[Federal Register Volume 71, Number 172 (Wednesday, September 6, 2006)]
[Proposed Rules]
[Pages 52504-52519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-7438]


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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 195

[Docket No. PHMSA-2003-15864; Notice 3]
RIN 2137-AD98


Pipeline Safety: Protecting Unusually Sensitive Areas From Rural 
Onshore Hazardous Liquid Gathering Lines and Low-Stress Lines

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 
U.S. Department of Transportation (DOT).

ACTION: Notice of proposed rulemaking.

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SUMMARY: We are proposing to extend pipeline safety regulations to 
rural onshore hazardous liquid gathering lines and low-stress lines 
within a defined buffer of previously defined ``unusually sensitive 
areas.'' These are non-populated areas requiring extra protection 
because of the presence of sole source drinking water resources, 
endangered species, or other ecological resources.
    This proposal will define ``regulated rural onshore gathering 
lines'' and ``regulated rural onshore low-stress lines'' and require 
operators of the lines to comply with certain safety requirements. 
These proposed safety requirements will address the most common threats 
to the integrity of these rural lines: corrosion and third-party 
damage. This proposal is intended to provide additional integrity 
protection for unusually sensitive areas that could be affected by 
these lines and improve public confidence in the safety of hazardous 
liquid rural onshore gathering and low-stress lines.

DATES: Persons interested in submitting written comments on the rules 
proposed in this document must do so by November 6, 2006. PHMSA will 
consider late filed comments so far as practicable.

[[Page 52505]]


ADDRESSES: You may send written comments to the docket by any of the 
following methods:
     Mail: Dockets Facility, U.S. Department of Transportation, 
Room PL-401, 400 Seventh Street, SW., Washington, DC 20590-0001. Anyone 
wanting confirmation of mailed comments must include a self-addressed 
stamped postcard.
     Hand delivery or courier: Room PL-401, 400 Seventh Street, 
SW., Washington, DC. The Dockets Facility is open from 10 a.m. to 5 
p.m., Monday through Friday, except Federal holidays.
     Web site: Go to http://dms.dot.gov, click on ``Comments/
Submissions'' and follow instructions at the site. Alternatively, go to 
http://regulations.gov.
    All written comments should identify the docket number and notice 
number stated in the heading of this notice.
    Docket access. For copies of this notice or other material in the 
docket, you may contact the Dockets Facility by phone (202-366-9329) or 
go to the hand delivery address. For Web access to the docket to read 
and download filed material, go to http://dms.dot.gov/search. Then type 
in the last five digits of the docket number shown in the heading of 
this notice, and click on ``Search.''
    Anyone can search the electronic form of all comments filed in any 
of DOT's dockets by the name of the individual filing the comment (or 
signing the comment, if filed for an entity such as an association, 
business, or labor union). You may review DOT's complete Privacy Act 
Statement in the April 11, 2000 issue of the Federal Register (65 FR 
19477) or go to http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: DeWitt Burdeaux by phone at 405-954-
7220 or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: 

I. Background

a. History

    Over the past six years, PHMSA has designed and executed a risk-
based system approach to oversight of the national pipeline 
infrastructure. This approach is embodied in the ``Integrity Management 
Program'' of the agency and its budget. The program has many elements, 
including the data that supports the agency's decision making, 
regulatory framework, enforcement program, training and preparation of 
Federal and State inspectors, research and development to advance 
integrity assessment and management, and performance measurement and 
reporting. We have sought advice on each aspect of the program at the 
conceptual stage from our technical advisory committee members and in 
public meetings.
    As to regulatory framework, we undertook rulemaking projects on a 
risk-prioritized basis, acting first on those parts of the 
infrastructure that posed the greatest risk to people and the 
environment. To begin the program, we defined high consequence areas 
and mapped the locations on the National Pipeline Mapping System, 
including areas unusually sensitive to environmental damage, which we 
previously defined in our 2000 regulation. Since 2000, we have 
completed and implemented regulations that provided integrity 
management protections for people and the environment that could be 
affected by a failure from high pressure, large and small hazardous 
liquid pipelines and provided protections to people that could be 
affected by high pressure gas transmission pipelines. We recently 
completed our gas gathering lines regulation by taking an integrity-
related approach to protecting people from gas gathering lines. We 
began consideration of the current regulatory initiative in 2003 and 
discussed it during our technical advisory committee meetings, and at 
public meetings in 2004. This is the remaining element in the 
regulatory framework designed to protect unusually sensitive areas from 
hazardous liquid pipelines in rural areas.

b. PHMSA's Safety Rules for Hazardous Liquid Pipelines Exempt Rural 
Low-Stress Lines and Gathering Lines

    Low-stress lines generally transport hazardous liquid at low-stress 
levels for relatively short distances to and from refineries and 
terminals, while gathering lines transport petroleum products from 
production facilities to downstream locations, such as a refinery or 
processing plant.
    PHMSA's safety rules for hazardous liquid pipelines (49 CFR part 
195) apply to both offshore and onshore gathering and low-stress lines. 
PHMSA currently regulates gathering lines in populated areas, and those 
in rural areas in the inlets of the Gulf of Mexico. PHMSA also 
regulates low-stress lines that are located in populated areas or cross 
commercially navigable waterways. It also regulates any low-stress line 
transporting highly volatile liquids. These lines are subject to all of 
the regulatory requirements in part 195.
    This proposal impacts some of the onshore rural gathering lines and 
low-stress lines that PHMSA currently exempts from all or portions of 
the part 195 regulatory requirements. Onshore gathering lines in rural 
areas are exempt from all part 195 rules except requirements for 
inspection and burial in Gulf of Mexico inlets (Sec.  195.1(b)(4)). 
Part 195 defines ``gathering line'' as a pipeline 8\5/8\ inches or less 
in nominal outside diameter that transports petroleum from a production 
facility. The term ``production facility'' is defined as piping or 
equipment used in the production, extraction, recovery, lifting, 
stabilization, separation, or treating of petroleum or carbon dioxide, 
and associated storage or measurement. To qualify, piping or equipment 
must be used to extract petroleum or carbon dioxide from the ground or 
facilities where petroleum or carbon dioxide is produced and prepared 
for transportation by pipeline. This includes piping between treatment 
plants that extract carbon dioxide and facilities used for the 
injection of carbon dioxide for recovery operations. The term 
``petroleum'' means crude oil, condensate, natural gasoline, natural 
gas liquids, and liquefied petroleum gas. Also, ``rural area'' means 
outside the limits of any incorporated or unincorporated city, town, 
village, or any other designated residential or commercial area such as 
a subdivision, a business or shopping center, or community development.
    Part 195 defines ``low-stress'' as a hazardous liquid pipeline 
operated in its entirety at a stress level of 20 percent or less of the 
specified minimum yield strength (SMYS) of the line pipe. SMYS is the 
minimum yield strength, expressed in p.s.i. (kPa) gage, prescribed by 
the specification under which the material is purchased from the 
manufacturer. Low-stress lines in rural areas are exempt from part 195 
if they transport nonvolatile petroleum products and are located 
outside a waterway currently used for commercial navigation. Under this 
proposal, some of these rural lines will no longer be exempt if within 
a defined buffer zone of an unusually sensitive area. This proposal 
will not affect other exempt low-stress lines, specifically pipelines 
subject to safety regulations of the U.S. Coast Guard, or those 
pipelines that serve certain refining and terminal facilities, if the 
pipeline is less than 1-mile long (measured outside of facility 
grounds) and does not cross an offshore area or a waterway currently 
used for commercial navigation.

c. Statutory Authority

    Except for a 1991 requirement establishing inspection and burial 
rules for pipelines, including rural gathering

[[Page 52506]]

lines, located in Gulf of Mexico inlets, from 1979 until 1992, PHMSA 
did not have statutory authority to regulate rural gathering lines.\1\ 
It was not until the Pipeline Safety Act of 1992 (codified at 49 U.S.C. 
60101(a)(22)), that Congress gave DOT authority to regulate certain 
rural gathering lines. This legislation directed DOT to define the term 
``gathering line'' by October 24, 1994, and the term ``regulated 
gathering line'' by October 24, 1995 (49 U.S.C. 60101(b)(1)(A) and 
(b)(2)(A)).
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    \1\ Although these lines are not regulated under part 195, 
PHMSA's rules for onshore oil spill response plans (49 CFR part 194) 
cover many rural crude oil gathering lines and low-stress lines. 
Part 194 regulations apply to oil pipelines that could cause 
substantial harm to the environment by spilling oil into or on any 
navigable water of the United States or adjoining shoreline.
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    Four years later, in the Accountable Pipeline Safety and 
Partnership Act of 1996 (Pub. L. 104-304), Congress moderated its 
directive to define ``regulated gathering line'' by adding the words 
``if appropriate'' (49 U.S.C. 60101(b)(2)(A)). Congress also gave DOT 
specific authority to collect information from gathering line operators 
related to deciding whether and to what extent to regulate rural 
gathering lines (49 U.S.C. 60117(b)). Because of the need to regulate 
the safety of certain rural petroleum gathering lines (as explained in 
section II of this preamble), we think it is now appropriate to define 
the term ``regulated gathering line'' for hazardous liquid 
transportation.
    In defining ``regulated gathering line'' for hazardous liquid 
transportation, PHMSA is required by statute to consider various 
physical characteristics to decide which rural onshore gathering lines 
need safety regulation. These characteristics include location, length 
of line from the well site, operating pressure, throughput, and 
composition of the transported hazardous liquid (49 U.S.C. 
60101(b)(2)(A) and (b)(2)(B)(i)). Further, the statute states a 
``regulated gathering line'' may not include ``a crude oil [petroleum] 
gathering line that has a nominal diameter of not more than 6 inches, 
is operated at low pressure, and is located in a rural area that is not 
unusually sensitive to environmental damage'' (49 U.S.C. 
60101(b)(2)(B)(ii)).\2\ In other words, in rural areas unusually 
sensitive to environmental damage, PHMSA may regulate petroleum 
gathering lines of any diameter or operating pressure. But in other 
rural areas, PHMSA may not regulate petroleum gathering lines 6 inches 
or less in nominal diameter operating at a low pressure. Congress did 
not define ``low pressure'' or areas ``unusually sensitive to 
environmental damage.'' PHMSA, however, has defined ``unusually 
sensitive areas'' in Sec. Sec.  195.2 and 195.6, and low-stress 
hazardous liquid pipeline in Sec.  195.2, as discussed above. PHMSA 
considers a low pressure pipeline synonymous to a low-stress pipeline.
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    \2\ In addition to these requirements related specifically to 
regulated gathering lines, under the Federal pipeline safety law, 
PHMSA must consider various other factors in prescribing pipeline 
safety rules (see 49 U.S.C. 60102(b)).
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    PHMSA has statutory authority under 49 U.S.C. 60102 to prescribe 
regulations that provide adequate protection against risks to life and 
property posed by pipeline transportation. This statute requires PHMSA 
to develop practicable standards designed to ensure hazardous liquids 
are safely transported by pipeline of any stress level, and to protect 
people and the environment. PHMSA's authority (49 U.S.C. 60102(k)) 
specifically prohibits it from excepting from regulation a hazardous 
liquid pipeline facility only because the facility operates at low 
internal stress.

