[Federal Register Volume 76, Number 87 (Thursday, May 5, 2011)]
[Rules and Regulations]
[Pages 25576-25588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10778]


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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 195

[Docket PHMSA-2008-0186; Amdt. 195-96]
RIN 2137-AE36


Pipeline Safety: Applying Safety Regulations to All Rural Onshore 
Hazardous Liquid Low-Stress Lines

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

ACTION: Final rule.

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SUMMARY: PHMSA is amending its pipeline safety regulations to apply 
safety regulation to rural low-stress hazardous liquid pipelines that 
were not covered previously by safety regulations. This change complies 
with a mandate in the Pipeline Inspection, Protection, Enforcement, and 
Safety Act of 2006 (PIPES Act).

DATES: This final rule takes effect October 1, 2011.

FOR FURTHER INFORMATION CONTACT: For technical contents of the final 
rule contact Mike Israni by phone at 202-366-4571 or by e-mail at 
[email protected]. For all other information contact Tewabe Asebe by 
phone at 202-366-4595 or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: 

[[Page 25577]]

Background

    Until 2008, a hazardous liquid pipeline operating at low-stress in 
a rural area was not regulated under Federal pipeline safety 
regulations in 49 CFR part 195 unless it crossed a commercially 
navigable waterway. Section 195.2 defines a ``rural area'' as one 
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.
    The PIPES Act was signed into law on December 29, 2006, (Pub. L. 
109-468). Section four of the PIPES Act (codified at 49 U.S.C. 
60102(k)) required PHMSA to ``issue regulations subjecting low-stress 
hazardous liquid pipelines to the same standards and regulations as 
other hazardous liquid pipelines.'' The PIPES Act also stated that the 
new regulations could be issued in phases.

Implementation of the PIPES Act Mandate

    PHMSA decided to implement the PIPES Act mandate in phases, in part 
because PHMSA did not have complete data on the extent of rural low-
stress pipelines that would be covered by the statutory mandate. Phase 
one, through a final rule published on June 3, 2008, (73 FR 31634), 
applied full Part 195 regulation to higher-risk, larger-diameter rural 
low-stress pipelines (i.e., those low-stress pipelines with a diameter 
of 8 \5/8\ inches or greater located in or within one-half mile of an 
unusually sensitive area (USA)). (These requirements are in 49 CFR 
195.12.) These are the rural low-stress pipelines that have more 
potential to cause harm to USAs. These were also the rural low-stress 
pipelines on which PHMSA had the most information to prepare a 
regulatory cost/benefit evaluation. PHMSA planned to regulate all 
remaining rural low-stress pipelines (i.e., smaller-diameter--less than 
8 \5/8\ inches diameter--rural low-stress pipelines located in or 
within one-half mile of a USA and all rural low-stress pipelines, of 
any diameter, located outside the one-half mile USA buffer) once PHMSA 
had more complete information on the extent of these unregulated rural 
low-stress pipelines. Phase one also applied reporting requirements in 
Subpart B of Part 195 to all rural low-stress pipelines (Sec.  195.48). 
This data was necessary for PHMSA to complete the regulatory evaluation 
for the extension of all safety requirements to the remaining rural 
low-stress pipelines in phase two.

Surveys

    Because PHMSA did not have adequate information on the number of 
operators with rural low-stress pipelines, or on the total mileage of 
these lines in service, we initiated the following actions:
    (1) We revised the Pipeline Safety Regulations to require operators 
of any low-stress line (including those rural low-stress lines not 
brought under safety regulations) to comply with the annual reporting 
requirements and the incident reporting requirements of Part 195. This 
was part of phase one, as discussed above.
    (2) On July 31, 2008, (73 FR 44800) OMB Control Number 2137-0623, 
PHMSA published in the Federal Register a notice of OMB-approved survey 
asking each operator of a rural low-stress hazardous liquid pipeline 
for voluntary information concerning the mileage and characteristics of 
these pipelines to assess the costs of subjecting rural low-stress 
pipeline mileage to Part 195 regulation.
    (3) Based on the information received in response to the notice, 
PHMSA conducted two follow-up inquiries: (1) A request for information 
from operators who operate rural low-stress lines to determine the 
potential operating costs they were likely to incur to bring these 
unregulated lines into compliance with Part 195 regulation; and (2) a 
request to states with the majority of rural low-stress lines to 
identify any incident data the state may have collected through the 
years.

Phase Two--Notice of Proposed Rulemaking

    With the information PHMSA gathered, we moved to phase two to 
complete the requirement of the PIPES Act and to apply Part 195 safety 
requirements to all rural low-stress pipelines not included in the 
phase one rule. A Notice of Proposed Rulemaking (NPRM) was published in 
the Federal Register on June 22, 2010, (75 FR 35366) that proposed to 
extend Part 195 safety requirements to rural low-stress pipelines of 
any diameter located more than one-half mile from a USA and those less 
than 8\5/8\ inches in diameter located in or within one-half mile of a 
USA.
    The phase one rule established compliance deadlines for the rural 
low-stress pipelines that it addressed. The phase two NPRM proposed no 
changes to these phase one deadlines, but proposed new compliance 
deadlines to apply the requirements to the phase two rural low-stress 
pipelines proposed for regulation. In addition, PHMSA proposed to 
define the scope of the ``could affect'' buffer for application of the 
integrity management (IM) requirements in Sec.  195.452 to the phase 
two pipelines. To codify the compliance dates and requirements, we 
proposed to define three ``categories'' of rural low-stress pipelines 
subject to the requirements of Sec.  195.12. These were as follows:
     Category 1: Those rural low-stress pipelines that were 
covered under the phase one rule;
     Category 2: Rural low-stress pipelines of smaller diameter 
(less than 8\5/8\ inches diameter) located in or within one-half mile 
of a USA (which would be subject to all Part 195 requirements including 
IM requirements); and
     Category 3: All other rural low-stress pipelines that were 
not included in phase one. Category 3 lines would fall outside the 
defined ``could affect'' buffer for application of IM requirements.

Integrity Management

    Section 195.452 addresses IM requirements for hazardous liquid 
pipelines. Under the requirements of that section, operators must take 
additional actions for each pipeline segment that could affect a high 
consequence area (HCA). PHMSA has defined HCAs as populated areas, 
commercially navigable waterways and USAs. HCAs are identified and 
displayed on maps available from the NPMS.
    To comply with IM requirements, pipeline operators must first 
determine which segments of their pipeline could affect an HCA. To do 
this, an operator needs to compare its pipeline's location to the 
locations of HCAs and determine which segments of the pipeline could 
affect an HCA if there was a product release from the segment. These 
comparisons have proven to be considerably more burdensome in practice 
than PHMSA believed when IM rules were initially established. They 
involve more than just comparison of maps of pipeline location to maps 
of HCAs. Operators have had to consider the topography and nature of 
ground cover around their pipelines to estimate the direction and 
distance that released product might flow. Operators have also had to 
consider the potential transport of released product via nearby 
waterways, including such factors as seasonal variations in flow, the 
effect of stream turbulence, and their ability to respond to a release 
and contain further transport of spilled product.
    During the phase one rulemaking for rural low-stress pipelines, 
PHMSA

