[Federal Register Volume 63, Number 39 (Friday, February 27, 1998)]
[Proposed Rules]
[Pages 9993-9996]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5115]


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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Part 195

[Docket No. PS-117; Notice 4]
RIN 2137-AC87


Low-Stress Hazardous Liquid Pipelines Serving Plants and 
Terminals

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: This action proposes to exclude from RSPA's safety regulations 
for hazardous liquid pipelines low-stress pipelines regulated for 
safety by the U.S. Coast Guard and certain low-stress pipelines less 
than one mile long serving plants and terminals. Difficulties involving 
compliance with RSPA's regulations do not appear warranted by risk and 
may cause operating errors that impair safety. It is RSPA's policy 
toward effective government to eliminate duplicative and unnecessarily 
burdensome regulations.

DATES: RSPA invites interested persons to submit comments by close of 
business April 28, 1998. Late comments will be considered as far as 
practicable.

ADDRESSES: Send comments in duplicate to the Dockets Unit, Room 8421, 
Research and Special Programs Administration, U.S. Department of 
Transportation, 400 Seventh St., SW, Washington, D.C. 20590. Comments 
should identify the docket and the notice number stated in the heading 
of this notice. Persons wishing to receive confirmation of receipt of 
their comments must include a self-addressed stamped postcard. All 
comments and docketed material will be available for inspection and 
copying in Room 8421 between 8:30 a.m. and 5 p.m. each business day.

FOR FURTHER INFORMATION CONTACT: L. M. Furrow at (202) 366-4559 or 
[email protected]. For copies of this notice or other material in 
the docket, contact the Dockets Unit at (202) 366-5046.

SUPPLEMENTARY INFORMATION:

I. Background

    When RSPA's safety regulations for hazardous liquid 1 
pipelines (49 CFR part 195) were first published, the regulations did 
not apply to low-stress pipelines 2 (34 FR 15473; Oct. 4, 
1969). In recent years, however, during a time of increased 
environmental awareness, critical accidents involving low-stress 
pipelines led Congress to restrict DOT's discretion to except these 
lines from regulation. So, in an amendment to the pipeline safety laws, 
Congress directed the Secretary of Transportation not to except from 
regulation 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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    \1\ ``Hazardous liquid'' means petroleum, petroleum products, or 
anhydrous ammonia.
    \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 (SMYS) of the line 
pipe.
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    In response to this change in the law, RSPA extended the Part 195 
regulations to cover certain low-stress pipelines (Docket No. PS-117; 
59 FR 35465; July 12, 1994). Except for onshore rural gathering lines 
and gravity-powered lines, the following categories of low-stress 
pipelines were brought under the regulations: pipelines that transport 
highly volatile liquids, pipelines located onshore and outside rural 
areas, pipelines located offshore, and pipelines located in waterways 
that are currently used for commercial navigation (Sec. 195.1(b)(3)). 
Because the rulemaking record showed that many low-stress pipelines 
probably were not operated and maintained consistent with Part 195 
requirements, operators were allowed to delay compliance of their 
existing lines until July 12, 1996 (Sec. 195.1(c)).

II. Interfacility Transfer Lines

A. Description

    The largest proportion of low-stress pipelines brought under Part 
195 consisted of interfacility transfer lines (about two-thirds of the 
pipelines and one-third of the overall mileage). The remainder included 
trunk lines and gathering lines located outside rural areas.
    Interfacility transfer lines move hazardous liquids locally between 
facilities such as truck, rail, and vessel transportation terminals, 
manufacturing plants (including petrochemical plants), and oil 
refineries, or between these facilities and associated storage or long-
distance pipeline transportation.3 The lines usually are 
short, averaging about a mile in length. Typically they are operated in 
association with other transfer piping on the grounds of the industrial 
plants and terminals they serve.
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    \3\ The interfacility transfer lines did not include piping that 
connect high-stress pipelines with surge tanks located at plants and 
terminals. This piping was already subject to the part 195 
regulations as part of the pipeline systems for which the tanks 
relieve surges.
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B. Related Federal Regulations