d. Public Participates in Decision Making

1. Meetings
    In 2003, PHMSA invited the public to discuss oil and gas gathering 
line issues at meetings in Austin, Texas (68 FR 62555; Nov. 5, 2003) 
and Anchorage, Alaska (68 FR 67129; Dec. 1, 2003). The meetings gave 
people an opportunity to comment on what might make regulating the 
safety of rural gathering lines appropriate, and what the safety rules 
should be. State pipeline safety agencies also actively participated in 
these meetings. Transcripts of both meetings are in the docket (PHMSA-
2003-15864-2 and 3).
    Following the two public meetings, PHMSA published a notice to 
clarify its plans about regulating rural gathering lines (69 FR 5305; 
Feb. 4, 2004). In the notice, PHMSA sought comments on a suitable 
approach to identifying gathering lines it should regulate.
    PHMSA held a public workshop to discuss the need to regulate rural 
low-stress lines on June 26, 2006, in Alexandria, Virginia. This 
meeting is discussed further in section C.3. of this document.
2. Comments Addressing Rural Gathering Lines
    Because of the public meetings and clarification notice, PHMSA 
received several comments on regulating rural gathering lines. Next is 
a summary of the significant comments.
    The Association of Oil Pipelines (AOPL), a trade association 
representing operators of hazardous liquid pipelines, stated gathering 
lines usually are in areas of little population and operate at low 
pressures. It said most releases are due to small corrosion leaks and 
operators repair the leaks quickly. AOPL found that 67 percent of these 
hazardous liquid leaks resulted in spills of less than five barrels. 
Thus, AOPL said, releases were unlikely to have serious public safety 
or environmental consequences. Nevertheless, in recognition of 
Congress' safety concerns, AOPL said it would support limited pipeline 
safety regulation of certain higher-risk rural gathering lines as a 
reasonable balance between costs and risk. It said comprehensive 
regulation could cause oil producers to shut in marginally profitable 
wells or switch to riskier truck transport.
    AOPL put forward a regulatory plan for rural crude oil gathering 
lines. The plan covers any line 6 inches or more in nominal diameter 
operating at a hoop stress of more than 20 percent of SMYS if the line 
could affect a high consequence area. AOPL said operators should have 
discretion in selecting a method to identify which gathering lines 
could affect high consequence areas. (Section 195.450 defines a ``high 
consequence area'' as a commercially navigable waterway, an area of 
high or concentrated population, or an unusually sensitive area. And 
Sec.  195.6 defines ``unusually sensitive area'' as a drinking water or 
ecological resource unusually sensitive to environmental damage from a 
hazardous liquid pipeline release. Both sections contain subordinate 
definitions that further explain the meaning of ``high consequence 
area'' and ``unusually sensitive area.'')
    AOPL's plan recommended certain safety regulations it thought would 
be suitable for higher-risk rural gathering lines. AOPL's plan includes 
the corrosion control rules in subpart H of part 195. In addition, to 
address excavation damage, AOPL's plan includes the public education 
rules in Sec.  195.440 and the damage prevention program rules in Sec.  
195.442. Finally, the plan includes the accident and safety-related 
condition reporting rules in subpart B of part 195.
    AOPL also suggested PHMSA regulate nonrural gathering lines in 
locations with rural characteristics in the same manner as rural 
gathering lines. Although AOPL did not offer a method to identify these 
lines, the most likely method would be a population density survey. 
Part 195 does not require operators of nonrural gathering lines to 
conduct population density surveys. Thus, PHMSA believes it would be 
burdensome for operators to conduct

[[Page 52507]]

such surveys just to identify nonrural line segments in rural-like 
settings and to discover later changes in population. Apart from AOPL's 
comment, operators of nonrural gathering lines have not expressed 
dissatisfaction with the present regulatory scheme of part 195. 
Therefore, PHMSA is not proposing to change how part 195 applies to 
nonrural gathering lines.
    After filing its written comment, AOPL sent PHMSA data for the 
years 2001-2003 on 583 gathering line spills collected from five of its 
member companies, representing multiple gathering systems. The origin 
of the data was the industry's Pipeline Performance Tracking System, a 
voluntary data collection effort that began in 1999. Participants 
report spills of 5 gallons or more to land and all spills to water from 
oil pipelines, whether regulated by part 195 or not. AOPL's data shows 
one third of the spills were 5 barrels or more. The data also show 
corrosion (84%) and excavation damage (7%) caused 91 percent of the 
reported gathering line spills; pipe material and weld failure, 2 
percent; and other identified causes, less than 1 percent.
    Arctic Connections, an environmental consulting firm based in 
Alaska, urged PHMSA to regulate rural gathering lines in sensitive 
Alaskan wetlands and coastal environments because oil spills threaten 
subsistence living and have lasting effects in the Arctic. The Cook 
Inlet Regional Citizens Advisory Council, a nonprofit environmental 
protection organization, and Cook Inlet Keeper, a nonprofit watershed 
protection organization, also supported regulation of unregulated 
pipelines that threaten Alaska's Cook Inlet. To show the need for 
regulation, Arctic Connections and Cook Inlet Keeper filed data from 
the Alaska Department of Environmental Conservation (ADEC) and other 
sources on releases by various unregulated pipelines in Alaska. 
Although the data do not distinguish pipelines by type, Cook Inlet 
Keeper said its review showed most of the oil spills in Cook Inlet 
between 1998 and 2003 came from unregulated gathering lines.
    North Slope Borough, the northernmost county of Alaska, favored 
regulation of all high-pressure, large-diameter North Slope lines that 
could injure residents or affect subsistence living, the environment, 
or traditional use areas.
    Delta County Colorado considered regulation of rural gathering 
lines essential to assure safe development of oil and gas in areas 
experiencing increased pressures of population growth. Delta County 
thought safety rules should apply to all gathering lines (rural and 
nonrural), but should be suitable for the risks involved.
    Chevron Texaco Upstream and the U.S. Department of Energy (DOE) 
suggested PHMSA identify and analyze the risks of rural gathering lines 
and target regulations to specific problems. The Independent Petroleum 
Association of America (IPAA) also urged PHMSA to focus on actual--not 
speculative--risks.
    DOE and IPAA were concerned with the possible increased costs of 
gathering crude oil could cause producers to shut in marginally 
profitable wells. They pointed out that added costs would have the 
potential to reduce the nation's oil supply and hinder development of 
new wells.\3\ The Interstate Oil & Gas Compact Commission defines 
marginal wells, sometimes called ``stripper'' wells, as wells producing 
10 barrels of oil per day or less. DOE also said some part 195 rules, 
such as integrity management, corrosion control, personnel 
qualification, public education, accident reporting, and determining 
whether a pipeline could affect a high consequence area, could be too 
costly for smaller operators to carry out. (A discussion of energy 
impacts is under the Regulatory Analyses and Notices section of this 
document.)
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    \3\ Marginal wells account for 16 percent of US oil production 
(Interstate Oil and Gas Compact Commission, ``Marginal Oil and 
Natural Gas: American Energy for the American Dream, 2005).''
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    The Oklahoma Independent Petroleum Association (OIPA) also 
expressed concern about the potential impact on marginal wells of 
imposing new safety rules on rural gathering lines. In addition, OIPA 
argued PHMSA should not consider regulating rural gathering lines until 
it has data showing the types and scale of safety problems.
3. Comments Addressing Rural Low-Stress Lines
    On June 26, 2006, PHMSA held both a public workshop and meeting of 
the Technical Hazardous Liquid Pipeline Safety Standards Committee to 
discuss how best to regulate low-stress lines to better protect 
unusually sensitive areas from risks from spills. During this meeting 
PHMSA received several significant comments.
    API and AOPL presented their proposal, which is discussed in detail 
in Section II. b. below. The majority of the participants agreed that 
recent accidents reinforced the need for PHMSA's plan to regulate low-
stress lines near unusually sensitive areas (USAs), and supported, for 
the most part, API's and AOPL's regulatory proposal. API and AOPL's 
proposal recommended low-stress lines located within \1/4\ mile of an 
USA, i.e., buffer, be partially regulated under part 195. Their 
analysis of the spill data for low-stress pipelines showed that the \1/
4\-mile buffer would contain the spread in 99.6% of the releases. 
Several of the commenters questioned whether the proposed \1/4\-mile 
buffer was large enough to provide adequate protection to these 
critical areas. Some commented on whether a larger buffer would 
encompass too many lines. Others questioned the effectiveness of leak 
detection methods on these lines. The transcript of this meeting is in 
the docket (PHMSA-2003-15864). PHMSA invites comments on whether the 
proposed \1/4\-mile buffer zone is appropriate.
    Conoco Phillips noted that most unregulated low-stress pipelines 
are less than 1-mile long, and are rarely more than 25 miles. Conoco 
Phillips also noted that the primary threat to the unregulated low-
stress lines is corrosion because many lack an effective coating and 
cathodic protection. Further, it noted that internal corrosion may be 
exacerbated by water and microbiological organisms.
    The Alaska Department of Environmental Conservation also believes 
that government oversight is needed for unregulated low-stress lines, 
and shared its proposal on how Alaska plans to address lines not 
currently regulated by PHMSA.

II. Need To Regulate

a. Rural Onshore Hazardous Liquid Gathering Lines

    Congress recognized some rural gathering lines might pose risks 
warranting federal safety regulation and authorized DOT to regulate a 
class of rural gathering lines called ``regulated gathering lines'' 
based on risk-related physical characteristics, such as diameter, 
pressure, location, and length of line. In its report on H.R. 1489, a 
bill that led to the Pipeline Safety Act of 1992, the House Committee 
on Energy and Commerce said ``DOT should find out whether any gathering 
lines present a risk to people or the environment, and if so how large 
a risk and what measures should be taken to mitigate the risk'' (H.R. 
Report No. 102-247--Part 1, 102d Cong., 1st Session, 23 (1991)). In 
PHMSA's view, Congress wanted to limit ``regulated gathering lines'' to 
lines posing a significant risk and to limit regulation of those lines 
to suitable risk-reduction measures.
    To get more information about rural crude oil gathering lines PHMSA 
asked the public whether these pipelines pose a risk warranting 
pipeline safety

[[Page 52508]]

regulation, and, if so, what those rules should be. As discussed in 
section I of this preamble, commenters largely recognized a need for 
PHMSA safety rules to prevent serious accidents and to respond to 
Congress' safety concern. Most commenters backed rules addressing known 
risks of a significant scale. However, a few commenters expressed 
concern that extensive rules could cause producers to shut in marginal 
wells or divert transportation to riskier modes--mainly trucks.
    A few commenters submitted data about oil pipeline accidents, 
including accidents on rural crude oil gathering lines. AOPL's data 
show corrosion damage and excavation damage were the leading causes of 
spills, and 33 percent of the spills were 5 barrels or more. Although 
the data do not separate spills occurring from rural gathering lines 
from those occurring from other unregulated liquid lines, the spill 
causes are consistent with PHMSA's accident data on hazardous liquid 
pipelines overall. Also, there is no reason to expect rural gathering 
lines are less vulnerable to corrosion, excavation damage, and other 
integrity threats than nonrural gathering lines. They may be even more 
vulnerable because they have not been subject to federal safety 
regulation to ensure their continued integrity. While we have limited 
data, we think it is reasonable to assume AOPL's data are 
representative of rural crude oil gathering lines. A full discussion of 
the available data is in the regulatory evaluation for this proposed 
rulemaking, which can be obtained in the docket listed above.
    A 1997 report by California's Office of the State Fire Marshal, 
``An Assessment of Low-Pressure Crude Oil Pipelines and Gathering 
Lines,'' strengthens this assessment. In California, the State Fire 
Marshal regulates intrastate pipelines covered by part 195. The report, 
available online at http://osfm.fire.ca.gov/lowpressrpt.html, concerns 
accidents during 1993-1995 on rural gathering lines and other pipelines 
specifically exempt from part 195. According to the report, the leading 
causes of the accidents `` corrosion and excavation damage--matched the 
leading causes of accidents on regulated pipelines.

