[Federal Register Volume 89, Number 156 (Tuesday, August 13, 2024)]
[Notices]
[Pages 65969-65971]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17993]
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DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration
[Docket No. PHMSA-2024-0131]
Pipeline Safety: Proposed Waiver of the Build America, Buy
America Act Requirements for Gas Service Risers and Gas Meters Under
the NGDISM Program
AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
Department of Transportation (DOT).
ACTION: Notice; request for comments.
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SUMMARY: The Pipeline and Hazardous Materials Safety Administration
(PHMSA), proposes to waive the Build America, Buy America (BABA) Act's
domestic preference requirements for certain products widely used in
natural gas distribution systems on the basis of nonavailability. The
proposed duration of the waiver will apply to expenditures on or after
the effective date of the final waiver for recipients of funding under
the Natural Gas Distribution Infrastructure Safety and Modernization
(NGDISM) Grant Program and would expire after three years. In
accordance with Section 70914(c) of BABA, PHMSA is seeking public
comments on the proposed waiver.
DATES: Comments must be received by August 28, 2024.
ADDRESSES: Please submit your comments to the Federal eRulemaking
Portal at http://www.regulations.gov, Docket No. PHMSA-2024-0131, and
follow the online instructions for submitting comments.
Instructions: You must include the agency name and docket number at
the beginning of your comments. Except as described below under the
heading ``Confidential Business Information,'' all submissions
received, including any personal information provided, will be posted
without change or alteration to http://www.regulations.gov. For more
information, you may review the U.S. Department of Transportation's
complete Privacy Act Statement published in the Federal Register on
April 11, 2000 (65 FR 19477).
FOR FURTHER INFORMATION CONTACT: For questions about this notice,
please contact Ms. Shakira Mack, Office of Pipeline Safety, 202-366-
5090, or via email at [email protected]. Office hours for PHMSA are
from 8:30 a.m. to 5 p.m., E.T., Monday through Friday, except Federal
holidays.
SUPPLEMENTARY INFORMATION:
Electronic Access and Filing
A copy of this Notice, all comments received on this Notice, and
all background material may be viewed online at http://www.regulations.gov using the docket number listed above. Electronic
retrieval help and guidelines are also available at http://www.regulations.gov. An electronic copy of this document also may be
downloaded from the Office of the Federal Register's website at:
www.FederalRegister.gov and the Government Publishing Office's website
at: www.GovInfo.gov.
Confidential Business Information
Confidential Business Information (CBI) is commercial or financial
information that is both customarily and actually treated as private by
its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552),
CBI is exempt from public disclosure. If your comments responsive to
this notice contain commercial or financial information that is
customarily treated as private, that you actually treat as private, and
that is relevant or responsive to this notice, it is important that you
clearly designate the submitted comments as CBI. You may ask PHMSA to
give confidential treatment to information you give to the agency by
[[Page 65970]]
taking the following steps: (1) mark each page of the original document
submission containing CBI as ``Confidential''; (2) send PHMSA, along
with the original document, a second copy of the original document with
the CBI deleted; and (3) explain why the information you are submitting
is CBI. Unless you are notified otherwise, PHMSA will treat such marked
submissions as confidential under the FOIA, and they will not be placed
in the public docket of this Notice. Submissions containing CBI should
be sent to: Ms. Shakira Mack, PHMSA, 1200 New Jersey Avenue SE,
Washington, DC 20590. Any comment submissions that PHMSA receives that
are not specifically designated as CBI will be placed in the public
docket for this matter.
Background
The NGDISM program was authorized by the Infrastructure Investment
and Jobs Act (IIJA) (Pub. L. 117-58). The program provides Federal
funding to municipal- or community-owned natural gas utilities (not
including for-profit entities) to repair, rehabilitate, or replace
their natural gas distribution pipeline systems or portions thereof, or
to acquire equipment to (1) reduce incidents and fatalities and (2)
avoid economic losses. The IIJA appropriates $200 million per year for
each of Fiscal Years (FY) 2022 through 2026 for the NGDISM program ($1
billion in total). The IIJA provides that 2 percent of this amount
shall be used to pay the administrative expenses of the NGDISM program.
