[Federal Register Volume 70, Number 205 (Tuesday, October 25, 2005)]
[Rules and Regulations]
[Pages 61571-61577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-21233]


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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 192 and 195

[Docket No. RSPA-04-16855; Amdt. 192-101 and 195-85]
RIN 2137--AD97


Pipeline Safety: Standards for Direct Assessment of Gas and 
Hazardous Liquid Pipelines

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 
DOT.

ACTION: Final rule.

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SUMMARY: Under current regulations governing integrity management of 
gas transmission lines, if an operator uses direct assessment to 
evaluate corrosion risks, it must carry out the direct assessment 
according to PHMSA standards. In response to a statutory directive, 
this Final Rule prescribes similar standards operators must meet when 
they use direct assessment on certain other onshore gas, hazardous 
liquid, and carbon dioxide pipelines. PHMSA believes broader 
application of direct assessment standards will enhance public 
confidence in the use of direct assessment to assure pipeline safety.

DATES: This Final Rule takes effect November 25, 2005. Incorporation by 
reference of NACE Standard RP0502-2002 in this rule is approved by the 
Director of the Federal Register as of November 25, 2005.

FOR FURTHER INFORMATION CONTACT: L.M. Furrow by phone at 202-366-4559, 
by fax at 202-366-4566, by mail at U.S. Department of Transportation, 
400 Seventh Street, SW., Washington, DC 20590, or by e-mail at 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    This Final Rule concerns direct assessment, a process of managing 
the effects of external corrosion, internal corrosion, or stress 
corrosion cracking on pipelines made primarily of steel or iron. The 
process involves data collection, indirect inspection, direct 
examination, and evaluation. Operators use direct assessment not only 
to find existing corrosion defects but also to prevent future corrosion 
problems.
    Congress recognized the advantages of using direct assessment on 
U.S. Department of Transportation (DOT) regulated gas, hazardous 
liquid, and carbon dioxide pipeline facilities. Section 14 of the 
Pipeline Safety Improvement Act of 2002 (Pub. L. 107-355; Dec. 17, 
2002) directs DOT to issue regulations on using internal inspection, 
pressure testing, and direct assessment to manage the risks to gas 
pipeline facilities in high consequence areas. In addition, Section 23 
directs DOT to issue regulations prescribing standards for inspecting 
pipeline facilities by direct assessment.
    In response to the first statutory directive, Section 14, DOT's 
Research and Special Programs Administration (RSPA) \1\ published 
regulations in 49 CFR part 192, subpart O, that require operators to 
follow detailed programs to manage the integrity of gas transmission 
line segments in high consequence areas. Subpart O also requires an 
operator electing to use direct assessment in its integrity management 
program, to carry out the direct assessment according to Sec.  Sec.  
192.925, 192.927, and 192.929, as appropriate.\2\
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    \1\ The Norman Y. Mineta Research and Special Programs 
Improvement Act (Pub. L. 108-426, 118; November 30, 2004) 
reorganized RSPA into two new DOT administrations: the Pipeline and 
Hazardous Materials Safety Administration (PHMSA) and the Research 
and Innovative Technology Administration. RSPA's regulatory 
authority over pipeline and hazardous materials safety was 
transferred to PHMSA.
    \2\ The standard on external corrosion direct assessment Sec.  
192.925) requires operators to integrate data on physical 
characteristics and operating history, conduct indirect aboveground 
inspections, directly examine pipe surfaces, and evaluate the 
effectiveness of the assessment process. Under the standard for 
direct assessment of internal corrosion (Sec.  192.927), operators 
must predict locations where electrolytes may accumulate in normally 
dry-gas pipelines, examine those locations, and validate the 
assessment process. The standard for direct assessment of stress 
corrosion cracking (Sec.  192.929) involves collecting data relevant 
to stress corrosion cracking, assessing the risk of pipeline 
segments, and examining and evaluating segments at risk.
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    Sections 192.925, 192.927, and 192.929 cross-reference the American 
Society of Mechanical Engineers' (ASME), ASME B31.8S-2001, ``Managing 
System Integrity of Gas Pipelines.'' ASME B31.8S-2001 describes a 
comprehensive process to assess and mitigate the likelihood and 
consequences of gas pipeline risks. In addition, Sec.  192.925 cross-
references a

[[Page 61572]]

NACE International (NACE) standard, NACE Standard RP0502-2002, 
``Pipeline External Corrosion Direct Assessment Methodology.'' NACE 
Standard RP0502-2002 describes a step-by-step process for identifying 
and addressing external corrosion activity, repairing defects, and 
taking remedial action. Other parts of Sec.  Sec.  192.925, 192.927, 
and 192.929 ensure operators use appropriate criteria in making direct 
assessment decisions.

