Operator Qualification Requirements for Parts 192 and 195\n2 Public Law 112-90\n3 The text of E.O. 12866 can be found here: http://www.archives.gov/federal-register/executive-\norders/pdf/12866.pdf and E. O. 13563 here:\nhttp://www.whitehouse.gov/sites/default/files/omb/inforeg/eo12866/eo13563_01182011.pdf\n3\n\n<<<PAGE 4>>>\n\nApril 30, 2014\n Special Permit Renewal\n Farm Taps\n Reversal of Flow or Change in Product\n Control Room Team Training\n Editorial Amendments\n Assessment tools by Incorporation by Reference\n modifying the criteria used to make decisions about conducting post-accident drug and\nalcohol tests\n Electronic Reporting of Drug and Alcohol Testing Results\n Post-Accident Drug and Alcohol Testing\n3 Identification of the Problem and the Need for the Rule\nUnder the Federal Pipeline Safety Laws, 49 U.S.C. 60101 et seq., the Secretary of Transportation\nmust prescribe minimum safety standards for pipeline transportation and for pipeline facilities.\nThe Secretary has delegated this authority to the PHMSA Administrator (49 CFR 1.97(a)). The\nproposed rule would create changes in the regulations consistent with the protection of persons\nand property while changing unduly burdensome or nonsensical requirements.\nExecutive Order 12866 states that \"Federal agencies should promulgate only such regulations as\nare required by law, are necessary to interpret the law, or are made necessary by compelling\nneed, such as material failures of private markets to protect or improve the health and safety of\nthe public, the environment, or the well-being of the American people ... .\" The mission of the\nPHMSA is to ensure the safety of the natural gas and hazardous liquids pipeline system.\nPipeline operators do not always bear the full costs of an incident. Even in cases where they\nprovide compensation for losses that can be monetized, those monetary penalties or settlements\ndo not necessarily capture the full impact on affected parties, especially when a death or injury\noccurs. As a result, there is a negative externality present in which the company may not take the\nfull societal cost of a possible incident into account in its decision-making. The negative\nexternality alters the company’s decision about safety precautions, leading to a need for\ngovernment to set minimum levels of safety precautions. Pipeline safety regulations are\ndesigned to address this potential market failure. The rulemaking package analyzed here is more\nspecifically intended to improve compliance with these regulations by updating references and\ntechnical standards, providing clarification, and removing conflicting language. Some of the\nprovisions also promote improved pipeline integrity and safety by addressing small gaps in the\ncurrent regulations, as discussed in more detail below.\nExecutive Orders 12866 and 13563 direct all Federal agencies to consider the costs and benefits\nof “significant regulatory actions.” Federal agencies are directed to develop a formal Regulatory\n4\n\n<<<PAGE 5>>>\n\nApril 30, 2014\nImpact Analysis consistent with Office of Management and Budget (OMB) Circular A-4 for all\n“economically significant” rules, or those rules estimated to have an impact of $100 million in\n1995 dollars or more in any one year. The Order also requires a determination as to whether a\nrule could adversely affect the economy in terms of productivity and employment, the\nenvironment, public health, safety, or State, local, or tribal governments. This requirement\napplies to rulemakings that rescind or modify existing rules as well as to those that establish new\nrequirements. The goal of the analysis is to provide decision makers with a clear indication of the\nmost efficient alternative – that is, the alternative that generates the largest net benefits to society\nignoring distributional effects.\nThis proposed rule has been considered a non-significant regulatory action under Section 3(f) of\nExecutive Order 12866 (58 FR 51735), and therefore is not reviewed by OMB. This proposed\nrule is non-significant under the Regulatory Policies and Procedures of the Department of\nTransportation (44 FR 11034). It falls below the $100 million per year in annual impact\nthreshold.\nThis regulatory analysis:\n Identifies the target problem, including a statement of the need for the action.