[Federal Register: June 3, 2008 (Volume 73, Number 107)]
[Rules and Regulations]
[Page 31634-31646]
[DOCID:fr03jn08-11]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 195

[Docket ID PHMSA-RSPA-2003-15864]
RIN 2137-AD98

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

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

ACTION: Final rule.

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

SUMMARY: PHMSA is amending its pipeline safety regulations to extend
added protection to certain environmentally sensitive areas that could
be damaged by failure of a rural onshore hazardous liquid gathering
line or low-stress pipeline. Building on PHMSA's existing regulatory
framework, the rule is intended to protect designated ``unusually
sensitive areas'' (USAs)--locations requiring extra protection because
of the presence of sole-source drinking water, endangered species, or
other ecological resources. This rule defines ``regulated rural onshore
hazardous liquid gathering lines'' and requires operators of these
lines to comply with safety requirements that address the most common
threats to the integrity of these pipelines: Corrosion and third-party
damage. In accordance with the Pipeline Inspection, Protection,
Enforcement and Safety (PIPES) Act of 2006, the rule also significantly
narrows the regulatory exception for rural onshore low-stress hazardous
liquid pipelines by extending all existing safety regulations,
including integrity management requirements, to large-diameter low-
stress pipelines within a defined ``buffer'' area around a USA. The
final rule requires operators of these, and all other low-stress
pipelines, to comply with annual reporting requirements, furnishing
data needed for further rulemaking required by the PIPES Act.

EFFECTIVE DATE: July 3, 2008.

FOR FURTHER INFORMATION CONTACT: Lane Miller by phone at<PHONE_NUMBER>
or by e-mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

    PHMSA published a Notice of Proposed Rulemaking (NPRM) (71 FR
52504; September 6, 2006) proposing to extend pipeline safety
regulations to rural onshore hazardous liquid gathering lines and rural
onshore hazardous liquid low-stress pipelines located in or within a
quarter mile of previously-defined ``unusually sensitive areas'' (See
Sec.  195.6). Unusually sensitive areas (USAs) that are in non-
populated areas need extra protection because they contain sole-source
drinking water, endangered species, or other ecological resources that
could be adversely affected by accidents or leaks from hazardous liquid
pipelines. There is no universal definition of either gathering lines
or low-stress pipelines. For purposes of safety regulation, PHMSA
defines gathering lines by reference to diameter and function and low-
stress pipelines by reference to the stress level at which they operate
(see Sec.  195.2).
    With limited exceptions, pipelines operating at low-stress in rural
areas and onshore gathering lines in rural areas have not been
regulated under Federal safety regulations for hazardous liquid
pipelines (49 CFR part 195). Section 195.2 defines a ``rural area'' as
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. Low-stress pipelines in these areas have been regulated
only if they cross commercially navigable waterways (Sec.
195.1(b)(i)(C)); in the case of rural gathering lines, only limited
requirements (inspection and burial (Sec.  195.1(b)(4)) have applied
and only to onshore gathering lines located in Gulf of Mexico inlets.
    The proposed rule would have defined ``regulated rural onshore
gathering lines'' and ``regulated rural onshore low-stress lines'' and
would have required operators of such pipelines to comply with a
threat-focused set of requirements in part 195. The safety requirements
proposed to be applied addressed the most common threats to the
integrity of these rural lines: Corrosion and third-party damage. The
proposal was intended to provide additional integrity protection, to
prevent significant adverse environmental consequences, and to