II. Proposed Rules

    In response to the second statutory directive, Section 23, PHMSA 
published a notice of proposed rulemaking (NPRM) (69 FR 61771; Oct. 21, 
2004). The NPRM proposed standards for using direct assessment on any 
onshore gas pipeline made primarily of steel or iron and regulated by 
49 CFR part 192 or onshore steel hazardous liquid or carbon dioxide 
pipeline regulated by 49 CFR part 195. Under proposed Sec.  192.490, if 
an operator chooses to use direct assessment to evaluate the threat of 
external corrosion, internal corrosion, or stress corrosion cracking on 
a regulated onshore gas pipeline, the direct assessment would have to 
be done according to Sec.  Sec.  192.925, 192.927, or 192.929, as 
appropriate. For regulated hazardous liquid and carbon dioxide 
pipelines, proposed Sec.  195.588 would require similar action, except 
compliance with Sec.  192.927 would not be required, because Sec.  
192.927 requirements are only suitable for dry gas pipelines.

III. Advisory Committee Recommendations

    The Technical Pipeline Safety Standards Committee (TPSSC) and the 
Technical Hazardous Liquid Pipeline Safety Standards Committee 
(THLPSSC) considered the NPRM at meetings in Washington, DC, on 
December 14 and 15, 2004. The TPSSC, a statutorily mandated advisory 
committee, advises PHMSA on proposed safety standards and other 
policies concerning gas pipelines. The THLPSSC is a similar committee 
that provides advice about hazardous liquid and carbon dioxide 
pipelines. Each committee has an authorized membership of 15 persons 
with membership evenly divided between government, industry, and the 
public. Each member is qualified to consider the technical feasibility, 
reasonableness, cost-effectiveness, and practicability of proposed 
pipeline safety standards. A transcript of each committee's meeting is 
available in Docket No. PHMSA-98-4470.
    After careful consideration of the NPRM, the THLPSSC voted 
unanimously to recommend the following: (1) Adopt a single definition 
of direct assessment for use by hazardous liquid pipeline operators 
inside and outside high consequence areas; (2) state direct assessment 
standards directly in part 195, rather than by cross-referencing part 
192 standards; (3) consider adopting the consensus standard under 
development by NACE for direct assessment of stress corrosion cracking; 
and (4) amend the integrity management rule (Sec.  195.452) to allow 
use of direct assessment without prior notice.
    As a result of its deliberation, the TPSSC voted unanimously that 
proposed Sec.  192.490 should not be applied to gas distribution lines. 
It also voted unanimously that the Final Rule should distinguish direct 
assessment from similar methods of assessing corrosion. Such a 
distinction would identify situations where similar methods of 
addressing corrosion are appropriate but are not regulated under the 
proposed direct assessment standard.

IV. Disposition of Comments and Advisory Committee Recommendations on 
Proposed Rules

    We received written comments on the proposed rules from 19 sources. 
These sources are categorized as follows:

State pipeline safety agency...........  Pennsylvania Public Utility
                                          Commission.
Gas pipeline operators.................  Duke Energy Gas Transmission
                                          (Duke), El Paso Corporation
                                          (El Paso), Nicor Gas (Nicor),
                                          NiSource Corporate Services
                                          Company (Nisource), Pacific
                                          Gas & Electric Company (PG&E),
                                          Paiute Pipeline Company
                                          (Paiute), Puget Sound Energy
                                          (Puget), Southwest Gas
                                          Corporation (SWGas).
Gas pipeline trade associations........  American Public Gas Association
                                          (APGA), American Gas
                                          Association (AGA), Interstate
                                          Natural Gas Association of
                                          America (INGAA), Northeast Gas
                                          Association (NGA).
Gas pipeline industry committee........  Gas Piping Technology Committee
                                          (GPTC).
Hazardous liquid pipeline trade          American Petroleum Institute
 associations.                            (API), Association of Oil Pipe
                                          Lines (AOPL).
Nonprofit organizations................  Cook Inlet Regional Citizens
                                          Advisory Council, Pipeline
                                          Safety Trust
Consultant.............................  Glen F. Armstrong.
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    Only one commenter, the Cook Inlet Regional Citizens Advisory 
Council (Council), created by the Oil Pollution Act of 1990, supported 
the proposed rules without change. The Council welcomed the additional 
Federal standards because of the need to control pipeline corrosion. 
The remaining commenters' issues are stated below along with our 
disposition of those issues and the advisory committee's 
recommendations.
    Is this rulemaking necessary? AGA, Duke, El Paso, GPTC, INGAA, 
NiSource, and Puget claimed the integrity management regulations for 
gas transmission lines (subpart O of part 192) satisfy the statutory 
directive to prescribe direct assessment standards. Taking a similar 
position, AOPL and API contended that Congress did not intend direct 
assessment standards to apply outside integrity management regulations. 
To support this position, these commenters stated that Congress did not 
require operators to use direct assessment on pipelines outside 
integrity management regulations. They also pointed out that direct 
assessment was developed for use in integrity management programs.
    Because the legislative history does not support the commenter's 
argument that direct assessment standards should apply only to 
pipelines subject to integrity management rules, PHMSA believes this 
rulemaking is necessary. It is reasonable to conclude Congress did not 
intend to restrict direct assessment standards to pipelines covered by 
integrity management regulations. Unlike the first statutory directive 
concerning direct assessment, which applies only to pipeline facilities 
in high consequence areas, the second directive applies to pipeline 
facilities regardless of location. Also, the first and second 
directives appear in separate sections of the statute (Sections 14 and 
23 of Pub. L. 107-355), with no apparent connection. Had Congress 
wanted to restrict direct assessment standards to pipelines covered by 
integrity management regulations, it could have expressly linked the 
second directive to the first or included the second directive in the 
same section as the first.
    Is proposed Sec.  192.490 appropriate for gas distribution lines? 
AGA, APGA,