b. Rural Onshore Hazardous Liquid Low-Stress Lines

    The original safety regulations for hazardous liquid pipelines did 
not apply to any low-stress pipelines. Because of their low operating 
pressures and minimal accident history, low-stress hazardous liquid 
pipelines were thought to pose little risk to public safety. PHMSA 
began rulemaking in this area in 1990 following one of the most 
prominent hazardous liquid pipeline accidents on record involving the 
spill of approximately 500,000 gallons of heating oil from an 
underwater pipeline in Arthur Kill Channel in New York.
    To get more information on low-stress lines, in 1990, PHMSA 
published an advance notice of proposed rulemaking (ANPRM) (55 FR 
45822; October 31, 1990). In the ANPRM, PHMSA sought information about 
the costs and benefits of regulating low-stress lines. The analysis of 
the data received in response to the ANPRM showed regulation of all 
low-stress pipelines could impose costs disproportionate to benefits. 
PHMSA, therefore, focused on those low-stress pipelines posing a higher 
risk to people and the environment. The risk factors identified were 
the commodity in transportation and the location of the pipeline. In 
1994, PHMSA extended the hazardous liquid safety requirements to low-
stress pipelines that transport highly volatile liquids (HVL) in all 
locations, and other low-stress lines in populated areas and where the 
pipeline segments cross navigable waterways. In this rulemaking, PHMSA 
deferred regulating non-HVL low-stress pipelines in rural 
environmentally sensitive areas pending development of a suitable 
definition of ``environmentally sensitive area.'' The agency said it 
was developing a better concept of what constitutes an environmentally 
sensitive area for purposes of pipeline regulation and this would 
provide the groundwork for the future rulemaking on rural low-stress 
lines. PHMSA explained that it needed to learn the extent to which low-
stress pipeline spills affect environmentally sensitive areas and the 
definition used in part 194 (Response Plans for Onshore Oil Pipelines) 
was too broad for part 195.
    In 2000, PHMSA issued a final rule defining ``unusually sensitive 
areas'' (USAs) (65 FR 246). The USAs address higher risk 
environmentally sensitive areas needing extra protection. In this rule, 
PHMSA noted its 1994 decision to defer regulating nonvolatile products 
transported in low-stress pipelines located in rural sensitive areas 
until it defined these areas. The agency reiterated its intention to 
reconsider the issue once there was a sensitive area definition. In 
2000, PHMSA defined protection of USAs for most hazardous liquid 
pipelines through its integrity management regulations. As explained 
previously in section I.a, this definition was essential to PHMSA's 
completing its series of risk-based rulemakings to provide better 
protection to people and the environment from high pressure hazardous 
liquid pipelines, high pressure gas transmission pipelines and rural 
gas gathering pipelines. Protecting these areas from rural low-stress 
lines is the last of these initiatives.
    Since 2000, there have been about 30 hazardous liquid low-stress 
line incidents on lines PHMSA currently regulates. While PHMSA does not 
have incident data for non-regulated lines, we believe a comparable 
number of incidents have occurred on currently unregulated low-stress 
lines, some of which have been significant. For instance on August 6, 
2006, a crude oil spill occurred on a 30-inch, unregulated low-stress 
pipeline in the Eastern Operating Area of the Prudhoe Bay Field on the 
North Slope of Alaska. This spill resulted in the release of at least 
20 barrels of crude oil onto the tundra, and at least another 175 
barrels that were collected in a portable tank. Previously, on March 2, 
2006, a leak from a 34-inch, unregulated low-stress pipeline was 
discovered in the Western Operating Area of the Prudhoe Bay Field. This 
leak resulted in the release of approximately 5,000 barrels of 
processed crude oil. Although we believe these incidents are not 
representative of the condition of unregulated rural low-stress lines 
in the lower 48 states, these incidents reinforced the necessity for 
PHMSA to complete this rulemaking to better protect USAs from any spill 
that could occur from an unregulated rural low-stress pipeline.
    As PHMSA was developing its proposal on how best to address rural 
low-stress lines, after the March incident, API and AOPL submitted a 
regulatory proposal on how PHMSA should address certain currently 
exempt low-stress pipelines. The proposal requests PHMSA:
     Add a new subpart in part 195 to address assessment and 
control of low pressure pipelines;
     Define regulated low-stress lines as pipelines with a 
diameter greater than 8\5/8\ inches, operating at 20 percent or less of 
SMYS, located off the operator's property, and located within \1/4\-
mile of an unusually sensitive area; and
     Modify 49 CFR 195.1(b)(iii) to add petroleum storage 
facilities to the list of facilities exempt from regulation, unless a 
facility crosses a sole source aquifer in an unusually sensitive area.
    Further, API and AOPL propose that PHMSA add programmatic 
requirements to require operators of a regulated rural low-stress line 
to comply with the reporting requirements in subpart B, the corrosion 
control requirements in subpart H, the line marker requirements in 
Sec.  195.410, and four additional requirements:

[[Page 52509]]

    1. Assessment: The operator should inspect the pipeline using in-
line inspection tools or commensurate technology to assess the pipeline 
segment every five years unless the operator performs an engineering 
analysis to justify a longer timeframe.
    2. Leak Detection: The operator should have a means to detect leaks 
on the covered pipelines.
    3. Damage Prevention: The operator should put in place basic damage 
prevention practices, such as registering facilities with one-call 
organizations and excavation monitoring.
    4. Training for Abnormal Operating Conditions: The operator should 
be trained to recognize and respond to abnormal operating conditions.
    Lastly, API and AOPL recommend, with the exception of line 
identification, operators have up to 5 years after the effective date 
of a rule to begin compliance.
    As a follow-up to the June 26th public meeting, the Cook Inlet 
Regional Citizens Advisory Council submitted comments to the docket. 
Cook Inlet recommends eliminating the low-stress regulatory exemption 
in 49 CFR 195.1(b)(3)(i). Instead, Cook Inlet recommends PHSMA apply 
its baseline pipeline regulations to all low-stress transmission 
pipelines, and its integrity management program rules to those low-
stress transmission pipelines that may affect High Consequence Areas.
    API and AOPL also submitted supplemental information reflecting 
their analysis of spill data. They found that of the 312 large releases 
of hazardous liquids (greater than five barrels) between 1999 and 2004, 
only 67 (21%) were from low-stress transmission pipelines. Further, 
releases from low-stress lines accounted for only 7% of the total 
volume of hazardous liquid releases from all pipeline incidents. They 
determined that corrosion (64%) and third party damage (21%) together 
caused 85% of these releases from low-stress pipelines.

c. Conclusion for Need To Regulate

    Based on our consideration of Congress' safety concern, the public 
comments, and the accident data, we believe the potential for future 
harm to the public's health and environment from rural onshore 
gathering and rural low-stress lines is clear. The record shows rural 
gathering lines experience the same leading causes of accidents as 
hazardous liquid pipelines we now regulate, and releases from 
unregulated low-stress lines can affect unusually sensitive areas. 
Therefore, we believe it no longer appropriate to continue to exempt 
rural onshore gathering lines and rural low-stress lines from nearly 
all safety requirements in part 195.

III. Regulatory Options

    In considering what safety rules should apply to ``regulated rural 
gathering lines'' and ``regulated rural low-stress lines,'' the first 
alternative we considered was to collect more information about the 
potential hazards of these lines before proposing any specific safety 
rules. We rejected this alternative because we believe we have 
sufficient information; collecting more information would be unlikely 
to change our current understanding of the risks these lines pose.
    The second alternative we considered was to apply all part 195 
rules to regulated rural gathering lines and, as suggested by Cook 
Inlet, for regulated rural low-stress lines. We rejected this 
alternative because it could impose significant costs on the industry 
without offsetting safety benefits. Also, the costs could have a 
significant effect on U.S. oil supplies by causing production to stop 
at many marginal oil wells. Further, while we understand Cook Inlet's 
desire to extend oversight to all low-stress lines, we believe we 
should focus on those posing the most significant threats to USAs, and 
on the most critical issues associated with those lines. Therefore, the 
proposal only includes safety requirements that address the most 
prominent threats to low-stress lines. This determination is based on 
our analysis of the most critical safety concerns, including the data 
submitted by API and AOPL demonstrating that corrosion and third party 
damage cause the greatest threat to the integrity of these lines.
    The third alternative was to adopt the approaches API and/or AOPL 
suggested. For gathering lines, AOPL's suggested approach includes 
limited operation and maintenance rules and reporting rules for 
accidents and safety-related conditions. The operation and maintenance 
rules would be the public education rules in Sec.  195.440, the 
excavation damage prevention rules in Sec.  195.442, and the corrosion 
control rules in subpart H of part 195. The reporting rules would be 
provisions of subpart B of part 195 related to accidents and safety-
related conditions. The benefit of this alternative is it would focus 
on the leading threats to rural gathering lines--corrosion and 
excavation damage. Also the information collected would enable PHMSA to 
recognize safety problems and evaluate the effectiveness of adopting 
only limited safety rules.
    By focusing mainly on the threats of excavation damage and 
corrosion, the AOPL approach does not address significant safety issues 
related to pipeline design, construction, and testing, such as choice 
of materials, qualification of welding procedures, and suitable test 
pressure. AOPL's approach does not include installation and maintenance 
of line markers under Sec.  195.410 or operator qualification program 
requirements under part 195, subpart G. The use of line markers to warn 
excavators of the presence of hazardous liquid pipelines has long been 
a safety practice in the hazardous liquid pipeline industry. Regarding 
operator qualifications, Congress mandated PHMSA establish regulations 
for operator qualification programs on pipelines. Congress also 
directed pipeline operators to develop and adopt a qualification 
program should DOT fail to prescribe standards and criteria.
    The fourth alternative to address rural onshore low-stress lines 
was also the approach suggested by API and AOPL. This approach would 
subject rural onshore hazardous liquid low-stress lines that have a 
diameter greater than 8\5/8\ inches, operate at 20 percent SMYS, and 
are located within a \1/4\-mile of an unusually sensitive area to 
certain regulatory requirements. The regulatory approach includes the 
reporting requirements of part 195, subpart B, the corrosion control 
rules in part 195, subpart H, the damage prevention rules in Sec.  
195.442, and installation of line markers in Sec.  195.410. The API and 
AOPL approach also includes leak detection, assessment, and limited 
operator qualification requirements. We believe the information 
collected about threats on non-regulated gathering lines also applies 
to threats associated with regulated hazardous liquid lines. Based on 
this information, we believe corrosion and excavation damage are the 
leading causes of accidents on low-stress lines. Thus, the benefit of 
this approach is it focuses on these leading threats to rural onshore 
low-stress lines.
    A disadvantage of the API and AOPL approach for rural gathering 
lines is it does not address other significant safety issues related to 
pipeline design, construction, and testing, and does not include the 
public awareness requirements under Sec.  195.440. In its petition, API 
and AOPL did not explain why these safety requirements were omitted. 
Regarding public awareness, in 49 U.S.C. 60112(c), Congress mandated 
that pipeline facility operators establish and carry out continuing 
public awareness programs to notify the public about the location of 
its facilities, one-call programs and accident procedures. Further, the 
API and AOPL proposal does not fully address the operator

