This week’s Pipeliners Podcast episode features Keith Coyle of Babst Calland returning to the podcast to discuss how U.S. pipeline policy was shaped during the previous four years under the Trump administration and how pipeline policy might be affected under the Biden administration.
In this episode, you will learn about the key PHMSA rulemakings that were finalized over the past four years. You will also learn about the status of rulemakings that are in the works (e.g. Parts 2 and 3 of the Gas Mega Rule) and how the new administration could influence other rulemakings.
Pipeline Policy: Show Notes, Links, and Insider Terms
- Keith Coyle is a shareholder and attorney with the Babst Calland law firm. Mr. Coyle is a member of the firm’s Washington, D.C. office and a shareholder in the Energy and Natural Resources, Environmental and Transportation Safety groups and Pipeline and HazMat Safety practice. [Connect with Mr. Coyle on LinkedIn]
- PHMSA (Pipeline and Hazardous Materials Safety Administration) is responsible for providing pipeline safety oversight through regulatory rulemaking, NTSB recommendations, and other important functions to protect people and the environment through the safe transportation of energy and other hazardous materials.
- PIPES Act of 2020 (Protecting Our Infrastructure of Pipelines and Enhancing Safety) reauthorized the U.S. DOT PHMSA pipeline safety program through fiscal year 2023.
- Gas Mega Rule (The Mega Rule) is a set of pipeline safety standards issued by PHMSA in October 2019.
- The San Bruno or PG&E Incident in September 2010 refers to a ruptured pipeline operated by the Pacific Gas & Electric Company. The rupture created a crater near San Bruno, California, caused an explosion after natural gas was released and ignited, and resulted in fires causing loss to life and property. [Read the full NTSB Accident Report.]
- The Gas Gathering Rule (Safety of Gas Transmission and Gathering Pipelines) was initiated in 2016 when PHMSA issued a notice seeking comments on changes to the pipeline safety regulations for gas transmission and gathering pipelines. The proposed rule has advanced through various stages to expected issuance in 2019.
- PHMSA issued FAQs in September 2020 to assist gas pipeline owners and operators in complying with the pipeline safety regulations in 49 CFR Parts 191 and 192.
- MAOP (maximum allowable operating pressure) is the maximum pressure that a pipeline or segment of pipeline can be operated at under Part 192.
- The final MAOP Rule, “Safety of Gas Transmission Pipelines: MAOP Reconfirmation, Expansion of Assessment Requirements, and Other Related Amendments” (a/k/a Gas Transmission Final Rule) was published in October 2019 to address the requirements for recordkeeping and the applicability of maximum allowable operating pressure (MAOP) reconfirmation.
- Hazardous Liquid Rule FAQs were released by PHMSA in November 2020 providing guidance to owners and operators of hazardous liquid pipelines subject to the pipeline safety standards in 49 CFR Part 195.
- The Underground Natural Gas Storage Facility Rule was published by PHMSA in January 2020. The rule is in regards to pipeline safety for Underground Natural Gas Storage facilities (UNGSF).
- The Aliso Canyon gas leak in 2015 was the result of natural gas escaping from a well within the Aliso Canyon’s underground storage facility in the Santa Susana Mountains near Porter Ranch, Los Angeles. The facility was operated by the Southern California Gas Company, who discovered the leak after residents complained of symptoms associated with natural gas exposure. Following the incident, Congress directed PHMSA to establish new safety standards for underground gas storage facilities.
- API RP 1170 (Design and Operation of Solution-mined Salt Caverns Used for Natural Gas Storage) and API RP 1171 (Functional Integrity of Natural Gas Storage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs) are the industry standards for Underground Gas Storage.
- 49 CFR 192 is minimum safety requirements for pipeline facilities and the transportation of gas by PHMSA-regulated pipeline.
- Gas Pipeline Regulatory Reform was an NPRM issued by PHMSA in June 2020 focusing on proposed amendments to the Federal Pipeline Safety Regulations that are intended to ease regulatory burdens on the construction, maintenance, and operation of gas transmission, distribution, and gathering pipeline systems.