    Segments of interfacility transfer lines located on the grounds of 
industrial plants and transportation terminals are subject to the 
Process Safety Management regulations of the Occupational Safety and 
Health Administration (OSHA) (29 CFR 1910.119). These regulations, 
which involve hazard analysis and control, operating and maintenance 
procedures, and personnel training, are intended to reduce the risk of 
fires and explosions caused by the escape of hazardous chemicals from 
facility processes.
    Although on-grounds segments of interfacility transfer lines 
generally are excepted from Part 195 (Sec. 195.1(b) (6) and 
(7)),4 the on-grounds segment and regulated off-grounds 
segment of a line function together as a unit. Thus, OSHA's Process 
Safety Management regulations, though applicable only to on-grounds 
segments, affect the operation of off-grounds segments. And, similarly, 
compliance with part 195 for off-grounds segments affects operation of 
the unregulated on-grounds segments.
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    \4\ Segments of interfacility transfer lines on plant or 
terminal grounds are subject to Part 195 if the segment connects a 
regulated pipeline (including off-grounds segments of interfacility 
transfer lines) to a surge tank or other device necessary to control 
the operating pressure of the regulated pipeline.
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    In addition, most transfer lines between vessels and marine 
transportation-related facilities are subject to safety regulations of 
the U.S. Coast Guard (33 CFR parts 154 and 156). The Coast Guard 
applies these regulations to transfers of hazardous liquid 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.

C. Compliance Difficulties

    Information we received in response to Notice 1 of Docket PS-117 
(55 FR 45822; Oct. 31, 1990) showed that bringing interfacility 
transfer lines into full compliance with part 195 would be difficult 
for many operators. The primary difficulty is that their lines are not 
installed and operated on the basis of part 195 standards. For example,

[[Page 9994]]

considering the short length and low operating stress of the lines, 
additional pipe wall thickness is often used instead of cathodic 
protection to resist expected corrosion. But, regardless of this 
feature, under part 195, cathodic protection systems would have to be 
developed and installed as required. Other part 195 requirements that 
may not bring commensurate benefits for short, low-stress transfer 
lines involve modifying operations and maintenance manuals, installing 
pressure control equipment, and establishing programs to carry out drug 
and alcohol rules under 49 CFR part 199. Also, operating personnel 
would have to be trained to carry out part 195 requirements.
    After publication of the Final Rule in Docket PS-117, we learned 
about another significant compliance difficulty. Transfer line 
operators and their representatives said that coping with the separate 
federal regulatory regimes of RSPA, OSHA, and the Coast Guard over 
transfer lines was a strain on resources. As explained above, OSHA's 
Process Safety Management regulations and RSPA's part 195 standards 
have an overlapping effect on operation of interfacility transfer 
lines. This overlap results in analogous administrative costs for 
records, procedures, and manuals. Worse yet it creates opportunities 
for mistakes when operating personnel have to meet different 
requirements with similar objectives.
    For transfers between vessels and marine transportation-related 
facilities, the Coast Guard safety regulations compound the RSPA-OSHA 
overlap problem. Moreover, applying part 195 to these marine terminal 
transfer lines duplicates agency efforts within DOT. It also leaves the 
industry uncertain which DOT safety standards apply to particular 
facilities. So the upshot of these separate regulatory regimes of RSPA, 
OSHA, and the Coast Guard is not only the added costs of meeting 
separate requirements directed at similar safety objectives, but also 
possible confusion of operating personnel.
    The low-stress pipeline regulations also present RSPA and its 
cooperating State agencies with related compliance difficulties. 
Carrying out adequate compliance inspections on interfacility transfer 
lines would require a significant increase in resources. We estimate 
that about 11,000 miles of low-stress pipelines are now under part 195, 
with over a third of the mileage composed of short interfacility 
transfer lines. Just the job of finding and educating the many 
operators of these short lines would likely be a major, protracted 
effort.

