Notice of Proposed Rulemaking: Pipeline Damage Prevention Programs Docket ID PHMSA-2009-0192

1. Notice of Proposed Rulemaking:Pipeline Damage Prevention ProgramsDocket ID PHMSA-2009-0192 Sam Hall (804) 556-4678 sam.hall@dot.gov

2. Background • Pipeline Inspection, Protection, Enforcement and Safety (PIPES) Act of 2006 • Heavy focus on preventing excavation damage to pipelines (a leading cause of serious pipeline incidents) • Granted limited enforcement authority to PHMSA pertaining to excavators who damage pipelines in states with inadequate damage prevention law enforcement programs • Advance Notice of Proposed Rulemaking (ANPRM) published on this subject October 29, 2009 • ANPRM sought input on how to structure the proposed rule

3. Background • April 2, 2012: PHMSA published a Notice of Proposed Rulemaking entitled “Pipeline Damage Prevention Programs” (Docket ID PHMSA-2009-0192) • The NPRM proposed: • Criteria used to evaluate states’ damage prevention law enforcement programs • Administrative process for states to contest notice of inadequacy • Federal standards PHMSA will enforce in states with inadequate enforcement programs • Adjudication process for violators

4. Intent of the NPRM • Every state has an excavation damage prevention law, but no two laws are identical • Some states do not adequately enforce their damage prevention laws • Effective enforcement reduces excavation damage rates The proposed rule is intended to accomplish the following: • Reduce excavation damage to pipelines • Encourage states to enforce their damage prevention laws • Provide “backstop” Federal enforcement authority in states that lack adequate enforcement programs

6. Topics Covered in the Rule • Criteria PHMSA will use to evaluate the adequacy of state damage prevention law enforcement programs • Administrative process for states to contest notice of inadequacy • Federal standards PHMSA will enforce in states with inadequate enforcement programs • Adjudication process for violators of federal standards

7. Comments to the NPRM • PHMSA received comments from 39 separate entities. The commenters are categorized as follows: • Pipeline trade associations (AGA, APGA, AOPL, API, INGAA, state associations) and individual pipeline operators • Excavation and construction trade associations • Individual citizens • Pipeline safety consultants • State one-call organizations and one-call services providers • Non-profit damage prevention associations (Common Ground Alliance)

8. Comments (continued) • The National Association of Pipeline Safety Representatives (NAPSR) and individual NAPSR member states • Utility locating trade associations and individual utility locating companies • The American Farm Bureau Federation • The Association of American Railroads • The Gas Processors Association

9. Prominent Themes in Comments • The scope and applicability of the proposed criteria for evaluating state enforcement programs • The scope and applicability of the proposed federal excavation standard that would be applicable in states found to have inadequate enforcement programs, including exemptions • Incentives for states to implement adequate enforcement programs

10. Proceeding with A Vote on Key Topics • Briefing on each topic • Members will be given an opportunity to comment after each topic • Public will be given an opportunity to comment after the completion of the brief • LPAC and GPAC will vote separately

11. Minor Comments • Several comments were relatively minor in scope and controversy. These items included: • Definitions of terms • Editorial changes to the proposed language

12. Proposed Criteria for Evaluating State Enforcement Programs NPRM Language: § 198.55 What criteria will PHMSA use in evaluating the effectiveness of state damage prevention enforcement programs? (a) PHMSA will use the following criteria to evaluate the effectiveness of a state excavation damage prevention enforcement program: (1) Does the state have the authority to enforce its state excavation damage prevention law through civil penalties? (2) Has the state designated a state agency or other body as the authority responsible for enforcement of the state excavation damage prevention law?

13. Proposed Criteria for Evaluating State Enforcement Programs (3) Is the state assessing civil penalties for violations at levels sufficient to ensure compliance and is the state making publicly available information that demonstrates the effectiveness of the state’s enforcement program? (4) Does the enforcement authority (if one exists) have a reliable mechanism (e.g., mandatory reporting, complaint- driven reporting, etc.) for learning about excavation damage to underground facilities? (5) Does the state employ excavation damage investigation practices that are adequate to determine the at-fault party when excavation damage to underground facilities occurs?

14. Proposed Criteria for Evaluating State Enforcement Programs (6) At a minimum, does the state’s excavation damage prevention law require the following: a. Excavators may not engage in excavation activity without first using an available one-call notification system to establish the location of underground facilities in the excavation area. b. Excavators may not engage in excavation activity in disregard of the marked location of a pipeline facility as established by a pipeline operator. c. An excavator who causes damage to a pipeline facility: i. Must report the damage to the owner or operator of the facility at the earliest practical moment following discovery of the damage; and ii. If the damage results in the escape of any flammable, toxic, or corrosive gas or liquid that may endanger life or cause serious bodily harm or damage to property, must promptly report to other appropriate authorities by calling the 911 emergency telephone number or another emergency telephone number.