- Strength Testing Requirements are contained in Section 192.505 of PHMSA rulemaking that outline the requirements for steel pipeline to operate at a hoop stress of 30 percent or more of SMYS.
- SMYS (Specified Minimum Yield Strength) is a measurement of a pipe’s strength, as determined by the manufacturing specifications of the pipe.
- ASME (American Society of Mechanical Engineers) develops codes and standards to create a safer world.
- SMYS (Specified Minimum Yield Strength) is a measurement of a pipe’s strength, as determined by the manufacturing specifications of the pipe.
- Valve Installation and Minimum Rupture Detection Standards was a pipeline safety NPRM issued by PHMSA in February 2020 that sought out to revise the Pipeline Safety Regulations applicable to newly constructed and entirely replaced onshore natural gas transmission and hazardous liquid pipelines to mitigate ruptures.
- Regulatory Reform for Hazardous Liquid Pipelines was a pipeline safety NPRM issued by PHMSA in April 2020 that includes proposed amendments to the Federal Pipeline Safety Regulations for the safety of hazardous liquid pipelines that would revise the requirements for facility response plans, revise the definition for accidents, and consider repealing, replacing, or modifying other specific regulations.
- Class Location Modernization Rule was an ANPRM issued by PHMSA in July 2018 that sought public comment on whether PHMSA should change its class location requirements for gas pipeline facilities.
- Leak Detection and Repair rulemaking was included in the PIPES Act of 2020 recommending that PHMSA promulgate final regulations that require operators of regulated gathering lines in a Class 2 location, Class 3 location, or Class 4 location, operators of new and existing gas transmission pipeline facilities, and operators of new and existing gas distribution pipeline facilities to conduct leak detection and repair programs.
- Administrative Procedure Act (APA) is the United States federal statute that governs the way in which administrative agencies of the federal government of the United States may propose and establish regulations and grants U.S. federal courts oversight over all agency actions.
Pipeline Policy: Full Episode Transcript
Russel Treat: Welcome to the Pipeliners Podcast, episode 164, sponsored by the American Petroleum Institute, driving safety, environmental protection, and sustainability across the natural gas and oil industry through world-class standards and safety programs. Since its formation as a standards-setting organization in 1919, API has developed more than 700 standards to enhance industry operations worldwide. Find out more about API at api.org.
Announcer: The Pipeliners Podcast, where professionals, Bubba geeks, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations. Now your host, Russel Treat.
Russel: Thanks for listening to the Pipeliners Podcast. I appreciate you taking the time. To show appreciation, we give away a customized YETI tumbler to one listener each episode. This week, our winner is David Martinez with Energy Transfer. To learn how you can win this signature prize, stick around to the end of the episode.
This week on the Pipeliners Podcast, Keith Coyle is returning to talk to us about what’s happening in pipeline policymaking and what we can expect related to the change of policy that’s going to be occurring.
Just for the listeners, I want to say that I know that there’s a lot of people that are watching what’s going on in Washington at the moment. There’s a lot about politics. We here at the Pipeliners Podcast don’t really want to get into all that.
What we do want to do is talk about policy and provide information that’s of use to pipeliners as they’re trying to evaluate their future plans and strategies. With that, let me welcome Keith Coyle.
Keith Coyle: Thanks for having me on again, Russel. This is one of the most enjoyable things I do. I always look forward to our chats.
Russel: Well, likewise. I always get educated and always get caught up on some of the things that are going on in the policymaking domain. Why don’t we start? A lot has happened in pipeline policymaking in the last four years.
Why don’t we talk about what has happened? What are some of the things that have been brought to conclusion? Then we’ll transition, and we’ll talk about where we might go from there. Maybe you can give us an overview of what’s happened in the last administration.
Keith: Sure. The Trump administration has been extremely active, from my perspective. They’ve closed out some very important legislative and regulatory initiatives. Many of those regulatory initiatives are things that were left outstanding or work that had been pending from the previous administration.
In some cases, we’re talking about regulatory processes that have been going on for almost a decade. We’ve seen a continuation in the workflow coming out of PHMSA. Even in the past few months, we’ve had some significant developments on the legislative front.