[[Page 61573]]

Duke, El Paso, GPTC, INGAA, NGA, Nicor, NiSource, Paiute, and PG&E 
argued direct assessment was developed for gas transmission integrity 
management and has not been shown to be appropriate for gas 
distribution lines. They said the relevant technical data and 
experience do not show direct assessment would be effective on gas 
distribution lines. In addition, some of these commenters thought 
because gas distribution lines differ from gas transmission lines in 
design, operation, configuration, and location, direct assessment may 
be impractical on gas distribution lines. The many aboveground and 
belowground utility facilities--both in-service and abandoned--were 
thought to pose significant technical hurdles. The Pennsylvania Public 
Utility Commission and the Pipeline Safety Trust also questioned the 
suitability of direct assessment for gas distribution lines.
    These comments came as a surprise to PHMSA because the two 
documents that are the mainstays of the proposed direct assessment 
standards, ASME B31.8S-2001 and NACE Standard RP0502-2002, can be 
interpreted to cover gas distribution lines. Each document states that 
it applies to onshore pipelines. Although neither document defines 
``pipeline,'' ASME's B31.8 Code, to which ASME B31.8S-2001 is a 
supplement, defines ``pipeline'' as ``all parts of physical facilities 
through which gas moves in transportation.'' And ``transportation of 
gas'' is defined as the ``gathering, transmission, or distribution of 
gas.''
    No matter how ASME B31.8S-2001 and NACE Standard RP0502-2002 are 
interpreted, the comments persuaded us that direct assessment, as 
depicted by these two documents, is not appropriate for gas 
distribution lines. Both ASME B31.8S-2001 and NACE Standard RP0502-
2002, were developed during the rulemaking proceeding on gas 
transmission integrity management and in furtherance of that 
proceeding. Consequently, neither document was developed with a focus 
on gas distribution lines. Furthermore, although both documents apply 
to pipelines, they do not take full account of gas distribution line 
features as comments suggest they should to treat gas distribution 
lines appropriately.
    Given these considerations and the TPSSC's unanimous recommendation 
that we not apply the proposed direct assessment standards to gas 
distribution lines, we decided to exclude distribution lines from final 
Sec.  192.490. Removing ``pipeline'' from the proposed wording and 
adding ``transmission line'' in its place accomplishes this change.
    Would the proposed standards discourage the voluntary use of 
corrosion control methods? AGA, Armstrong, Duke, El Paso, GPTC, INGAA, 
NGA, Nicor, NiSource, Paiute, PG&E, Puget, and SWGas were concerned the 
proposed standards (Sec.  Sec.  192.490 and 195.588) would discourage 
operators from voluntarily using corrosion control methods related to 
direct assessment on pipelines not subject to the integrity management 
regulations. Their concern stemmed from the difficulty of recognizing 
when direct assessment is being used. They said performance of any one 
of the four steps that constitute direct assessment could imply use of 
direct assessment and lead to disagreements with government inspectors 
over whether direct assessment is being used. For example, some 
commenters said performing a close interval electrical survey resembled 
the indirect examination step of direct assessment. Others thought 
examining buried pipe for corrosion could be considered the direct 
examination step. El Paso, INGAA, Nicor, and Armstrong suggested the 
Final Rule clarify that operators may use corrosion control methods 
related to direct assessment without having to meet the proposed direct 
assessment standards.
    We recognize disagreements could arise over whether the use of a 
corrosion control method is part of the direct assessment process. 
However, we do not think such disagreements are likely to be serious 
enough to discourage operators from continuing to use such methods 
separately from direct assessment. To minimize potential disagreements, 
operators may explain in their corrosion control procedures the 
situations in which they use methods related to direct assessment 
separately from direct assessment.
    In view of the commenters' concern, PHMSA has added provisions to 
final Sec.  Sec.  192.490 and 195.588 to clarify application of the 
direct assessment standards. The statement provides that the direct 
assessment standards do not apply to methods related to direct 
assessment, such as close interval surveys, voltage gradient surveys, 
or examination of exposed pipelines, when used separately from the 
direct assessment process. This change is consistent with the TPSSC's 
second recommendation.
    Are the gas pipeline standards cross-referenced in proposed Sec.  
195.588 suitable for hazardous liquid and carbon dioxide pipelines? In 
their comments on proposed Sec.  195.588, AOPL and API opposed cross-
referencing Sec.  Sec.  192.925 and 192.929 primarily because these 
standards refer to ASME B31.8S-2001. They argued ASME B31.8S-2001 was 
developed for natural gas transmission lines and without the 
involvement of hazardous liquid pipeline operators. They were also 
concerned that cross-referencing part 192 gas pipeline standards could 
lead to misunderstandings by hazardous liquid pipeline operators. The 
THLPSSC similarly opposed cross-referencing part 192 standards.
    In developing the NPRM, we assumed the cross-referenced part 192 
standards and their cross-references to ASME B31.8S-2001 would be 
suitable for hazardous liquid and carbon dioxide pipelines. However, 
the AOPL and API comments and the THLPSSC's recommendation have caused 
us to doubt that assumption. In addition, we are concerned that 
application of the part 192 direct assessment standards to hazardous 
liquid and carbon dioxide pipelines could present compliance problems. 
Contributing to this concern is the comment that ASME B31.8S-2001 was 
not developed with an eye to hazardous liquid pipelines. In fact, 
paragraph 1.1 of ASME B31.8S-2001 specifically states that the scope of 
ASME B31.8S-2001 is limited to ``onshore pipeline systems * * * that 
transport gas.''
    Therefore, we decided not to include cross-references to part 192 
standards or to ASME B31.8S-2001 in final Sec.  195.588. Instead, final 
Sec.  195.588 includes a complete statement of direct assessment 
standards, with cross-references only to NACE Standard RP0502-2002.
    Should the integrity management regulations for hazardous liquid 
and carbon dioxide pipelines allow use of direct assessment without 
advance notice? The integrity management regulations for hazardous 
liquid and carbon dioxide pipelines (Sec.  195.452) prescribe three 
ways to assess pipeline integrity: internal inspection via a smart pig, 
pressure testing, and any other technology the operator demonstrates 
can provide an equivalent understanding of pipe conditions. However, 
before another technology, such as direct assessment may be used, the 
operator must notify PHMSA at least 90 days in advance (Sec.  Sec.  
195.452(c)(1)(i)(C) and 195.452(j)(5)(iii)).
    In contrast to Sec.  195.452, the proposed direct assessment 
standards do not include a requirement to give 90 days' advance notice 
as a precondition to using direct assessment. We see no need to propose 
such a requirement since the current Part 192 direct assessment 
standards do not require operators to

[[Page 61574]]