\n Identifies available alternative approaches\n Defines the baseline.\n Defines the scope and parameters of the analysis.\n Defines and evaluates the costs and benefits of the action and the main alternatives\nidentified by the analysis.\n Compares the costs and benefits.\n Interprets the cost and benefit results.\nSubsections 3.1 to 3.13 describe the proposed regulatory changes in detail and the specific needs\nto which each regulatory change responds.\n3.1 Accident and Incident Notification\nCurrently, PHMSA requires pipeline owners and operators to notify the National Response\nCenter by telephone or electronically at the earliest practicable moment following discovery\n(§§ 191.5 and 195.52). In an advisory notice (67 FR 57060) dated September 6, 2002, PHMSA\nadvised owners and operators of gas and hazardous liquids pipeline systems and liquefied natural\ngas (LNG) facilities that at the earliest practicable opportunity usually means 1 to 2 hours after\ndiscovery of the incident.\nSection 9 of the Act requires PHMSA to require a specific time limit for telephonic or electronic\nreporting of pipeline accidents and incidents.\n5\n\n<<<PAGE 6>>>\n\nApril 30, 2014\nIn this rulemaking, PHMSA proposes to revise the pipeline safety regulations to establish time\nlimits for telephonic or electronic notification of an accident or incident to require such\nnotification at the earliest practicable moment following the confirmed discovery of an accident\nor incident, not later than 1 hour following the time of such confirmed discovery. Owners and\noperators would also be required to revise their initial telephonic or electronic notice to the\nSecretary and the National Response Center with an estimate of the amount of the product\nreleased, an estimate of the number of fatalities and injuries, if any, and any other information\ndetermined appropriate by the Secretary. This information must be reported within 48 hours of\nthe accident or incident, to the extent practicable.\nOwners and operators of gas and hazardous liquid pipelines and LNG facilities are already\nrequired to report an incident to the NRC in Washington, DC, at the earliest practicable\nopportunity (usually one to two hours after discovering the incident). However, under Section\n9(b)(1) of the Act, PHMSA is required to issue regulations requiring owners and operators to\nnotify the NRC no later than one hour of discovery of a pipeline accident or incident. Therefore,\nPHMSA is proposing that pipeline operators report accidents and incidents within one hour of\nconfirmed discovery.\n3.2 Cost Recovery for Design Reviews\nThis proposed rulemaking action would amend the Federal pipeline safety regulations to\nprescribe a fee structure and assessment methodology for recovering Agency costs associated\nwith design reviews of new gas and hazardous liquid pipelines with overall design and\nconstruction costs totaling at least $2,500,000,000 or that contain new and novel technologies.\nPHMSA has no method for recovering design review costs from the operator of the pipeline\nincurred by the agency while conducting these reviews.\nSection 13 of the Act requires PHMSA to recover costs associated with design reviews. Section\n13 of the Act allows PHMSA to prescribe a fee structure and assessment methodology for\nrecovering costs associated with design reviews. Specifically, cost recovery can apply to any\nproject that : 1) has costs totaling at least $2,500,000,000 as adjusted by the Secretary to take into\naccount changes in CPI, 2) uses new or novel technologies or design, as determined by the\nSecretary. The Act also requires the Secretary of Transportation to issue guidance to clarify the\nmeaning of the term \"new or novel technologies\" one year after the date of enactment.\nAs directed, in January 2013, PHMSA issued guidance on its website to clarify the meaning of\nthe term ‘‘new or novel technologies or design’’ as meaning, “any products, designs, materials,\ntesting, construction, inspection, or operational procedures that are not addressed in Title 49 CFR\nPart 192, 193, or 195 due to technology or design advances and innovation.”\nPHMSA conducts facility design safety reviews in connection with proposals to construct,\nexpand, or operate gas or hazardous liquid pipelines or liquefied natural gas pipeline facilities.