On October 3, 2016, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), within the U.S. Department of Transportation, released a new rule on its authority to issue emergency orders for pipeline safety.  The Interim Final Rule, titled “Pipeline Safety: Enhanced Emergency Order Procedures,” comes as a result of the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016 (“PIPES”).  PIPES was signed into law by President Obama in June 2016 and allows the PHMSA to impose emergency restrictions, prohibitions, and safety measures on gas or hazardous liquid pipeline facilities to address safety concerns.

The purpose of the new rule is to establish “procedures for the issuance of emergency orders that will be used to address an unsafe condition or practice,” or an “imminent hazard.”  Imminent hazard is defined as,

“the existence of a condition relating to a gas or hazardous liquid pipeline facility that presents a substantial likelihood that death, serious illness, severe personal injury, or a substantial endangerment to health, property, or the environment may occur before the reasonably foreseeable completion date of a formal proceeding begun to lessen the risk of such death, illness, injury, or endangerment.”  Interim Final Rule, § 190.3.

In sum, the PHMSA is seeking to avoid and ameliorate potential pipeline accidents.  The Interim Final Rule provides examples of when it may need to invoke its emergency authority, such as when an operator discovers a flaw in a pipeline or when an accident discloses that an industry practice is unsafe. “The order must articulate a sufficient factual basis to address the emergency situation warranting prompt corrective action.”  Id. § 190.236.

The PHMSA stated that the rulemaking will result in “no additional burden or compliance costs to industry.”  But the procedure for an operator to challenge the imposition of an emergency order is not clear, especially where such order could halt operations.  The Interim Final Rule gives PHMSA sufficiently broad authority that this lack of clarity as to how an emergency order might be challenged is a significant concern.  The agency is accepting comments on the Interim Final Rule for 60 days, and will then make changes as needed and issue the final rule by March 19, 2017.   We encourage our affected readers to submit comments on the proposed rule.