give advance notice before using direct assessment.
    In their comments on proposed Sec.  195.588, AOPL and API suggested 
direct assessment of external corrosion should be listed directly in 
Sec.  195.452 as a permissible method of integrity assessment. They 
believe that when external corrosion direct assessment is performed 
according to NACE Standard RP0502-2002, it is an acceptable use of 
``other technology'' for which 90 days advance notice is no longer 
necessary. As discussed above under Advisory Committee Recommendations, 
the THLPSSC also favored listing direct assessment directly in Sec.  
195.452 as a recognized assessment method that would bypass the 90-day 
advance notice requirement.
    The purpose of the 90 days advance notice requirement in Sec.  
195.452 is to provide time for PHMSA and State pipeline safety agencies 
to review technology other than pigging and pressure testing to learn 
what information the technology provides about pipe conditions. 
According to information on a PHMSA Web site (http://primis.phmsa.dot.gov/iim/notifications.imd), several operators have 
submitted notices of their intent to use direct assessment on hazardous 
liquid or carbon dioxide pipelines. In a majority of cases, there were 
no PHMSA or State government objections to the use of direct 
assessment. Objections were raised where the notification lacked 
information explaining how the direct assessment was to be performed.
    When applied to direct assessment, we believe the 90-day advance 
notice requirement of Sec.  195.452 is no longer useful and is 
inconsistent with the proposed rules. Direct assessment is now being 
used under the part 192 integrity management regulations without 
advance notice. As a result, government inspectors are fully aware of 
the direct assessment technology and the situations for which it is 
suited, making advance case-by-case review under Sec.  195.452 
unnecessary. In addition, requiring operators to follow prescribed 
standards when using direct assessment will remove the primary 
objection previously raised about operators' advance notices--
insufficient information to explain the method of assessment. 
Therefore, we are changing Sec.  Sec.  195.452(c)(1)(i)(C) and 
195.452(j)(5)(iii) to allow use of direct assessment in accordance with 
final Sec.  195.588 without 90 days advance notice.
    What standard should apply to direct assessment of stress corrosion 
cracking on hazardous liquid and carbon dioxide pipelines? The NPRM 
proposed that Sec.  192.929 be the standard for direct assessment of 
stress corrosion cracking on hazardous liquid and carbon dioxide 
pipelines. This standard relies largely on cross-references to ASME 
B31.8S-2001.
    Besides their objections to cross-referencing part 192 standards 
and particularly ASME B31.8S-2001, AOPL and API suggested that we not 
adopt any standard for the direct assessment of stress corrosion 
cracking on hazardous liquid pipelines. They said because methods of 
detecting stress corrosion cracking are developing rapidly, direct 
assessment may not be the optimum technology for hazardous liquid 
pipelines. The THLPSSC recommended we consider adopting the consensus 
standard that NACE International was developing for direct assessment 
of stress corrosion cracking.
    As explained above, we decided not to cross-reference directly or 
indirectly ASME B31.8S-2001 in final Sec.  195.588, because the 
document is closely identified with gas pipelines. Consequently, since 
provisions of ASME B31.8S-2001 are an important part of the proposed 
stress corrosion standard, we have not included a direct assessment 
standard for stress corrosion cracking in final Sec.  195.588. As the 
THLPSSC recommended, we will consider the recently published NACE 
Standard RP0204-2004, Stress Corrosion Cracking (SCC) Direct Assessment 
Methodology, for possible future rulemaking action. By removing the 
proposed cross-reference to Sec.  192.929, final Sec.  195.588 consists 