\nReviews include design, construction, and operational inspections and oversight. These reviews\n6\n\n<<<PAGE 7>>>\n\nApril 30, 2014\ndivert a significant amount of PHMSA’s limited resources from the agency’s pipeline safety\nenforcement responsibilities. Currently, PHMSA has no method for recovering design review\ncosts from the operator of the pipeline that are incurred by the agency while conducting these\nreviews. The proposed rule would prescribe a fee structure and assessment methodology for\nrecovering the costs associated with design reviews. Section 13 of the Act permits the agency to\nrequire the entity or individual proposing the project to pay the costs incurred by PHMSA\nrelating to such reviews. PHMSA is proposing to exercise the cost recovery authority described\nin Section 13(a) of the Act by prescribing a fee structure and assessment methodology that is\nbased on the costs of providing these reviews. PHMSA has developed a sample master cost\nrecovery agreement for use by PHMSA and the applicant for a project proposal meeting the\ncriteria of proposed 49 CFR Part 190, Subpart D requirements. The sample master cost recovery\nagreement will be posted on PHMSA’s website and in Docket No. PHMSA-2013-0163.\n3.3 Operator Qualification Requirements for Parts 192 and 195\nThis proposed rulemaking action would amend the Federal pipeline safety regulations in 49 CFR\nParts 192 and 195. The amendments would include: expanding the scope of the regulations to\ncover new construction and certain operation and maintenance tasks and including requirements\nfor program effectiveness review and recordkeeping in the Operator Qualification (OQ) program.\nThe recommended changes would enhance the OQ requirements by clarifying existing\nrequirements and making necessary changes to address findings and shortcomings in the interest\nof public safety. This proposed rule would address the National Transportation Safety Board’s\n(NTSB) recommendation that would clarify OQ requirements to control rooms (Safety\nRecommendation P-12-8). In addition, PHMSA is extending the program requirements to\noperators of regulated Type B onshore gas gathering lines.\nOn July 25, 2012 the National Transportation Safety Board (NTSB) recommended to PHMSA to\nextend Operator Qualification requirements in Title 49 CFR Part 195 Subpart G to all hazardous\nliquid and gas transmission control center staff involved in pipeline operational decisions.\nPHMSA determined that requiring only a description of the processes used to qualify personnel\ninstead of qualification methods for each individual that is allowed to perform tasks on Type A\ngas gathering in Class 2 locations and regulated hazardous liquids gathering in rural locations\nfails to provide necessary ability to ensure that individuals possess requisite abilities.\nThe proposed action would amend the Federal Pipeline Safety Regulations in 49 CFR parts 192\nand 195. The Amendments would include:\n Standardization of the format used in OQ\n Changing the scope of OQ rule in §§ 192.801 and 195.501 so that the method of\ndetermining a \"covered task\" is changed to a technically justified method instead of the\nnegotiated \"4-part test\" originally in the rule. In particular, a “covered task” would now\ninclude new construction rather than just operations and maintenance.\n7\n\n<<<PAGE 8>>>\n\nApril 30, 2014\n Established dates in General Sections of §§ 192.809 and 195.509 no longer affect\nimplementation requirements for operators and are renumbered as §§ 192.803 and\n195.503\n In §§ 192.809 and 195.509 enhancements are being included to clarify requirements, one\ntraining requirement date is deleted while clarifying the needs for training, a new\nParagraph J has been added to establish requirements for evaluators including necessary\ntraining\n New program effectiveness requirements are added in §§ 192.806 and 195.506\n In §§ 192.807 and 195.507, record requirements that would address evaluators and\nprogram effectiveness have been added that are normally reviewed during inspection of\nOQ programs\n After additional definitions have been added to guide the operators in the regulation, §§\n192.803 and 195.503 have been added into general definition in §§ 192.3 and 195.2\nrespectively\n Sections 192.9 and 195.11 have been modified to have and administer an Operator\nQualification program covering personnel that perform work on regulated Type B\nonshore gas gathering lines and regulated hazardous liquids gathering in rural locations\nrespectively.