The agency has issued a final rule for gas regulatory reform. We’re seeing new guidance documents. PHMSA has stayed extremely active. I would say it’s been active throughout the Trump administration. It has remained active even since the election, which is a good thing. They’re moving policy forward, as best they can.
Russel: I would say, Keith, at least in my experience, that I didn’t notice that big of a change in policy between Obama and Trump as it relates to pipeline rulemaking. Certainly, there was a change in constructability and permitting. There really wasn’t a change in policymaking, per se. Would you agree with that?
Keith: There are probably some rules that came out in a way that is different than they would have come out under a different administration. There’s a lot of speculation built into that answer. Obviously, nobody knows how things may have come out under a different administration.
The one thing that stood out for me is the pace. They have moved very quickly to get a lot of rules done, rules that were around for a long time. Also moving rules quickly, proposed rules that were issued earlier last year. They’re getting those rules done in a year. Pace has definitely quickened. There probably have been some policy differences, maybe not that we can measure or see. That’s my perspective.
Russel: That’s a better way to say it. One of the things that’s a credit to the agency is that PHMSA tends to continue to move these programs forward across administrations, and without, at least in my experience, significant change to what’s being done.
That’s related to the fact these rules, as we’ve said on many other of our podcasts, these rules come out of incidents. They’re driven by operators, and engineers, and folks of that nature in terms of what is actually going to make things safer and better.
Keith: There’s a little bit of insulation from some of the other forces that you see in other regulatory programs. For example, bipartisan pipeline safety legislation. We’ll talk about that in a little bit.
There tends to be more of a consensus around getting to the right answer on safety. Maybe you don’t see the same traumatic ebbs and flows that you might see for some other programs. That’s a good way of framing it.
Russel: What’s some of the legislation that’s been finalized during the Trump administration?
Keith: One of the things we saw in the past few weeks here was passage of the latest reauthorization of the federal pipeline safety program. The legislation, Protecting Our Infrastructure of Pipelines and Enhancing Safety Act of 2020, or the PIPES Act of 2020.
As I said before, that was a bipartisan bill that was passed by Congress as part of a broader COVID-19 relief package and annual appropriations bill. It was a really significant achievement in terms of getting reauthorization of the Pipeline Safety Act on the books. The program is reauthorized through fiscal year 2023. We have a couple of years.
It was a significant achievement, not something that was necessarily expected. Everybody’s glad to see that it got across the finish line.
Russel: I certainly am aware of some of the conversations that were occurring in the various committee meetings about, what’s taking so long to respond to these mandates that Congress has put in place. This actually gets those mandates done, some of them.
Keith: What we ended up with in the end was, what I’ll call a skinny bill, or a bill that dropped out some of the more controversial items that both sides were hoping to get in reauthorization. We got a bill that was a little bit more middle of the road.
There are some significant new rulemaking mandates in there, one related to Leak Detection and Repair Program Requirements. That’s a rulemaking mandate that the new administration will pick up.
Again, it was a bipartisan bill, which is always very good. It was work that got done in the last Congress. Everybody’s happy to have made that achievement and to move on.
Russel: What are the final rulemakings? Let’s summarize that, because there’s a lot that’s occurred, particularly in the last two years.
Keith: In getting ready for the podcast today, I started to pull together a list of everything that’s happened in the PHMSA world. I was surprised to see how many things got finished. That’s a credit to the folks over at PHMSA, and to the administration for moving some of these rulemakings along.
The first one and the one that’s the most important was completing the first phase of the Gas Mega Rule. This was a final rule that got issued back in October of 2019. We talked about this on a couple of podcasts ago. This was the rulemaking that came out of the San Bruno incident, which is now 10 years old.
This was a rulemaking that had been going on for about a decade. There were a couple of key rulemaking mandates that PHMSA satisfied in that final rule process. I’d be interested in hearing from you on the outside. What your thoughts were on seeing that rulemaking come to conclusion.
Russel: With a lot of these, the industry sees them coming and is making plans. This is pretty dang significant. Particularly the MAOP Reconfirmation, that’s a big project. In particular, that’s a big project for a lot of the gas utilities, particularly the older larger gas utilities. There’s a lot that’s going to be happening in that domain for a while.