[[Page 52510]]

qualification requirements. Congress mandated PHMSA establish 
regulations for operator qualification programs on pipelines. Congress 
also directed pipeline operators to develop and adopt a qualification 
program should DOT fail to prescribe standards and criteria. Although 
Congress provided some flexibility in the statute, we believe that the 
API and AOPL approach is too limited because it only addresses one of 
the multiple facets of the operator qualification requirements.
    As a fifth alternative, we considered developing new safety rules 
for ``regulated rural gathering lines'' and ``regulated rural low-
stress lines.'' We rejected this alternative because we have no reason 
to conclude part 195 safety rules now in effect for non-rural gathering 
and low-stress lines would be less effective if applied to rural lines. 
Our experience shows part 195 rules are effective and should work well 
for ``regulated rural gathering lines'' and ``regulated rural low-
stress lines'' because the integrity threats involved are similar for 
all the lines.
    Finally, we considered modified versions of the approaches API and 
AOPL suggested for rural gathering and low-stress lines. This approach 
would provide integrity protection by focusing on the primary threats 
to these lines--corrosion and third-party damage. For rural gathering, 
this alternative would add, line marker requirements under Sec.  
195.410 and the qualification requirements in subpart G for the 
operator's personnel. Markers are a traditional way of alerting 
excavators to dig carefully in the presence of hazardous liquid 
pipelines. Under 49 U.S.C. 60131, DOT must require pipeline operators 
to develop and adopt a qualification program that complies with the 
standards DOT develops for such programs.
    In addition, the modified version would require operators to 
establish a maximum operating pressure for each steel line according to 
Sec.  195.406, and to design, construct, and test lines according to 
applicable part 195 rules. A maximum operating pressure would guard 
against the danger of accidental overpressure. Part 195 design, 
construction, and testing rules would ensure a minimum standard of 
integrity for all new, replaced, and relocated ``regulated gathering 
lines.'' We required similar rules on markers, operating pressure, 
design, construction, and testing for rural gas gathering lines in a 
final rule published March 15, 2006 (71 FR 13289). These requirements 
should not be too burdensome, because similar safety requirements are 
in the ASME B31.4 Code, ``Pipeline Transportation Systems for Liquid 
Hydrocarbons and Other Liquids,'' a consensus standard followed widely 
throughout the hazardous liquid pipeline industry.
    Our modified approach to the API and AOPL suggestion for rural 
onshore low-stress lines would include public awareness requirements in 
Sec.  195.440 and a modified version of the operator qualification 
requirements. These operators are also required under 49 U.S.C. 
60102(a) to have public awareness program. Under 49 U.S.C. 60131(e)(5) 
and (f), Congress allowed DOT and State pipeline safety agencies to 
waive or modify any operator qualification requirement if not 
inconsistent with the pipeline safety laws. PHMSA believes an approach 
similar to the modified approach used for gas gathering would be 
appropriate for low-stress lines. This modification would allow 
operators to describe the processes they have in place to ensure 
personnel performing operations and maintenance activities are 
qualified.
    Additionally, the modified version would require operators to 
establish a maximum operating pressure for each steel line according to 
Sec.  195.406, and to design, construct, and test lines according to 
applicable part 195 rules. A maximum operating pressure would guard 
against the danger of accidental overpressure. Part 195 design, 
construction, and testing rules would ensure a minimum standard of 
integrity for all new, replaced, and relocated ``regulated rural low-
stress lines.'' Lastly, the modified version would require an operator 
to periodically assess the integrity of the lines to identify and 
address any conditions affecting the integrity of the lines, no matter 
the cause, and to establish and maintain a leak detection program based 
on API's recommended practice 1130 (API 1130) ``Computational Pipeline 
Monitoring,'' which is currently being used by industry and is 
incorporated by reference into our existing regulations. Because API 
1130 only addresses pipelines transporting a stable single phase 
product, operators transporting other products will need to develop 
another appropriate leak detection method.
    Further, our modified version includes additional corrosion control 
requirements for onshore rural gathering lines and low-stress lines. 
Our proposal includes a requirement to continuously monitor these lines 
and based on identified changes to clean and accelerate the corrosion 
control program when necessary.
    A discussion of the safety rules we are proposing is in section IV 
of this preamble.

IV. Proposed Regulations for Regulated Rural Gathering Lines

a. Proposed Definition of ``Regulated Rural Gathering Line''

    We are defining those rural gathering lines presenting a higher 
risk to public health and the environment as regulated rural gathering 
lines.\4\ PHMSA believes Congress did not think all rural gathering 
lines subject people or the environment to a high enough risk to 
qualify as a regulated rural gathering line. This reasoning is based on 
the various risk factors the statute requires us to consider, the 
complete exemption in most rural areas of low-pressure lines 6 inches 
or less in nominal diameter. Thus, we have determined higher risk rural 
areas are those areas we defined in Sec.  195.6 as unusually sensitive 
areas. These areas include drinking water and ecological resource 
areas.
---------------------------------------------------------------------------

    \4\ Although the statute directs us to define a regulated 
gathering line, for purposes of this rulemaking, we are proposing to 
define regulated rural line. Non rural onshore gathering is already 
regulated under part 195 and we are not proposing to change 
regulation of these currently regulated lines. This rulemaking 
focuses on certain rural onshore gathering not presently regulated.
---------------------------------------------------------------------------

    PHMSA considered whether the present definition of gathering line 
in Sec.  195.2 is acceptable. This definition represents the typical 
function of a crude oil gathering line--to move crude oil away from a 
production facility. It also represents the typically small size of 
crude oil gathering lines--8\5/8\ inches or less in nominal outside 
diameter. Since its adoption, the definition has served to identify 
which petroleum pipelines in rural areas are exempt from part 195 
because they are gathering lines. Also, in our experience, operators 
and government inspectors have had little difficulty using the 
definition for that purpose. We decided, therefore, the Sec.  195.2 
definition of gathering line is acceptable for helping to define a 
regulated rural gathering line. Furthermore, because we are not 
changing the coverage of the non-rural gathering lines we now regulate, 
we see no reason to change the long-standing definition of a gathering 
line.
    Congress identified ``throughput'' and ``composition of the 
transported hazardous liquid'' as two other possible risk factors to 
consider in determining which rural gathering lines should be 
regulated. We think it unnecessary to include these factors. 
Throughput, or volume of oil moved in a unit of time, is largely 
dependent on pipe diameter and operating pressure. And the composition 
of hazardous liquids transported by gathering lines is chiefly crude 
oil.

[[Page 52511]]

    AOPL was the only commenter to offer a definition of ``regulated 
gathering line.'' Under this definition, a ``regulated gathering line'' 
would be a line 6 inches or more in nominal diameter operating above 20 
percent of SMYS that could affect a high-consequence area.
    An advantage of AOPL's definition is its use of the statutory risk 
factors of diameter, operating pressure (expressed as a percentage of 
SMYS), and location (could affect a high consequence area) to identify 
higher-risk lines. And we think the definition uses these factors in a 
reasonable way.
    Our proposed definition of a regulated rural gathering line is 
based in part on AOPL's suggested definition. AOPL's definition is 
based on gathering lines in high consequence areas. High consequence 
areas include populated areas. We already regulate onshore gathering 
lines in populated areas and are not proposing to change any of the 
pipeline safety requirements applicable to these lines. Therefore, we 
are basing our definition on those rural gathering lines meeting 
certain criteria and located within a defined zone of an unusually 
sensitive area as defined in Sec.  195.6. Unusually sensitive areas 
include drinking water and ecological resource areas. These areas are 
unusually sensitive to environmental damage from a hazardous liquid 
pipe release because a release into these areas could substantially 
impact the Nation's supply of drinking water, endanger public health, 
and create long-term or irrevocable damage to the habitat of threatened 
and endangered species.
    Our proposed definition, like AOPL's definition, does not use line 
length as a defining characteristic of these higher-risk rural lines. 
Line length, a statutory risk factor, is relevant to potential spill 
volume, because the shorter the line, the less oil there is to drain 
out after shutdown. Part 194 recognizes this risk factor by not 
requiring spill response plans for certain small pipelines 10 miles or 
less in length. However, because short lines can cause substantial 
environmental harm in vulnerable locations, part 194 does not allow 
operators to use the 10-mile exception for lines proximate to navigable 
waters, public drinking water intakes, or environmentally sensitive 
areas.
    Instead of using AOPL's criteria to define a regulated rural 
gathering line as one that could affect an unusually sensitive area, we 
have decided to use a buffer. We saw a potential difficulty in 
operators determining which lines could affect an unusually sensitive 
area. Part 195 uses the phrase ``could affect a high consequence area'' 
to identify pipelines subject to integrity management rules (Sec.  
195.452). Section I. B. of Appendix C to part 195 lists various risk 
factors, such as topography and shutdown ability, an operator can use 
in deciding if a pipeline ``could affect a high consequence area.'' 
PHMSA believes this would be too burdensome for most operators. To 
reduce the burden of making this decision for possibly thousands of 
rural line segments, we are proposing a buffer--a distance beyond the 
defined area where a rural gathering line presumably could not affect 
that area.
    PHMSA considered the buffers used in Sec. Sec.  194.103(c)(4) and 
(5) of the Oil Spill response plan requirements. Those sections require 
a buffer of five miles from a public drinking water intake and one mile 
from an environmentally sensitive area. However, after reviewing the 
incident data, we concluded those buffer sizes were not warranted. 
During the June 26th public meeting, AOPL clarified it recommended a 
buffer of \1/4\-mile for rural gathering lines because its data 
revealed the largest on land spill from a pipeline traveled no more 
than 2 acres. The operating pressure is also a factor when evaluating 
the potential spill volume from a pipeline. Thus, gathering lines 
operating at lower pressures do not have the potential to release as 
much product as those operating at higher pressures. Thus, we have 
determined that gathering lines that operate above 20% SMYS and that 
are between 6\5/8\ inches and 8\5/8\ inches in diameter and are located 
in or within \1/4\-mile of an USA have the potential to substantially 
impact public health and the environment. We invite comments and 
supporting technical documentation on whether a larger buffer is needed 
to provide better protection for these critical environmental areas. 
PHMSA would also like data on the miles of gathering lines likely to be 
affected by any increase in the size of the buffer.
    Thus, we are proposing to add a new section 195.11(a) that would 
define a ``regulated rural gathering line'' as a rural onshore 
gathering line with the following characteristics:
     A nominal diameter between 6\5/8\ inches and 8\5/8\ 
inches;
     Operates at a maximum operating pressure established under 
Sec.  195.406 that corresponds to a stress level greater than 20 
percent of SMYS or, if the stress level is unknown or the pipeline is 
not constructed with steel pipe, at a pressure of more than 125 psig; 
and
     Is located in or within \1/4\-mile of an unusually 
sensitive area as defined in Sec.  195.6.
    A pressure of 125 psig conservatively approximates 20 percent of 
SMYS for steel pipe of unknown stress level, based on minimum weight 
pipe 8 inches in nominal diameter with 24000 psi yield strength.
    We invite comments and supporting technical documentation on 
whether values other than 125 psig and \1/4\-mile would be more 
suitable for the respective purposes. We are particularly interested in 
comment on whether the proposed \1/4\-mile buffer is adequate to 
protect those drinking water and ecological resources particularly 
vulnerable to damage from a hazardous liquid pipeline release, or 
whether a larger buffer is needed. If commenters believe a larger 
buffer is needed, data on the pipeline mileage that would be affected 
would be helpful.

b. Proposed Rewrite of Sec.  195.1

    Section 195.1 specifies the hazardous liquid pipeline facilities 
subject to the requirements of part 195 and those exempt from coverage. 
We propose to rewrite this section to clarify which lines are subject 
to part 195. This section clarifies that onshore non-rural gathering 
lines are subject to all of part 195's requirements. A regulated rural 
gathering line, as defined in this proposal, would be subject to the 
limited safety requirements provided in a new Sec.  195.11, discussed 
below.
    The rewrite of Sec.  195.1 clarifies the present rulemaking does 
not affect onshore gathering lines in inlets of the Gulf of Mexico. 
Onshore gathering in these inlets would continue to be subject only to 
the inspection and burial rules in Sec.  195.413. At no point during 
our public meetings on regulating onshore gathering lines in rural 
areas did anyone comment on the need to expand these rules.
    We also have clarified the language in several of the exceptions 
from part 195's coverage. We have not changed the intent or scope of 
any of these. We have simply cleaned up some of the language to make 
the exceptions easier to read.