of the text of Sec.  192.925 without its cross-references to ASME 
B31.8S-2001.

V. Editorial Changes

     Final Sec.  Sec.  192.490 and 195.588 do not include the 
proposed phrase ``or to meet any requirement of this Subpart regarding 
that threat.'' The phrase was used in the proposed rules to draw 
attention to situations in which operators might choose to use direct 
assessment. However, the phrase appears to be unnecessary and, 
according to comments, possibly confusing.
     Final Sec.  192.490 clarifies that ``direct assessment'' 
means direct assessment as defined in Sec.  192.903.\3\ This definition 
applies to ``direct assessment'' as it is used in subpart O of part 
192, including Sec.  Sec.  192.925, 192.927, and 192.929--the bases of 
the proposed direct assessment standards. Also, in final Sec.  192.490, 
instead of using the proposed term ``ferrous'' to limit pipelines to 
which the direct assessment standards apply, we used ``made primarily 
of steel or iron.'' This change removes the possibility of confusion 
over the meaning of ferrous.
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    \3\ Section 192.903 defines ``direct assessment'' as ``an 
integrity assessment method that utilizes a process to evaluate 
certain threats (i.e., external corrosion, internal corrosion and 
stress corrosion cracking) to a covered pipeline segment's 
intergrity. The process includes the gathering and integration of 
risk factor data, indirect examination or analysis to identify areas 
of suspected corrosion, direct examination of the pipeline in these 
areas, and post assessment evaluation.''
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     We added a similar definition of ``direct assessment'' to 
Sec.  195.553, which contains definitions applicable to subpart H of 
part 195, including final Sec.  195.588. This addition satisfies the 
first THLPSSC recommendation. The definition of ``external corrosion 
direct assessment,'' which was proposed through the cross-reference to 
Sec.  192.925, is also added to Sec.  195.553.
     In final Sec.  195.588, we substituted ``pipeline 
segment'' for the terms ``covered segment'' and ``covered pipeline 
segment'' to avoid the possibility that the definition of these terms 
in Sec.  192.903--a segment of transmission pipeline located in a high 
consequence area--would unintentionally constrain the scope of final 
Sec.  195.588. A footnote resolves a similar problem in final Sec.  
192.490.
     Section 192.925(b) provides that if coating damage is 
detected by external corrosion direct assessment, the operator must 
integrate that information with data gathered and integrated under 
certain other requirements (Sec.  Sec.  192.917(b) and 192.917(e)(1)). 
These other requirements, which involve evaluating and addressing risks 
besides corrosion, including third-party damage, apply only to gas 
transmission lines subject to the integrity management regulations in 
subpart O of part 192. Although the proposed direct assessment 
standards for other pipelines included cross-references to Sec.  
192.925, the NPRM did not address extending Sec.  Sec.  192.917(b) and 
192.917(e)(1) to pipelines outside subpart O by virtue of the cross-
references. The focus of the NPRM was strictly on using direct 
assessment to evaluate and address corrosion risks. Using direct 
assessment data to evaluate non-corrosion risks to pipeline integrity 
was not discussed. So it would be inappropriate to infer that the 
proposed references to Sec.  192.925 meant that operators who 
voluntarily use external corrosion direct assessment on pipelines 
outside subpart O would also have to comply with Sec.  Sec.  192.917(b) 
and 192.917(e)(1). To ensure this possible inference does not affect 
the Final Rules, final Sec.  Sec.  192.490 and 195.588 exclude 
pipelines outside subpart O from the Sec.  192.925(b) requirement 
related to integrating coating damage data. Nevertheless, for