Keith: That MAOP Reconfirmation Rule and the Pipeline Materials Verification provision that goes along with it, those are probably the two most significant changes to the gas pipeline safety regulations, probably since they were issued back in the ‘70s. Very complex rules, not to be entered into lightly.
There’s a lot that’s going to go on there. It’s a 15-year initial phase program. It’s something that’s going to play out for quite some time. Industry, I think was generally happy with the outcome. Above all, glad to see the rulemaking process concluded.
It’s very hard to make commitments in terms of capital or to go out and start to do work if you’re not sure that the work that you’re doing it’s going to get you to the place where you need to go for compliance.
Russel: Exactly. I think that’s exactly right. I think the industry would in general agree that this is a needed effort and that it’s going to have a significant impact on a previous safety.
Keith: The rulemaking process — the Trump administration went to great lengths to get that completed during the first four years. They had a series of advisory committee meetings and not just one.
I’m talking several in a row to handle some very complicated issues that were resolved in this rule. It’s a credit to them and a credit to the folks over at the agency. This was not an easy rulemaking to finish.
Keith: They deserve a lot of credit for getting it done.
Russel: What are some of the others? We talked about Part One of the Gas Mega rules, what are some of the others?
Keith: The Trump administration also issued a final rule for hazardous liquid pipelines. This one was a little interesting because it got caught up in a previous transition of administration. The Obama administration had brought a final rule on hazardous liquid pipelines almost to conclusion in January of 2017.
They had it over at the Federal Register ready to publish. In response to a memo from the new White House Chief of Staff, the Trump administration pulled that rule back from the Federal Register, did a review of what was in the rule, and then they ended up issuing a modified version of that final rule in October of 2019.
Some of the key changes — extension of reporting requirements to unregulated gravity lines and gathering lines, a new 72-hour inspection requirement following extreme weather events, and then some other things related to leak detection and periodic assessments of pipelines. That was another good achievement from the administration to come in, take a look at that rule, review it and then get it out.
Russel: Then I think the next one that came out was the Underground Gas Storage Rule. To me that one’s interesting because it moves so quickly.
Keith: We had talked about this. I guess it was last year in a podcast. That was a rule that originated from a significant incident out in Aliso Canyon, California.
There was a rulemaking mandate in the previous reauthorization of the Pipeline Safety Act back in 2016 directing the agency to establish regulations for underground gas storage facilities. The Obama administration issued an interim final rule pretty quickly in 2016.
What the Trump administration issued in February of 2020 was, what I’d call the final final rule but a modified version of that interim final rule that settled the landscape for regulation of underground gas storage facilities at least for the new term to close out that rulemaking process and let landscape settle for a little while.
Russel: I think one of the things that accelerated that rulemaking is there’s a couple of API standards out there. 1170 and 1171, actually, recommended practices to be more specific that they incorporated by reference. Given the fact that those standards were out there and were recently renewed, it made the rulemaking I think a little easier because there was already some agreed, “Here’s what we need to do.”
Keith: I’m a big advocate of industry putting together codes and standards. I think they are very helpful in terms of influencing the rulemaking process. It provides the agency with a vehicle to incorporate by reference.
It gives industry a voice and sort of shaping potential regulatory requirements that will apply. I’m a big fan of doing industry standards, keeping them current, investing time and effort into those initiatives. It’s not always easy, but I think it’s to industry’s credit that they dedicate resources to those things.
Russel: Absolutely. The other thing too about the API standards process is, it’s engineers and operators, and it’s technical primarily. There’s not a lot of conversation in those standards about rulemakings or policies or such.
It’s just really the engineers looking and trying to figure out what’s the best way to do this and what are the new technologies and how do we adopt those, very, very technical and very boots on the ground how do we do it type stuff.
Again, I think you’re right that’s a very important process. It’s handy for great work, but also handy that those things are available to be referenced by the rules themselves.
Keith: When I get to sit in on those meetings is when I realized how little I actually know about all this stuff, particularly on the technical side. There’s some really smart people that they put a lot of time in to develop those standards, to get them right technically. I think it’s a good thing for industry and for the regulators.
Russel: That’s three major rulemakings, what others are out there?
