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.

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Photo of Mike Mills Mike Mills

Mike Mills is a partner and chair of the firm’s Oil & Gas, Pipelines and Mining Industry Team.  Oil & gas, as well as mining companies, look to Mike to skillfully advise them on natural resources development issues, counsel them on federal and…

Mike Mills is a partner and chair of the firm’s Oil & Gas, Pipelines and Mining Industry Team.  Oil & gas, as well as mining companies, look to Mike to skillfully advise them on natural resources development issues, counsel them on federal and state hazardous waste cleanup matters, and help them successfully navigate property tax valuation disputes.

When necessary to protect his clients’ interests, Mike relies on his understanding of complex regulatory matters and his clients’ businesses to defend them in environmental litigation, defeat citizen suit claims, and reduce or eliminate fines and penalties. He has been listed in Northern California Super Lawyer® since 2013 in Environmental Law and Energy & Natural Resources.

Click here for Mike Mills’ full bio.

Photo of Shannon Morrissey Shannon Morrissey

Shannon Morrissey is an associate in Stoel Rives’ Environment, Land Use & Natural Resources group. She has experience with permitting, transactional and natural resources matters. She is the Secretary for the Executive Committee of the Sacramento County Bar Association, Environmental Law Section. Before

Shannon Morrissey is an associate in Stoel Rives’ Environment, Land Use & Natural Resources group. She has experience with permitting, transactional and natural resources matters. She is the Secretary for the Executive Committee of the Sacramento County Bar Association, Environmental Law Section. Before joining Stoel Rives, Shannon was a summer associate (2014) and law clerk (2014-2015) with Stoel Rives LLP and was a legal extern at the Calif. State Water Resources Control Board and California Department of Justice. She is a frequent contributor to Stoel Rives’ California Environmental Law and Mineral Law blogs.