enhance public confidence in the safety of these rural pipelines.
    Before PHMSA issued the NPRM, Congress adopted the Pipeline
Inspection, Protection, Enforcement, and Safety Act of 2006 (PIPES
Act), which the President signed into law on December 29, 2006 (Pub. L.
109-468). Section four of the PIPES Act (codified at 49 U.S.C. 60102)
requires PHMSA to ``issue regulations subjecting low-stress hazardous
liquid pipelines to the same standards and regulations as other
hazardous liquid pipelines.'' The Act expressly provides that the new
regulations may be phased in.
    The threat-focused set of requirements PHMSA proposed in the NPRM,
although drawn from part 195, would not have satisfied the ``same
standards and regulations'' requirement in the PIPES Act. PHMSA
concluded it would be inefficient to finalize that proposal without
change and then later impose the rest of the Part 195 requirements.
PHMSA noted that the rural low-stress pipelines covered by the NPRM are
those where additional safety regulation is most important--larger-
diameter pipelines that can have adverse impacts on unusually sensitive
areas. PHMSA therefore concluded that the most appropriate means of
implementing the PIPES Act mandate was to extend full regulation to the
higher-risk, larger-diameter rural low-stress pipelines in this initial
phase, followed by regulation of all smaller diameter low-stress
pipelines and larger-diameter pipelines located outside of the defined
``buffer'' area.
    PHMSA presented its plan for phased rulemaking to the Technical
Hazardous Liquid Pipeline Safety Standards Committee (THLPSSC) in
January 2007. For low-stress pipelines, PHMSA recommended that
regulations be developed in two phases and explained that in phase one
it would extend all of part 195 to those higher risk, rural low-stress
pipelines addressed in the NPRM and in phase two would address those
remaining unregulated rural low-stress pipelines. This phased approach
will allow PHMSA to bring the higher-risk pipelines under immediate
regulation while gathering more comprehensive data for later rulemaking
concerning the lower-risk unregulated rural pipelines.
    To implement phase one, PHMSA modified its NPRM via a supplemental
notice of proposed rulemaking (SNPRM) that proposed to apply all part
195 requirements to any rural low-stress pipeline with a nominal
diameter of 8\5/8\ inches or more and located in or within one-half
mile of a USA. This buffer area was increased from one-quarter to one-
half mile based upon comments from the NPRM. PHMSA published the SNPRM
(72 FR 28008; May 18, 2007).

II. Rural Onshore Hazardous Liquid Gathering Lines

Proposed Changes

    Congress gave DOT specific authority to define gathering lines for
purposes of safety regulation, and to regulate a class of rural
gathering lines called ``regulated gathering lines'' (49 U.S.C.
60101(a)(21) and 60101(b)). This authority directed DOT to consider
functional and operational characteristics in defining gathering lines.
Further direction was to consider such factors as location, length of
line, operating pressure, throughput, and gas composition in deciding
which rural lines warrant regulation. In its report on H.R. 1489, a
bill that led to the Pipeline Safety Act of 1992, the House Committee
on Energy and Commerce said ``DOT should find out whether any gathering
lines present a risk to people or the environment, and if so how large
a risk and what measures should be taken to mitigate the risk'' (See
H.R. Report No. 102-247-Part 1, 102d Cong., 1st Sess., 23 (1991)). In
PHMSA's view, Congress wanted to limit ``regulated gathering lines'' to
lines posing a significant risk and to limit regulation by using a
risk-based approach for areas where the consequences of a pipeline
failure would be the greatest. DOT subsequently revised its regulations
in part 195 to cover hazardous liquid gathering lines in non-rural
areas.
    The rural onshore hazardous liquid gathering lines PHMSA proposed
to regulate in the September 6, 2006 NPRM are those that present the
greatest risk to the environment. The NPRM proposed to add a new Sec.
195.11(a) to define a ``regulated rural gathering line'' as a rural
onshore gathering line with the following characteristics:
     A nominal diameter between 6\5/8\ inches and 8\5/8\
inches;
     Operates at a maximum operating pressure established under
Sec.  195.406 that corresponds to a stress level greater than 20
percent of the specified minimum yield strength (SMYS) or, if the
stress level is unknown or the pipeline is not constructed with steel
pipe, at a pressure of more than 125 pounds per square inch (psi) gage;
and
     Is located in or within a quarter mile of an unusually
sensitive area as defined in Sec.  195.6.
    In the NPRM, PHMSA further proposed that rural gathering lines
meeting these criteria would have to comply with a focused set of
requirements in part 195 that would address the principal risks posed
by these rural pipelines.
    The PIPES Act did not affect this proposal. The subsequent SNPRM
did not change what had been proposed in the NPRM with respect to these
rural gathering lines.