Keith: The last one I wanted to talk about is gas regulatory reform. This is a final rule that actually got issued just a couple of days ago.
This was part of the Trump administration’s broader regulatory reform initiative to take a look at provisions or regulations across the federal government where changes could be made to ease unnecessary burdens to reduce complexity. Things like that.
PHMSA started a rulemaking process with some reforms for the gas pipelines safety regulations. They issued a proposed rule in 2020. Then they got this final rule done. I think it was inside of a year actually which is very quick. A couple of key developments.
One, they adjusted this $50,000 monetary threshold in the incident reporting requirements to account for inflation. That $50,000 amount was actually set back in 1984. I think if you do the math, and I’m not a math guy, I think it’s actually about $122,000 now for an incident.
It’s important to right-size that threshold, otherwise, you’re skewing the incident data that you’re getting. You’re filing reports for events that wouldn’t have met that threshold back in 1984 because the value of $50,000 has changed over time.
That was a good change by the agency. Some of the things that they did provided some relief for farm tap operators. This is an issue that the regulation farm taps has become a hot topic in the PHMSA world over the past few years as a result of some interpretations and potential extension of distribution integrity management requirements to farm taps.
PHMSA provided some relief on those requirements. The last thing that PHMSA tackled that I thought was significant was providing an exception from the strength testing requirements — for pressure vessels that were installed between 2004 and 2021.
This is in the weeds. It was an issue on the difference between the test factor that was in the edition of the ASME standard that was incorporated by reference in what PHMSA believed you needed to test under the 192 rules.
Russel: Thanks for that because the one I was reviewing the note you had provided me I was looking that and I’m like, “I don’t understand that one.” That’s helpful. Thanks for that, Keith.
Keith: I worked on that in various aspects of that. It was the one that took a little bit of time to wrap your mind around. The short story long is, ASME had changed the test factor for pressure vessels manufactured under the ASME.
I think it was in the late ’90s and then PHMSA ended up incorporating an edition of the ASME code that had that lower test factor. There was a perceived difference between what you needed to test under the ASME code and what 192 may require under its strength testing requirements.
PHMSA after looking at the safety of it and decided, “Look, there is really no safety issue here that we need to address.” Otherwise, it would have required operators to go out and re-test 17 years’ worth of pressure vessels that were installed, and that wouldn’t be a good outcome. I think everybody agreed.
Russel: That’s just because of standards that they incorporated by reference was not perfectly safe with other requirements in the rule.
Keith: That’s one of those things where you have to pay attention to the standards committees making sure when you’re incorporating something by reference that you’re confident that everything is going to line up when that’s done. That was I think a good resolution from the industry perspective.
Russel: Sure. What are some of the other proposed rules that are in the pipeline yet incomplete at this point?
Keith: The Trump administration in addition to issuing final rules with the force and effect of law kicked off or moved the ball in some pretty significant rulemaking proceedings where they put some proposals out for public comment.
The first one, and I think it’s pretty significant, is the Valve and Rupture Detection proposed rule that was released earlier in 2020. You and I talked about that rule a couple of months ago. It’s designed to address a congressional mandate on the installation and use of automatic shutoff valves or remote-controlled valves.
It has several other provisions related to valve spacing and rupture detection and mitigation, but a very significant rule. It’s going to address both gas pipelines and hazardous liquid pipelines. Good progress to get that proposed rule out.
This is one of those we will have to wait and see how things shake out in the next administration to see where it ultimately ends up.
Russel: Then I think there were also the class location and the hazardous liquid reform as well.
Keith: Modernization of the class location requirements has been on industry’s wish list for couple of years now. The class location requirement they’ve been in the code since 1970 and actually development of the class location concept predates the pipelines safety regulations by a couple of decades.
This was an early approach that was developed for accounting for potential risk and safety factors associated with pipelines. There’s some pretty draconian consequences that are acknowledged in the rules if you have a class location changed due to an increase in population density.
You may have to replace your pipe. You may have to do a new hydrostatic pressure test. One of the things that industry has been looking to is to have other alternatives to those measures.
Things such as, can we go out and do some enhanced or additional integrity management on those pipelines that experience class location changes instead of having to reduce pressure or do more testing or changing out the pipe? That’s one of those rules.