\nIn consideration of the NTSB recommendations in this area, PHMSA also proposes requiring\neach operator to define the roles and responsibilities and qualifications of others who have the\nauthority to direct or supersede the specific technical actions of controllers (a change to 49 CFR\n192.631(b) and 49 CFR 195.446(b)).\n3.4 Special Permit Renewal\nThis proposed rulemaking action would amend 49 CFR 190.341 of the Federal pipeline safety\nregulations to add procedures for renewing a special permit.\nAs defined in Section 190.341(a), a special permit is an order by which PHMSA waives\ncompliance with one or more of the pipeline safety regulations. In order to grant a request for a\nspecial permit, PHMSA must determine that granting the permit would “not be inconsistent with\npipeline safety.” Special permits are authorized by statute in 49 USC § 60118(c), and the\napplication process is set forth in 49 CFR 190.341. PHMSA performs extensive technical\nanalysis on special permit applications and typically conditions a grant of a special permit on the\nperformance of alternative measures that will provide an equal or greater level of safety.\nPHMSA is committed to public involvement and transparency in special permit proceedings and\npublishes notice of every special permit application received in the Federal Register for\ncomment.\n8\n\n<<<PAGE 9>>>\n\nApril 30, 2014\nIn the past, PHMSA has included an expiration date for certain special permits depending on the\nnature of the permit. Starting in 2009, PHMSA began adding an expiration date to all new\npermits. By doing so, PHMSA is able to ensure that each special permit will be re-reviewed no\nlater than the expiration date. This process ensures that a special permit will not continue to be\nused if it is no longer in the best interest of public safety.\nSince the special permits that were issued with expiration dates in 2009 will start expiring in\n2014, PHMSA is proposing to add renewal procedures to the pipeline safety regulations.\nPHMSA acknowledges that not all active special permits have expiration dates. Therefore,\nPHMSA may seek to modify any existing special permit without an expiration date through the\n“order to show cause” process described in 190.341(h)(2).\n3.5 Farm Taps\nThis proposed rulemaking action would amend the Federal pipeline safety regulations in 49 CFR\nPart 192. The amendment would include adding a new section (§ 192.740) to cover regulators\nand over-pressure protection equipment for an individual service line that originates from a\ntransmission, gathering, or production pipeline, and would revise § 192.1003 to exclude farm\ntaps from the requirements of pipeline Distribution Integrity Management Program (DIMP).\nA “farm tap” is industry jargon for a pipeline that branches from a transmission, gathering, or\nproduction pipeline to deliver gas to a farmer or other landowner. PHMSA has recognized farm\ntaps as distribution lines for many years. Historically, PHMSA and its predecessor agencies\nhave held that farm taps are service lines—a subset of distribution pipelines. Rulemaking\nproceedings and responses to requests for interpretation have recognized this fact on numerous\noccasions, dating as far back as 1971.\nOn Friday, December 4, 2009, PHMSA published the DIMP final rule for gas distribution\npipelines (74 FR 63906). That rule applies integrity management requirements to all distribution\npipelines. Unlike the integrity management requirements for hazardous liquid or gas\ntransmission pipelines, the DIMP requirements do not focus on a subset of pipelines in “high\nconsequence areas,” but instead apply to all distribution pipelines. Therefore, little consideration\nwas given to the potential impact or appropriateness of subjecting farm taps to DIMP\nrequirements.