c. Proposed Safety Requirements for ``Regulated Rural Gathering Lines''

    A new Sec.  195.11(b) would be added to the part 195 regulations to 
specify the safety requirements for these lines. We have developed 
these proposed requirements to manage the integrity of rural gathering 
lines by providing complete protections to address the known 
significant threats and to continue to collect more information about 
these lines through the reporting requirements. Based on our review of 
the gathering lines in populated areas and our investigation of the 
non-

[[Page 52512]]

regulated lines in rural areas, we have found that the highest risks to 
these lines are corrosion and third party damage. This proposal focuses 
on those threats. Through continuous monitoring of the lines, required 
as part of the corrosion program, the operators will gather more 
information about the risk the lines pose. We seek comments on whether 
this proposal should specifically address other threats. We also seek 
comment on whether PHMSA should require all gathering line operators to 
submit an annual report and accident reports as required for regulated 
operators by Sec. Sec.  195.49 and 195.59.
    Operators would first have to identify all segments of regulated 
rural gathering pipeline. Operators would have to design, install, 
construct, initially inspect, and initially test new, replaced, 
relocated, or otherwise changed steel lines according to certain 
existing part 195 rules. However, for pipelines converted to hazardous 
liquid service, operators would have the option of following the 
conversion rules in Sec.  195.5.
    Operators of newly constructed non-steel lines would have to notify 
PHMSA at least 90 days before the start of transportation. The notice 
would give PHMSA an opportunity to review the pipeline and order any 
changes necessary for safety.
    Under the proposal, operators would have to comply with the 
reporting requirements in subpart B of part 195. The other proposed 
safety requirements for these regulated rural lines include:
     Establishing a maximum operating pressure under Sec.  
195.406;
     Installing and maintaining line markers under Sec.  
195.410;
     Establishing and applying a public education program 
according to Sec.  195.440;
     Establishing and applying a damage prevention program 
according to Sec.  195.442;
     For steel lines, controlling and remediating corrosion 
according to subpart H of part 195; to include cleaning, continuous 
monitoring, and remediating any problems identified; and
     Establishing and applying an operator qualification 
program that describes the processes the operator has in place to 
ensure the personnel performing operations and maintenance activities 
are qualified.
    To address one of the major threats to these lines, we are 
proposing operators include these lines in their corrosion control 
program. A corrosion control program under part 195's subpart H 
includes provisions on how an operator is to remediate corroded pipe. 
We are also proposing additional corrosion control requirements in the 
form of continuous monitoring and cleaning. We seek public comment on 
whether the continuous monitoring provision primarily associated with 
corrosion control should be as proposed, or extended to other 
provisions of this proposed rule.
    Although not listed as a specific safety requirement in the rule, 
operators are required to continue to comply with the drug and alcohol 
testing rules in 49 CFR part 199. Part 199 requires operators of 
pipelines subject to part 195 to test personnel for use of prohibited 
drugs and misuse of alcohol. Persons subject to testing are those who 
perform a regulated operation, maintenance, or emergency-response 
function on a regulated pipeline.
    Under Sec.  195.406, the maximum operating pressure of a pipeline 
is the lowest pressure applicable to the pipeline among a list of 
pressures. However, most of the pressures listed apply only to 
pipelines subject to the design and pressure testing rules of part 195. 
The only pressure applicable to pipelines not subject to those rules is 
in Sec.  195.406(a)(2)--the design pressure of any other component of 
the pipeline. Because operators normally do not operate a hazardous 
liquid pipeline above its design pressure, compliance with Sec.  
195.406(a)(2) should not be difficult on ``regulated rural gathering 
lines'' to which part 195 design and pressure testing rules would not 
apply. Still, we do not want operators to reduce operating pressure 
unnecessarily on any existing line with a history of satisfactory 
operation. So we invite comments on the need to amend Sec.  195.406 to 
allow such continued operation and, if so, what that amendment should 
be.
    The proposal provides, except for the requirements applicable to 
newly-constructed pipelines and corrosion control, the safety 
requirements apply to all materials of construction.
    The proposed time frames for compliance with each proposed safety 
requirement are shown in section V.d. of this document. The proposed 
compliance deadlines vary according to the safety requirements. To gain 
a better understanding of how different time frames will affect the 
costs and feasibility of an operator's compliance, we have proposed a 
range of compliance times. This approach will allow operators longer 
time frames for complex activities that are more costly to implement, 
and to readily implement less complex safety requirements. For example, 
under the proposal, operators would have six months, 12 months or some 
period in between those time frames after the effective date of the 
final rule to identify regulated rural gathering pipeline segments and 
to comply with the reporting requirements. The corrosion control 
program, including the additional requirements for continuous 
monitoring, remediation and cleaning, would have to be in place within 
two to three years from the final rule's effective date. We believe a 
longer time frame for the corrosion control program may be necessary 
for pipelines that require major construction to implement new 
monitoring, remediation, or cleaning facilities. Additionally, 
recoating of the line involves major construction and a longer planning 
and construction cycle may be necessary.
    A final rule will require a period somewhere in the proposed 
ranges. Our preference is for shorter compliance periods. But we have 
proposed a lower and upper range of compliance periods so that in a 
final rule we can set compliance times that can be done quickly enough 
to address any problems on these lines but are not cost burdensome, 
impractical or have an adverse effect on energy supply. We seek 
comments and supporting documentation to address the effects of these 
compliance periods on an operator's operations. These comments should 
address cost, operational difficulties in complying, technology 
concerns, and other issues, such as time needed to secure necessary 
permits.

d. New Unusually Sensitive Areas

    Proposed Sec.  195.11(c) concerns onshore rural gathering lines 
that become ``regulated rural gathering lines'' because of a new 
unusually sensitive area. Operators should at least annually review the 
National Pipeline Mapping System (NPMS) to determine if the addition of 
a new unusually sensitive area has caused any of their unregulated 
rural gathering lines to become ``regulated rural gathering lines.'' We 
are proposing a range between six months to one year for compliance 
with applicable safety requirements when a previously unregulated line 
becomes regulated. We seek comments and supporting documentation that 
address the effect of these time frames on the costs and feasibility of 
compliance. We want to completely understand the impacts of an 
operator's ability to comply with a shorter or longer time frame.

e. Records

    Proposed Sec.  195.11(d) provides record retention requirements. 
Certain records,

[[Page 52513]]

such as the segment identification records, would have to be retained 
for the life of the pipe. Other records would have to be kept according 
to the record keeping requirements of the specific section or subpart 
referenced.

V. Proposed Rules for ``Regulated Rural Low-Stress Lines''

a. Proposed Definition of ``Regulated Rural Low-Stress Lines''

    We are proposing to define regulated rural low-stress lines as 
those rural low-stress lines presenting a higher risk to the public's 
health and the environment. Congress directed PHMSA to focus pipeline 
regulation on protecting people and the environment against risks 
presented by pipeline transportation, but not to exempt pipeline 
facilities solely because they operate at low-stress levels. Thus, as 
with rural gathering lines, we determined the higher risk rural areas 
that should be protected from a release from a low-stress pipeline are 
those areas we defined in Sec.  195.6 as unusually sensitive 
environmental areas. These areas include drinking water and ecological 
resource areas.
    After evaluating the accident history and the API and AOPL proposed 
definition, we believe PHMSA's definition should focus on rural low-
stress lines with a diameter of 8\5/8\ inches or more and operating at 
20 percent or less of SMYS that could cause harm to an USA. In its 
proposed definition, API and AOPL recommended a buffer zone of \1/4\-
mile from an USA and provided data showing the impact from a spill has 
not gone beyond \1/4\-mile. Their data showed hazard liquid releases, 
regardless of whether the spill has a radius, diameter, or ellipse 
formation, will not spread more than \1/4\-mile. Based on this data, 
PHMSA proposes a \1/4\-mile buffer as the zone of protection for an 
USA. Thus, if a rural low-stress line meets the above criteria and is 
within \1/4\-mile of an USA, it would be regulated.
    PHMSA considered the buffer zones used in Sec.  194.103(c)(4) and 
(5) of the Oil Spill response plan requirements, but after reviewing 
the incident data found those buffer sizes were not warranted. We 
believe regulating low-stress pipeline segments located within \1/4\-
mile of an unusually sensitive area provides a reasonable zone of 
protection for these areas from the release of large quantities of 
hazardous liquids. We invite comments and supporting technical 
documentation on whether a larger buffer is needed to provide better 
protection for these critical environmental areas. PHMSA would also 
like data on the miles of low-stress lines likely to be affected by 
increasing the buffer size.
    We are proposing to add a new section Sec.  195.12(a) to define a 
``regulated low-stress line'' as an onshore line in a rural area 
meeting the following criteria:
     A nominal diameter of 8\5/8\ inches or more;
     Located within \1/4\-mile of an unusually sensitive area 
as defined in Sec.  195.6; and
     Operates at a maximum pressure established under Sec.  
195.406 that corresponds to a stress level equal to or less than 20 
percent of SMYS, or if the stress level is unknown or the pipeline is 
not constructed with steel pipe, a pressure equal to or less an 125 
psig.

b. Proposed Rewrite of 195.1

    We propose to rewrite this section to clarify which lines are 
subject to part 195. This section clarifies which low-stress pipelines 
are subject to part 195 and which are exempt. A regulated rural low-
stress line would be subject to the limited safety requirements 
provided in a new Sec.  195.12, discussed below.
    We also have clarified the language in several of the exceptions 
from part 195's coverage. We have not changed the intent or scope of 
any of these. We have simply cleaned up some of the language to make 
the exceptions easier to read. PHMSA is not adopting AOPL's suggestion 
to exempt petroleum storage facilities in Sec.  195.1 because the 
proposal is unclear as to which storage facilities should be exempt. 
For example, regulated tanks are tanks that are used to relieve surges 
in a pipeline system or used to receive and store hazardous liquid 
transported by a pipeline for reinjection and continued transportation 
by pipeline. API/AOPL, in their proposal and presentation at the public 
meeting, did not explain why these facilities should be exempted.

c. Proposed Safety Requirements for ``Regulated Rural Low-Stress 
Pipelines''

    A new Sec.  195.12(b) would be added to part 195 regulations to 
specify the safety requirements for regulated rural low-stress lines. 
As we did with rural gathering lines, we have developed these safety 
protections to address the known threats to the integrity of these 
lines. Based on our review of regulated low-stress lines and our 
investigation of non-regulated lines in rural areas, we have found that 
the highest risks to these lines are corrosion and third party damage. 
Although this proposal focuses on those threats, operators will gather 
additional information through the reporting requirements, the 
continuous monitoring required as part of the corrosion program, and 
the integrity assessment that includes identification and remediation 
of any condition presenting a threat to the integrity of these lines, 
no matter the cause. We seek comments on whether this proposal should 
specifically address other threats. We seek comment on whether PHMSA 
should require all operators of low-stress lines to submit an annual 
report as required by Sec.  195.49.
    Operators would have to identify all segments of regulated rural 
low-stress lines. They would also have to design, install, construct, 
initially inspect and test new, replaced, relocated, or otherwise 
changed steel lines according to certain existing part 195 
requirements. However, for pipelines converted to hazardous liquid 
service, operators would have the option of following the conversion 
rules in Sec.  195.5.
    Under the proposal, operators would have to comply with the 
reporting requirements in subpart B of part 195. The other proposed 
safety requirements for these regulated rural lines include:
     Establishing a maximum operating pressure under Sec.  
195.406;
     Installing and maintaining line markers under Sec.  
195.410;
     Establishing and applying a public education program 
according to Sec.  195.440;
     Establishing and applying a damage prevention program 
according to Sec.  195.442;
     For steel lines, controlling and remediating corrosion 
according to part 195, subpart H, and cleaning and continuous 
monitoring to identify and remediate problems;
     Establishing and applying a modified operator 
qualification program to allow an operator to describe the processes 
the operator has in place to ensure personnel performing operations and 
maintenance activities are qualified under part 195, subpart G;
     Establishing and applying a program to assess at 
continuing intervals the integrity of the low-stress lines. The purpose 
of this assessment is to determine and remediate any condition 
presenting a threat to the integrity of these regulated segments. These 
conditions are not limited to those caused by corrosion or third-party 
damage. The proposal allows an operator to use in-line inspection tests 
and pressure testing as assessment methods. An operator could also use 
alternative technology, such as direct assessment, if the operator 
demonstrates the technology can provide an equivalent understanding of 
the line