It’s a proposal that was issued in October of 2020 and another one we will have to wait and see where things head. The hazardous liquid regulatory reform rule has not as much news from my perspective and in that proposal.
There were some proposed changes to the oil spill response plan requirements and some proposed changes for submission of electronic reconciled agency, but probably not as significant as the class location proposal or the valve and rupture protection proposal.
Russel: Then the other thing that they just came out with was a bunch of drafted and proposed FAQs.
Keith: The Trump administration has gotten quite a few what we call frequently asked questions or FAQs. This is agency guidance that PHMSA will publish to help clarify or interpret existing rules, regulations, or statutes. They can play a pretty important role from a compliance perspective.
Quite a bit of my time as lawyer is spent reviewing a lot of these FAQs and other agency guidance documents. One of the first things I was told in law school is no statute or regulation speak for itself.
We have to turn to a lot of these others non-statutory or non-regulatory sources of information to try to figure out what something means particularly if a rule or regulation isn’t clear.
PHMSA has been pretty active in the last few months and in the last few years in getting out some new FAQs for the first part of the gas mega rule, some FAQs for the extensive jurisdiction of a midstream processing facilities, and then FAQs for farm taps.
The ones that just came out were, I believe it was operator qualification and some more FAQs on the Mega Rule. A lot to chew on in those FAQs for sure.
Russel: Normally, even FAQs take a while to settle out and finalize. They are as in — at least in my experience as somebody who’s working with the operators to try to put in place policy, procedure, and software tools to implement various requirements of the regulations — the FAQs become really important.
There are actually a lot of times they are even more important than the actual protocol or the actual law because that’s where you actually, “Where is the line between what the regulation says and what we’re actually doing? Are we lined up in the right way?”
Keith: I would say agency guidance document is something that anybody who works in administrative law recognizes over the year has increased in importance.
One of the things that PHMSA has done lately is to publish their FAQs, put them out for public notice, and then invite comments before they finalize an FAQ. I think that’s a really good change by the agency because it gives stakeholders an opportunity to basically influence the FAQ before it’s done.
Russel: In addition to that, I think, Keith, that it allows the industry to request clarification because sometimes even the FAQs are not clear when they first come out.
Keith: Absolutely, and as good as the people over at PHMSA are, no one can think of everything. People who work on those documents, they are working in good faith but they are definitely things that end up in a document that could be clearer, questions that should be answered that someone maybe didn’t think of, or impacts that maybe aren’t foreseen.
One of the things that’s really good about doing a notice and comment process is you get to reduce the potential impact of unintended consequence and you get to make documents a lot clearer than they might have been if you just did one version and issued it without giving people the opportunity to provide feedback.
Russel: A lot of times the questions get really specific when you’re clarifying FAQs.
Keith: Yeah, and one of the attentions that I get as an industry lawyer that how much is an agency trying to make law in a guidance document versus interpret or clarify existing law. You have to be…I think the agency is more mindful of this today than probably they were several years ago.
It’s trying to make sure that the FAQs or the guidance itself is grounded in law or regulation — that we shouldn’t be writing rules in guidance documents; we should be writing rules in rulemakings. I think the agency is really conscious of that now. That’s one of the reasons why they are doing this public comment process and trying to be more deliberate in how they develop the FAQs.
Russel: If you think about that just everything we’ve talked about in the last 20 or so minutes, that is a very significant piece of work that PHMSA has done during the Trump administration that I think by and large has moved pipeline safety forward.
It’s made us better operators. It’s made us better as an industry. There’s not a lot of fluff for things in there that are off the market, at least in my opinion. Would you agree with that?
Keith: Yeah. I think you have to tip your hat to the Administrator and the staff over at PHMSA. Like I said, when I sat down and started to pull together this list, I realized how much work they have gotten done in this four-year period. It’s a tremendous amount of achievement on the regulatory front to get through some of these final rules.
You got reauthorization that was recently passed by Congress, you’ve got new rules that are in the queue. Everyone over there should be proud from my perspective of all the work that they’ve done in the last few years to move these things forward.
Russel: I would absolutely agree with you. Let’s transition here Keith and let’s talk about what the future looks like.