D. Stay of Enforcement

    We weighed these industry and government compliance difficulties 
against the need for risk reduction on low-stress interfacility 
transfer lines. Our conclusion was that the potential benefits of 
complying with part 195 do not justify the compliance difficulties if 
the line is short and does not cross an offshore area or a commercially 
navigable waterway, or if the line is regulated by the Coast Guard. 
There were several reasons for this decision. First, RSPA's pipeline 
safety data do not show that short interfacility transfer lines have 
been a source of significant safety problems. Another reason was that 
the low operating hoop stress of interfacility transfer lines is itself 
a safeguard against several accident causes. And, from the consequence 
perspective, a short length means the potential spill volume would be 
limited should an accident occur. Also, public exposure is typically 
limited in the industrial areas where most low-stress interfacility 
transfer lines are located. For marine transfer lines, the risk is 
reduced even further by the Coast Guard regulations and inspection 
force. At the same time, except for Coast Guard regulated lines, the 
potential of transfer lines crossing offshore or a commercially 
navigable waterway to cause environmental harm tipped the scale toward 
continued compliance with part 195.
    In view of the above considerations, we became concerned that the 
continued application of part 195 to Coast Guard regulated lines and 
other short interfacility transfer lines not crossing an offshore area 
or a commercially navigable waterway was not in the public interest. 
Consequently, we announced a stay of enforcement of part 195 against 
these lines (61 FR 24245; May 14, 1996). The stay applies to low-stress 
pipelines that are regulated by the Coast Guard or that extend less 
than 1 mile outside plant or terminal grounds without crossing an 
offshore area or any waterway currently used for commercial navigation. 
The stay will remain in effect until modified or until the part 195 
regulations are finally revised as a result of the present action.
    Since announcement of the stay, we have not received any request to 
lift it. More important, we have explained this new enforcement policy 
at two public meetings of the Technical Hazardous Liquid Pipeline 
Safety Advisory Committee, a statutory panel that reviews RSPA's 
pipeline safety program. We also explained our plan to revise the part 
195 regulations consistent with the stay. Neither the Committee members 
nor the public attendees raised any significant objection to the 
enforcement policy or planned rule change. Further, State agencies who 
cooperate with RSPA in enforcing safety standards over interfacility 
transfer lines have not objected to the stay.

E. Direct Final Rule

    Following publication of the stay of enforcement, we issued a 
direct final rule to expand the low-stress pipeline exclusion under 
Sec. 195.1(b)(3) to include interfacility transfer lines that are 
covered by the stay (62 FR 31364; June 9, 1997).
    The direct final rule changed Sec. 195.1(b)(3) to read as follows:

    (b) This part does not apply to--
* * * * *
    (3) Transportation through the following low-stress pipelines:
    (i) An onshore pipeline or pipeline segment that--
    (A) Does not transport HVL;
    (B) Is located in a rural area; and
    (C) Is located outside a waterway currently used for commercial 
navigation;
    (ii) A pipeline subject to safety regulations of the U.S. Coast 
Guard; and
    (iii) A pipeline that serves refining, manufacturing, or truck, 
rail, or vessel terminal facilities, if the pipeline is less than 1 
mile long (measured outside facility grounds) and does not cross an 
offshore area or a waterway currently used for commercial 
navigation;
* * * * *
    The procedures governing issuance of direct final rules are in 49 
CFR 190.339. These procedures provide for public notice and opportunity 
for comment subsequent to publication of a direct final rule. They also 
provide that if an adverse comment or notice of intent to file an 
adverse comment is received, RSPA will issue a timely notice in the 
Federal Register to confirm that fact and withdraw the direct final 
rule in whole or in part. Under the procedures, RSPA may then 
incorporate the adverse comment into a subsequent direct final rule or 
may publish a notice of proposed rulemaking.
    Four persons submitted comments on the direct final rule: American 
Petroleum Institute (API), California Department of Fish and Game 
(CDF&G), California Independent Petroleum Association (CIPA), and 
Western States Petroleum Association (WSPA). API made an editorial 
comment, while CIPA and WSPA argued that the direct final rule should 
be expanded to also exclude from part 195 short low-stress pipelines 
serving production shipping facilities in urban areas.
    However, CDF&G opposed the direct final rule. This State agency 
contended the Coast Guard's regulations are not an

[[Page 9995]]

adequate substitute for RSPA's because the Coast Guard regulations do 
not specify a hold time for pressure tests, do not apply to transfer 
lines that only serve small vessels (less than 250 barrels of cargo 
capacity), and do not require cathodic protection to guard against 
corrosion. CDF&G also said the exclusion of short plant and terminal 
transfer lines should apply only if a discharge would not impact marine 
waters of the United States.
    Because of the adverse comment from CDF&G, we withdrew the direct 
final rule (62 FR 52511; October 8, 1997). As a result, 
Sec. 195.1(b)(3) remains as it was before issuance of the direct final 
rule. In the withdrawal notice, we said we would follow up the 
withdrawal with a notice of proposed rulemaking based on the direct 
final rule and the comments we received on it. The present action is 
that notice of proposed rulemaking.