[[Page 61575]]

hazardous liquid and carbon dioxide pipelines that are subject to the 
integrity management regulations in Sec.  195.452, the detection of 
coating damage is an important factor to consider in the information 
analysis required by Sec.  195.452(g) and the continual integrity 
evaluation required by Sec.  195.452(j)(2).

VI. Regulatory Analyses and Notices

    Executive Order 12866 and DOT Policies and Procedures. PHMSA does 
not consider this rulemaking to be a significant regulatory action 
under Section 3(f) of Executive Order 12866 (58 FR 51735; Oct. 4, 
1993). Therefore, the Office of Management and Budget (OMB) has not 
received a copy of the Final Rule to review. PHMSA also does not 
consider this rulemaking to be significant under DOT regulatory 
policies and procedures (44 FR 11034: February 26, 1979).
    PHMSA has evaluated the costs and benefits of this Final Rule and a 
copy of the evaluation is in the docket. The evaluation concludes 
operators will incur only minimal costs to comply with the Final Rule.
    Regulatory Flexibility Act. Under the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), PHMSA must consider whether rulemaking actions 
have a significant economic impact on a substantial number of small 
entities. Based on the facts available about the anticipated impacts of 
this rulemaking, I certify that this rulemaking will not have a 
significant impact on a substantial number of small entities.
    Executive Order 13175. PHMSA has analyzed this rulemaking according 
to the principles and criteria contained in Executive Order 13175, 
``Consultation and Coordination with Indian Tribal Governments.'' 
Because the Final Rule will not significantly or uniquely affect the 
communities of the Indian Tribal Governments nor impose substantial 
direct compliance costs, the funding and consultation requirements of 
Executive Order 13175 do not apply.
    Paperwork Reduction Act. Operators have just recently begun to use 
direct assessment to assess the effects of corrosion on onshore gas 
transmission lines subject to the integrity management regulations in 
subpart O of part 192. The use of direct assessment on other pipelines 
regulated by part 192 or part 195 is voluntary. This Final Rule does 
not change this voluntary use status. It merely sets standards for 
performing direct assessment if operators choose to use it.
    Pipeline operators covered by the Final Rule who choose to use 
direct assessment would have to prepare appropriate plans and 
procedures and keep records as required by Section 7 of NACE Standard 
RP0502-2002. To help estimate the paperwork burden these operators 
would face, the NPRM invited comments on how many operators plan to use 
direct assessment voluntarily and what the burden hours and cost would 
be.
    None of the commenters foresaw any voluntary use of direct 
assessment or commented on the potential paperwork burden. This result 
was not a surprise, for direct assessment is a new process and so far 
its use is mostly limited to gas transmission lines subject to subpart 
O of part 192. Under these circumstances, it is reasonable to expect 
that few, if any, operators will be affected by the Final Rule. So no 
net increase in paperwork burdens is likely from this Final Rule. For 
this reason, we believe that submitting an analysis of the burdens to 
OMB under the Paperwork Reduction Act is unnecessary.
    Unfunded Mandates Reform Act of 1995. This Final 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 rulemaking.
    National Environmental Policy Act. PHMSA has analyzed the Final 
Rule for purposes of the National Environmental Policy Act (42 U.S.C. 
4321 et seq.). Because the Final Rule affects only those operators that 
voluntarily use direct assessment and because it largely involves 
processes of data collection and evaluation, we have determined that it 
is unlikely to significantly affect the quality of the human 
environment. An Environmental Assessment is available for review in the 
docket.
    Executive Order 13132. PHMSA has analyzed the Final Rule according 
to the principles and criteria contained in Executive Order 13132, 
``Federalism.'' No part of the rule (1) has substantial direct effects 
on the States, the relationship between the national government and the 
States, or the distribution of power and responsibilities among the 
various levels of government; (2) imposes substantial direct compliance 
costs on State and local governments; or (3) preempts State law. 
Therefore, the consultation and funding requirements of Executive Order 
13132 do not apply.
    Executive Order 13211. This Final Rule is not a ``Significant 
Energy Action'' under Executive Order 13211. It is not a significant 
regulatory action under Executive Order 12866 and is not likely to have 
a significant adverse effect on the supply, distribution, or use of 
energy. Further, this rulemaking has not been designated by the 
Administrator of the Office of Information and Regulatory Affairs as a 
significant energy action.