[[Page 52514]]

pipe. If an operator uses direct assessment, PHMSA would expect the 
methodology to follow that required for using direct assessment in the 
gas integrity management regulations; and
     Establishing and applying a leak detection program based 
on API 1130, or other appropriate method suitable for the commodity 
being transported.
    To address one of the major threats to these lines, we are 
proposing operators include these lines in their corrosion control 
program. A corrosion control program under part 195's subpart H 
includes provisions on how an operator is to remediate corroded pipe. 
We are also proposing additional corrosion control requirements in the 
form of continuous monitoring, cleaning and remediating problems 
identified from the continuous corrosion monitoring. We seek public 
comment on whether the continuous monitoring provision associated 
primarily with corrosion control should be as proposed or extended to 
other provisions of this proposed rule.
    Although not listed as a specific safety requirement in the 
proposed rule, operators are required to continue to comply with the 
drug and alcohol testing rules in 49 CFR part 199, which requires 
operators to test personnel for use of prohibited drugs and misuse of 
alcohol. Individuals subject to testing are those who perform a 
regulated operation, maintenance, or emergency-response function on a 
regulated pipeline.
    The proposed compliance deadlines vary according to the safety 
requirements, and are listed below. To gain a better understanding of 
how different time frames will affect the costs and feasibility of an 
operator's compliance, we have proposed a range of compliance times. 
API and AOPL recommended that compliance begin for all requirements 
within 5 years, but we believe a phased approach is more appropriate. 
This approach will allow operators longer time frames for complex 
activities that are more costly and time consuming to implement, and to 
readily implement less complex requirements. For example, under the 
proposal, operators would have six months, 12 months or some period in 
between those ranges after the effective date of the final rule to 
identify regulated rural low-stress pipeline segments and to comply 
with the reporting requirements. The proposal would have an operator 
establish an integrity assessment program within one year to two years 
from the final rule's effective date, and allow 5 years to 7 years to 
complete the integrity assessment of all regulated rural low-stress 
segments, with half of those segments having to be completed within 
three to four years from the final rule's effective date. The proposed 
time frame for the integrity assessment takes into account the time 
necessary to address physical changes to the pipeline for the use of 
internal inspection devices, and any extensive planning and 
construction. The corrosion control program, including the additional 
requirements for continuous monitoring and cleaning, would have to be 
in place within two to three years from the final rule's effective 
date.
    A final rule will require a completion period somewhere in the 
proposed ranges. Our preference is for shorter compliance periods. 
Shorter periods should be feasible because operators currently comply 
with many of these requirements and would merely be adding low-stress 
lines to their current operations. But we have proposed a lower and 
upper range of compliance periods so that in a final rule we can set 
compliance times that can be completed quickly enough to address any 
problems on these lines but are not cost burdensome, impractical or 
have an adverse effect on energy supply. We seek comments and 
supporting documentation to address the effects of these compliance 
periods on an operator's operations. These comments should address 
cost, operational difficulties in complying, technology concerns, and 
other issues, such as time needed to secure necessary permits. We also 
seek comment on whether there are simpler and more immediate methods an 
operator could use to identify the condition of these regulated rural 
low-stress pipelines.

d. Compliance Time Frames for Gathering Lines and Low-Stress Lines

    Unless otherwise indicated the time frames shown in the chart below 
are applicable to both onshore rural gathering lines and low-stress 
lines.

------------------------------------------------------------------------
           Safety requirement                       Time frame
------------------------------------------------------------------------
Identification of Line Segments........  6 months-12 months following
                                          effective date of rule.
Design, Construction, and Testing of     1 year-2 years following
 Steel Pipelines.                         effective date of rule.
Reporting Requirements.................  6 months-12 months following
                                          effective date of rule.
Maximum Operating Pressure.............  12 months-18 months following
                                          effective date of rule.
Installation of Line Markers...........  12 months-18 months following
                                          effective date of rule for
                                          existing lines.
Public Education Program...............  12 months-18 months following
                                          effective date of rule for
                                          existing lines.
Damage Prevention Program..............  12 months-18 months following
                                          effective date of rule for
                                          existing lines.
Corrosion Control Program..............  2 years-3 years following
                                          effective date of rule.
Operator Qualification Program.........  1 year-2 years following
                                          effective date of rule.
Integrity Assessment Program **........  1 year-2 years following
                                          effective date of rule.
Integrity Assessment--50% completed **.  3 years-4 years following
                                          effective date of rule.
Completed Integrity Assessments **.....  5 years-7 years following
                                          effective date of rule.
Leak Detection Program \5\.............  2 years-3 years following
                                          effective date of rule.
------------------------------------------------------------------------

e. New Unusually Sensitive Areas

    Proposed Sec.  195.12(c) concerns onshore rural low-stress lines 
that become ``regulated rural low-stress lines'' because of a new 
unusually sensitive area. Operators should, at least annually, review 
the NPMS to determine whether their unregulated low-stress lines have 
become ``regulated rural low-stress lines.'' We are proposing a range 
of time periods for compliance with applicable safety requirements when 
a previously unregulated line becomes regulated. We would establish a 
period between six months to one year for operators to comply with all 
proposed requirements except the integrity assessment, and two to three 
years to do the integrity assessment. We request comment and supporting 
documentation that addresses the effect of these time frames on the 
costs and feasibility of compliance. We want to completely understand 
the impacts of an operator's ability to comply with a shorter or longer 
time frame.
---------------------------------------------------------------------------

    \5\ The compliance time frame applies only to onshore rural low-
stress lines.

---------------------------------------------------------------------------

[[Page 52515]]

f. Records

    Proposed Sec.  195.12(d) provides record retention requirements. 
Certain records such as the segment identification records would have 
to be retained for the life of the pipe. Other records would have to be 
kept according to the record keeping requirements of the specific 
section or subpart referenced.

g. Minor Changes to Existing Rules

    A few corrosion control rules in subpart H of part 195 address 
procedures under Sec.  195.402(c)(3). Under the requirements proposed 
for regulated rural gathering and low-stress lines, operators would 
have to establish corrosion control procedures under Sec.  
195.11(b)(9), not under Sec.  195.402(c)(3). So in existing Sec. Sec.  
195.555, 195.565, 195.573(d), and 195.579(d), we are proposing to 
replace ``Sec.  195.402(c)(3)'' with ``Sec. Sec.  195.11(b)(9), 
195.12(b)(8) or Sec.  195.402(c)(3).''
    Existing Sec. Sec.  195.557(a) and 195.563(a) refer to pipelines 
``constructed, relocated, replaced, or otherwise changed after the 
applicable date in Sec.  195.401(c),'' the deadline for compliance with 
part 195. Comparable deadlines for ``regulated rural gathering lines 
and regulated rural low-stress lines are in proposed Sec. Sec.  
195.11(b)(9) and 195.12(b)(8), respectively. Thus, in Sec. Sec.  
195.557(a) and 195.563(a), we are proposing to replace ``Sec.  
195.401(c)'' with ``Sec. Sec.  195.11(b)(9), 195.12(b)(8) or 
195.401(c).''

V. Regulatory Analyses and Notices

    Executive Order 12866 and DOT Policies and Procedures. PHMSA 
considers this proposed 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 
received a copy of this proposed rulemaking to review. This proposed 
rulemaking is also significant under DOT regulatory policies and 
procedures (44 FR 11034: February 26, 1979).
    PHMSA prepared a draft Regulatory Evaluation of the proposed rule. 
A copy is in Docket No. PHMSA-2003-15864. If you have comments about 
the Regulatory Evaluation, please file them as described under the 
ADDRESSES heading of this document.
    For the purpose of the Regulatory Evaluation, PHMSA estimates 599 
of the 2,722 miles of onshore rural hazardous liquid gathering lines 
would be newly defined as regulated rural gathering lines as a 
consequence of the proposed regulatory changes. Since these lines 
operate at greater than 20 percent of SMYS (or 125 psig), PHMSA assumes 
major pipeline firms operate these lines.
    PHMSA estimates 684 of the 5,000 miles of onshore rural hazardous 
liquid low-stress lines would be newly defined as regulated rural low-
stress lines as a consequence of this proposal. Although these lines 
operate at lower than 20 percent of SMYS, PHMSA believes the affected 
operators also are major pipeline firms.
    PHMSA acknowledges these mileage figures are estimates. PHMSA 
invites comments on the reasonableness of those estimates.
    Overall, the initial costs of the proposed regulatory changes are 
expected to be approximately $5 million, the recurring annual costs are 
expected to be $2 million during years 2 through 6, and the recurring 
annual costs are expected to be $1 million for years 7 and beyond. The 
present value of the NPRM over 20 years using a 3 percent discount rate 
would be $21 million, while its present value over 20 years using a 7 
percent discount rate would be $17 million.
    Evidence suggests the two most significant safety problems on 
onshore rural hazardous liquid gathering lines and low-stress lines are 
corrosion and excavation damage. The proposed regulatory changes 
address both. Consequently, the intended benefits of the proposed 
regulatory changes are that they will reduce both.
    It is difficult to quantify the benefits that would result from the 
proposed regulatory changes. Information that could be used to estimate 
the benefits attributable to improved safety through reduced incidents 
and incident consequences on gathering lines is difficult to quantify. 
Benefits due to improved safety can be estimated for low-stress lines, 
however. Those benefits are $3.3 million per year. The present value of 
those benefits over 20 years using a 3 percent discount rate would be 
$49 million, while their present value over 20 years using a 7 percent 
discount rate would be $35 million. PHMSA invites public comment on its 
cost and benefit estimates.
    In addition to any reduction in incidents that might be 
attributable to the proposed regulatory changes, we expect the proposed 
changes to improve public confidence in the safety of onshore hazardous 
liquid gathering lines and low-stress lines in rural areas. This we 
believe would be a significant benefit of the proposed regulatory 
changes.
    The proposed rules also may produce public benefits by preventing 
disruptions in fuel supply caused by pipeline failures. Any 
interruption in fuel supply impacts the U.S. economy by putting upward 
pressure on the prices paid by businesses and consumers. Supply 
disruptions also have national security implications, because they 
increase dependence on foreign sources of oil. In most cases, we would 
not expect failures of onshore rural gathering lines to have 
significant impacts on fuel supply. However, low-stress pipelines in 
Alaska feeding major liquid pipelines are important links in the fuel 
supply chain, as recent incidents have illustrated.
    Other additional benefits expected to result from the proposed rule 
include avoided environmental and other damage from pipeline spills. 
These benefits can be significant. For example, on January 1, 1990, a 
low-stress pipeline operated by Exxon ruptured and eventually spilled 
567,000 gallons of No. 2 fuel oil into the Arthur Kill, which separates 
Staten Island from New Jersey. The incident has a known cost of nearly 
$84 million (in 2005 dollars). While the figure includes costs 
attributable to the spill response by the responsible parties, the 
natural resources damage assessment, penalties, and ``Other'', it does 
not include any public response costs or third party claims against the 
responsible parties. Even though the proposed rule does not include 
such costs in its cost estimates, if the rule would prevent only one 
incident similar to the Arthur Kill spill during the first 20 years, 
the overall benefits of the proposed rule could potentially increase by 
between 95% and 166%.
    Regulatory Flexibility Act. Under the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), PHMSA must consider whether its rulemaking actions 
would have a significant economic impact on a substantial number of 
small entities.
    PHMSA assumes major pipeline firms operate the lines that will be 
regulated under this proposal. These operators are already subject to 
part 195 because they operate pipelines covered by part 195. These 
operators will experience slight added costs because they will be 
required to fold their newly regulated rural gathering lines into their 
existing part 195 compliance programs.
    PHMSA consulted the International Petroleum Association of America 
(IPAA), which represents over 6,000 independent crude oil and natural 
gas producers throughout the U.S., and IPAA believes small operators 
would not be impacted. PHMSA also consulted with the Small Business 
Administration, which also believes this proposal will not impact small 
entities. Therefore, PHMSA does not expect the