F. Proposed Rule

    In commenting on the direct final rule, API suggested we clarify 
that a low-stress pipeline would be excluded from part 195 if it comes 
under any one of the three categories of excluded low-stress pipelines 
((i), lines previously excluded; (ii), lines subject to Coast Guard 
regulations; and (iii), certain lines serving plants and terminals). 
API further suggested that replacing the word ``and'' between 
categories (ii) and (iii) with the word ``or'' would accomplish this 
objective. In addition to adopting this comment, to avoid any further 
misunderstanding, we are proposing to modify the introductory phrase of 
Sec. 195.1(b)(3) to read ``transportation through any of the following 
low-stress pipelines.''
    CIPA and WSPA argued that our rationale for excluding certain short 
transfer lines serving refineries, manufacturing plants, and truck, 
rail, or vessel terminals applies equally to similar transfer lines 
serving production shipping facilities in urban areas. These two 
commenters also said that until the direct final rule was published, 
many of their members thought the stay of enforcement covered these 
transfer lines (otherwise known as gathering lines) located in urban 
areas because of the reference to low-stress pipelines outside 
``plant'' grounds in the operative words of the stay.
    Despite the parallels these commenters drew, we are not proposing 
to exclude from part 195 short low-stress pipelines serving production 
shipping facilities in urban areas. First of all, we never intended the 
stay to apply to urban gathering lines.5 Our notice of the 
stay discussed part 195 compliance problems associated with short 
transfer lines that interconnect refineries; manufacturing plants; 
petrochemical plants; truck, rail, or vessel transportation terminals; 
and long-distance pipelines. It is within this context that the term 
``plant'' was used. Also, when the notice of the stay referred to 
gathering lines, the context distinguished gathering lines from other 
kinds of transfer lines. Moreover, the primary reason for the stay, as 
well as the direct final rule, was the overlapping effect of part 195 
and OSHA's Process Safety Management regulations (29 CFR 1910.119) on 
plant and terminal transfer lines. However, these OSHA regulations do 
not apply to oil production operations. So, although there may be 
similarities between urban gathering lines and transfer lines covered 
by the stay, the absence of an overlap with the OSHA regulations 
significantly weakens CIPA's and WSPA's argument for excluding short 
urban gathering lines from part 195. Not only do the OSHA regulations 
not compound the difficulties these lines may have in meeting part 195, 
neither can the OSHA regulations be counted on to lower the risk of the 
lines. And this latter point is even more important because urban 
gathering lines are not as likely to exist in uninhabited industrial 
areas as are the transfer lines covered by the stay.
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    \5\ Rural gathering lines are excluded from part 195 by 
Sec. 195.1(b)(4).
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    We share CDF&G's concern that any exclusion of plant and terminal 
transfer lines not increase the risk to marine waters. But we do not 
agree that the Coast Guard's regulations do not afford as much 
protection as RSPA's. Although the Coast Guard's regulations do not 
specify a hold time for pressure tests and do not require cathodic 
protection, they do require that existing transfer lines be pressure 
tested annually to at least 150 percent of the pipeline's maximum 
allowable working pressure. This requirement is more rigorous than 
RSPA's pressure testing standard (subpart E of part 195) for low-stress 
pipelines. Not only does the RSPA standard exempt most existing low-
stress pipelines (49 CFR 195.302(b)(3)), low-stress transfer lines that 
are subject to testing under the standard only have to be tested once 
to no more than 125 percent of maximum operating pressure. We also 
believe the higher safety margin of the Coast Guard test (50% above 
maximum allowable working pressure) and the higher frequency of 
testing, with on-scene Coast Guard inspection, makes the lack of a 
cathodic protection requirement less important. As to the concern over 
transfers to small capacity vessels, any low-stress marine transfer 
lines that are not subject to Coast Guard regulations would continue to 
be covered by part 195, unless they are otherwise excluded under 
Sec. 195.1(b)(3).
    In light of CDF&G's comment about the impact on marine waters of 
plant and terminal transfer lines, we also considered broadening in 
this notice the provision in the direct final rule that kept under part 
195 short lines crossing offshore or commercially navigable waters. As 
mentioned above, our reason for not excluding these short pipelines 
from regulation was their potential for environmental harm. This 
potential is increased by the presence of the lines in important water 
resources and by the vulnerability of the lines to outside force 
damage. In weighing the need for risk reduction against the 
difficulties of compliance with part 195, we decided this increased 
potential for environmental harm was reason enough to keep the lines 
under part 195. CDF&G's suggestion to exclude short lines only if a 
discharge would not impact marine waters would possibly keep even more 
lines under part 195; for example, lines that are proximate to, but do 
not cross, marine waters. But unlike lines crossing offshore or 
commercially navigable waterways, we do not believe that as a whole 
these additional short lines pose a level of risk that outweighs their 
compliance difficulties. Therefore, the proposed rule would exclude 
from part 195 the same low-stress pipelines that were covered by the 
direct final rule.