[[Page 25578]]

concluded it would be unnecessarily burdensome to require operators of 
these pipelines to perform a complete ``could affect'' analysis to 
determine which rural low-stress pipeline segments would be subject to 
IM requirements. Rather, PHMSA adopted a one-half mile buffer around 
USAs \1\ as the ``could affect'' area (i.e., any rural low-stress 
pipeline segment covered by the phase one rule within the one-half mile 
buffer would be subject to IM requirements). PHMSA found it unlikely a 
``could affect'' analysis on a rural low-stress pipeline would result 
in a larger area than the one-half mile buffer for application of IM 
requirements. Available data showed that the largest spill on land from 
a low-stress line covered two acres. An acre is 43,560 square feet. If 
this spill had been limited to a corridor 35 feet wide over its entire 
length, it still would not have traveled one-half mile. This data, 
coupled with the relatively lower pressure of low-stress pipelines, led 
PHMSA to conclude that a one-half mile buffer was more than adequate 
for application of IM requirements. In the NPRM, PHMSA proposed to 
continue to use the one-half mile buffer for phase two because PHMSA 
believed it would be an adequate ``could affect'' area that identifies 
the vast majority (if not all) of rural low-stress pipelines that could 
affect a USA.
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    \1\ The other component of HCAs (i.e., populated areas) was not 
affected by the phase one rulemaking and was not included in the 
phase two NPRM since pipelines in populated areas are not, by 
definition, in ``rural areas'' and are already regulated.
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    As in phase one, PHMSA also proposed to include an option for 
pipeline operators to use ``could affect'' analyses in lieu of the one-
half mile buffer to determine which of their smaller-diameter low-
stress pipelines would be subject to IM requirements. PHMSA recognized 
that operators could use this option in circumstances where it is 
likely the ``could affect'' analysis would determine that a pipeline 
segment cannot affect a USA (e.g., where the USA is uphill from the 
pipeline). Nevertheless, PHMSA concluded it would be unreasonable to 
exclude this option for rural low-stress pipelines since it can 
identify instances in which application of IM requirements would be 
unnecessary.

Economic Burden

    The phase one rule allowed operators of pipelines meeting specified 
criteria to notify PHMSA if they would incur an excessive economic 
burden in complying with IM assessment requirements. The criteria were 
designed for rural pipelines that carry oil from a production facility 
(e.g., well) and where the pipeline would be abandoned or shut down as 
a result of the economic burden associated with IM assessments. The 
phase one rule provided that PHMSA would stay compliance with the IM 
assessment requirements while it reviews the notification. Based on the 
outcome of the review, PHMSA may grant the operator a special permit 
imposing alternative safety requirements in lieu of IM assessments.
    For phase two, PHMSA considered extending the economic compliance 
burden provision to Category 2 pipelines--those smaller diameter rural 
low-stress pipelines located in or within one-half mile of a USA that 
would be subject to IM assessment requirements. (Category 3 low-stress 
pipelines would not be subject to the IM requirements under the NPRM, 
as described above). PHMSA concluded that this was not necessary 
because no Category 2 low-stress pipeline would meet the criteria in 
the economic burden compliance provision (Sec.  195.12(c)) and concerns 
about preserving oil production or minimizing risk of alternative 
transport of crude oil from wells would not apply to these pipelines. 
Accordingly, we did not propose to extend the economic burden 
compliance provision to these pipelines in the NPRM.

Pipelines Subject to USCG Regulation

    Section 195.1(b)(3) states that Part 195 requirements do not apply 
to pipelines subject to safety regulations of the United States Coast 
Guard (USCG). The NPRM noted that this exception had previously applied 
only to low-stress pipelines subject to USCG regulation and through a 
drafting error in the phase one final rule, was inadvertently expanded 
to all pipelines subject to USCG requirements. PHMSA proposed to 
correct this error.

Public Comments

    PHMSA received comments from three trade associations (two of which 
filed joint comments), one government agency (National Transportation 
Safety Board, NTSB), one pipeline consultant, and one individual. None 
of the comments objected to the changes proposed in the NPRM. The 
American Petroleum Institute (API) and the Association of Oil Pipelines 
(AOPL), in joint comments, explicitly noted that they did not oppose 
application of the baseline requirements of Part 195 to all low-stress 
pipelines and a requirement that rural low-stress pipelines within one-
half mile of a USA also be subject to the IM requirements of Part 195. 
NTSB supported regulating all low-stress pipelines with requirements 
graded according to risk. All those commenting suggested some changes, 
however.
    Several comments addressed the scope of the proposed rule. API-AOPL 
requested that PHMSA clarify that the proposed rule did not apply to 
gathering or production pipelines or to pipelines excluded from 
regulation in Sec.  195.1(b). The Independent Petroleum Association of 
America similarly requested clarification that the proposed 
requirements do not apply to gathering pipelines. NTSB suggested that 
the change should include all rural gathering lines and gathering lines 
in inlets of the Gulf of Mexico. Tracy S. Dahl, who commented on behalf 
of herself, suggested that the scope should include low-stress gas 
pipelines such as those associated with coal bed methane gas 
production.
    With the exception of correcting a drafting error associated with 
low-stress pipelines subject to regulation by the USCG (discussed 
above), the NPRM proposed no changes to the exclusions listed in Sec.  
195.1(b). This section lists the types of pipelines excluded from the 
requirements of Part 195. The NPRM did not propose any new requirements 
for gathering pipelines, and thus no requirements applicable to those 
pipelines may be included in this final rule. Regulation of rural 
gathering pipelines is governed by Sec.  195.11, which is not affected 
by this rulemaking. Further, PHMSA notes that Section 4 of the PIPES 
Act explicitly states, ``[t]he regulations issued under this paragraph 
shall not apply to gathering lines.'' \2\ Gas pipelines were not 
included in the scope of the NPRM and thus no new requirements can be 
applied to gas pipelines as part of this rulemaking.
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    \2\ 49 U.S.C. 60102(k)(1), as amended by PIPES Act Section 4.
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    API-AOPL specifically requested that PHMSA clarify the exclusion in 
paragraph (4) of Sec.  195.1(b) applying to ``[a] low-stress pipeline 
that serves refining, manufacturing, or truck, rail, or vessel terminal 
facilities, if the pipeline is less than one mile long (measured 
outside facility grounds) and does not cross an offshore area or a 
waterway currently used for commercial navigation.'' API-AOPL noted 
that PHMSA field personnel have recently informed certain pipeline 
operators that these segments are part of a larger, non-low-stress 
pipeline and are thus subject to Part 195, which the associations 
believe is contrary to the plain language of the regulation. As noted 
above, the exclusions of Sec.  195.1(b) are not changed

[[Page 25579]]

by this rulemaking, and low-stress inter-facility pipelines meeting 
these criteria are excluded from regulation under Part 195. However, 
PHMSA notes that Sec.  195.2 and the PIPES Act both define a low-stress 
hazardous liquid pipeline to be one ``that is operated in its entirety 
at a stress level of 20 percent or less of the specified minimum yield 
strength of the line pipe'' (emphasis added). Inter-facility pipelines 
operating at less than 20% SMYS that is part of a larger pipeline 
(i.e., some of which operates at higher stress levels) would not fall 
under this exclusion. Such inter-facility pipelines would be subject to 
Part 195. Determining whether particular inter-facility piping is part 
of a larger pipeline depends on the characteristics of individual 
installations and the applicability of Part 195 requirements to 
specific inter-facility lines.
    API-AOPL objected to the proposed change to the exception in Sec.  
195.1(b)(3) for pipelines subject to regulation by the USCG. API-AOPL 
contended that this was not an error because the change was included in 
the phase one NPRM and final rule, had been subject to notice and 
comment and thus cannot simply be ``corrected.'' PHMSA disagrees. The 
entire rulemaking record clearly demonstrates that this was an error in 
the regulatory language in the phase one rule. API-AOPL is correct that 
the re-write of the regulatory language of Sec.  195.1(b) in the phase 
one NPRM failed to limit this exception to low-stress pipelines and 
that this omission was repeated in the regulatory language in the final 
phase one rule. The remainder of the record makes it clear, however, 
that this change was not intended. The NPRM for the phase one rule 
stated that PHMSA had

    * * * also 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 \3\ (emphasis added).
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    \3\ Federal Register, September 6, 2006, 71 FR 52511.