[[Page 52516]]

proposed rules to impact any small entities.
    Based on these facts, I certify that a small number of major 
operators will experience increased costs, but this impact will not be 
a significant economic impact on a substantial number of small 
entities. PHMSA invites public comment on its estimate of the number of 
small entities that would become subject to part 195 for the first time 
as a result of this rulemaking.
    Executive Order 13175. PHMSA has analyzed this proposed rulemaking 
according to the principles and criteria contained in Executive Order 
13175, ``Consultation and Coordination with Indian Tribal 
Governments.'' Because the proposed rulemaking would 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. This proposed rulemaking contains 
information collection requirements applicable to operators of 
hazardous liquid gathering lines and low-stress lines in rural areas. 
As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), 
PHMSA has submitted a paperwork analysis to the Office of Management 
and Budget for its review.
    Operators of rural gathering lines and low-stress lines proposed to 
be regulated would have to comply with part 195 information collection 
requirements regarding corrosion control, damage prevention programs, 
public education programs, and accident reporting. These operators 
would also have to comply with the information collection requirements 
in 49 CFR part 199 concerning drug and alcohol testing.
    Certain gathering lines and low-stress lines in nonrural areas are 
currently subject to part 195. The number of gathering line and low-
stress line operators subject to regulation may vary as lines are 
brought into and taken out of service and as changes occur in the 
boundaries of nonrural locations. If the proposed rules become final, 
this number also may vary as changes occur in the boundaries of 
unusually sensitive areas.
    PHMSA currently has an OMB approved information collection request 
(2137-0047) for hazardous liquid operators under its jurisdiction. 
PHMSA currently has an OMB approved information collection request 
(2137-0047) for hazardous liquid operators under its jurisdiction. This 
proposed rule, if adopted, will not increase the number of operators 
under PHMSA jurisdiction and will only marginally increase the burden 
hours currently approved under OMB No. 2137-0047. We estimate that this 
proposal will require an additional burden of 8 hours. This is for all 
impacted operators. The total cost of this operator burden is 
approximately $520.56 (= $65.07 x 8 hours, assuming a senior engineer 
costing $65.07 fully loaded is preparing the incident reports).
    Type of Information Collection Request: Revision of an Existing 
Collection.
    Title of Information Collection: Transportation of Hazardous 
Liquids by Pipeline.
    Recordkeeping and Accident Reporting Requirements Respondents: 
Estimated 0 new operators.
    Estimated Total Annual Burden on New Respondents: 0 hours.
    PHMSA invites comments on the above estimates.
    Unfunded Mandates Reform Act of 1995. This proposed rulemaking does 
not include unfunded mandates under the Unfunded Mandates Reform Act of 
1995. It would not result in costs of $100 million or more (adjusted 
for inflation) to either State, local, or tribal governments, in the 
aggregate, or to the private sector, and it is the least burdensome 
alternative that achieves the objective of the proposed rulemaking.
    National Environmental Policy Act. PHMSA has analyzed the proposed 
rulemaking for purposes of the National Environmental Policy Act (42 
U.S.C. 4321 et seq.). PHMSA has preliminarily determined that the 
proposed rulemaking is unlikely to significantly affect the quality of 
the human environment.
    The proposed rulemaking would require only limited physical 
modification or other work that would disturb pipeline rights-of-way, 
such as, identifying segments of pipelines meeting the regulatory 
definitions, inspection and testing, installing and maintaining line 
markers, implementing corrosion controls, pipeline cleaning, and 
establishing integrity assessment and leak detection programs. All of 
these activities result in negligible to minor negative environmental 
impact. PHMSA also believes that many of these safety measures (for 
example, implementing corrosion control and installing and maintaining 
line markers) are already being undertaken for a large portion of the 
pipeline mileage that would become regulated under the proposed rules. 
Furthermore, by requiring these and other safety rules such as accident 
reporting, implementing public education and damage prevention 
programs, and establishing operator qualification programs, it is 
likely the number of spills on rural gathering lines and low-stress 
lines will be reduced, thereby resulting in minor to moderate positive 
environmental impact that would offset the negative environmental 
impacts.\6\
---------------------------------------------------------------------------

    \6\ This EA considers the pipeline safety actions proposed for 
rural onshore gathering and low-stress pipelines. This EA does not 
consider other actions that operators are required to take to comply 
with other statutory authorities, such as the Clean Water Act.
---------------------------------------------------------------------------

    An environmental assessment document is available for review in 
Docket No. PHMSA-2003-15864. A final determination on environmental 
impact will be made following the close of the comment period. If you 
have any comments about this draft and environmental assessment, please 
submit them as described under the ADDRESSES heading of this document.
    Executive Order 13132. PHMSA has analyzed the proposed rulemaking 
according to the principles and criteria contained in Executive Order 
13132 (``Federalism''). None of the proposed regulatory requirements 
(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.
    Although the state consultation requirements do not apply to this 
proposed regulatory action because there are no preemption issues, 
PHMSA has involved state pipeline safety personnel in discussing 
approaches on regulating rural gathering and low-stress pipelines. 
PHMSA representatives met on several occasions with the National 
Association of Pipeline Safety Representatives (NAPSR), an organization 
of state pipeline safety personnel, to discuss regulation of rural 
onshore gathering pipelines. In September 2003 and February 2004, PHMSA 
met with the NAPSR gathering pipeline committee and also gave 
presentations at the national NAPSR meetings in 2004 and 2005. In 2003, 
PHMSA discussed the potential impact of a regulation on rural liquid 
gathering pipelines with State officials in West Virginia and 
Louisiana. In April 2006, PHMSA looked at the impact of the regulation 
on rural gathering and low-stress pipelines in West Virginia and Ohio. 
PHMSA also met with State

[[Page 52517]]

officials at the Texas Railroad Commission in April 2002 to gather data 
on rural low-stress lines in Texas. Further, PHMSA talked to the Alaska 
Department of Environmental Conservation about low-stress lines in 
Alaska.
    Executive Order 13211. The transportation of hazardous liquids 
through rural gathering lines and low-stress lines has a substantial 
aggregate effect on the nation's available energy supply. However, 
after analysis, PHMSA has determined this proposed rulemaking is not a 
``significant energy action'' under Executive Order 13211. It is not 
likely to have a significant adverse effect on the supply, 
distribution, or use of energy. It is possible avoiding future spills 
may have a positive effect on the supply of energy. We invite comments 
on the Energy Impact Analysis, which is available for review in the 
docket.

List of Subjects in 49 CFR Part 195

    Carbon dioxide, Crude oil, Petroleum, Pipeline safety, Reporting 
and recordkeeping requirements.

    For the reasons discussed in the preamble, PHMSA proposes to amend 
49 CFR part 195 as follows:

PART 195--TRANSPORTATION OF HAZARDOUS LIQUIDS BY PIPELINE

    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 CFR1.53.

    2. Amend Sec.  195.1 to revise the section heading and to revise 
paragraphs (a) and (b), to redesignate paragraph (c) as paragraph (d) 
and to add a new paragraph (c) to read as follows:


Sec.  195.1  Which pipelines are covered by this part?

    (a) Except for the pipelines listed in paragraph (c) of this 
section, this part applies to pipeline facilities and the 
transportation of hazardous liquids or carbon dioxide associated with 
those facilities in or affecting interstate or foreign commerce, 
including pipeline facilities on the Outer Continental Shelf (OCS).
    (b) This part applies to:
    (1) Any pipeline that transports a highly volatile liquid (HVL);
    (2) Transportation through any pipeline, other than a gathering 
line, that has maximum operating pressure (MOP) greater than 20 percent 
of the specified minimum yield strength;
    (3) Any pipeline segment that crosses a waterway currently used for 
commercial navigation;
    (4) Transportation of petroleum in any of the following onshore 
gathering pipelines:
    (i) A pipeline located in a non-rural area;
    (ii) A regulated rural gathering pipeline defined in Sec.  195.11. 
The requirements for these lines are provided in Sec.  195.11; or
    (iii) A pipeline located in an inlet of the Gulf of Mexico. These 
lines are only subject to the requirements in Sec.  195.413;
    (5) Transportation of a hazardous liquid or carbon dioxide through 
a low-stress pipeline in a non-rural area; or
    (6) Transportation of a hazardous liquid through a regulated low-
stress pipeline in a rural area as defined in Sec.  195.12. The 
requirements for these lines are provided in Sec.  195.12.
    (c) This part does not apply to any of the following--
    (1) Transportation of a hazardous liquid transported in a gaseous 
state;
    (2) Transportation of a hazardous liquid through a pipeline by 
gravity;
    (3) A pipeline subject to safety regulations of the U.S. Coast 
Guard;
    (4) A low-stress 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;
    (5) Transportation of hazardous liquid or carbon dioxide in an 
offshore pipeline in State waters where the pipeline is located 
upstream from the outlet flange of the following farthest downstream 
facility: the facility where hydrocarbons or carbon dioxide are 
produced or the facility where produced hydrocarbons or carbon dioxide 
are first separated, dehydrated, or otherwise processed;
    (6) Transportation of hazardous liquid or carbon dioxide in a 
pipeline on the OCS where the pipeline is located upstream of the point 
at which operating responsibility transfers from a producing operator 
to a transporting operator;
    (7) A pipeline segment upstream (generally seaward) of the last 
valve on the last production facility on the OCS where a pipeline on 
the OCS is producer-operated and crosses into State waters without 
first connecting to a transporting operator's facility on the OCS. 
Safety equipment protecting PHMSA-regulated pipeline segments is not 
excluded. A producing operator of a segment falling within this 
exception may petition the Administrator, under 49 CFR Sec.  190.9, for 
approval to operate under PHMSA regulations governing pipeline design, 
construction, operation, and maintenance.
    (8) Transportation of a hazardous liquid or carbon dioxide through 
onshore production (including flow lines), refining, or manufacturing 
facilities or storage or in-plant piping systems associated with such 
facilities;
    (9) Transportation of a hazardous liquid or carbon dioxide--
    (i) By vessel, aircraft, tank truck, tank car, or other non-
pipeline mode of transportation; or
    (ii) Through facilities located on the grounds of a materials 
transportation terminal if the facilities are used exclusively to 
transfer hazardous liquid or carbon dioxide between non-pipeline modes 
of transportation or between a non-pipeline mode and a pipeline. These 
facilities do not include any device and associated piping that are 
necessary to control pressure in the pipeline under Sec.  195.406(b); 
or,
    (10) Transportation of carbon dioxide downstream from the 
applicable following point:
    (i) The inlet of a compressor used in the injection of carbon 
dioxide for oil recovery operations, or the point where recycled carbon 
dioxide enters the injection system, whichever is farther upstream; or
    (ii) The connection of the first branch pipeline in the production 
field where the pipeline transports carbon dioxide to an injection well 
or to a header or manifold from which a pipeline branches to an 
injection well.
    (d) Breakout tanks subject to this part must comply with 
requirements that apply specifically to breakout tanks and, to the 
extent applicable, with requirements that apply to pipeline systems and 
pipeline facilities. If a conflict exists between a requirement that 
applies specifically to breakout tanks and a requirement that applies 
to pipeline systems or pipeline facilities, the requirement that 
applies specifically to breakout tanks prevails. Anhydrous ammonia 
breakout tanks need not comply with Sec. Sec.  195.132(b), 195.205(b), 
195.242 (c) and (d), 195.264 (b) and (e), 195.307, 195.428 (c) and (d), 
and 195.432 (b) and (c).
    3. Amend Sec.  195.3(c) by revising item B. (12) of the 49 CFR 
Reference table to read ``Sec. Sec.  195.12(b)(11), 195.134, 195.444.''
    4. Add Sec.  195.11 and Sec.  195.12 to read as follows:


Sec.  195.11  What is a regulated rural gathering line and what 
requirements apply?