List of Subjects

49 CFR Part 192

    Natural gas, Pipeline safety, Reporting and recordkeeping 
requirements.

49 CFR Part 195

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


0
In consideration of the foregoing, PHMSA amends 49 CFR parts 192 and 
195 as follows:

PART 192--TRANSPORTATION OF NATURAL AND OTHER GAS BY PIPELINE: 
MINIMUM FEDERAL SAFETY STANDARDS

0
1. The authority citation for part 192 continues to read as follows:

    Authority: 49 U.S.C. 5103, 60102, 60104, 60108, 60109, 60110, 
60113, and 60118; and 49 CFR 1.53.


0
2. Add Sec.  192.490 to read as follows:


Sec.  192.490  Direct assessment.

    Each operator that uses direct assessment as defined in Sec.  
192.903 on an onshore transmission line made primarily of steel or iron 
to evaluate the effects of a threat in the first column must carry out 
the direct assessment according to the standard listed in the second 
column. These standards do not apply to methods associated with direct 
assessment, such as close interval surveys, voltage gradient surveys, 
or examination of exposed pipelines, when used separately from the 
direct assessment process.

------------------------------------------------------------------------
                  Threat                            Standard \1\
------------------------------------------------------------------------
External corrosion.......................  Sec.   192.925 \2\
Internal corrosion in pipelines that       Sec.   192.927
 transport dry gas.
Stress corrosion cracking................  Sec.   192.929
------------------------------------------------------------------------
\1\ For lines not subject to subpart O of this part, the terms ``covered
  segment'' and ``covered pipeline segment'' in Sec.  Sec.   192.925,
  192.927, and 192.929 refer to the pipeline segment on which direct
  assessment is performed.
\2\ In Sec.   192.925(b), the provision regarding detection of coating
  damage applies only to pipelines subject to subpart O of this part.

PART 195--TRANSPORTATION OF HAZARDOUS LIQUIDS BY PIPELINE

0
3. The authority citation for part 195 continues to read as follows:


[[Page 61576]]


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


0
4. In Sec.  195.3(c), amend the table of referenced material by adding 
item G.(2) to read as follows:


Sec.  195.3  Matter incorporated by reference in whole or in part.

* * * * *
    (c) * * *

------------------------------------------------------------------------
 
------------------------------------------------------------------------
G. * * *..................................  * * *
(2) NACE Standard RP0502-2002 ``Pipeline    Sec.   195.588
 External Corrosion Direct Assessment
 Methodology'' (2002).
------------------------------------------------------------------------


0
5. Amend Sec.  195.452 as follows:
0
a. Redesignate paragraph (c)(1)(i)(C) as (c)(1)(i)(D);
0
b. Remove ``or'' from the end of paragraph (c)(1)(i)(B);
0
c. Redesignate paragraph (j)(5)(iii) as (j)(5)(iv);
0
d. Remove ``or'' from the end of paragraph (j)(5)(ii); and
0
e. Add new paragraphs (c)(1)(i)(C) and (j)(5)(iii) to read as follows:


Sec.  195.452  Pipeline integrity management in high consequence areas.

* * * * *
    (c) * * *
    (1) * * *
    (i) * * *
    (C) External corrosion direct assessment in accordance with Sec.  
195.588; or
* * * * *
    (j) * * *
    (5) * * *
    (iii) External corrosion direct assessment in accordance with Sec.  
195.588; or
* * * * *

0
6. In Sec.  195.553, add definitions for ``direct assessment'' and 
``external corrosion direct assessment (ECDA)'' as follows:


Sec.  195.553  What special definitions apply to this Subpart?

