1. Regulation of Pipelines
Pipeline Safety Trust Conference
Denise Hamsher
November 2006

2. Forget the Term “Unregulated”
Environmental Protection Agency
Federal Energy Regulatory Commission
Mineral Management Service
Occupational Safety and Health Administration
Department of Transportation, Pipeline and Hazardous Materials Administration
State Utility Commissions
State Pipeline Safety Offices
State Department of Natural Resources
State Environmental Agencies
U.S. Fish and Wildlife
U.S. Forest Service
U.S. Army Corps of Engineers
the list goes on…..
UNREGULATED

3. FERC Regulation of Onshore* Pipelines
Natural Gas
Legislation: Natural Gas Act of 1938, Natural Gas Policy Act of 1978 and Energy Policy Act of 2005
FERC oversight clarified in case history
Import and export
Rates and terms of service for pipelines in interstate commerce
Construction and abandonment of service
System of accounts and records
Code of conduct for affiliates
Liquid Petroleum
Legislation: Hepburn Act made oil^ pipelines subject to Interstate Commerce Act
Energy Policy Act of 1992
oil pipeline rates now indexed, unless rate case, negotiated or market-based rates filed
Rates and terms of service for common carrier oil pipelines in interstate commerce
*Note: offshore pipelines may differ
^Oil pipelines include crude oil, refined products, etc.

4. Pipeline and Hazardous Materials Safety Administration—Onshore
Pipeline Safety Act as amended through periodic “reauthorization” of Act
Regulations issued in 49 CFR Part
Scope regulation depends on function
Incident reporting
Operator qualification
Design and abandonment
Operation, maintenance and testing
Integrity management programs
Drug and alcohol prevention program
Some differences between natural gas and liquid petroleum pipeline regulations

5. Gathering Pipelines: How FERC and PHMSA regulate
FERC’s “primary function test”
Natural Gas Act exempts gathering but does not define it
Defined in extensive case history
Numerous factors considered:
Length, diameter and operating pressure
Extension beyond central point in the field
Geographic configuration
Location of wells, compressors and processing
Gas quality
The entity involved
Crude oil not exempted under Interstate Commerce Act
Short distance typically exempted, otherwise case specific
Also subject to state regulation and oversight

6. Gathering Pipelines: How FERC and PHMSA regulate
PHSMA
Gas Gathering (49 CFR Part 192)
Defined in new regulations, adopts API 80
Clarifies producer exemption
Refocuses on populated areas (HCA) versus government municipal boundaries
Liquid Gathering (49 CFR Part 195)
Existing definitions ≤ 8⅝ inches
Proposed rulemaking re-focuses on HCA rather than municipal boundaries
New rules focus on highest risks (damage and corrosion)
Also subject to state regulation and oversight

7. Who Regulates What? Refining center Local distribution company lines
Natural gas transmission or main line
Underground storage
Underground
& steel storage
Gas plant
Industrial users
LPG distribution
Oil and gas gathering lines
Oil products line
Gathering stations
Products terminals
Crude oil trunk or main line
Refining center
Courtesy of Meisner and Leffer

8. Commerce: FERC and State Utility Commissions
FERC regulates oil or gas pipelines in interstate commerce
States regulate intrastate transmission pipelines, LDC service, rates and some oversight of gathering (varies)

9. Safety: Federal Pipeline Safety
States can and do expand regulation of intrastate pipeline and local distribution
Gathering:
Was municipal boundaries
(now HCAs)
Production facilities exempt from federal pipeline safety legislation; where production ends is the issue

10. Environmental Regulation
Building new pipelines
Host of federal and state environmental requirements/permits to protect waterways, wetlands, agriculture, threatened and endangered species, cultural resources
Examples: U.S. Army Corps of Engineers, State Public Utility Commission, State DNR, U.S. Forest Service, Tribal Councils
FERC is lead role in EIS or EA for interstate gas pipelines
Lead role for liquid pipelines or intrastate gas vary
U.S. State Department if crossing international border
Operations
Various facility emission permits
Spills: reporting and remediation
Disposal of hazardous waste such as solvents used to clean

11. Incident Reporting: Federal and State Requirements
Notification to National Response Center of major incidents
“Notification” and alert system: not reporting system
Reporting to PHMSA
State
In addition to federal requirements
Varies depending on state
Requires reporting of incidents and environmental spills
Local
All first responders
Alert to local and regional supply interruptions

12. Worker Safety and Training
Occupational Health and Safety Administration
Worker and contractor safety
Construction and work practices
E.g. trenching, exposure to hazardous vapors, working in confined spaces, etc.
Worker and emergency responder training for hazardous material and petroleum spills
PHMSA
Operator qualification rules

13. Security Department of Homeland Security oversight
Regulations for pipelines and storage pending
Meanwhile, various local, state and federal agencies have worked with companies to develop and test plans
DHS consultation with PHMSA

14. Whether commercial, pipeline, worker safety or environmental regulation, there is extensive federal and state oversight
Thank you