    Each operator of a regulated rural gathering line, as defined in 
paragraph (a) of this section, must comply with the

[[Page 52518]]

safety requirements described in paragraph (b) of this section.
    (a) Definition. As used in this section, a regulated rural 
gathering line means an onshore gathering line in a rural area that 
meets all of the following criteria--
    (1) Has a nominal diameter between 6\5/8\ inches (168 mm) and 8\5/
8\ inches (219.1 mm);
    (2) Is located in, or within \1/4\-mile (.40 km) of an unusually 
sensitive area as defined in Sec.  195.6; and
    (3) Operates at a maximum pressure established under Sec.  195.406 
corresponding to--
    (i) A stress level greater than 20 percent of the specified minimum 
yield strength of the line pipe; or
    (ii) If the stress level is unknown or the pipeline is not 
constructed with steel pipe, a pressure of more than 125 psi (861 kPa) 
gage.
    (b) Safety requirements. Each operator must prepare, follow, and 
maintain written procedures to carry out the requirements of this 
section. Except for the requirements in paragraphs (b)(2) and (b)(9) of 
this section, the safety requirements are applicable to all materials 
of construction.
    (1) Identify all segments of regulated rural gathering pipeline 
within [6 months-12 months following effective date of final rule].
    (2) For steel pipelines constructed, replaced, relocated, or 
otherwise changed after [1 year-2 years following effective date of 
final rule], design, install, construct, initially inspect, and 
initially test the pipeline according to this part, unless the pipeline 
is converted under Sec.  195.5.
    (3) For non-steel pipelines constructed after [1 year following 
effective date of final rule], notify the Administrator according to 
Sec.  195.8.
    (4) Beginning [6 months-12 months following effective date of final 
rule], comply with the reporting requirements in subpart B of this 
part.
    (5) Establish the maximum operating pressure of the pipeline 
according to Sec.  195.406 before transportation begins, or if the 
pipeline exists on [effective date of final rule], before [12 months-18 
months following effective date of final rule].
    (6) Install and maintain line markers according to Sec.  195.410 
before transportation begins, or if the pipeline exists on [effective 
date of final rule], before [12 months-18 months following effective 
date of final rule].
    (7) Establish and apply a public education program according to 
Sec.  195.440 before transportation begins, or if the pipeline exists 
on [effective date of final rule], before [12 months-18 months 
following effective date of final rule].
    (8) Establish and apply a damage prevention program according to 
Sec.  195.442 before transportation begins, or if the pipeline exists 
on [effective date of final rule], before [12 months-18 months 
following effective date of final rule].
    (9) For steel pipelines, control and remediate corrosion according 
to subpart H of this part, except corrosion control is not required for 
pipelines existing on [effective date of final rule] before [2 years-3 
years following effective date of final rule]. In addition to the 
requirements in subpart H, continuously monitor to identify and 
remediate any changes in operating conditions that could necessitate 
cleaning the lines and accelerating the corrosion control program.
    (10) Demonstrate compliance with the Operator Qualification program 
requirements in subpart G of this part by describing the processes used 
to determine the qualification of persons performing operations and 
maintenance tasks. These processes must be established before 
transportation begins or if the pipeline exists on [effective date of 
final rule], before [1 year-2 years following the effective date of the 
final rule].
    (c) New unusually sensitive areas. If, after [effective date of 
final rule], a new unusually sensitive area is identified and a segment 
of pipeline becomes regulated as a result, the operator must implement 
the requirements in paragraphs (b)(2) through (b)(10) of this section 
within [ six months-one year] for the affected segment.
    (d) Records. An operator must maintain the segment identification 
records required in paragraph (b)(1) of this section for the life of 
the pipe. For the requirements in paragraphs (b)(2) through (b)(10) of 
this section, an operator must maintain the records necessary to 
demonstrate compliance with each requirement according to the record 
retention requirements of the referenced section or subpart.


Sec.  195.12  Which low-stress lines in rural areas are regulated and 
what requirements apply?

    Each operator of a regulated low-stress line in a rural area, as 
defined in paragraph (a) of this section, must comply with the safety 
requirements described in paragraph (b) of this section.
    (a) Definition. As used in this section, a regulated low-stress 
line in a rural area means an onshore line in a rural area that meets 
all of the following criteria:
    (1) Has a nominal diameter of 8\5/8\ inches (219.1 mm) or more;
    (2) Is located in, or within \1/4\-mile (.40 km) of, an unusually 
sensitive area as defined in Sec.  195.6; and
    (3) Operates at a maximum pressure established under Sec.  195.406 
corresponding to--
    (i) A stress level equal to or less than 20 percent of the 
specified minimum yield strength of the line pipe; or
    (ii) If the stress level is unknown or the pipeline is not 
constructed with steel pipe, a pressure equal to or less than 125 psi 
(861 kPa) gage.
    (b) Safety requirements. Each operator must prepare, follow, and 
maintain written procedures to carry out the requirements of this 
section. Except for the requirements in paragraphs (b)(2) and (b)(8) of 
this section, the safety requirements in this section are applicable to 
all materials of construction.
    (1) Identify all segments of regulated low-stress pipeline in rural 
locations before [6 months-12 months following effective date of final 
rule].
    (2) For steel pipelines constructed, replaced, relocated, or 
otherwise changed after [1 year-2 years following effective date of 
final rule], design, install, construct, initially inspect, and 
initially test the pipeline according to this part, unless the pipeline 
is converted under Sec.  195.5.
    (3) Beginning [6 months-12 months following effective date of final 
rule], comply with the reporting requirements in subpart B of this 
part.
    (4) Establish the maximum operating pressure of the pipeline 
according to Sec.  195.406 before transportation begins, or if the 
pipeline exists on [effective date of final rule], before [12 months-18 
months following effective date of final rule].
    (5) Install and maintain line markers according to Sec.  195.410 
before transportation begins, or if the pipeline exists on [effective 
date of final rule], before [12 months-18 months following effective 
date of final rule]
    (6) Establish and apply a public education program according to 
Sec.  195.440 before transportation begins, or if the pipeline exists 
on [effective date of final rule], before [12 months-18 months 
following effective date of final rule].
    (7) Establish and apply a damage prevention program according to 
Sec.  195.442 before transportation begins, or if the pipeline exists 
on [effective date of final rule], before [12 months-18 months 
following effective date of final rule].
    (8) For steel pipelines, control and remediate corrosion according 
to

[[Page 52519]]

subpart H of this part, except corrosion control is not required for 
pipelines existing on [effective date of final rule] before [2 years-3 
years following effective date of final rule]. In addition to the 
requirements in subpart H, continuously monitor to identify and 
remediate any changes in operating conditions that could necessitate 
cleaning the lines and accelerating the corrosion control program.
    (9) Demonstrate compliance with the Operator Qualification program 
requirements in subpart G of this part by describing the processes used 
to determine the qualification of persons performing operations and 
maintenance tasks. These processes must be established before 
transportation begins or if the pipeline exists on [effective date of 
final rule], before [1 year-2 years following the effective date of the 
final rule].
    (10) Establish and apply a program to assess the integrity of the 
regulated pipeline segments to determine and remediate any condition 
presenting a threat to the integrity of these segments before [12 
months-24 months following effective date of final rule]. These 
conditions are not limited to those caused by corrosion and third-party 
damage. An operator may use in-line inspection tools, pressure testing 
conducted in accordance with subpart E of this part, or other 
technology the operator demonstrates can provide an equivalent 
understanding about the condition of line pipe. An operator must 
prioritize the regulated rural low-stress segments for the integrity 
assessment and conduct the integrity assessment of at least 50 percent 
of these segments before [36 months-48 months following effective date 
of final rule], and complete the assessment for all regulated segments 
before [60 months-84 months following effective date of final rule]. An 
operator must establish reassessment intervals for continually 
assessing the pipe segments. The intervals must be as frequent as 
necessary to ensure the continued integrity of each pipe segment, but 
may not exceed 68 months. An operator may be able to justify an 
engineering basis for a longer assessment interval on a segment of line 
pipe. The justification must be supported by a reliable engineering 
evaluation.
    (11) Establish and apply a program, based on API 1130, or other 
appropriate method suitable for the commodity being transported to 
detect leaks on the regulated segments before [24 months-36 months 
following effective date of the final rule]. The leak detection method 
cannot be based solely on field personnel's visual and olfactory 
senses. The program must evaluate the capability of the leak detection 
means. The evaluation must consider the following factors:
    (i) Length and diameter of the pipeline;
    (ii) Product transported;
    (iii) Timeliness of detection capability; and
    (iv) Proximity of response personnel and equipment.
    (c) New unusually sensitive areas. If, after [effective date of 
final rule], a new unusually sensitive area is identified and a segment 
of pipeline becomes regulated as a result, the operator must take the 
following actions:
    (1) Implement the requirements in paragraphs (b)(2) through (b)(9) 
and (b) (11) of this section within six months-one year from the date 
the area is identified; and
    (2) Complete the assessment required by paragraph (b)(10) of this 
section within two years-three years from the date the area is 
identified.
    (d) Records. An operator must maintain the segment identification 
records required in paragraph (b)(1) of this section for the life of 
the pipe. For the requirements in paragraphs (b)(2) through (b)(9) of 
this section, an operator must maintain the records necessary to 
demonstrate compliance with each requirement according to the record 
retention requirements of the referenced section or subpart. For the 
integrity assessment program required in paragraph (b)(10) and the leak 
detection program required in paragraph (b)(11), an operator must 
maintain the records for the life of the pipe.
    5. Amend Sec. Sec.  195.555, 195.565, 195.573(d), and 195.579(d) by 
removing ``Sec.  195.402(c)(3)'' and adding, in its place, ``Sec. Sec.  
195.11(b)(9), 195.12(b)(8) or Sec.  195.402(c)(3).''
    6. Amend Sec. Sec.  195.557(a) and 195.563(a) by removing ``Sec.  
195.401(c)'' and adding in its place, ``Sec. Sec.  195.11(b)(9), 
195.12((b)(8)) or Sec.  195.401(c).''

    Issued in Washington, DC, on August 31, 2006.
Jeffrey D. Wiese,
Acting Deputy Associate Administrator for Pipeline Safety.
[FR Doc. 06-7438 Filed 8-31-06; 11:46 am]
BILLING CODE 4910-60-P