PHMSA proposes new reporting requirements

July 2, PHMSA released a Notice of Proposed Rulemaking (NPRM) for Updates to Pipeline and Liquefied Natural Gas Reporting Requirements. The NPRM lists 27 changes for annual, incident and safety related condition reports for gas, hazardous liquid and LNG operators. 

Some of the key changes are:

•     Amend the definition of “incident” in 191.3.

•     Require all reports to be submitted electronically.

•     Merging gas integrity management reporting with the annual report.

•     Require LNG operators to submit incident and annual reports.

•     Modifying hazardous liquid telephonic notification requirements.

•     Require all operators to participate in a National Registry of Pipeline and LNG Operators.

The definition of incident will be changed by splitting the $50,000 property damage and cost of gas lost into two separate criteria, and adding a fourth condition:

•     191.3(1)(ii) Estimated property damage of $50,000 or more, including loss to the operator and others, or both.

•     191.3(1)(ii) Estimated gas loss of 3,000 Mcf or more.

•     191.3(1)(iv) An explosion or fire not intentionally set by the operator.

The $50,000 threshold was established in 1984. As the price of gas increases, smaller releases are reported, making it more difficult to categorize significant incidents as PHMSA and operators work to manage and reduce risk. These changes address operator concerns about “the cost of gas lost” and aligns the incident definition with the accident definition in 49 CFR Part 195.

The regulatory analysis for the rule indicates that incident reports will likely increase by 308 in the first year after the rule goes into effect. In subsequent years, it is estimated the increase will be approximately 34 additional reports. The overall industry costs seem minimal, approximately $17,000 to $28,000 the first year and about $2,000 to $3,000 per year after that.

This NPRM proposes changes to 49 CFR 191.7 and 195.58, requiring operators to electronically submit all required reports through the PHMSA website at http://opsweb.phmsa.dot.gov. Currently incident and annual reports for all operators can be submitted online, as well as integrity management reports for gas transmission. The rule would add safety-related condition reports and all newly required LNG reports to this process. 

The docket PHMSA-2008-0291 for the proposed rule has draft versions of the revised forms that will be needed to implement the new regulation. Operators should also note that there are proposed revisions to incident reporting forms in an earlier notice in Docket PHMSA-2008-0211.

If electronic submission creates an “undue burden” on an operator, they may submit a written request to PHMSA for an alternative reporting method. The request must describe the reasons for the burden and hardship. PHMSA estimates that 55 to 80% of operators already submit annual reports electronically, and that the industry has the technology to submit all reports in this manner.

New code sections, 49 CFR 191.22 and 195.64, National Registry of Pipeline and LNG Operators, will be added to the gas and liquid regulations. It will require all operators to apply for an Operator Identification (OPID) number from PHMSA. This number would then be used on all reports submitted to PHMSA for that system, improving consistency and accuracy of information needed for identifying changes that may impact pipeline safety.

These new code sections will also require operators to report certain changes that impact the facilities associated with the respective OPID. Notifications must be made 60 days in advance of changes in operating entity; acquisition or divestiture of 50 or more miles of regulated pipeline; rehabilitation/modification/upgrade costing more than $5 million; 10 or more miles of new gas transmission or liquid lines or any project over $5 million; and acquisition, divestiture, construction of LNG facilities.

The complete NPRM can be found in the docket at http://www.regulations.gov. Search for docket PHMSA-2008-0291.