III. Regulatory Analyses and Notices

A. Executive Order 12866 and DOT Policies and Procedures

    The Office of Management and Budget (OMB) does not consider this 
action to be a significant regulatory action under Section 3(f) of 
Executive Order 12866 (58 FR 51735; October 4, 1993). Therefore, OMB 
has not reviewed this final rule document. DOT does not consider this 
action significant under its regulatory policies and procedures (44 FR 
11034; February 26, 1979).
    RSPA prepared a study of the costs and benefits of the Final Rule 
that extended part 195 to cover certain low-stress pipelines (Final 
Regulatory Evaluation, Docket No. PS-117). That study, which 
encompassed short or Coast Guard regulated interfacility transfer 
lines, showed that the Final Rule would result in net benefits to 
society, with a benefit to cost ratio of 1.5.

[[Page 9996]]

    The Final Regulatory Evaluation determined costs and benefits of 
the Final Rule on a mileage basis. But while costs were evenly 
distributed, most of the expected benefits were projected from accident 
data that did not involve short or Coast Guard regulated interfacility 
transfer lines. Since the present action affects only these lines, it 
is reasonable to believe the action will reduce more costs than 
benefits. Thus, the present action should enhance the net benefits of 
the Final Rule. Because of this likely economic effect, a further 
regulatory evaluation of the Final Rule in Docket No. PS-117 or of the 
present action is not warranted.

B. Regulatory Flexibility Act

    Low stress interfacility transfer lines covered by the present 
action are associated primarily with the operation of refineries, 
petrochemical and other industrial plants, and materials transportation 
terminals. In general, these facilities are not operated by small 
entities. Nonetheless, even if small entities operate low-stress 
interfacility transfer lines, their costs will be lower because this 
action reduces compliance burdens. Therefore, based on the facts 
available about the anticipated impact of this rulemaking action, I 
certify, pursuant to Section 605 of the Regulatory Flexibility Act (5 
U.S.C. 605), that this rulemaking action will not have a significant 
economic impact on a substantial number of small entities.

C. Executive Order 12612

    RSPA has analyzed this action in accordance with the principles and 
criteria contained in Executive Order 12612 (52 FR 41685). RSPA has 
determined that the action does not have sufficient federalism 
implications to warrant preparation of a Federalism Assessment.

D. Paperwork Reduction Act

    This action reduces the pipeline mileage and number of operators 
subject to part 195. Consequently, it reduces the information 
collection burden of part 195 that is subject to review by OMB under 
the Paperwork Reduction Act of 1995. OMB has approved the information 
collection requirements of part 195 through May 31, 1999 (OMB No. 2137-
0047).

E. Unfunded Mandates Reform Act of 1995

    This proposed rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It does not result in costs of 
$100 million or more to either State, local, or tribal governments, in 
the aggregate, or to the private sector, and is the least burdensome 
alternative that achieves the objective of the rule.

List of Subjects in 49 CFR Part 195

    Ammonia, Carbon dioxide, Petroleum, Pipeline safety, Reporting and 
recordkeeping requirements.

    In consideration of the foregoing, RSPA proposes to amend 49 CFR 
part 195 as follows:

PART 195--[AMENDED]

    1. The authority citation for Part 195 continues to read as 
follows:

    Authority: 49 U.S.C. 5103, 60102, 60104, 60108, 60109, 60118; 
and 49 CFR 1.53.

    2. In Sec. 195.1, the introductory text of paragraph (b) is 
republished, and paragraph (b)(3) would be revised to read as follows:


Sec. 195.1  Applicability.

* * * * *
    (b) This part does not apply to--
* * * * *
    (3) Transportation through any of the following low-stress 
pipelines:
    (i) An onshore pipeline or pipeline segment that--
    (A) Does not transport HVL;
    (B) Is located in a rural area; and
    (C) Is located outside a waterway currently used for commercial 
navigation;
    (ii) A pipeline subject to safety regulations of the U.S. Coast 
Guard; or
    (iii) A pipeline that serves refining, manufacturing, or truck, 
rail, or vessel terminal facilities, if the pipeline is less than 1 
mile long (measured outside facility grounds) and does not cross an 
offshore area or a waterway currently used for commercial navigation;
* * * * *
    Issued in Washington, D.C. on February 23, 1998.
Richard B. Felder,
Associate Administrator for Pipeline Safety.
[FR Doc. 98-5115 Filed 2-26-98; 8:45 am]
BILLING CODE 4910-60-P