Comments on the NPRM

    PHMSA received comments from 22 organizations in response to the
NPRM for rural hazardous liquid gathering lines. These included two
pipeline operators, one consultant providing services to pipeline
operators, eleven trade associations and related organizations, and
eight public interest groups involved in pipeline safety.
Scope
    As described above, PHMSA proposed applying regulatory requirements
to rural gathering lines located in or within a quarter mile of a USA
using a risk-based approach on those areas where the consequences of a
pipeline failure would be the greatest. A number of commenters
suggested changes, discussed below, to the scope of the proposed rule.
PHMSA has not made any changes in the final rule in response to these
comments.

    a. Effect on production facilities. Some commenters sought
clarification about whether the proposed changes would affect
production facilities. Several commenters, including several
associations representing petroleum producers, suggested that a clearer
definition of ``production facility'' is needed to confirm that crude
oil producers are not subject to the regulations. The Western States
Petroleum Association, supported by the American Petroleum Institute
(API) and the California Independent Petroleum Association (CIPA),
requested clarification on the applicability of the new requirements to
flow lines.
Response
    PHMSA does not have statutory authority to regulate production
facilities. ``Production facility'' has long been defined in Sec.
195.2, and PHMSA did not propose to change the definition in the NPRM.
Therefore, revising the definition is beyond the scope of this
rulemaking. Further, it is commonly understood within industry and by
regulators that flow lines are part of production facilities. The
regulations in part 195 do not apply to any portion of production
facilities.

    b. Alternative bases. Some commenters questioned the use of a USA
as a basis for determining the scope of the proposed rule. The North
Slope Borough (Alaska) Planning

Department suggested that part 195 requirements should apply to all
North Slope pipelines. The Department also suggested that PHMSA revise
the definition of a USA. In addition, the Ohio Oil and Gas Association
(OOGA) requested clarification to ensure the proposed regulations do
not include pipelines within a quarter mile of individual residential
water wells absent other triggering features.
Response
    The rule applies safety regulations to those portions of rural
gathering lines (and rural low-stress pipelines as discussed further
below) where leaks can cause the most significant damage. In regulating
pipelines based on risk, PHMSA does not have a basis for extending
regulation to other unregulated rural gathering lines. PHMSA does not
have regulatory authority over all types of production operations
conducted on the North Slope. This rule regulates rural gathering
lines, which are not present on the North Slope based upon the current
production operation designs. Therefore, the rural gathering line
provisions in this final rule do not apply to the production operations
on the North Slope.
    The clarification requested by OOGA is unnecessary. PHMSA proposed
to regulate rural onshore gathering lines based on their proximity to
USAs. USAs are defined in Sec.  195.6. Section 195.6(a) defines
drinking water sources; individual residential wells are not included
in this definition. Neither the NPRM nor the SNPRM proposed changes to
the USA definition to include such wells. Any changes to the definition
of a USA are beyond the scope of this rulemaking.

    c. Volume throughput. The Alaska Department of Environmental
Conservation (ADEC) suggested that PHMSA include volume throughput as a
contributing factor, along with location and size, in classifying
pipelines for purposes of establishing risk and determining the
appropriate regulatory regime.
Response
    PHMSA has decided to use operating stress level and size of a
gathering line as opposed to volume throughput for the purposes of
establishing the correlation of risk and consequence to a USA. Volume
throughput can fluctuate considerably on a daily basis depending on the
operation of a pipeline. Stress level and size does correlate to volume
but stress level is an understood pipeline characteristic in the
pipeline industry. Therefore, PHMSA did not include a throughput
criterion.