* * * * *
    Direct assessment means an integrity assessment method that 
utilizes a process to evaluate certain threats (i.e., external 
corrosion, internal corrosion and stress corrosion cracking) to a 
pipeline segment's integrity. The process includes the gathering and 
integration of risk factor data, indirect examination or analysis to 
identify areas of suspected corrosion, direct examination of the 
pipeline in these areas, and post assessment evaluation.
* * * * *
    External corrosion direct assessment (ECDA) means a four-step 
process that combines pre-assessment, indirect inspection, direct 
examination, and post-assessment to evaluate the threat of external 
corrosion to the integrity of a pipeline.
* * * * *

0
7. Add Sec.  195.588 to read as follows:


Sec.  195.588  What standards apply to direct assessment?

    (a) If you use direct assessment on an onshore pipeline to evaluate 
the effects of external corrosion, you must follow the requirements of 
this section for performing external corrosion direct assessment. This 
section does not apply to methods associated with direct assessment, 
such as close interval surveys, voltage gradient surveys, or 
examination of exposed pipelines, when used separately from the direct 
assessment process.
    (b) The requirements for performing external corrosion direct 
assessment are as follows:
    (1) General. You must follow the requirements of NACE Standard 
RP0502-2002 (incorporated by reference, see Sec.  195.3). Also, you 
must develop and implement an ECDA plan that includes procedures 
addressing pre-assessment, indirect examination, direct examination, 
and post-assessment.
    (2) Pre-assessment. In addition to the requirements in Section 3 of 
NACE Standard RP0502-2002, the ECDA plan procedures for pre-assessment 
must include--
    (i) Provisions for applying more restrictive criteria when 
conducting ECDA for the first time on a pipeline segment;
    (ii) The basis on which you select at least two different, but 
complementary, indirect assessment tools to assess each ECDA region; 
and
    (iii) If you utilize an indirect inspection method not described in 
Appendix A of NACE Standard RP0502-2002, you must demonstrate the 
applicability, validation basis, equipment used, application procedure, 
and utilization of data for the inspection method.
    (3) Indirect examination. In addition to the requirements in 
Section 4 of NACE Standard RP0502-2002, the procedures for indirect 
examination of the ECDA regions must include--
    (i) Provisions for applying more restrictive criteria when 
conducting ECDA for the first time on a pipeline segment;
    (ii) Criteria for identifying and documenting those indications 
that must be considered for excavation and direct examination, 
including at least the following:
    (A) The known sensitivities of assessment tools;
    (B) The procedures for using each tool; and
    (C) The approach to be used for decreasing the physical spacing of 
indirect assessment tool readings when the presence of a defect is 
suspected;
    (iii) For each indication identified during the indirect 
examination, criteria for--
    (A) Defining the urgency of excavation and direct examination of 
the indication; and
    (B) Defining the excavation urgency as immediate, scheduled, or 
monitored; and
    (iv) Criteria for scheduling excavations of indications in each 
urgency level.
    (4) Direct examination. In addition to the requirements in Section 
5 of NACE Standard RP0502-2002, the procedures for direct examination 
of indications from the indirect examination must include--
    (i) Provisions for applying more restrictive criteria when 
conducting ECDA for the first time on a pipeline segment;
    (ii) Criteria for deciding what action should be taken if either:
    (A) Corrosion defects are discovered that exceed allowable limits 
(Section 5.5.2.2 of NACE Standard RP0502-2002 provides guidance for 
criteria); or
    (B) Root cause analysis reveals conditions for which ECDA is not 
suitable (Section 5.6.2 of NACE Standard RP0502-2002 provides guidance 
for criteria);
    (iii) Criteria and notification procedures for any changes in the 
ECDA plan, including changes that affect the severity classification, 
the priority of direct examination, and the time frame for direct 
examination of indications; and
    (iv) Criteria that describe how and on what basis you will 
reclassify and re-prioritize any of the provisions specified in Section 
5.9 of NACE Standard RP0502-2002.
    (5) Post assessment and continuing evaluation. In addition to the 
requirements in Section 6 of NACE Standard UP 0502-2002, the procedures 
for post assessment of the effectiveness of the ECDA process must 
include--
    (i) Measures for evaluating the long-term effectiveness of ECDA in 
addressing external corrosion in pipeline segments; and
    (ii) Criteria for evaluating whether conditions discovered by 
direct examination of indications in each ECDA region indicate a need 
for reassessment of the pipeline segment at an interval less than that 
specified in

[[Page 61577]]

Sections 6.2 and 6.3 of NACE Standard RP0502-2002 (see Appendix D of 
NACE Standard RP0502-2002).

    Issued in Washington, DC, on October 19, 2005.
Brigham A. McCown,
Acting Administrator, PHMSA.
[FR Doc. 05-21233 Filed 10-24-05; 8:45 am]
BILLING CODE 4910-60-P