\nFarm taps are mostly located in less-populated areas (Class 1 and 2 locations). The risk to the\npublic from farm taps is generally low, but the risk is dependent upon the service in which the\nfarm tap is employed, the environment in which it operates, and the consequence of an over-\npressurization event. DIMP is written to identify needed risk control practices for threats\nassociated with distribution systems, whereas threats to typical farm taps are limited, and most\nare already addressed within Part 192. Therefore, PHMSA is proposing to amend Part 192 to\n9\n\n<<<PAGE 10>>>\n\nApril 30, 2014\nexempt farm taps from the requirements of Part 192, Subpart P - Gas Distribution Pipeline\nIntegrity Management. However, to better protect customers served by these lines, PHMSA is\nproposing to amend Part 192, Subpart M - Maintenance by adding a new section that prescribes\ninspection activities for pressure regulators and over-pressurization protection equipment on\nservice lines that originate from transmission, gathering, or production pipelines.\n3.6 Control Room Team Training\nIn response to NTSB recommendation P-12-7, PHMSA is proposing a small addition to the\nregulations related to Control Room Management (49 CFR 192.631 and 195.446). Specifically,\nPHMSA’s proposed language would reinforce the need for team training and exercises that\ninclude not only controllers, but other individuals, such as supervisors, that controllers would\nreasonably be expected to interface with during normal, abnormal, and emergency conditions..\n3.7 Reversal of Flow or Change in Product\nOn November 26, 2010, PHMSA published a final rule (75 FR 72878) that established and\nrequired participation in the National Registry of Pipeline and LNG Operators. This final rule\namends the Federal pipeline safety regulations to require operators to notify PHMSA\nelectronically of the occurrence of certain events no later than 60 days before the events occur.\nIn this NPRM, PHMSA proposes to expand the scope of reportable events in §§191.22 and\n195.64 to include the reversal of flow of product or change in product in a mainline pipeline.\nThis notification is not required for pipeline systems already designed for bi-directional flow, or\nwhen the reversal is not expected to last for a duration of 30 days or less. The proposed rule\nwould require operators to notify PHMSA electronically no later than 60 days before there is a\nreversal of the flow of product through a pipeline, and also in the instance that there is a change\nin the product flowing through a pipeline. Examples include, but may not be limited to,\nchanging a transported product from liquid to gas, from crude oil to highly volatile liquids\n(HVL), and vice versa. In addition, a modification is proposed to §§ 192.14 and 195.5 to reflect\nthe 60 days notification.\n3.8 Editorial Amendments\nIn this NPRM, PHMSA is also proposing to make the following editorial amendments to the\npipeline safety regulations:\nOn July 13, 1998, the Research and Special Programs Administration (RSPA) issued a final rule\n(63 FR 37500) to provide metric equivalents to the English units. RSPA provided the metric\nequivalents for informational purposes only. Operators were required to continue using the\nEnglish units for purposes of compliance and enforcement. RSPA provided a metric equivalent\nfor § 192.175(b) as follows: RSPA removed C=(3DxPxF/1,000) and replaced it with\nC=(DxPxF/48.33) (C=(3DxPxF/1,000)). However, the replacement formula was in error. The\ncorrect formula is: C = (3D*P*F)/1000) (C = (3D*P*F*)/6,895).\nWhere, C = (3D*P*F)/1000) is in inches (English unit), and\n10\n\n<<<PAGE 11>>>\n\nApril 30, 2014\n(C = (3D*P*F*)/6,895) is in millimeters (metric conversion).\nOn November 26, 2010, PHMSA published a final rule (75 FR 72878), which established the\nNational Registry of Pipeline and LNG Operators. In this rule, PHMSA inadvertently omitted\nthe inclusion of carbon dioxide in the operating commodity types. In an effort to maintain\nconsistency with the rest of Part 195, this proposed rule would amend the language in §\n195.64(a) and § 195.64(c)(1)(ii) to correct the term “hazardous liquid” to read “hazardous liquid\nor carbon dioxide.”\nIn § 195.248, the correct conversion to 100 feet is mistakenly stated as 30 millimeters.\nTherefore, the phrase “100 feet (30 millimeters)” is replaced to read “100 feet (30.5 meters).”\nIn § 195.452, a new paragraph (a)(4) is added to clarify the applicability of § 195.452 to low\nstress pipelines as described in § 195.12.