15. Proposed Criteria for Evaluating State Enforcement Programs (7) Does the state limit exemptions for excavators from its excavation damage prevention law? A state must provide to PHMSA a written justification for any exemptions for excavators from state damage prevention requirements. PHMSA will make the written justifications available to the public. (b) PHMSA may also consider individual enforcement actions taken by a state in evaluating the effectiveness of a state’s damage prevention enforcement program.

16. Significant Comments Regarding Scope and Applicability of Criteria • NAPSR, Iowa Utilities Board – the section contains two separate and unrelated provisions; one about assessment of civil penalties, and another about publicizing information on the enforcement program. They recommended that the second part should not be adopted. Also, 198.55(a)(6) and (7) have nothing to do with enforcement; Section 60114(f) of the PIPES Act does not authorize PHMSA to find state enforcement inadequate due to unrelated perceived deficiencies in the state law – the two sections should be removed.

17. Significant Comments Regarding Scope and Applicability of Criteria • KCC - It appears paragraph (b) would allow PHMSA to deem a state program inadequate if PHMSA did not agree with an enforcement action taken by the State. PHMSA has not offered sufficient guidance (i.e., a procedure) on how it will carry out the concepts found in the NPRM. • DCA, NUCA of Ohio - §198.55 (a)(6) is incomplete - PHMSA should restate the operator’s responsibilities. • Some commenters stated that the criteria are too vague and leave too much to interpretation. Some criteria might be considered pass/fail, while others are more subjective.

18. Vote Vote #1 • Both committees must motion and vote separately. • Passed language: • The proposed rule as published in the Federal Register, in terms of the Criteria for Evaluating State Enforcement Programs, is technically, feasible, reasonable, cost-effective, and practicable if the following changes are considered: • PHMSA develops a policy, incorporated into the preamble of the final rule, that clarifies the scope and applicability of the state evaluation criteria. The policy will address the relative importance and intent of each of the criteria and the three items identified in paragraph 9 of the document provided by member (Pierson). • The proposed rule as published in the Federal Register is not (or cannot be made) made technically, feasible, reasonable, cost-effective, and practicable.

19. Proposed Federal Excavation Standard NPRM Language: § 196.103 What must an excavator do to protect underground pipelines from excavation-related damage? Prior to commencing excavation activity where an underground gas or hazardous liquid pipeline may be present, the excavator must: (a) Use an available one-call system before excavating to notify operators of underground pipeline facilities of the timing and location of the intended excavation; (b) If underground pipelines exist in the area, wait for the pipeline operator to arrive at the excavation site and establish and mark the location of its underground pipeline facilities before excavating;

20. Proposed Federal Excavation Standard (c) Excavate with proper regard for the marked location of pipelines an operator has established by respecting the markings and taking all practicable steps to prevent excavation damage to the pipeline; and (d) Make additional use of one-call as necessary to obtain locating and marking before excavating if additional excavations will be conducted at other locations. § 196.105 Are there any exceptions to the requirement to use one-call before digging? Homeowners using only hand tools, rather than mechanized excavating equipment, on their own property are not required to use a one-call prior to digging.

21. Proposed Federal Excavation Standard § 196.107 What must an excavator do if a pipeline is damaged by excavation activity? If a pipeline is damaged in any way by excavation activity, the excavator must report such damage to the pipeline operator, whether or not a leak occurs, at the earliest practicable moment following discovery of the damage.

22. Proposed Federal Excavation Standard § 196.109 What must an excavator do if damage to a pipeline from excavation activity causes a leak where product is released from the pipeline? If damage to a pipeline from excavation activity causes the release of any flammable, toxic, or corrosive gas or liquid from the pipeline that may endanger life or cause serious bodily harm or damage to property or the environment, the excavator must immediately report the release of hazardous products to appropriate emergency response authorities by calling 911. Upon calling the 911 emergency telephone number, the excavator may exercise discretion as to whether to request emergency response personnel be dispatched to the damage site.

23. Significant Comments Regarding Scope and Applicability of Federal Excavation Standard • AFBF, AAR, AGC, Iowa One-Call, Iowa Utilities Board, and Northern Natural Gas oppose the homeowner exemption but support other state exemptions. AFBF supports exemptions for routine farming activities like tillage and injecting fertilizer. • AAR - railroads do not routinely contact one-call centers for the constant maintenance-of-way work undertaken along the 140,000 miles of right-of-way; therefore, there would be a significant cost to the railroads, the call centers, and utilities if such calls would be required by the rule.

