New PHMSA Final Rule Strengthens Safety Requirements for Pipelines

On January 13, 2017, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a new final rule amending regulations for hazardous liquid pipelines. The rule becomes effective on July 13, 2017 and creates new compliance obligations for system owners and operators that are intended to maintain pipe integrity and prevent pipeline accidents. Let’s review some of the major changes brought about by the new rule to help develop a plan for compliance.

The Background

Why is PHMSA issuing this new final rule? In the Executive Summary of the Rule, PHMSA notes that there have been significant hazardous liquid pipeline accidents in recent years, including a 2010 crude oil spill near Marshall, MI in which at least 843,000 gallons of crude were released, contaminating the Kalamazoo River. The National Transportation Safety Board (NTSB) conducted an investigation of the accident and issued a report on July 10, 2012 stating that the pipeline breach was caused by cracks formed due to “corrosion fatigue,” a degradation due to the joint action of corrosion and cyclical loading. The NTSB report recommended improvements in both the inspection of pipeline integrity and what they refer to as “discovery of condition,” meaning the responsibility to determine whether inspection results indicate a safety threat.

What Does the New Rule Require?

PHMSA has established a number of new requirements to better enable early detection and correction of pipeline integrity issues. In general, the rule extends some of the existing requirements for high consequence area (HCA) pipelines currently subject to integrity management (IM) regulations to non-HCA pipelines, and strengthens assessment, repair and reporting requirements. Some of the key new requirements are listed below.

New Reporting Requirements: Operators of pipelines used to transport hazardous liquids by gravity, and all onshore hazardous liquid gathering pipelines must now submit annual safety-related condition and incident reports for these pipelines. The reports will inform PHMSA about the safety performance of these lines and the risks posed to the public.

Periodic Assessment: Operators must inspect hazardous liquid transmission lines located outside of high consequence areas (HCAs) that can accommodate in-line-inspection (ILI) tools at least once every 10 years, using ILI tools appropriate for the threats relevant to the pipe segment. If ILI tools cannot be used, operators must substitute a pressure test, external corrosion direct assessment, or other suitable technology. Operators are to determine if the proposed technology is suitable by providing PHMSA with at least 90 days’ notice of the method to be used, and receiving a “no objection” response. PHMSA specifies that a person qualified by knowledge, training and experience must make the assessment, and a determination as to whether the assessment identifies potential threats to pipeline integrity.

Integrity Management (IM) Pipe: Operators must ensure that each pipeline subject to IM requirements is modified to accommodate the passage of an ILI device within 20 years. The rule also states that the only allowable testing option for IM pipeline integrity is ILI (unless impracticable), and specifies the data elements operators must integrate into their information analysis. Finally, it requires operators to annually verify the risk factors used in identifying the pipeline segments that could affect an HCA, and specifies how operators are to perform engineering critical assessments (ECAs).

Leak Detection: Non-HCA onshore hazardous liquid pipelines transporting liquid in a single phase must implement effective leak detection systems. Operators are responsible for evaluating the capability of their leak detection systems to prevent leaks, and must modify their systems as necessary. Existing pipelines must comply within 5 years of the publication of the final rule in the Federal Register, and new pipelines must comply within 1 year of the publication of the final rule.

Inspections: Operators must inspect all potentially affected pipeline facilities within 72 hours after the end of an extreme weather event, natural disaster or similar event to detect conditions that might impact the safe operation of the pipelines. If the inspection reveals adverse impacts, the operator must promptly act to correct the problems. Operators who are unable to complete an inspection (e.g., because of lack of personnel or equipment) must notify the PHMSA regional director.

Repair Criteria: The rule specified that these conditions, when detected, will require immediate repair:

  • metal loss of greater than 80% of the nominal wall
  • a metal loss defect with a predicted failure of less than 1.1 times maximum operating pressure (MOP)
  • any dent with indication of metal loss/cracking/stress riser
  • a topside dent with depth greater than 6%
  • significant stress corrosion cracking (SCC), unless the repair timeframe is extended after performing an engineering critical assessment (ECA)
  • selective seam weld corrosion (SSWC) unless the repair timeframe is extended after an ECA

It should be noted that on January 20, 2017, the White House issued a directive that no regulations were to be sent to the Office of the Federal Register for publication until further notice, and to withdraw any regulations that had been sent but not yet published in an effort to control the pace of new regulations. Since the PHMSA final rule has not yet been published in the Federal Register, it is subject to the directive. A procedure exists for agencies to seek exemptions from the Director or Acting Director of the Office of Management and Budget (OMB) for certain regulations pertaining to safety and health, which would seem to apply to the PHMSA rule, but it is not known at the time of this article if PHMSA will seek this exemption. Therefore, the timeline for when the rule will become effective, assuming it still will be published, currently remains unclear.

Regardless of this uncertainty, pipeline owners and operators can’t afford to lack a top-quality inspection, reporting and maintenance program at their facilities. The cost of environmental cleanup following a spill like the Marshall, Michigan incident can total in the hundreds of millions of dollars, in addition to substantial fines, civil penalties, legal fees and the adverse impacts to surrounding communities. There is also the incalculable cost of bad publicity, of tarnishing of your company’s brand and reputation, of diminished investor confidence and the loss of public trust. Regardless of when or even if the final rule becomes effective, improved pipeline safety measures will prevent spills and other safety incidents, help protect the environment, and demonstrate a high level of corporate social responsibility on the part of your organization.

 Let VelocityEHS Help!

VelocityEHS can provide you with the tools you need to prepare for the new final rule, but more importantly, to help you identify and correct hazards at your pipeline facilities before they result in system disruptions, lost production, or worse. Our Audit & Inspection solution makes it easy to schedule and assign inspections, build and distribute checklists, and clearly document hazards to pipeline safety and integrity, all with one centralized cloud EHS software system. Combined with the VelocityEHS corrective actions solution, you’ll be able to instantly generate and assign corrective actions to ensure any hazards or deficiencies are quickly and definitively resolved. Built-in escalating notifications alert your crews when inspection and repair activities are required or past due, and our solution’s responsive mobile design allows you to access these powerful capabilities right from your tablet or smartphone, whether you’re on-site or in the field. With VelocityEHS, you get a solution designed around industry best practices that provides greater visibility of facility safety and performance — helping you to protect your business and the good name that comes with it.