\n3.9 Pipeline Assessment Tools\nThe National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113; March 7,\n1996) directs Federal agencies to use voluntary consensus standards and design specifications\ndeveloped by voluntary consensus standard bodies instead of government-developed voluntary\ntechnical standards, when applicable. OMB Circular A-119: “Federal Participation in the\nDevelopment and Use of Voluntary Consensus Standards and in Conformity Assessment\nActivities” sets the policy for Federal use and development of voluntary consensus standards.\nAs defined in OMB Circular A-119, voluntary consensus standards are technical standards\ndeveloped or adopted by organizations, both domestic and international. These organizations use\nagreed upon procedures to update and revise their published standards every 3 to 5 years to\nreflect modern technology and best technical practices.\nThe legal effect of incorporation by reference is that the material is treated as if it were published\nin the Federal Register and Code of Federal Regulations (CFR). This material, like any other\nproperly issued rule, has the force and effect of law. Congress authorized incorporation by\nreference to reduce the volume of material published in the Federal Register and CFR (See 5\nU.S.C. 552(a) and 1 CFR Part 51). Congress granted authority to the Director of the Federal\nRegister to determine whether a proposed incorporation by reference serves the public interest.\nSection 24 of the Act amended 49 U.S.C. 60102 by adding a new requirement on documents\nincorporated by reference after January 3, 2013. The law states, “Beginning 1 year after the date\nof enactment of this subsection, the Secretary may not issue guidance or a regulation pursuant to\nthis chapter that incorporates by reference any documents or portions thereof unless the\ndocuments or portions thereof are made available to the public, free of charge, on an Internet\nWeb site.’’ To meet this requirement, PHMSA negotiated agreements with the majority of the\nstandards-setting organizations with documents incorporated by reference in the pipeline safety\nregulations. The American Petroleum Institute (API), the American Society for Nondestructive\n11\n\n<<<PAGE 12>>>\n\nApril 30, 2014\nTesting (ASNT), and the National Association of Corrosion Engineers (NACE) International\nhave signed such agreements with PHMSA.\nThis proposed rule would incorporate by reference consensus standards for assessing the\nphysical condition of in-service hazardous liquids pipelines using in-line inspection (ILI) and\nstress corrosion cracking direct assessment (SCCDA). Periodic assessment of hazardous liquids\npipelines is required by § 195.452. These sections allow use of the inspection techniques\naddressed in these standards. Incorporation of the consensus standards would assure better\nconsistency, accuracy and quality in pipeline assessments conducted using these techniques. In\naddition, the incorporation of these standards would address part of the NTSB Recommendation\nP-12-3 by identifying crack defects and seam corrosion using crack tools and circumferential\ntools. PHMSA proposes to incorporate by reference the following consensus standards into 49\nCFR Part 195: API STD 1163, “In-Line Inspection Systems Qualification Standard” (August\n2005); NACE Standard Practice RP0102-2010 “Inline Inspection of Pipelines;” NACE SP0204-\n2008 “Stress Corrosion Cracking Direct Assessment;” and ANSI/ASNT ILI-PQ-2005, “In-line\nInspection Personnel Qualification and Certification” (2005). Also, PHMSA proposes to allow\npipeline operators to conduct assessments using tethered or remote control tools not explicitly\ndiscussed in NACE SP0102-2010, provided the operators comply with applicable sections of\nNACE SP0102-2010.\nNote that this proposed rulemaking action addresses only Part 195, but PHMSA will consider\nmaking a similar proposed rule for 49 CFR Part 192 under a separate rulemaking action.\n3.10 Electronic Reporting of Drug and Alcohol Testing Results\nPHMSA’s pipeline safety regulations at 49 CFR 191.7 and 49 CFR 195.58 require electronic\nreporting of most pipeline safety reports through the PHMSA Portal. PHMSA proposes to also\nrequire electronic reporting for anti-drug testing results required under § 199.119 and alcohol\ntesting results required under § 199.229. Pipeline operators with less than 50 covered employees\nare required to submit these reports only when PHMSA provides written notice. PHMSA\nproposes to modify these regulations to specify that PHMSA will provide notice to operators in\nthe PHMSA Portal.