    The NPRM stated elsewhere that, ``[t]his proposal will not affect 
other exempt low-stress lines, specifically pipelines subject to the 
safety regulations of the USCG * * *'' \4\ (emphasis added). The 
exception applicable to lines subject to USCG regulation prior to the 
effective date of the phase one final rule clearly applied only to low-
stress pipelines. Further, the PIPES Act required that PHMSA continue 
to except from part 195 those ``low-stress hazardous liquid pipelines'' 
that were subject to USCG safety regulations. Therefore, PHMSA 
concludes that the record demonstrates the regulatory language in the 
phase one final rule concerning the exemption for low-stress pipelines 
subject to USCG regulation was an inadvertent error and that error has 
been corrected in this final rule.
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    \4\ Federal Register, September 6, 2006, 71 FR 52505.
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    API-AOPL and the Independent Petroleum Association of America 
suggested that PHMSA exclude low-stress carbon dioxide (CO2) 
pipelines involved in enhanced oil recovery and/or carbon capture and 
storage. The associations noted that these pipelines pose different 
risks from petroleum pipelines, that releases from low-stress 
CO2 pipelines would not require the cleanup that would be 
associated with releases from crude oil or refined petroleum product 
pipelines, and that new requirements on CO2 lines could have 
a chilling effect on future investment in such pipelines. PHMSA notes 
that these factors were not raised in comments on the phase one rule 
even though the phase one rule applies to rural low-stress 
CO2 pipelines. PHMSA never proposed such an exclusion and 
also considers it inappropriate to exclude some rural low-stress 
CO2 pipelines from safety regulation while regulating others 
(i.e., those subject to the phase one final rule), and has not 
incorporated the suggested exclusion in this final rule.
    API-AOPL also objected to the proposed requirement that a pipeline 
segment subject to IM requirements must remain subject to those 
requirements if subsequent changes to USA boundaries result in it being 
more than one-half mile from a USA. They contended this requirement is 
inappropriate and unsupported. They stated:

    ``[i]f future analyses demonstrate that a segment could affect a 
USA that it previously could not affect, an operator is 
appropriately required to apply IMP requirements to that segment. 
Likewise, if a segment no longer could affect a USA, it is only 
equitable that an operator need not apply the additional protection 
of such plans to the segment.''

    PHMSA would agree if the operator of a rural low-stress pipeline 
were, indeed, required to analyze its pipelines to determine which 
segments could affect a USA. They are not. This final rule uses a one-
half mile buffer as a surrogate for these expensive and complex 
analyses, as did the phase one rule. While PHMSA considers this a 
reasonable surrogate, it is possible, though unlikely, that a pipeline 
segment slightly less than one-half mile from a USA could not affect 
that USA and it is similarly possible that a pipeline segment slightly 
more than one-half mile distant could affect a USA. Thus, eliminating 
IM requirements that already apply solely because the distance to a USA 
has increased above one-half mile is not appropriate. Operators always 
have the option to perform an analysis to demonstrate that any pipeline 
segment could not affect a USA, in which case IM requirements need not 
apply regardless of the distance from a USA. Operators who experience a 
change in USA boundaries could exercise this option to remove a 
pipeline segment from IM scope. If the change in USA boundaries is 
significant (e.g., the USA ceases to exist), demonstrating that a 
segment could not affect a USA could be a simple analysis. PHMSA has 
retained in this final rule the requirement that a pipeline segment 
determined to be subject to IM requirements due to proximity to a USA 
must remain subject to those requirements if boundary changes result in 
more than one-half mile separation, absent a demonstration that the 
segment could not affect a USA.
    Thomas Lael Services, L.P., a pipeline consultant, suggested 
changes to the regulatory language to improve clarity. Specifically, 
Lael suggested that proposed Sec. Sec.  195.12(c)(2)(i) and 
195.12(c)(3)(i) be modified to refer specifically to the criteria 
defining the pipeline segments for which identification is required. 
PHMSA agrees that this change would improve the clarity of the 
regulatory language and has revised the final rule accordingly.
    Lael also suggested that the provision allowing the operator of a 
Category 1 rural low-stress pipeline to notify PHMSA of undue economic 
burden should be extended to operators of Category 2 rural low-stress 
pipelines. Lael noted that revenue is less for these smaller-diameter 
pipelines while costs are the same, increasing the importance of 
considering economic burden. Lael cites costs associated with 
patrolling the pipeline and performing pipe-to-soil potential readings 
as examples. These requirements, however, are outside the scope of the 
economic burden provision. That provision allows an operator of a 
Category 1 rural low-stress pipeline to notify PHMSA if the economic 
burden of complying with IM assessment requirements, not other 
provisions as cited by Lael, would be sufficient to cause the operator 
to shut down its pipeline. The provision is applicable only to 
pipelines carrying crude oil from a production facility (among other 
criteria). Pipelines of 8\5/8\ inches or less nominal outside 
diameter--the size that would

[[Page 25580]]

categorize a rural low-stress pipeline as Category 2--and that carry 
crude oil from a production facility are, by definition, gathering 
pipelines. Gathering pipelines, as noted above, are not subject to the 
provisions of Sec.  195.12 and are not subject to IM requirements. 
Thus, PHMSA concludes that no change to the economic burden provision 
is needed.
    Lael also suggested that the time allowed for operators to identify 
Category 2 and 3 rural low-stress pipelines be extended to 12 months 
from the proposed nine months. Lael noted that this would correct an 
apparent inconsistency with discussion in the NPRM preamble noting the 
proposed timeframes were the same as those required in phase one; 
therefore, 12-month timeframes were being proposed for operators of 
Category 2 and 3 rural low-stress pipelines in instances where 12 
months was required of operators of Category 1 rural low-stress 
pipelines. There is no inconsistency. The NPRM preamble discussion 
cited by Lael clearly uses 12 months only as an example. The phase one 
rule required operators of Category 1 rural low-stress pipelines to 
identify pipeline segments meeting the criteria in the rule before nine 
months after the effective date of the phase 1 rule. Nine months is 
also required for Category 2 and 3 rural low-stress pipelines in this 
final rule, thus affording the consistency discussed in the NPRM.
    Lael also questioned the logic of a statement in the phase two NPRM 
that available data showed that the largest spill on land from a low-
stress pipeline traveled two acres and that this justified a one-half 
mile buffer as a surrogate for analyses of whether a pipeline segment 
could affect a USA. Lael noted that an acre is a measure of area rather 
than a measure of distance. PHMSA agrees that the NPRM statement was 
unclear about the assumptions we used to conclude that this data 
demonstrated a one-half mile buffer was adequate. PHMSA considered that 
a spill covering two acres would need to be limited to 35 feet in width 
over its entire length if it were to extend one-half mile from the 
pipeline. We concluded that it was unlikely that a spill would behave 
in this manner and that based on the data we could conclude that a one-
half mile buffer was adequate. PHMSA has revised the discussion in the 
preamble of this final rule to better explain its reasoning.
    API-AOPL raised a number of concerns regarding the draft regulatory 
analysis and regulatory flexibility (i.e., small business) analysis 
supporting the NPRM. These included use of data from parent companies 
rather than distinct operating subsidiaries in determining whether 
small businesses could be affected and use of inappropriate data to 
estimate costs. These comments have been addressed in the final 
regulatory analysis that is included in the rulemaking docket.
    Finally, NTSB suggested that PHMSA should be given sole 
jurisdiction over offshore pipelines on the outer continental shelf. 
NTSB noted, in making this suggestion, that regulation of offshore 
pipelines was outside the scope of this NPRM. PHMSA agrees that changes 
in PHMSA jurisdiction over offshore pipelines are beyond the scope of 
this proceeding.