Accordingly, the total amount expected to be awarded as grant funding
over the five-year period is approximately $980,000,000. In FY22, PHMSA
awarded approximately $196 million to 37 municipal- and community-owned
natural gas utilities across the nation to fund pipeline replacement
projects and the purchase of leak-detection equipment.
Congress also enacted the Build America, Buy America Act (BABA),
providing that ``none of the funds made available for a Federal
financial assistance program for infrastructure . . . may be obligated
for a project unless all of the iron, steel, manufactured products, and
construction materials used in the project are produced in the United
States.'' IIJA, Public Law 117-58, Sec. 70914(a). Under IIJA Section
70914(b), PHMSA has authority to waive the requirements of BABA (1) if
a domestic product is unavailable, (2) if using a domestic product
would present an unreasonable cost, or (3) if application of BABA would
not be in the public interest.
In January 2024, PHMSA was contacted by several FY22 NGDISM
recipients who requested waivers for certain products on the basis of
nonavailability and submitted the results of their independent market
research to PHMSA. The products requested to be waived included gas
service risers and gas meters. PHMSA considers these products to be
either ``iron or steel products'' or ``manufactured products'' under
BABA depending on the cost of the iron and steel components
incorporated in each product. See 2 CFR 184.3. A more detailed
description of each product is provided below:
Gas Service Risers: Service risers are sections of pipe
that provide a 90-degree connection between underground gas service
lines and aboveground meter assemblies. Risers are made primarily of
steel but typically also include polyethylene components, and may
include a protective sleeve over the polyethylene components. Service
risers are manufactured in a variety of sizes, and may be rigid or
flexible. PHMSA proposes to waive BABA requirements for field assembly
risers and service head adapter risers.
Gas Meters: Gas meters are placed outside of a residence
or business that utilizes natural gas and allows the utility operator
to track how much gas is being used by the residence or business. Gas
meters incorporate a variety of components made of different materials,
but are typically made primarily of aluminum. ``Smart'' meters are not
typically used in the gas industry. Instead, gas meters are commonly
paired with automated meter reading technology (AMR) that uses radio
waves to transmit gas usage data. Accordingly, gas meters are typically
not capable of connecting to the internet. PHMSA proposes to waive BABA
requirements for both smaller-volume meters designed for residential
use and larger-volume meters designed for use on commercial
establishments.
Justification for the Waiver
PHMSA has preliminarily determined that these products are not
manufactured in the United States in sufficient and reasonably
available quantities or of a satisfactory quality. To support this
determination, PHMSA evaluated the market research performed by the
NGDISM grant recipients who requested the waiver. PHMSA also conducted
its own market research on the products identified by NGDISM grant
recipients. The market research performed by the NGDISM grant
recipients consisted of engaging the supplier scouting services of the
National Institute of Standards and Technology's Manufacturing
Extension Partnership (NIST-MEP), publicizing Invitations for Bids that
included terms requiring bidders to certify compliance with BABA, and
individually contacting known suppliers and vendors to identify
potential sources of BABA-compliant products. PHMSA thereafter
conducted its own supplier scouting through NIST MEP and independently
engaged with industry to confirm the findings of the NGDISM grant
recipients. At the conclusion of this process, PHMSA identified a
company who could produce BABA-compliant versions of certain types of
gas risers. Specifically, the company PHMSA identified currently
produces standard ``anodeless service risers'' that meet the
requirements of BABA but could not produce the ``field assembly
risers'' or ``service head adapter risers'' that are sometimes used in
lieu of standard risers, and that are needed by some NGDISM recipients.
Accordingly, PHMSA narrowed the scope of its proposed waiver to exclude
standard anodeless service risers.