\n3.11 Post-Accident Drug and Alcohol Testing\nPHMSA's regulations require documentation of decisions not to administer a post-accident\nalcohol test. The requirement to document a decision not to administer a post-accident drug test\nis implied in the regulations, but not explicitly required. PHMSA proposes to add a section to the\npost-accident drug testing regulation to require documentation of such a decision.\nThe NTSB issued the following safety recommendation (NTSB Recommendation P-11-12):\n\"Amend 49 CFR 199.105 and 49 CFR 199.225 to eliminate operator discretion with regard to\ntesting covered employees. The revised language should require drug and alcohol testing of each\n12\n\n<<<PAGE 13>>>\n\nApril 30, 2014\nemployee whose performance either contributed to the accident or cannot be completely\ndiscounted as a contributing factor to the accident.\"\nAccordingly, PHMSA also proposes to modify 49 CFR 199.105 and 49 CFR 199.225 by\nrestating and further defining the existing requirement to conduct post-accident drug and alcohol\ntesting of all employees except those for whom sufficient information establishes that they had\nno role in the accident.\n4 Identification of Available Alternative Approaches\n4.1 No Action\nThis was used as the baseline against which PHMSA compared all other alternatives.\nRegulatory analyses typically consider an alternative in which the agency would not take any\naction, because it would maintain the status quo. No new requirements would be levied. No costs\nwould be incurred to implement new requirements. No new benefits would result.\nPHMSA has an obligation to ensure the safe and effective transportation of hazardous liquids\nand gases by pipeline. The changes proposed in this NPRM serve that purpose by clarifying the\npipeline safety regulations, eliminating conflicting provisions, responding to new statutory\nmandates, and eliminating unduly burdensome requirements. A failure to undertake these\nactions would allow for the continued imposition of unnecessary compliance costs without\nincreasing public safety. Accordingly, PHMSA rejected the “no action” alternative.\n4.2 Proposed Revisions\nThis alternative was determined by PHMSA as the preferred regulatory option and is compared\nin the document with the baseline “no action” alternative.\nPHMSA is proposing to make certain amendments, corrections, and editorial changes to the\npipeline safety regulations. These revisions would eliminate inconsistencies and respond to\nseveral petitions for rulemaking and recommendations from our stakeholders, thereby facilitating\nthe safe and effective transportation of hazardous liquids and gases by pipeline. The changes\nproposed in this NPRM serve that purpose by clarifying the pipeline safety regulations and\neliminating unduly burdensome requirements.\n5 Industry Information\nThe affected industry comprises owners and operators of regulated natural gas and hazardous\nliquid pipelines. These include a mix of large and small businesses, as well as publically owned\n13\n\n<<<PAGE 14>>>\n\nApril 30, 2014\nutilities, municipalities, and other organizations. Using a combination of PHMSA 2011 Annual\nReport data and the Dun and Bradstreet company database, there are approximately 3,000\nregulated entities when all corporate subsidiaries are separately counted, with a total of roughly\n150,000 onsite employees. There are wide variations across entities with respect to the share of\nemployees actually engaged in pipeline operations, especially for public agencies.\nAmong these entities, common industry (NAICS) codes are 211111, Crude Petroleum and\nNatural Gas Extraction; 221210, Natural Gas Distribution; 324110, Petroleum Refineries;\n486910, Pipeline Transportation of Refined Petroleum Products; 486210, Pipeline Transportation\nof Natural Gas; and 424720, Petroleum and Petroleum Products Merchant Wholesalers.\nMany of the specific provisions in this rulemaking would apply only to specific subsets of this\npopulation, such as operators of gas gathering lines, as described in more detail in Section 6\nbelow.\n6 Definition and Evaluation of the Benefits and Costs\n6.1 Data Sources and Limitations\nCost information is taken from PHMSA databases and external datasets as detailed more\nspecifically below. In many cases the proposed changes are so small as to entail little to no\nquantifiable costs.