Consideration by Technical Hazardous Liquid Pipeline Safety Standards 
Committee

    On December 3, 2010, PHMSA discussed the proposed rule with the 
Technical Hazardous Liquid Pipeline Safety Standards Committee 
(THLPSSC). The THLPSSC is a statutorily mandated advisory committee 
that advises PHMSA about the technical feasibility, reasonableness and 
cost-effectiveness of its proposed regulations. PHMSA discussed the 
comments received in response to the NPRM (e.g., concerns over effect 
on pipelines excluded from regulation and on rural gathering 
pipelines). These comments have been previously discussed in this 
document.
    After careful consideration, the THLPSSC voted unanimously to find 
the NPRM and supporting regulatory evaluation technically feasible, 
reasonable, practicable, and cost effective. A transcript of the 
meeting is available in the docket for this rulemaking.

Final Rule

    This final rule revises 49 CFR part 195 to cover: (1) Rural onshore 
low-stress pipelines with a diameter smaller than 8\5/8\ inches located 
in or within one-half mile of a USA and (2) rural onshore low-stress 
pipelines of any diameter located more than one-half mile from a USA. 
With the publication of this final rule, and with limited exceptions, 
all low-stress pipelines regardless of location or size are now subject 
to the pipeline safety regulations. The final rule continues in place 
the one-half mile buffer to be used as the ``could affect'' area for 
application of IM requirements.
    Our phased approach resulted in several distinct groups of rural 
low-stress pipelines:
     Rural low-stress pipelines that cross navigable waterways. 
These have historically been subject to the safety requirements of Part 
195. These pipelines were not affected by phase one and are not 
affected by this rulemaking.
     Rural low-stress pipelines 8\5/8\ inches or greater in 
diameter that are located in or within one-half mile of a USA. The 
requirements of Part 195 were made applicable to these rural pipelines 
in the phase one rule.
     Rural low-stress pipelines less than 8\5/8\ inches in 
diameter that are located in or within one-half mile of a USA. These 
pipelines are made subject to the safety requirements of Part 195, 
including the IM requirements in Sec.  195.452, by this final rule.
     Rural low-stress pipelines of any diameter that are 
located more than one-half mile from a USA. These pipelines are also 
made subject to the safety requirements of Part 195, excluding the IM 
requirements in Sec.  195.452, by this final rule.
    The phase one rule established a number of compliance deadlines for 
the rural pipelines it addressed, now referred to as Category 1 rural 
low-stress pipelines. These deadlines varied from relatively near term 
(e.g., identifying all pipeline segments subject to the phase one rule 
by April 3, 2009) to long term (e.g., completing baseline IM 
assessments by July 3, 2015). This final rule retains the compliance 
deadlines established in phase one for Category 1 rural low-stress 
pipelines. This rule subjects Category 2 rural low-stress pipelines to 
the same Part 195 requirements as those made applicable to Category 1 
pipelines in phase one but with different compliance deadlines. 
Finally, this rule applies all requirements of Part 195 to Category 3 
rural low-stress pipelines except for the IM requirements of Sec.  
195.452. Consistent with the phase one rule, pipeline segments will 
have to be identified within nine months of publication of this final 
rule, baseline IM assessments will have to be completed within five 
years of publication of the final rule, compliance with the 
requirements of subpart H of Part 195, Corrosion Control, will have to 
occur within three years and compliance with all other applicable 
requirements will have to occur with 12 months of publication of the 
final rule.
    This final rule includes, as did the phase one rule, an option for 
operators to determine which pipeline segments are subject to IM 
requirements by performing analyses to determine whether pipeline 
segments could affect a USA in lieu of using the one-half-mile buffer.
    This rule includes, as did the phase one rule, a provision 
addressing newly

[[Page 25581]]

identified USAs. Such new USAs could result in additional pipeline 
segments meeting criteria for Category 1 or 2 rural low-stress 
pipelines and thus become subject to IM requirements. This final rule 
requires that pipeline segments identified as Category 1 or 2 continue 
to meet the requirements applicable to those Categories even if the 
boundaries of a USA are redefined so that the pipeline segment (or 
portion thereof) is no longer within one-half mile of the USA unless 
the operator determines that the segment could not affect the USA. This 
provision adds no additional burden because pipeline operators may 
simply continue to treat their pipelines as they would have without the 
redefinition of USA boundaries.

Section-by-Section Analysis

Section 195.1

Which pipelines are covered by this Part?
    Section 195.1 has been revised numerous times over the years to 
include changes to the pipelines covered or excluded from the scope of 
Part 195. Section 195.1 was revised in the phase one rule to provide 
more clarity and to include the phase one rural low-stress pipelines 
within the scope of Part 195. This final rule revises Sections 195.1(a) 
and (b) to include the rural low-stress pipelines brought under Part 
195 regulations in phase two. The changes to this section do not affect 
any of the other covered or excluded pipelines previously identified in 
Sec.  195.1.
    This final rule also corrects an inadvertent error to Sec.  195.1 
that was introduced by the changes made under the phase one rule. The 
error concerns the long-standing exception for low-stress pipelines 
subject to the regulations of the USCG. Under the phase one rule, Sec.  
195.1 was incorrectly revised to state that Part 195 does not apply to 
any pipeline subject to the safety regulations of the USCG. In this 
final rule, we are correcting Sec.  195.1 to state again that Part 195 
does not apply to any low-stress pipeline subject to the safety 
regulations of the USCG.

Section 195.12

What requirements apply to low-stress pipelines in rural areas?
    This Section is being revised to clarify that all previously 
unregulated low-stress pipelines in rural areas are now covered under 
Part 195 regulation. This Section does not apply to rural low-stress 
pipelines that cross a waterway used for commercial navigation because 
they have been regulated under Part 195 before either of the 
rulemakings addressing rural low-stress pipelines.
    This section has been revised to define three categories of rural 
low-stress pipelines (Section 195.12(b)):
     Category 1 lines are those that were regulated in phase 
one (i.e., rural low-stress pipelines with a diameter of 8\5/8\ inches 
or more located in or within one-half mile of a USA).
     Category 2 pipelines are those rural low-stress pipelines 
of smaller diameter (less than 8\5/8\ inches) located in or within one-
half mile of a USA.
     Category 3 are all remaining rural low-stress pipelines 
except for those that cross navigable waterways (which are already 
regulated under Sec.  195.1 and are not addressed in Sec.  195.12).
    Section 195.12(c) also sets forth the required deadlines for 
compliance with various portions of Part 195. The compliance deadlines 
established by the phase one final rule for Category 1 rural low-stress 
pipelines remain unchanged. Except for the compliance deadlines for the 
completion of baseline IM assessments, this final rule establishes 
deadlines for Category 2 and Category 3 rural low-stress pipelines in 
the same manner as was done for Category 1 pipelines. For example, 
operators of Category 1 rural low-stress pipelines were required to 
identify these pipelines within nine months of the effective date of 
the phase one final rule and this final rule requires the same nine-
month time frame for an operator of a Category 2 or Category 3 rural 
low-stress pipeline. In phase one, PHMSA adopted a compliance deadline 
of three and one-half years for completing 50% of baseline IM 
assessments and seven years for completing all baseline assessments. 
PHMSA concluded that it was appropriate to reduce the compliance 
deadlines for these requirements for the pipelines covered by this 
final rule considering the amount of time that has transpired since the 
passage of the PIPES Act and the relatively small number of miles that 
would be subject to these requirements. Thus, this final rule requires 
that operators of Category 2 pipelines complete all baseline IM 
assessments within five years of the effective date of the final rule 
and that at least 50 percent of the assessments be completed within two 
and one-half years.
    As discussed above, PHMSA did not change the provision allowing 
operators of some Category 1 rural low-stress pipelines to notify PHMSA 
if they conclude that implementing the IM assessment requirements would 
pose such an economic burden that they would abandon their pipelines. 
This provision continues to be limited to Category 1 rural low-stress 
pipelines carrying crude oil from production facilities and where 
shutdown of the pipeline would cause loss of oil supply or a transition 
to truck transportation. PHMSA (with assistance from DOE, as 
appropriate) will review notifications and, if justified, may grant the 
operator a special permit to allow continued operation of the pipeline 
subject to alternative safety requirements.
    PHMSA's reasoning for not extending the provision to Category 2 
pipelines is based on the definition of ``gathering line'' in Sec.  
195.2. That Section defines any ``pipeline 219.1 mm (8\5/8\ inch) or 
less nominal outside diameter that transports petroleum from a 
production facility'' as a gathering line. Gathering lines are not 
subject to the provisions of Sec.  195.12. Instead, requirements 
applicable to regulated rural gathering lines are found in Sec.  
195.11, and do not include IM requirements. As a result, no rural low-
stress pipeline of 8\5/8\ inch or less nominal diameter that carries 
crude oil from a production facility is subject to IM requirements, and 
it is not necessary to provide an economic burden provision for these 
pipelines to ameliorate unintended impacts on production.

