On March 17, 2016, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) announced proposed new safety regulations concerning onshore natural gas transmission and gathering pipelines. These proposed regulations would expand and enhance the reach of PHMSA’s pipeline safety protocols. Among the proposed rule changes are: new assessment and repair criteria for gas transmission pipelines; expansion of this criteria into medium population density areas; enhanced corrosion control requirements; and verification of maximum allowable operating pressure, including verification of maximum pressures for pipelines that have not yet been verified due to grandfathering. Significantly, the proposed regulations would repeal an exemption for gas gathering line reporting requirements and add a new definition for onshore production facility/operation, as well as a revised definition of gathering lines. This rulemaking would extend regulatory requirements to certain previously unregulated lines that are eight inches or greater in diameter; however, such requirements would be limited to damage prevention, corrosion control, public education, maximum allowable operating pressure limits, line markers and emergency planning.

This effort to enhance safety regulations arises out a general concern for pipeline safety in the face of unprecedented demands on the pipeline system. These changes are also driven by the need to prevent significant gas pipeline incidents, including events such as the rupture and explosion of a natural gas transmission line in San Bruno, California, on September 9, 2010, that killed eight people. PHMSA estimates the total present value (15-year period, 7-percent discount rate) of benefits for the proposed rule to be around $3.3 billion, while costs for the same period are expected to be approximately $597 million. Other benefits from the proposed regulations include expected reductions in greenhouse gas emissions—in particular, methane—from pipelines. Leak detection protocols set forth in the proposed regulations are expected to prevent approximately 69,000 to 122,000 metric tons of methane and 14,000 to 22,000 metric tons of carbon dioxide over a 15-year period.

Comments on the proposed rulemaking, which is available on PHMSA website, are due within 60 days following publication in the Federal Register