[Federal Register Volume 61, Number 94 (Tuesday, May 14, 1996)]
[Rules and Regulations]
[Pages 24244-24246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11886]



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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Part 195


Petroleum Products and Low-Stress Pipelines

AGENCY: Research and Special Programs Administration, (RSPA), DOT.

ACTION: Interpretation and partial stay of enforcement of regulation.

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SUMMARY: This document interprets the definition of ``petroleum 
product'' under RSPA's safety regulations for hazardous liquid 1 
pipelines. The definition has been applied to petrochemical products 
that the regulations were not intended to cover. The interpretation 
should reduce confusion in deciding which low-stress pipelines 2 
are subject to the regulations.
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     1 ``Hazardous liquid'' means petroleum, petroleum 
products, or anhydrous ammonia. (Sec. 195.2)
     2 Low-stress pipeline means a hazardous liquid pipeline 
that is operated in its entirety at a stress level of 20 percent or 
less of the specified minimum yield strength of the line pipe. 
(Sec. 195.2)
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    In addition, this document stays enforcement of the regulations 
against low-stress pipelines regulated by the U.S. Coast Guard, and 
against certain short low-stress pipelines that serve plants and 
transportation terminals. Application of the regulations to these lines 
would cause undue burdens for industry and government. The stay should 
ease difficulties in applying the regulations to low-stress pipelines.

EFFECTIVE DATE: May 14, 1996.

FOR FURTHER INFORMATION CONTACT:
L. M. Furrow, (202) 366-4559.

SUPPLEMENTARY INFORMATION:

Background

     In response to a Congressional directive,3 RSPA extended its 
hazardous liquid pipeline safety regulations (49 CFR Part 195) to cover 
certain low-stress pipelines other than rural gathering lines and 
gravity-powered lines (59 FR 35465; July 12, 1994). That rulemaking 
action affected low-stress pipelines that transport highly volatile 
liquids, low-stress pipelines that are located onshore in non-rural 
areas, and low-stress pipelines that are located offshore or in 
waterways that are navigable in fact and currently used for commercial 
navigation (Sec. 195.1(b)(3)).
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     3 The Secretary of Transportation may not provide an 
exception from regulation for a hazardous liquid pipeline facility 
only because the facility operates at low internal stress. (49 
U.S.C. Sec. 60102(k))
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    Transfer lines comprised the largest proportion of low-stress 
pipelines brought under Part 195 (about two-thirds of the pipelines and 
one-third of the mileage). The remainder included trunk lines and non-
rural gathering lines. Transfer lines are used to transport hazardous 
liquid locally between facilities such as transportation terminals, 
manufacturing plants, petrochemical plants, and oil refineries, or to 
connect these facilities to associated storage or long-distance 
pipeline transportation. Because the rulemaking action affected the 
current operating practices of many companies unfamiliar with Part 195, 
we allowed operators to delay compliance of

[[Page 24245]]

existing low-stress pipelines until July 12, 1996 (Sec. 195.1(c)).