Section 195.48 Scope

    This Section was added in the phase one final rule. There had not 
previously been a scope Section in Subpart B because all pipelines 
subject to Part 195 were subject to all the reporting requirements in 
Subpart B. This Section was added in phase one because the reporting 
requirements of Subpart B were made applicable to all rural low-stress 
pipelines, even those not subject to the safety requirements of the 
phase one rule. Operators of those rural low-stress pipelines not 
subject to the technical requirements of Part 195 under phase one were 
not required to complete those portions of the annual report form that 
relate to IM requirements and inspections.
    With this final rule, all rural low-stress pipelines are now 
subject to all requirements of Part 195, except that Category 3 
pipelines are not subject to the IM requirements in Sec.  195.452. The 
exclusion of portions of the annual report form related to IM has 
therefore been modified to apply only to operators of Category 3 
pipelines.

Regulatory Analyses and Notices

Executive Order 12866 and DOT Policies and Procedures

    PHMSA considers this final rule a non-significant regulatory action 
under Section 3(f) of Executive Order 12866

[[Page 25582]]

(58 FR 51735; Oct. 4, 1993). The rule is also non-significant under DOT 
regulatory policies and procedures (44 FR 11034: February 26, 1979). 
PHMSA prepared a Regulatory Evaluation, a copy of which has been placed 
in the docket.
    This final rule affects those rural low- stress pipelines of any 
diameter that are more than one-half mile outside a USA and rural low-
stress pipelines less than 8\5/8\ inches in diameter that are located 
in or within one-half mile of a USA. The following table presents the 
estimates for the mileage affected by this rulemaking:
 Phase Two Eligible Mileage

------------------------------------------------------------------------
                                                   Miles         Miles
              Pipeline  diameter                 inside USA  outside USA
------------------------------------------------------------------------
< 8\5/8\''....................................        100.5        443.2
>= 8\5/8\''...................................           NA        840.6
------------------------------------------------------------------------

    Four sources of mileage data that provide varying levels of detail 
were analyzed to derive these final mileage estimates:
     The Regulatory Analysis for the low-stress phase 1 final 
rule by PHMSA published in August 2006.
     A survey of operators of low-stress pipelines.
     The annual mileage data pipeline operators report to 
PHMSA.
     Mileage estimates reported to the NPMS.
    PHMSA concluded that the estimate of 5,624 miles of rural low-
stress pipeline made in the phase one regulatory analysis was a high-
end estimate. The results of the survey PHMSA conducted identified 
1,575 miles and the NPMS reports 1,672.9 miles, with the NPMS data 
excluding both intra-plant miles and lines regulated in phase one. The 
PHMSA annual report database includes 1,536 newly-reported low-stress 
rural miles. Since the data collected in the survey includes a variety 
of other information used in this analysis, including characteristics 
of the reported mileage, it was used for phase two rural low-stress 
pipeline mileage estimates. Distribution percentages and assumptions 
relating to the three phase two rural low-stress pipeline segments 
result in a slightly lower estimate of total miles than the original 
estimate that resulted from the survey data. This final estimate is 
approximately 1,384 miles of eligible rural low-stress pipeline.

Costs of the Regulation

    PHMSA estimates the 30-year net present values \5\ of compliance 
costs for this final rule to be $104.9 million. The operators of the 
pipelines affected by the regulatory changes included in the final rule 
are expected to incur costs attributable to those changes. The costs of 
the rulemaking will be those associated with bringing the affected 
pipelines into compliance with Part 195, which has the following eight 
Subparts:

 Subpart A--General
 Subpart B--Annual, Accident, and Safety-Related Condition 
Reporting
 Subpart C--Design Requirements
 Subpart D--Construction
 Subpart E--Pressure Testing
 Subpart F--Operation and Maintenance
 Subpart G--Qualification of Pipeline Personnel
 Subpart H--Corrosion Control

    In addition, operators of the low-stress pipelines brought under 
Part 195 would also need to comply with 49 CFR part 199, the alcohol 
and drug testing requirements.

Benefits of the Regulation

    The 30-year net present value of benefits of this final rule is 
$326.5 million. PHMSA expects the regulatory changes to reduce the 
number of incidents and the incident costs and consequences. The 
ability of the final rule to reduce or avoid these costs is considered 
to be the primary benefit of the regulation and is referred to as 
traditional benefits. Data on incident costs for rural low-stress 
pipelines are generally not available because PHMSA has not regulated 
these pipelines in the past. Moreover, the reduction in costs that the 
regulation would cause is also unknown. The final 30-year net present 
values of benefits of this final rule are $326.5 million.
    This final rule also may produce benefits by preventing disruptions 
in the fuel supply caused by pipeline failures. Any interruption in the 
fuel supply impacts the U.S. economy by putting upward pressure on the 
prices paid by businesses and consumers, as incidents on Alaskan low-
stress pipelines feeding major petroleum trunk lines have illustrated. 
Supply disruptions also have national security implications because 
they increase dependence on foreign sources of oil.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980, as amended, requires 
Federal agencies to conduct a separate analysis of the economic impact 
of rules on small entities. The Regulatory Flexibility Act requires 
that Federal agencies take small entities' concerns into account when 
developing, writing, publicizing, promulgating, and enforcing 
regulations.

Need for Final Rule

    This final rule covers certain rural onshore low-stress hazardous 
liquid pipelines. Beginning in 1991, Congress paid greater attention to 
the risks that hazardous liquid and natural gas pipelines pose to the 
environment. In the Pipeline Safety Act of 1992 (Pub. L. 102-508), 
Congress gave DOT greater authority to protect the environment from 
risks posed by pipelines. Congress continued to emphasize the need to 
better protect the environment from the risks pipelines pose in the 
Accountable Pipeline Safety and Partnership Act of 1996 (Pub. L. 104-
304). With the PIPES Act of 2006 (Pub. L. 109-468), Congress went 
further and instructed DOT to apply all Part 195 requirements to 
unregulated rural low-stress pipelines.
    PHMSA decided to apply Part 195 requirements to rural low-stress 
pipelines as a two-phase process. The phase one rulemaking covered 
large diameter pipe (greater than or equal to 8\5/8\ inches in 
diameter) located in or within one-half mile of a USA. These were the 
higher-risk rural low-stress pipelines. This final rule addresses the 
remaining unregulated rural low-stress pipelines.