    d. Drug and alcohol testing. The Pipeline Testing Consortium, Inc.
(PTC) commented that drug and alcohol testing is not listed as one of
the applicable safety requirements.
Response
    Drug and alcohol testing requirements are contained in 49 CFR part
199. Section 199.1 states that they apply to operators of all
facilities subject to part 192, 193, or 195. Since the gathering lines
that will become regulated under this final rule are now ``subject to''
part 195, no further change is needed to ensure the applicability of
drug and alcohol testing requirements.
Buffer for Rural Onshore Gathering Lines
    The NPRM proposed to define a regulated rural onshore gathering
line as one meeting certain criteria and located in or within a quarter
mile of a USA. A number of comments addressed the adequacy of the
quarter mile buffer.
    Industry commenters supported the use of the buffer, noting that
analysis has shown that a quarter mile buffer will encompass most
releases that could affect a USA, and that use of a buffer will pose
less of a burden than a requirement for operators to determine, through
comprehensive analysis, which pipeline segments could affect a USA.
Taking a contrary position, Cook Inlet Regional Citizens Advisory
Council (CIRCAC) noted that the buffer fails to address the potential
for spilled hazardous liquids to move to environmentally-sensitive
areas through water or watersheds from farther than a quarter mile away
and would thus fail to include some pipelines that could affect a USA.
Response
    PHMSA agrees that using a pre-defined buffer to determine which
rural gathering lines will be regulated may except some rural gathering
line segments that could affect USAs. Nevertheless, PHMSA's experience
with oversight of ``could affect'' determinations for hazardous liquid
pipelines under integrity management requirements has shown that these
analyses are quite difficult and resource intensive.\1\ Data available
to PHMSA shows the largest spill on land traveled no more than two
acres from the site of failure. This data, coupled with the relatively
lower pressure and smaller diameter of gathering lines, leads us to
conclude that a quarter mile buffer is adequate to encompass most
pipelines that could affect a USA. We are using a buffer approach to
focus on the pipelines that pose the most significant risk and to
reduce the burden on these operators to determine which of their
pipelines are subject to regulation. It would be unnecessarily
burdensome to require all operators of these pipelines to perform
complete ``could affect'' analyses when it is unlikely such analyses
would result in much additional pipe becoming regulated.
---------------------------------------------------------------------------

    \1\ Part 195 uses the phrase ``could affect a high consequence
area'' to identify pipelines subject to integrity management rules
(Sec.  195.452). Section I.B. of Appendix C to part 195 lists
various risk factors, such as topography and shutdown ability, an
operator can use in deciding if a pipeline ''could affect a high
consequence area.''
---------------------------------------------------------------------------

Actions Required for Regulated Rural Gathering Lines
    The NPRM proposed that regulated rural gathering lines comply with
a set of requirements that focused on the most significant risks to
these pipelines--corrosion and third-party damage. The NPRM further
proposed that operators continuously monitor their pipelines to
identify and remediate any changes in operating conditions that could
necessitate cleaning the lines and accelerate their corrosion control
program as needed. Several commenters questioned the proposed required
actions or suggested that additional actions would be appropriate.

    a. Continuous monitoring. API commented that the proposed
requirement to continuously monitor regulated gathering lines for
corrosion was unnecessary because the existing regulations adequately
address corrosion and that it was unclear what additional monitoring is
needed.
Response
    We have clarified what we intended by the proposed requirement for
``continuous monitoring''. In the final rule we are requiring that
operators identify operating conditions that might require cleaning the
pipeline or using other measures, such as inhibitors, to prevent
conditions that may lead to internal corrosion (e.g. , the build-up of
solids). Gathering lines, by their nature, carry crude oil that
typically contains contaminants or impurities such as basic sediment
and water. These contaminants do not cause a problem where the oil is
traveling at high velocities in the pipeline. Under this condition,
these contaminants do not separate from the fluid stream and settle on
the bottom of the pipe. If the velocity of the fluid stream slows down,
these impurities can drop out of the oil which can potentially result
in internal

corrosion. PHMSA considers that monitoring operating conditions and
running cleaning pigs as appropriate will decrease the likelihood of
internal corrosion.