We’ll say in advance that there’s a lot of speculation in this, but there’s certainly some things that we know based on what the new administration has put out into the press and so forth. Just at a big picture view, what do you expect?
Keith: I think one of the things we’ll see some policy shift in a Biden administration. The President-Elect did emphasize environmental issues pretty significantly during the 2020 campaign. I expect that that environmental emphasis will come to fruition in terms of who may be selected for some of the political appointments over at DOT and PHMSA.
Then, in terms of the overall policy focus with things related to the agenda, I do think whoever ends up in those positions is going to confront a very active rulemaking docket. We have several rules that we talked about that are pending from the current administration.
There’s also some additional rulemaking mandates and other provisions in the 2020 PIPES Act that are going to require action. I wouldn’t counsel anybody who’s coming into these jobs to think that they are going to have an easy go of it. There’s a lot of work to be done.
One of the other things I think is during this initial period after the transition and the inauguration, I wouldn’t expect significant policy developments or necessarily controversial items until we see some of the key political posts over at DOT and particularly PHMSA filled.
There is a slate of people that need to be appointed. There is one person at PHMSA, the Administrator, who needs the Senate confirmation. I think in the immediate term, first 60, 90, 120 days, maybe things will be a little bit sleepier than they’ve been in the past few months, but then it’ll pick up again as we head into the fall.
Russel: That’s typical with any change of administration. Even when there’s not a change in the party, there’s some of that, because there tends to be some turnover in the positions around the administrators, the secretaries, and so forth. There tends to be some turnover every four years.
These are fairly demanding jobs, to say it lightly.
Keith: They’re not jobs that extend life expectancy. One of the things you’ll see here with a change in administration and a change in party is what we saw at the beginning of the Trump administration, which is a memo or some initiative that’ll come out of the White House, that’ll freeze currently pending rulemaking, a regulatory freeze.
Then there’ll be a period of a policy review, whether it’s 60 days, 90 days, 120 days, whatever it ends up being, where the new administration will take a look at what’s been going on within these agencies over the past couple of months or years. They’ll need to make a decision on where they want to head with some of these things.
The DOT Secretary, that the nominee’s Pete Buttigieg, you’ll see the DOT Secretary will be confirmed in pretty short order. In terms of when we may expect a Senate-confirmed PHMSA administrator, that might not be for a few months into the summer or into the fall. That’s been the pattern in recent years.
Russel: If you think about that, the Secretary first has to be approved. They have to be in the job and get oriented to where things are, and get oriented around what’s going to be required to execute the president’s policy. Then they’ve got to build their team. That team has to get through the confirmation process. That’s going to take some time…
Keith: You’ll see it on a smaller scale with the PHMSA Administrator. Once they figure out who he or she may be, that person will be nominated. They’ll need to prepare for a Senate confirmation process, which is pretty rigorous.
Once you get through the process, you have to acclimate yourself to agency operations, where things are on the policy agenda. What do I need to get to from a rulemaking perspective? Interacting with new folks. There’s a learning curve.
As I said, that there’s been a trend in the past to not do necessarily significant or controversial things until you have accountable political leadership in the federal agencies.
Russel: I want to unpack that a little bit, because that’s a very interesting point. Most of the people that work in these agencies are civil servants. They’re government employees. That goes to a fairly high level. At some point, they become directly accountable to somebody who’s an appointee.
During any period of transition, the role of that civil servant who’s in the leadership position is more about keeping things moving, continuing the work of the agency, but not making big changes until…It’s the appointed people.
It’s the politicians and those appointed by the politicians that actually execute change, because what they should be doing is executing the will of the people that voted them into office.
Keith: That’s right. That’s understood by the very senior people over at these agencies. That there’s a constitutional role to have Senate confirmation for some of these very important political posts.
The reason we have that is because we have elections. Those folks can be held accountable to the other branch or branches of government. They’re mindful of staying within their lanes. I don’t know that any career civil servant wants to be making a significant political decision if it’s something that is better left to someone with accountability or with an appointment.
There’s definitely a sensitivity there. Obviously, if a decision has to be made on something, it has to be made. They understand their role and are well aware of it.