The FY22 NGDISM recipients also requested a nonavailability waiver
for service regulators. Service regulators are devices incorporated
into a meter assembly designed to allow gas from a higher-pressure
service line to enter a residence's or business's gas lines at a lower
pressure ideal for everyday use. During its market research, PHMSA
identified a single company that currently produces BABA-compliant
service regulators and accordingly removed service regulators from the
scope of this proposed waiver, as PHMSA's market research did not
support a clear finding of nonavailability. However, some NGDISM
recipients have expressed concern about whether a single company would
be able to supply regulators needed by all NGDISM award recipients.
PHMSA has engaged with the company to determine its production capacity
for service regulators, but PHMSA lacks information on the anticipated
demand for service regulators during the life of the NGDISM program. A
lack of sufficient supply could unduly delay the safety-critical
construction projects funded by the NGDISM program; thus, PHMSA is
specifically requesting comments from industry on the demand for
service regulators purchased through the NGDISM program to inform its
future consideration of any potential
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waivers of BABA requirements for service regulators.
Proposed Waiver and Request for Comments
The products covered by this proposed waiver are essential products
used in every natural gas distribution system. Accordingly, nearly
every NGDISM project that includes infrastructure expenditures will
have a need for these products. Without these products, most NGDISM
projects would not be able to be completed safely and successfully.
PHMSA does not anticipate that this proposed waiver would have a
material impact on domestic manufacturing capabilities for these
products. The NGDISM program is authorized to fund $196 million of
pipeline replacements per year over five years, which PHMSA believes
represents a small fraction of the total market for pipeline
replacement construction projects in the United States. For example, in
the first year of the NGDISM program, PHMSA received grant applications
requesting over $1 billion in total funding combined. This suggests
that only a fraction of the overall market for these products will be
funded by the NGDISM program, and thus only a small fraction will be
subject to BABA requirements even in the absence of this waiver.
The products proposed to be waived will also constitute a small
percentage of total infrastructure spending under the NGDISM program.
Although the data currently available to PHMSA are incomplete, PHMSA
anticipates that only approximately $56 million of the $196 million
awarded per year will be spent directly on materials for pipeline
infrastructure. PHMSA further estimates that of this amount, less than
approximately $1.9 million per year will be spent on the products
proposed to be covered under this waiver across all recipients.
Accordingly, PHMSA believes that the purchasing power of the NGDISM
program is simply not great enough to incentivize the market to begin
domestic production of these parts in large enough quantities to meet
the needs of NGDISM award recipients before the program is slated to
end in FY26.
For similar reasons, PHMSA proposes to waive BABA requirements for
these gas service risers and gas meters for expenditures made in a
period of three years following publication of a Notice of Final
Waiver.
In addition, the proposed BABA waiver would not affect recipient
compliance with any other requirements of the NGDISM program, including
requirements to ensure the security and resilience of critical
infrastructure, requirements to perform a site-specific environmental
assessment pursuant to the National Environmental Policy Act, or
requirements to comply with Executive Orders applicable to Federal
financial assistance programs.
Under OMB Memorandum M-24-02, agencies are expected to assess
``whether a significant portion of any cost advantage of a foreign-
sourced product is the result of the use of dumped steel, iron, or
manufactured products or the use of injuriously subsidized steel, iron,
or manufactured products'' as appropriate before granting a public
interest waiver. PHMSA's analysis has concluded that this assessment is
not applicable to this waiver, as it is being proposed on the basis of
nonavailability, rather than public interest or unreasonable cost.
PHMSA will consider all comments received in the initial 15-day
comment period during our consideration of the proposed waiver, as
required by section 70914(c)(2) of the IIJA. Comments received after
this period, but before notice of our finding is published in the
Federal Register, will be considered to the extent practicable. PHMSA
is specifically requesting comments on the demand for service
regulators purchased through the NGDISM program to evaluate whether a
waiver of BABA requirements for service regulators is warranted.
Issued in Washington, DC, on August 7, 2024, under authority
delegated in 49 CFR 1.97.
Tristan H. Brown,
Deputy Administrator.
[FR Doc. 2024-17993 Filed 8-12-24; 8:45 am]
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