    b. Minimum standards for maintenance. ADEC commented that the
regulations should establish minimum standards for maintenance pigging
frequency and other maintenance operations designed to prevent a spill.
ADEC also suggested that the regulations should require monitoring and
recording of corrosion rates through the use of weight-loss coupons or
comparable technology.
Response
    The requirement to monitor conditions and take additional actions
to address potential internal corrosion as needed is new. It also
addresses ADEC's concern about the minimum frequency of maintenance
pigging and other activities to prevent a spill. PHMSA does not
consider it practical to establish a one-size-fits-all minimum
frequency for these activities, since the frequency at which they are
needed varies considerably for different pipeline conditions. A
requirement that operators monitor their conditions and implement
actions as appropriate to prevent or mitigate internal corrosion is
more appropriate than specified minimum frequencies for maintenance
operations.

    c. Integrity management requirements. CIRCAC noted that we did not
propose any integrity management requirements for rural gathering
lines.
Response
    The integrity management requirements are not necessary for rural
gathering lines. PHMSA's experience indicates that the most significant
threats to these pipelines are third-party damage and corrosion. The
requirements we are imposing on these pipelines address those threats.
Imposing integrity management requirements would require operators to
perform individual risk analyses. This analysis entails a foot by foot
evaluation of threats to the pipeline taking into account the
topography on both sides of the pipeline, the volume transported, the
diameter of the pipeline, the type of pipe, and the pressure in the
pipeline and the impact of the release. Our experience does not support
the need to impose such a burden. Instead, we have considered the risk
to these pipelines, identified the applicable threats and required the
measures that best address these threats. These measures include
developing a damage prevention program, complying with the corrosion
control requirements of subpart H, and monitoring and mitigating
conditions that could lead to internal corrosion.
Economic Impact
    Several commenters, including a number of associations representing
petroleum producers, noted that rural gathering lines are generally low
revenue pipelines. They contended that some of the proposed compliance
measures will be cost-prohibitive and will cause operators to abandon
these pipelines.
Response
    PHMSA does not intend to cause the unnecessary abandonment of
pipelines providing valuable contributions to the U.S. energy supply.
For gathering lines that will become regulated under this rule, the
safety regulations imposed represent a minimal set of requirements that
focus on the most significant threats to these pipelines. While they
may impose some additional burden, PHMSA considers this threat-focused
set of requirements necessary to assure adequate safety.
Reporting and Data Gathering
    Cook Inlet Keeper commented that data collection requirements for
rural gathering lines have been inadequate and supported the proposal
that operators of these gathering lines follow the reporting
requirements of subpart B.
Response
    The final rule makes the reporting requirements of part 195,
subpart B, applicable to those rural gathering lines meeting the
definition of a regulated rural gathering line.

III. Rural Onshore Hazardous Liquid Low-Stress Pipelines

Proposed Changes

    The NPRM proposed adding a new Sec.  195.12(a) to define a
``regulated rural low-stress line'' as an onshore pipeline in a rural
area meeting the following criteria:
     A nominal diameter of 8\5/8\ inches or more;
     Located in or within a quarter mile of a USA as defined in
Sec.  195.6; and
     Operating at a maximum pressure established under Sec.
195.406 that corresponds to a stress level equal to or less than 20
percent of SMYS, or if the stress level is unknown or the pipeline is
not constructed with steel pipe, a pressure equal to or less than 125
psi (861 kPa) gage.
    For these rural low-stress pipelines PHMSA proposed to apply a
threat-focused set of requirements in part 195. Most comments received
regarding this proposal were addressed in the SNPRM and are not further
discussed here.
    As discussed above, section four of the PIPES Act requires PHMSA to
``issue regulations subjecting low-stress hazardous liquid pipelines to
the same standards and regulations as other hazardous liquid
pipelines''. To address this mandate PHMSA issued a SNPRM proposing to
extend all part 195 requirements to rural low-stress pipelines meeting
certain criteria. This is phase one of PHMSA's phased approach to
implementing the mandate. Phase one addresses the larger-diameter,
higher-risk, rural low-stress pipelines that could pose a greater
threat to USAs. This phase will also help capture the data PHMSA needs
before it can extend part 195 coverage to all other unregulated, rural
low-stress pipelines in phase 2.
    The SNPRM:
     Revised the proposed definition to include rural low-
stress pipelines in or within a half mile of a USA,
     Applied to pipelines meeting the listed criteria of all
requirements of part 195 rather than the threat-focused set of
requirements proposed in the NPRM,
     Allowed operators to conduct ``could affect'' analyses of
which pipeline segments could affect a USA in lieu of the buffer for
application of the integrity management requirements of Sec.  195.452,
and
     Allowed operators of pipelines meeting specified criteria
to notify PHMSA if they would incur an excessive economic burden in
complying with the integrity management assessment requirement. PHMSA
proposed to stay compliance with the integrity management assessment
requirements while it reviewed the notification. Based on the outcome
of the review, PHMSA proposed to grant the operator a special permit
imposing alternative safety requirements in lieu of an assessment.
    The SNPRM also proposed to extend subpart B reporting requirements
to operators of all unregulated low-stress pipelines. PHMSA explained
that this was necessary so that it would have accurate and complete
data about these types of pipeline operations for phase two of its low-
stress pipeline rulemaking.