Meaning of Petroleum Product

    The impact of the rulemaking action intensified last fall, 
particularly for petrochemical companies, when RSPA interpreted the 
definition of ``petroleum product.'' Part 195 defines ``petroleum 
product'' as ``flammable, toxic, or corrosive products obtained from 
distilling and processing of crude oil, unfinished oils, natural gas 
liquids, blend stocks and other miscellaneous hydrocarbon 
compounds''4 (Sec. 195.2). The Hoechst Celanese Corporation had 
asked us whether two of its products come under this definition. 
Focusing on the ``miscellaneous hydrocarbon compounds'' aspect of the 
definition, we said the products, ethylene glycol and formic acid, were 
petroleum products because they are, respectively, flammable and toxic, 
and are produced by processing hydrocarbon compounds. Upon further 
consideration, however, we now believe that interpretation was too 
broad in light of the historical context of Part 195.
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    \4\ Hydrocarbon compounds are chemical compounds composed solely 
of hydrogen and carbon.
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    Since its inception, Part 195 has applied to petroleum products 
transported in liquid form by pipeline (34 FR 15473; Oct. 4, 1969). 
Only recently, while trying to clarify Part 195 requirements and reduce 
the burden of government regulation, did we adopt the present 
definition of petroleum product (59 FR 33395; June 28, 1994). 
Previously, both RSPA and the hazardous liquid pipeline transportation 
industry identified petroleum products as hydrocarbon compounds derived 
from processing natural gas or petroleum. This processing typically 
occurs at oil refineries, gas processing plants, and gasoline 
plants.5
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     5 Part 195 was based largely on voluntary standards contained 
in the 1966 edition of ``Code for Pressure Piping, Liquid Petroleum 
Transportation Piping Systems,'' (designated USAS B31.4-1966) 
prepared and published by the American Society of Mechanical 
Engineers. A diagram on page 2 of the code shows that the code 
applies to pipelines that run between production facilities, 
refineries, gasoline plants, gas processing plants, terminals, and 
bulk plants.
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    Petroleum products include butane, propane, gasoline, heating oil, 
aviation fuel, kerosine, and diesel fuel. Also included are hydrocarbon 
feedstocks, such as ethylene and propylene, that are the basis of 
hundreds of petrochemical products, including paints, plastics, 
synthetic fibers, and fertilizers. Prior to the definition, we did not 
consider the intermediate and finished products manufactured at 
petrochemical plants by further processing hydrocarbon feedstocks to be 
petroleum products. These petrochemical products are characterized by 
the addition of chemicals, such as chlorine, nitrogen, or oxygen, to 
the hydrocarbon feedstocks.
    In adopting the definition of petroleum product, we did not seek to 
expand this prior understanding of the term, only to clarify it.6 
For this reason, the definition of petroleum product must be applied 
consistent with its regulatory background. Thus, petrochemical products 
that are made by chemical means using petroleum products as a raw 
material do not come under the definition. Ethylene glycol, which is 
used in car antifreeze and other finished products, is an example of a 
petrochemical product that does not come under the Part 195 
regulations.
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     6 In the Federal Register document concerning petroleum 
product and other terms that RSPA proposed to define, RSPA said 
``[t]he proposed new definitions and definition change would not 
compromise pipeline safety because they would not alter the intended 
application of the existing part 195 regulations.'' (57 FR 56306; 
Nov. 27, 1992)
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Stay of Enforcement of 49 CFR Part 195 Against Certain Low-stress 
Pipelines