Description of Actions

    PHMSA is bringing the remaining rural onshore low-stress pipelines 
not regulated by phase one under the safety regulations of 49 CFR part 
195. These lines include rural low-stress pipelines with a diameter of 
less than 8\5/8\ inches that are within one-half mile of a USA and 
rural low-stress pipelines of any size diameter that are outside of the 
one-half mile USA buffer.

Related Federal Rules and Regulations

    There are currently no related rules or regulations issued by other 
departments or agencies of the Federal Government.

Identification of Potentially Affected Small Entities

    In accordance with size standards published by the Small Business 
Administration, a pipeline transportation business with 1,500 or fewer 
employees is considered a small entity.\6\ Depending on the products 
being transported, low-stress pipeline operators belong to the North 
American Industry Classification System Code (NAICS) 486110, Pipeline 
Transportation of Crude Oil, or NAICS 486910, Pipeline Transportation 
of Refined Petroleum Products. For both NAICS codes, a business with 
1,500 or

[[Page 25583]]

fewer employees is considered a small entity.
    PHMSA made an extensive effort to identify small and other 
operators of rural low-stress lines. PHMSA surveyed these operators to 
get better information about the number of miles and compliance costs 
of rural hazardous liquid low-stress pipelines.
    To ensure that the response rate was maximized, PHMSA publicized 
its plans to conduct the survey in (1) a 60-day Federal Register (FR) 
notice published on September 6, 2006, (71 FR 52504) and (2) a 30-day 
FR notice published on September 7, 2007, (72 FR 51489). No comments 
were submitted to either notice. PHMSA then announced the availability 
of the survey in a FR notice published on July 31, 2008, (73 FR 44800).
    PHMSA delivered the survey and a letter explaining the importance 
of the study via three methods:
    1. A version of the survey that allowed operators to directly input 
responses was posted on the PHMSA OPS Online Data Entry Web site 
(ODES). An e-mail announcing the survey was sent to the contact person 
responsible for each company's most recent annual report submission.
    2. Respondents were also able to print an electronic version of the 
survey directly from the e-mail received and mail or fax a completed 
hard copy to the Volpe National Transportation Systems Center (Volpe 
Center).
    3. Finally, in an effort to reach companies that currently operate 
unregulated pipelines exclusively, PHMSA and the Volpe Center worked 
with the American Petroleum Institute, the Association of Oil Pipelines 
and the Independent Petroleum Association of America to announce and 
distribute the survey to their members via their email newsletters.
    Of the 112 operators that responded, 20 reported rural low-stress 
pipeline mileage. PHMSA then conducted additional follow-up discussions 
with these operators. Only 12 of the 20 operators were identified as 
actually having rural low-stress pipeline mileage that would be 
addressed by the phase two rulemaking. Two of the 12 relevant operators 
are owned by the same parent company. Therefore, there are 11 
businesses that may be potentially affected by this rule.
    In order assess the potential business compliance impact, 
information on the size of the ultimate parent companies for the 
potentially affected pipeline operators was collected from a 
compilation of Dun & Bradstreet data, online company profiles, and 
direct phone calls. This use of data for the ultimate parent enterprise 
is consistent with the Regulatory Flexibility Act which directs Federal 
agencies to use the U.S. Small Business Administration's (SBA) 
definition of a small business. The SBA's definition of a small 
business considers a firm's parent company and all affiliates to be a 
single entity. The enterprise name, number of employees, revenues, 
profits, compliance costs and affected mileage are listed in the 
following table.

[[Page 25584]]

[GRAPHIC] [TIFF OMITTED] TR05MY11.129

    The table above shows that three of the 11 enterprises employ less 
than 1,500 persons and are thus considered small entities. The cost 
estimation analysis, described in the Regulatory Analysis, concluded 
that the rural low-

[[Page 25585]]

stress mileage held by two of these operators is already in compliance 
with Part 195. Therefore, these two small entities will not be 
adversely affected by the rulemaking. The other small entity, which has 
four miles of affected rural low- stress mileage, reports an initial 
compliance cost of $475,000 and recurring costs of $100,000 every five 
years.

Alternate Proposals for Small Businesses

    The Regulatory Flexibility Act directs agencies to establish 
exceptions and differing compliance standards for small businesses, 
where it is possible to do so, and still meet the objectives of 
applicable regulatory statutes.
    The phase two Regulatory Analysis analyzes six regulatory 
alternatives. They are as follows:
    Alternative 1: Apply all Part 195 requirements to all eligible 
rural low-stress pipelines.
    Alternative 2: Apply all Part 195 requirements to small diameter 
rural low-stress pipelines located in or within one-half mile of a USA.
    Alternative 3: Apply all Part 195 requirements to rural low-stress 
pipelines equal to or greater than 8\5/8\ inches in diameter located 
farther than one-half mile from a USA.
    Alternative 4: Apply all Part 195 requirements to rural low-stress 
pipelines less than 8\5/8\ inches in diameter outside one-half mile of 
a USA.
    Alternative 5: Apply all Part 195 requirements except Subpart H 
(Corrosion Control) to all rural low-stress pipelines not currently 
regulated.
    Alternative 6: Apply all Part 195 requirements except the IM 
Program to all rural low-stress pipelines not currently regulated.
    Alternative 1 is the alternative that PHMSA has selected. This 
alternative not only complies with the statutory requirement but also 
increases the level of safety and environmental protection associated 
with the transportation of hazardous liquids through low-stress 
pipelines to a level commensurate with other pipelines that are already 
subject to the pipeline safety regulations.

Conclusion

    From the information we have gathered, this final rule will have an 
economic impact on one known small entity. Therefore, under Section 605 
of the Regulatory Flexibility Act, this final rule will not have a 
significant impact on a substantial number of small entities.

Executive Order 13175

    PHMSA has analyzed this final rule according to the principles and 
criteria in Executive Order 13175, ``Consultation and Coordination with 
Indian Tribal Governments.'' Because this final rule would not 
significantly or uniquely affect the communities of the Indian tribal 
governments or impose substantial direct compliance costs, the funding 
and consultation requirements of Executive Order 13175 do not apply.

Paperwork Reduction Act

    Pursuant to 5 CFR 1320.8(d), PHMSA used the NPRM to provide 
interested members of the public and affected agencies with an 
opportunity to comment on information collection and recordkeeping 
requests. PHMSA identified four information collections that would bear 
some impact as a result of this rulemaking. No comments were received. 
Upon review of the burden impacts on the identified information 
collection requests, PHMSA believes that the minimal impact to these 
information collections do not warrant revisions to the currently 
approved information collections.
    The following information is provided for each information 
collection: (1) Title of the information collection; (2) OMB control 
number; (3) type of request; (4) abstract of the information collection 
activity; (5) description of affected public; (6) estimate of total 
annual reporting and recordkeeping burden; and (7) frequency of 
collection. PHMSA estimates that based on the requirements in this 
rule, the current information collection burden for the following 
information collections will remain as follows:
    Title of information Collection: Transportation of Hazardous 
Liquids by Pipeline: Recordkeeping and Accident Reporting.
    OMB Control Number: 2137-0047.
    Type of Request: Revision of a currently approved information 
collection.
    Abstract: Hazardous liquid pipeline operators must keep records to 
ensure that their pipelines are operated safely. Operators must also 
report accidents.
    Type of Respondents: Hazardous Liquid Operators.
    Total Annual Responses: 847.
    Total Annual Burden Hours: 51,329 hours.
    Frequency of Collection: On occasion.