Comments on the SNPRM and NPRM (to the Extent not Addressed in the
SNPRM)

    PHMSA received comments from ten organizations in response to the
SNPRM. These included one pipeline operator, six trade associations and
related organizations, and three public

interest groups involved in pipeline safety.
Buffer
    a. Buffer size. Several trade associations challenged our proposal
to increase from a quarter to a half mile the buffer used to determine
which rural low-stress pipelines will be subject to regulation. The
commenters noted that PHMSA stated in the SNPRM that it considered a
quarter mile to be adequate but had increased the buffer for
conservatism and to address concerns of public interest groups. The
commenters further noted that none of these groups provided any
technical basis for a particular buffer size and stated that they
believe expanding the buffer to a half mile is unwarranted.
Response
    As described above, the PIPES Act requires that all rural low-
stress pipelines be subject to all the safety requirements in part 195.
This requirement largely renders moot disagreements about the size of
the buffer used here. In the final rule, as was proposed in the SNPRM,
PHMSA has doubled the size of the buffer, to a half mile, for added
conservatism. For phase one, we are approximating the could-affect
analysis by using a buffer to provide a reasonable means of identifying
most of the pipelines that could affect USAs. This increase in the
buffer size from one-quarter to one-half mile increases the estimated
amount of low-stress pipelines covered in this final rule from 694
miles to 803 miles.

    b. Buffer vs. analysis. Cook Inlet Keeper again objected to the use
of a buffer approach in lieu of detailed could-affect determinations.
Cook Inlet Keeper further objected to the option for operators to use
could-affect determinations to reduce the scope of pipeline covered by
integrity management requirements in the absence of an analogous means
to increase the scope of coverage where pipeline segments more than a
half mile from a USA could have an effect in the event of a leak.

Response
    For phase one, the buffer is the first step in applying part 195
requirements to all rural low-stress pipelines. For this phase, PHMSA
considers it appropriate to increase the size of the buffer to be used
for bringing rural low-stress pipelines under regulation as a response
to the expressed concerns of the public interest groups and Congress.
PHMSA also notes that this final rule allows operators to analyze their
pipelines to determine which segments could affect USAs for purposes of
application of integrity management requirements. This could-affect
analysis could result in a larger or smaller area than the half mile
buffer. As PHMSA has done with other integrity management inspections,
these analyses will be scrutinized for adequate supporting technical
justification and appropriate consideration of risk factors.
Reporting Requirements
    a. Lack of integrity management data. The Independent Producers
Association of America (IPAA), the Independent Petroleum Association of
Mountain States (IPAMS), and API objected to the proposal to apply all
the reporting requirements in subpart B to those rural low-stress
pipelines that will be considered in the phase two rulemaking. These
associations suggested PHMSA require only infrastructure information
for these currently non-regulated pipelines until phase two is
implemented, because operators are not required to implement integrity
management requirements on these pipelines and would lack the
associated data for annual and incident reports. Cook Inlet Keeper
supported requiring operators of all low-stress pipelines to report
their incidents and safety-related conditions but took no position on
data related to integrity management.
Response
    Parts J and K of the annual report form require reporting of data
derived from integrity management assessments. PHMSA recognizes that
operators will not have integrity management information on pipelines
to which integrity management requirements are not applicable. We have
modified the new Sec.  195.48 so that operators of low-stress pipelines
do not have to complete parts J and K of the annual report form, or to
report mileage in high consequences areas,\2\ unless they are also
subject to integrity management requirements. However, all operators of
low-stress pipelines must report incidents and safety-related
conditions.
---------------------------------------------------------------------------