Russel: I would agree, certainly, in the conversations I’ve had with people in those positions that it’s very evident. They understand what their roles are and what the boundaries of their roles are. What do you think’s going to happen with the rulemakings that are in the pipeline?
Keith: We’ve got a few rulemakings that are in the queue. We have two pieces of the Gas Mega Rule that still need to be closed out.
The first piece is some leftover items related to gas transmission lines, probably not super controversial.
The third piece is the portion of the Mega Rule that deals with gas gathering lines. This is a part of the rulemaking that has generated significant public interest and industry interest. There was a provision in the 2020 PIPES Act that asked the agency to move on that role within 90 days. I don’t anticipate that that’s going to happen within 90 days.
Getting closure on this rulemaking is something that’s going to be important. It’s one of those where the new political leadership will matter. They’ll want to take a look at this rule and see which direction it heads. That’s one I would keep on the radar.
The Valve and Rupture Detection Rule is another one that’s addressing some outstanding mandates from earlier re-authorizations of the PIPES Act. We may see some change in direction on that rule, but within the bounds of what the Administrative Procedure Act would allow.
Agencies have flexibility between what they propose and what they do on a final rule, but there are bounds to that. You couldn’t radically alter course or something like that. We may see some differences that end up coming in that rule, as opposed to what we might have seen in a different administration.
We’ve still got that Class Location Modernization Rule to close out. The last one, which is one that’s worth mentioning, is this Leak Detection and Repair rulemaking. This was a mandate that was included in the 2020 PIPES Act.
It asks PHMSA to do new leak detection and repair requirements within a year for regulated gas pipelines. This is one of those areas where the environmental focus of the incoming administration, you could see their footprint or the environmental issues being raised in that rulemaking. That’s one where it will fit.
Russel: That’s a great point, Keith. I’m more intimate with the Gas Gathering Rule. I certainly can see where a change in administration could impact what the final rule looks like. As you’re talking about leak detection repair, I could see that as well. I hadn’t thought about that, but I could certainly see it.
Keith: One of the issues that was raised during the process of re-authorization was methane emissions, climate change issues. These are things that PHMSA has had environmental considerations within its ambit for some time, but it’s not a purely environmental regulatory body.
This Leak Detection and Repair Rule is one where there are references to concerns about methane emissions. That this is one where you may see that environmental focus come in in a way that maybe we haven’t seen it in the past on some of the more strictly focused on safety initiatives.
Russel: Having environmental aspect to these rulemakings or an environmental type review to these rulemakings, certainly, I can see that happening. That makes sense.
Keith, this has been awesome. I’m sitting here, and I’m processing all of this, and thinking about what it means. The takeaway that I would take away from this is that rulemakings are going to continue to happen. That pipelines are going to continue to operate. That’s what I take away from this conversation.
Keith: One thing I’ll say on the future predictions is, no one can know if there is an event that will upset the policy agenda or the rulemaking agenda. Things like Aliso Canyon or San Bruno. Those were events that were not accounted for when the political leadership was sitting down and figuring out how they were going to chart the next four years or eight years of their life.
In that regard, you always have to recognize that particularly in this regulatory space, one that has been very driven by incidents and events that aren’t predictable. If something does come along, it could upset some of these items. It could push things further down the road or it could accelerate rulemakings.
To be quite honest, we’ve seen it go both ways. Expect the unexpected is a caution I would put in there, too.
Russel: Events always change things without a doubt. Without a doubt. Keith, thanks again for coming on. It’s always a pleasure. It’s always informative. I know that the listeners always appreciate this information. Thanks again.
Keith: Always appreciate your time, Russel. Talk to you soon.
Russel: I hope you enjoyed this week’s episode of the Pipeliners Podcast and our conversation with Keith Coyle. Just a reminder before you go, you should register to win our customized Pipeliners Podcast YETI tumbler. Simply visit pipelinerspodcast.com/win to enter yourself in the drawing.
Russel: If you have ideas, questions, or topics you’d be interested in, please let me know on the Contact Us page at pipelinerspodcast.com or reach out to me on LinkedIn. Thanks for listening. I’ll talk to you next week.
Transcription by CastingWords