24. Significant Comments Regarding Scope and Applicability of Federal Excavation Standard • Iowa Utilities Board - definitions of "excavation" and "excavator" would not mimic state law, and would set different standards for when a notice of excavation is required than may be required by a state; the costs to excavators of contending with two sets of notice requirements are not reflected.

25. Vote Vote #2 • Both committees must motion and vote separately. • Passed language: • The proposed rule as published in the Federal Register, in terms of the proposed Federal Excavation Standard is technically, feasible, reasonable, cost-effective, and practicable if the following changes are considered: • Eliminate the homeowner exemption. • PHMSA develops a policy, incorporated into the preamble of the final rule, that clarifies the scope and applicability of the federal excavation standard. The policy will address triggers for federal enforcement, how PHMSA will consider state exemptions in enforcement decisions, and how the federal excavation standard will be applied in states with inadequate enforcement programs. • -In addition the items (2-5, and 7) as provided by member Pierson, be considered for incorporation into the final rule (including the policy as appropriate) • The proposed rule as published in the Federal Register is not (or cannot be made) made technically, feasible, reasonable, cost-effective, and practicable.

26. Incentives for States to Implement Adequate Enforcement Programs NPRM Language: § 198.53 When and how will PHMSA evaluate state excavation damage prevention law enforcement programs? PHMSA conducts annual program evaluations and certification reviews of state pipeline safety programs. PHMSA will also conduct annual reviews of state excavation damage prevention law enforcement programs. PHMSA will use the criteria described in § 198.55 as the basis for the reviews, utilizing information obtained from any state agency or office with a role in the state’s excavation damage prevention law enforcement program. If PHMSA finds a state’s enforcement program inadequate, PHMSA may take immediate enforcement against excavators in that state… (continued)

27. Incentives for States to Implement Adequate Enforcement Programs …The state will have five years from the date of the finding to make program improvements that meet PHMSA’s criteria for minimum adequacy. A state that fails to establish an adequate enforcement program in accordance with 49 CFR 198.55 within five years of the finding of inadequacy may be subject to reduced grant funding established under 49 U.S.C. 60107. The amount of the reduction will be determined using the same process PHMSA currently uses to distribute the grant funding; PHMSA will factor the findings from the annual review of the excavation damage prevention enforcement program into the 49 U.S.C. 60107 grant funding distribution to state pipeline safety programs. The amount of the reduction in 49 U.S.C. 60107 grant funding shall not exceed 10% of prior year funding. If a state fails to implement an adequate enforcement program within five years of a finding of inadequacy, the Governor of that state may petition the Administrator of PHMSA, in writing, for a temporary waiver of the penalty, provided the petition includes a clear plan of action and timeline for achieving program adequacy.

28. Significant Comments Regarding Incentives for States • Iowa Utilities Board – Reductions to base grant funding are not within the scope of this rule. • Several pipeline trade associations are opposed to reduction in base grant funding. • NAPSR - the proposed grant funding penalties for states deemed by PHMSA to have inadequate excavation damage prevention law enforcement programs are unnecessary, unjustified, and unfairly penalize a state’s pipeline safety program; this provision should be removed from the proposed language. • TPA - the grace period should be limited to three years, but PHMSA should not begin enforcement during the three-year grace period. Limit funding reductions to 10%.

29. Vote #3 (last vote) Vote • Both committees must motion and vote separately. • Passed language: • The proposed rule as published in the Federal Register, in terms of the incentives for States to Implement Adequate Enforcement Programs is technically, feasible, reasonable, cost-effective, and practicable if the following changes are considered: • Retain the potential penalty to base grants, but consider lowering the percentage that may be affected • PHMSA develops a policy, incorporated into the preamble of the final rule, that clarifies how base grants will be calculated by including the state program evaluation criteria defined in the final rule . • (Reduce grace period (198.53) from five years to three years.) • Ensure the Governors of states with inadequate enforcement are directly informed of PHMSA’s findings, including potential consequences to base grant funding. • The proposed rule as published in the Federal Register is not (or cannot be made) made technically, feasible, reasonable, cost-effective, and practicable.

30. Vote • Both committees must motion and vote separately. • Sample language: • The proposed rule as published in the Federal Register, except the issues previously voted upon, is technically, feasible, reasonable, cost-effective, and practicable . • The proposed rule as published in the Federal Register is not (or cannot be made) made technically, feasible, reasonable, cost-effective, and practicable.