    Title of information Collection: National Pipeline Mapping Program.
    OMB Control Number: 2137-0596.
    Type of Request: Revision of a currently approved information 
collection.
    Abstract: The operator of a pipeline facility (except distribution 
lines and gathering lines) provides information to PHMSA on the 
characteristics of its pipeline system. The submitted information 
includes updates to annual mapping information for each mile of 
pipeline.
    Type of Respondents: Pipeline Facility Operators (except 
distribution lines and gathering lines).
    Total Annual Responses: 894.
    Total Annual Burden Hours: 16,312 hours.
    Frequency of Collection: Annual.

    Title of information Collection: Pipeline Integrity Management in 
High Consequence Areas (Operators with less than 500 Miles of Hazardous 
Liquid Pipelines).
    OMB Control Number: 2137-0605.
    Type of Request: Revision of a currently approved information 
collection.
    Abstract: Hazardous Liquid Operators with less than 500 miles of 
Pipelines are required to continually assess and evaluate the integrity 
of their pipeline through inspection or testing. Such operators must 
also implement remedial, preventive, and mitigative actions on these 
pipelines.
    Type of Respondents: Hazardous Liquid Operators (with less than 500 
miles of pipelines).
    Total Annual Responses: 132.
    Total Annual Burden Hours: 267,960 hours.
    Frequency of Collection: On occasion.

    Title of information Collection: Public Awareness Program.
    OMB Control Number: 2137-0622.
    Type of Request: Revision of a currently approved information 
collection.
    Abstract: Current regulations require pipeline operators to develop 
and implement public awareness programs. Public awareness and 
understanding of pipeline operations is vital to the continued safe 
operation of pipelines. Upon request, operators must submit their 
completed programs to PHMSA or, in the case of an intrastate pipeline 
facility operator, the appropriate state agency.
    Type of Respondents: Pipeline Operators.
    Total Annual Responses: 22,500.
    Total Annual Burden Hours: 517,480 hours.
    Frequency of Collection: On occasion.
    Any questions regarding these information collections should be 
directed to Cameron Satterthwaite, Office of Pipeline Safety (PHP-30), 
Pipeline and Hazardous Materials Safety Administration (PHMSA), 2nd 
Floor,

[[Page 25586]]

1200 New Jersey Avenue, SE., Washington, DC 20590-0001, SW., 
Washington, DC 20590-0001, Telephone 202-366-8553.

Unfunded Mandates Reform Act of 1995

    This final rule does not impose unfunded mandates under the 
Unfunded Mandates Reform Act of 1995. It does not result in costs of 
$141.3 million or more to either state, local, or tribal governments, 
in the aggregate, or to the private sector, and is the least burdensome 
alternative that achieves the objective of the regulatory action.

National Environmental Policy Act

    The National Environmental Policy Act requires Federal agencies to 
integrate environmental values into their decision making processes by 
considering the environmental impacts of their proposed actions and 
reasonable alternatives to those actions. PHMSA conducted an 
environmental assessment of the application of phase two safety 
regulations to rural onshore hazardous liquid pipelines. This 
environmental assessment examined the environmental impacts of the 
requirements proposed in the NPRM, and reasonable alternatives to those 
actions, on the environment.
    The environmental assessment found that the NPRM requirements would 
not significantly affect the quality of the environment. Only limited 
physical modification or other work that would disturb pipelines would 
be required, 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 programs. The 
environmental assessment preliminarily concluded the expected 
reductions in hazardous liquid spills are a minor to moderate positive 
environmental impact offsetting the negligible negative environmental 
impacts associated with implementing the rulemaking. The full final 
environmental assessment is available for review in the public docket. 
We did not receive any comment on the assessment or preliminary 
conclusion. Therefore, we conclude that this rulemaking will not result 
in any significant negative or positive environmental impacts affecting 
the quality of the human environment.

Executive Order 13132

    PHMSA has analyzed this final rule according to the principles and 
criteria contained in Executive Order 13132 (``Federalism''). This 
final rule would not (1) have 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) impose substantial direct compliance costs on state and 
local governments; or (3) preempt state law. Therefore, the 
consultation and funding requirements of Executive Order 13132 do not 
apply.

Executive Order 13211

    This final rule is not a ``significant energy action'' under 
Executive Order 13211. It is not likely to have a significant adverse 
effect on the supply, distribution, or use of energy. Furthermore, this 
final rule has not been designated by the Administrator of the Office 
of Information and Regulatory Affairs as a significant energy action.

List of Subjects in 49 CFR Part 195

    Regulated rural gathering, Rural low-stress pipelines.

    For the reasons provided in the preamble, PHMSA amends 49 CFR Part 
195 as follows:

PART 195--TRANSPORTATION OF HAZARDOUS LIQUIDS BY PIPELINE

0
1. The authority citation for Part 195 continues to read as follows:

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


0
2. Section 195.1 is revised to read as follows:


Sec.  195.1  Which pipelines are covered by this Part?

    (a) Covered. Except for the pipelines listed in paragraph (b) 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). 
Covered pipelines include, but are not limited to:
    (1) Any pipeline that transports a highly volatile liquid;
    (2) Any pipeline segment that crosses a waterway currently used for 
commercial navigation;
    (3) Except for a gathering line not covered by paragraph (a)(4) of 
this Section, any pipeline located in a rural or non-rural area of any 
diameter regardless of operating pressure;
    (4) Any of the following onshore gathering lines used for 
transportation of petroleum:
    (i) A pipeline located in a non-rural area;
    (ii) A regulated rural gathering line as provided in Sec.  195.11; 
or
    (iii) A pipeline located in an inlet of the Gulf of Mexico as 
provided in Sec.  195.413.
    (b) Excepted. 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) Transportation of a hazardous liquid through any of the 
following low-stress pipelines:
    (i) A pipeline subject to safety regulations of the U.S. Coast 
Guard; or
    (ii) A pipeline that serves refining, manufacturing, or truck, 
rail, or vessel terminal facilities, if the pipeline is less than one 
mile long (measured outside facility grounds) and does not cross an 
offshore area or a waterway currently used for commercial navigation;
    (4) Transportation of petroleum through an onshore rural gathering 
line that does not meet the definition of a ``regulated rural gathering 
line'' as provided in Sec.  195.11. This exception does not apply to 
gathering lines in the inlets of the Gulf of Mexico subject to Sec.  
195.413;
    (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 Sec.  190.9 of this 
chapter, for approval to operate under PHMSA regulations governing 
pipeline design, construction, operation, and maintenance;
    (8) Transportation of 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;

[[Page 25587]]

    (9) Transportation of 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.
    (c) Breakout tanks. 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).


0
3. Section 195.12 is revised to read as follows:


Sec.  195.12  What requirements apply to low-stress pipelines in rural 
areas?