\n6.2 Costs\nIn the sub-sections below, each provision of the rulemaking is analyzed individually for potential\ncost implications.\n6.2.1 Accident and Incident Notification\nThere is an existing requirement to notify the NRC by telephone of incidents at the “earliest\npracticable moment” after discovery. This provision would clarify the existing rule and\naccompanying guidance by providing additional specificity on the expected timeframe. As a\nclarification to an existing requirement, this section does not entail any significant changes in\ncompliance costs.\n6.2.2 Cost Recovery for Design Reviews\nUnder this provision, PHMSA would conduct design reviews for certain large-scale pipeline\nprojects on a cost-recovery basis rather than at the agency’s own expense. The cost recovery\nprovision would represent a transfer between parties, with no net societal costs or benefits.\nParticularly for projects meeting the project cost criterion, the relatively small cost of the design\nreview is unlikely to hinder innovation in design techniques.\n14\n\n<<<PAGE 15>>>\n\nApril 30, 2014\n6.2.3 Operator Qualification Requirements for Parts 192 and 195\nOperator Qualification (OQ) programs are designed to ensure that each worker conducting\npipeline activities, such as operations and maintenance, has the appropriate knowledge and skills\nto perform that function. OQ programs are already required and in place for most pipeline\noperators, with some exceptions.\nThe proposed revisions to the OQ requirements include rearranging/renumbering with\nclarification to existing requirements and a number of small editorial changes and clarifications.\nThese smaller changes do not involve any significant compliance costs because they largely re-\nstate existing requirements and resolve perceived ambiguities in the regulatory text, rather than\nimpose substantively new requirements. Notable among these is a revision in scope that\nresponds to NTSB Recommendation P-12-8; it specifies that pipeline operators’ OQ plans must\ndefine the roles, responsibilities, and qualifications of any employees who have the authority to\ndirect or supersede pipeline controllers’ actions. As NTSB noted, it is inconsistent with safe\noperating principles to have controllers’ actions guided or overridden by employees who do not\nnecessarily have the same level of operator qualification. This change makes explicit that an\nemployee who guides or overrules a pipeline controller is also effectively acting as a controller,\neven if he/she has another job title. PHMSA is making this change in response to NTSB’s\nrecommendation and to make the regulations as clear as possible. However, PHMSA already\naddresses this issue through its Frequently Asked Questions for the OQ program and its\ndefinition of “controller” (49 CFR 192.3 and 195.2), which includes anyone who monitors and\ncontrols the safety-related operations of a pipeline from a control room. Supervisors already fall\nunder this functional definition to the extent that they direct first-line controllers, though this\nmay not be clear to all operators. This clarification explicitly reinforces that point. As a\nclarification of an existing requirement, there are no incremental compliance costs.\nPHMSA is also proposing a small revision to OQ programs to explicitly require a “management\nof change” component, i.e. that operators inform their employees if there are changes to their\nOQ-covered tasks. This proposed change again provides additional clarity to the regulations.\nHowever, PHMSA believes that there are little to no costs associated with the change, because\ncommunicating changes in employees’ responsibilities is a normal business practice.\nPHMSA’s proposed OQ-related provisions also include two more substantive changes that may\nentail changes to operator practices and incremental compliance costs:\n OQ would be extended to three additional pipeline categories that currently avail of a\nmodified recordkeeping approach that does not require individualized documentation:\no Type A gas gathering lines in Class 2 locations\no Type B onshore gas gathering lines\no Regulated hazardous liquid gathering lines in rural areas\n15\n\n<<<PAGE 16>>>\n\nApril ","truncated":true,"body_characters":76395}