August 2015, Vol. 70, No.8
Washington Watch
Pipelines Hope GOP or Courts Fix New Wetlands Rule
Republicans in Congress are working to pass legislation which would set aside a new EPA and Army Corps of Engineers joint rule to make it more expensive to build pipelines in areas containing streams and other small bodies of water. The new EPA rule would require pipelines – and anyone else wanting to build anything in these tributaries and ponds – to first do a site analysis and then, potentially, obtain a Clean Water Act permit. That is time consuming and expensive. The EPA published the new so-called Waters of the U.S. (WOTUS) rule in May. It goes into effect on Aug. 28.
“Landowners or projects disturbing land must perform intensive on-the-ground fact finding determinations by an expert just to determine if the area that will be disturbed is considered a WOTUS or if the project will not impact a WOTUS,” says Celina Romero, attorney for the Texas Pipeline Association. “For pipeline projects covering many miles, that will be a lot of case-by-case determinations.”
The rule responds to a Supreme Court decision in Rapanos v. United States, 547 U.S. 715 (2006). In that decision, the court defined more clearly which bodies of water were protected under the Clean Water Act, meaning anyone building near or in those waters would need a section 404 permit. A big issue for the pipeline industry is when a smaller stream, tributary or pond has a “significant nexus” to a second body of water which is clearly covered under the CWA.
The final rule makes some changes from the proposal, on “significant nexus,” as to what constitutes a tributary and when working in ditches requires a permit. But a wide range of industry groups are unhappy with the breadth of the final rule and want Congress to force the EPA to make changes.
“The rule is a significant obstacle to the agencies’ implementation of administration policy favoring expedited permitting for energy infrastructure projects,” says Dave McCurdy, CEO and president of the American Gas Association.
The Senate Environment and Public Works (EPW) Committee passed S. 1140, the Federal Water Quality Protection Act, by a vote of 11 to 9 on June 16. Democratic Sen. Heidi Heitkamp (ND) and Indiana Sen. Joe Donnelly (IN) are both co-sponsors of the bill, saying the waters rule is a top issue they hear about from their agricultural constituents. The bill would force the EPA to rewrite the rule.
Democratic support in the Senate is crucial. The House has already passed a version of the bill (H.R. 1732). Scott Berry, director of the Utility Infrastructure Division, Environment and Trade for the Associated General Contractors of America, says the groups supporting Republican efforts will need to find more Democratic supporters in the Senate to override an expected President Obama veto. If a version of the bill passes congress, it would require 66 votes.
But if congressional efforts fail, a number of lawsuits, filed by 27 states, separately and in some cases jointly, and by trade associations, could force the EPA to retrace its regulatory steps. Some of those lawsuits were filed within two days of the EPA publishing the final rule.
The EPA did make a number of concessions in the final rule, easing some of the requirements the agency included in the earlier proposed rule. Key changes, according to the AGC, were: first-time exclusions for certain types of ditches that fall outside the “tributary” definition; some limits on when a stream or wetland should be jurisdictional because it is near or “adjacent” to other jurisdictional waters; limits on the area where waters are subject to a “significant nexus” test on a case-by-case basis; clarification on storm water control features and unique water features like prairie potholes; an express exclusion for groundwater and shallow sub-surface drainage connections; provisions to address the validity of existing jurisdictional determinations, and further explanation of what the WOTUS rule means for municipal separate storm sewer systems (MS4s).
On the other hand, the AGC remains concerned the definition of a “tributary” would still include many ditches as “waters of the U.S.” In addition, the exclusions for specific ditches remain narrow and private entities may find it difficult to prove (through topographic maps, historic photographs, aerial photography, etc.) that they apply.
PHMSA Proposes Broad,
Minor Safety Changes
The federal pipeline agency proposed a hodgepodge of regulatory changes covering operator qualification, accident notification and charging of fees for pipeline design inspections. Most of the proposals stem from requirements in the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011, a law whose provisions the Pipeline and Hazardous Materials Safety Administration (PHMSA) has struggled to implement.
The proposed rule, with its somewhat numerous provisions of fairly minor consequence, seems to be an appetizer of sorts before the agency proposes much more significant safety changes, also required by the 2011 law. Those changes will impact integrity management programs and so-called “grandfathered pipelines” which are subject to less stringent requirements.
“This is mostly minor stuff,” says Terry Boss, senior vice president at the Interstate Natural Gas Association of America (INGAA). “But we are glad they are moving these things along.”
There is, however, one significant provision in the proposal, although it doesn’t affect pipeline operators directly but rather impacts construction companies who build pipelines. PHMSA is, for the first time, applying operator qualification requirements to those contractors. The proposal doesn’t spell out those requirements. But if the existing operator qualification requirements are any guide, these upcoming contractor requirements will be significant.
The proposed rule states: “In particular, proposed operator qualification provisions ensure that pipeline construction personnel and operations and maintenance personnel have the appropriate skills for the functions they are performing. This would reduce the likelihood of human error-related incidents. At an annual compliance cost of $3.1 million, the proposed changes would be cost effective if they prevented a single fatal incident over a three-year period.”
The new, “baby” safety rule refines some long standing PHMSA requirements, in some cases transforming standing guidance into legally-binding statute. That is the case with the accident notification provision. PHMSA published an advisory bulletin in 2002 which advised owners and operators of gas and hazardous liquids pipeline systems and liquefied natural gas (LNG) facilities that reporting at the earliest practicable opportunity usually means one to two hours after discovery of the incident. Section 9 of the 2011 Act requires PHMSA to require a specific time limit for telephonic or electronic reporting of pipeline accidents and incidents. The proposed rule mandates reporting “not later than one hour following the time of such confirmed discovery.” A pipeline would have to revise or confirm that initial notification within 48 hours of confirmed discovery of the accident or incident.
INGAA’s Boss calls this proposal “very, very useful.”
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