    As mentioned above, Part 195 applies to certain low-stress 
pipelines used to transfer hazardous liquids locally. These transfer 
lines link long-distance pipelines and truck, rail, and vessel 
transportation terminals with various industrial plants, including 
manufacturing plants, petrochemical plants, and oil refineries. Many of 
the lines interconnect the plants themselves. These local transfer 
lines are generally short, averaging about a mile in length. They are 
usually operated in association with transfer piping on the grounds of 
the plants and terminals. Some transfer lines that serve industrial 
plants or terminals may be operated by long-distance pipeline 
operators.
    Transfer lines or segments of lines on the grounds of industrial 
plants and transportation terminals generally are excepted from Part 
195 (Sec. 195.1(b) (6) and (7)).7 However, this excepted piping is 
subject to Occupational Safety and Health Administration (OSHA) safety 
standards, including, when 10,000 pounds or more of flammable liquid 
are involved, the Process Safety Management regulations (29 CFR 
1910.119) issued under the Clean Air Act Amendments of 1990. These 
regulations are designed to reduce the risk of fires and explosions 
caused by the escape of hazardous chemicals from facility processes. In 
addition, transfer lines between vessels and marine transportation-
related facilities are subject to safety requirements of the U.S. Coast 
Guard (33 CFR Parts 154 and 156). These requirements apply to transfer 
lines from the dock loading arm or manifold up to the first valve after 
the line enters the Spill Prevention Control and Countermeasure (SPCC) 
containment or secondary containment if the facilities are not 
protected by SPCC plans.
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     7 Part 195 applies to transfer piping on facility grounds 
if the piping is necessary to control the operating pressure of off-
grounds lines covered by Part 195, or if the on-grounds piping 
serves a breakout storage tank.
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    RSPA is concerned that the impending imposition of the Part 195 
regime on a multitude of short hazardous liquid transfer lines 
throughout the U.S. and Puerto Rico may create difficulties for both 
industry and government that are not counterbalanced by a reduction in 
risk. A significant difficulty for many operators of transfer lines is 
that the lines may be designed and operated according to standards and 
specifications that differ from Part 195 requirements. Some time and 
expense would be necessary for operating personnel to become familiar 
with Part 195 and the companion drug and alcohol rules in 49 CFR Part 
199.
    Another difficulty for industry is the separate federal regulatory 
regimes over transfer piping. Part 195 generally does not displace OSHA 
regulations over on-grounds transfer piping. So most plants and 
terminals would have to comply with OSHA's Process Safety Management 
regulations for some transfers and Part 195 for others.8 For 
transfers between vessels and marine transportation-related facilities, 
the Coast Guard safety regulations would apply as well. Application of 
Part 195 to these marine terminal transfer lines duplicates agency 
efforts within DOT and creates uncertainty in the industry as to which 
DOT regulations apply to particular facilities. The upshot of these 
separate regulatory regimes of RSPA, OSHA, and the Coast Guard is that 
differing safety rules and enforcement policies could confuse operating 
personnel and increase administrative costs through separate operating 
plans and recordkeeping.
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    \8\ However, where Part 195 applies to facility transfer piping, 
OSHA regulations may be preempted, because OSHA is precluded from 
enforcing its regulations against employee working conditions over 
which another federal agency prescribes or enforces safety 
regulations. (29 U.S.C. Sec. 653(b)(1)).
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    Carrying out adequate government inspections presents a further 
difficulty. The task of finding and educating the many new operators 
coming under Part 195 because of low-stress pipelines is

[[Page 24246]]

likely to be a major, protracted effort that could swamp current 
inspection resources.
    At the same time, the risk to the public from short low-stress 
transfer lines off plant or terminal grounds is generally low. A low 
operating stress is itself a safety factor against several accident 
causes. And the short length means the potential spill volume would be 
limited should an accident occur. Also, typically there is limited 
public exposure in the industrial areas where low-stress transfer lines 
are located. The risk of marine transfer lines is reduced even more by 
the U.S. Coast Guard regulations and inspection force.
    Therefore, we are considering amending Part 195 to except short, 
low-stress transfer lines that traverse areas outside plant and 
terminal grounds. We are also considering excepting low-stress transfer 
lines of any length that are regulated by the U.S. Coast Guard. We 
intend to publish a notice of proposed rulemaking (NPRM) in the Federal 
Register to seek public comment on these proposals.
    Meanwhile, effective May 14, 1996, I am staying enforcement of Part 
195 against two categories of low-stress pipelines: (1) low-stress 
pipelines regulated by the U.S Coast Guard; and (2) low-stress 
pipelines that are less than 1 mile in length (measured outside plant 
or terminal grounds), except if the pipeline crosses offshore or any 
waterway currently used for commercial navigation. This stay will 
remain in effect until modified through another Federal Register 
document or until Part 195 is amended as a result of the NPRM, 
whichever happens first. RSPA will continue to enforce Part 195 over 
short lines that cross offshore or commercially navigable waterways but 
do not come under U.S. Coast Guard regulations because of the need to 
reduce the threat of environmental damage.

Authority: (49 U.S.C. Sec. 60102 et seq.; 49 CFR 1.53)

    Issued in Washington, DC on May 7, 1996.
Richard B. Felder,
Associate Administrator for Pipeline Safety.
[FR Doc. 96-11886 Filed 5-13-96; 8:45 am]
BILLING CODE 4910-60-P