    (a) General. This Section sets forth the requirements for each 
category of low-stress pipeline in a rural area set forth in paragraph 
(b) of this Section. This Section does not apply to a rural low-stress 
pipeline regulated under this Part as a low-stress pipeline that 
crosses a waterway currently used for commercial navigation; these 
pipelines are regulated pursuant to Sec.  195.1(a)(2).
    (b) Categories. An operator of a rural low-stress pipeline must 
meet the applicable requirements and compliance deadlines for the 
category of pipeline set forth in paragraph (c) of this Section. For 
purposes of this Section, a rural low-stress pipeline is a Category 1, 
2, or 3 pipeline based on the following criteria:
    (1) A Category 1 rural low-stress pipeline:
    (i) Has a nominal diameter of 8\5/8\ inches (219.1 mm) or more;
    (ii) Is located in or within one-half mile (.80 km) of an unusually 
sensitive area (USA) as defined in Sec.  195.6; and
    (iii) Operates at a maximum pressure established under Sec.  
195.406 corresponding to:
    (A) A stress level equal to or less than 20-percent of the 
specified minimum yield strength of the line pipe; or
    (B) 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) gauge.
    (2) A Category 2 rural pipeline:
    (i) Has a nominal diameter of less than 8\5/8\ inches (219.1mm);
    (ii) Is located in or within one-half mile (.80 km) of an unusually 
sensitive area (USA) as defined in Sec.  195.6; and
    (iii) Operates at a maximum pressure established under Sec.  
195.406 corresponding to:
    (A) A stress level equal to or less than 20-percent of the 
specified minimum yield strength of the line pipe; or
    (B) 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.
    (3) A Category 3 rural low-stress pipeline:
    (i) Has a nominal diameter of any size and is not located in or 
within one-half mile (.80 km) of an unusually sensitive area (USA) as 
defined in Sec.  195.6; and
    (ii) Operates at a maximum pressure established under Sec.  195.406 
corresponding to a stress level equal to or less than 20-percent of the 
specified minimum yield strength of the line pipe; or
    (iii) 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.
    (c) Applicable requirements and deadlines for compliance. An 
operator must comply with the following compliance dates depending on 
the category of pipeline determined by the criteria in paragraph (b):
    (1) An operator of a Category 1 pipeline must:
    (i) Identify all segments of pipeline meeting the criteria in 
paragraph (b)(1) of this Section before April 3, 2009.
    (ii) Beginning no later than January 3, 2009, comply with the 
reporting requirements of Subpart B for the identified segments.
    (iii) IM requirements--
    (A) Establish a written program that complies with Sec.  195.452 
before July 3, 2009, to assure the integrity of the pipeline segments. 
Continue to carry out such program in compliance with Sec.  195.452.
    (B) An operator may conduct a determination per Sec.  195.452(a) in 
lieu of the one-half mile buffer.
    (C) Complete the baseline assessment of all segments in accordance 
with Sec.  195.452(c) before July 3, 2015, and complete at least 50-
percent of the assessments, beginning with the highest risk pipe, 
before January 3, 2012.
    (iv) Comply with all other safety requirements of this Part, except 
Subpart H, before July 3, 2009. Comply with the requirements of Subpart 
H before July 3, 2011.
    (2) An operator of a Category 2 pipeline must:
    (i) Identify all segments of pipeline meeting the criteria in 
paragraph (b)(2) of this Section before July 1, 2012.
    (ii) Beginning no later than January 3, 2009, comply with the 
reporting requirements of Subpart B for the identified segments.
    (iii) IM--
    (A) Establish a written IM program that complies with Sec.  195.452 
before October 1, 2012 to assure the integrity of the pipeline 
segments. Continue to carry out such program in compliance with Sec.  
195.452.
    (B) An operator may conduct a determination per Sec.  195.452(a) in 
lieu of the one-half mile buffer.
    (C) Complete the baseline assessment of all segments in accordance 
with Sec.  195.452(c) before October 1, 2016 and complete at least 50-
percent of the assessments, beginning with the highest risk pipe, 
before April 1, 2014.
    (iv) Comply with all other safety requirements of this Part, except 
Subpart H, before October 1, 2012. Comply with Subpart H of this Part 
before October 1, 2014.
    (3) An operator of a Category 3 pipeline must:
    (i) Identify all segments of pipeline meeting the criteria in 
paragraph (b)(3) of this Section before July 1, 2011.
    (ii) Beginning no later than January 3, 2009, comply with the 
reporting requirements of Subpart B for the identified segments.
    (A)(iii) Comply with all safety requirements of this Part, except 
the requirements in Sec.  195.452, Subpart B, and the requirements in 
Subpart H, before October 1, 2012. Comply with Subpart H of this Part 
before October 1, 2014.
    (d) Economic compliance burden.
    (1) An operator may notify PHMSA in accordance with Sec.  
195.452(m) of a situation meeting the following criteria:

[[Page 25588]]

    (i) The pipeline is a Category 1 rural low-stress pipeline;
    (ii) The pipeline carries crude oil from a production facility;
    (iii) The pipeline, when in operation, operates at a flow rate less 
than or equal to 14,000 barrels per day; and
    (iv) The operator determines it would abandon or shut-down the 
pipeline as a result of the economic burden to comply with the 
assessment requirements in Sec.  195.452(d) or 195.452(j).
    (2) A notification submitted under this provision must include, at 
minimum, the following information about the pipeline: its operating, 
maintenance and leak history; the estimated cost to comply with the 
integrity assessment requirements (with a brief description of the 
basis for the estimate); the estimated amount of production from 
affected wells per year, whether wells will be shut in or alternate 
transportation used, and if alternate transportation will be used, the 
estimated cost to do so.
    (3) When an operator notifies PHMSA in accordance with paragraph 
(d)(1) of this Section, PHMSA will stay compliance with Sec. Sec.  
195.452(d) and 195.452(j)(3) until it has completed an analysis of the 
notification. PHMSA will consult the Department of Energy, as 
appropriate, to help analyze the potential energy impact of loss of the 
pipeline. Based on the analysis, PHMSA may grant the operator a special 
permit to allow continued operation of the pipeline subject to 
alternative safety requirements.
    (e) Changes in unusually sensitive areas.
    (1) If, after June 3, 2008, for Category 1 rural low-stress 
pipelines or October 1, 2011 for Category 2 rural low-stress pipelines, 
an operator identifies a new USA that causes a segment of pipeline to 
meet the criteria in paragraph (b) of this Section as a Category 1 or 
Category 2 rural low-stress pipeline, the operator must:
    (i) Comply with the IM program requirement in paragraph 
(c)(1)(iii)(A) or (c)(2)(iii)(A) of this Section, as appropriate, 
within 12 months following the date the area is identified regardless 
of the prior categorization of the pipeline; and
    (ii) Complete the baseline assessment required by paragraph 
(c)(1)(iii)(C) or (c)(2)(iii)(C) of this Section, as appropriate, 
according to the schedule in Sec.  195.452(d)(3).
    (2) If a change to the boundaries of a USA causes a Category 1 or 
Category 2 pipeline segment to no longer be within one-half mile of a 
USA, an operator must continue to comply with paragraph (c)(1)(iii) or 
paragraph (c)(2)(iii) of this section, as applicable, with respect to 
that segment unless the operator determines that a release from the 
pipeline could not affect the USA.
    (f) Record Retention. An operator must maintain records 
demonstrating compliance with each requirement applicable to the 
category of pipeline according to the following schedule.
    (1) An operator must maintain the segment identification records 
required in paragraph (c)(1)(i), (c)(2)(i) or (c)(3)(i) of this Section 
for the life of the pipe.
    (2) Except for the segment identification records, an operator must 
maintain the records necessary to demonstrate compliance with each 
applicable requirement set forth in paragraph (c) of this Section 
according to the record retention requirements of the referenced 
Section or Subpart.


0
4. Section 195.48 is revised to read as follows:


Sec.  195.48  Scope.

    This Subpart prescribes requirements for periodic reporting and for 
reporting of accidents and safety-related conditions. This Subpart 
applies to all pipelines subject to this Part. An operator of a 
Category 3 rural low-stress pipeline meeting the criteria in Sec.  
195.12 is not required to complete those parts of the hazardous liquid 
annual report form PHMSA F 7000-1.1 associated with IM or high 
consequence areas.

    Issued in Washington, DC, on April 28, 2011.
Cynthia L. Quarterman,
Administrator.
[FR Doc. 2011-10778 Filed 5-4-11; 8:45 am]
BILLING CODE 4910-60-P