    \2\ High consequence areas are defined in 49 CFR 195.450.
---------------------------------------------------------------------------

    b. Effective dates for reporting. API noted the range of proposed
dates for complying with the reporting requirements differed between
proposed sections 195.12(b)(1), where it was stated as 6-12 months, and
195.48 where it was stated as 6-9 months. Cook Inlet Keeper supported
the proposed implementation timeframes but made no choices for
particular values within the ranges proposed.
Response
    In the SNPRM, we solicited comments on a range of potential
implementation timeframes for reporting requirements and received no
comments on which time period was appropriate. PHMSA will require that
reporting begin six months after the effective date of the final rule.
This date was included in the range suggested in both sections cited by
API, and PHMSA believes it affords operators reasonable time to make
necessary changes in internal data collection and processing
procedures.
Economic Burden
    Several organizations noted that the increased burden to conduct
integrity management assessments could cause operators of some
pipelines associated with marginal and ``stripper'' wells to cease
operation, causing loss of oil supply or use of more costly and more-
risky truck transport. To address these comments, PHMSA proposed a
procedure under which operators serving such wells could obtain relief
from the integrity management assessment requirement. The SNPRM
proposed to limit this procedure to operators of rural low-stress
pipelines serving production facilities and operating at a flow rate
lower than or equal to 14,000 barrels per day. The operator of such a
pipeline could notify PHMSA of its intent to abandon the pipeline
because of the economic burden associated with the integrity management
assessment requirements. PHMSA would stay the integrity management
assessment requirements pending review of such notification and, based
on the analysis of the notification, could grant the operator a special
permit to allow continued operation of the pipeline while also assuring
safety through alternative safety requirements.
    API and SemCrude (a pipeline operator) suggested that the economic
burden notification provision be made available to all low-stress
pipelines by eliminating the criterion that a pipeline must carry crude
oil from a production facility. Independent Petroleum Association of
New Mexico (IPANM) supported the proposed exemption from the inline
inspection requirements for pipelines with less than 14,000 barrels per
day flow rate because of the potential loss of energy supply if wells
were abandoned. API and AOPL recommended that PHMSA prepare a guidance
document describing the factors it intends to consider in its review of
economic burden notifications. IPA, IPAMS, and Cook

Inlet Keeper supported the proposed notification requirement, with Cook
Inlet Keeper noting that it proposes ``a reasonable approach to ensure
that PHMSA's rule will not result in loss of a critical energy
supply.''
Response
    PHMSA did not propose an exemption from compliance. Rather, in the
SNPRM, PHMSA proposed to allow operators of pipelines meeting specified
criteria to notify PHMSA that an integrity management assessment would
be too economically burdensome and to have their particular
circumstances considered. In these limited instances, after
consultation with the Department of Energy (DOE), we intended to issue
a special permit that would require other, less economically burdensome
safety requirements in lieu of an assessment.
    We have included this provision in the final rule. This provision
is intended to address impacts on producing wells that are only
marginally economical. Operation of these wells would be affected if
the pipeline serving them is shut down because of an economic inability
to comply with the assessment requirements. The result would be a loss
to U.S. energy supply of oil from shutting these wells or an adverse
impact on safety by a shift to another form of transportation (e.g. ,
trucks). As such, the concern is specifically limited to pipelines that
carry crude oil from production facilities. We recognize that the final
rule will impose further economic burden on those operators of rural
low-stress pipelines that have not previously been subject to PHMSA's
regulations and oversight. In most cases, this will not be a factor. As
PHMSA explained in the SNPRM, we believe most of the rural low-stress
pipelines that will be subject to the final rule are held by large
operators, which are already complying with the requirements of part
195. In addition, in keeping with the PIPES Act, we consider the
regulatory burden justified by the increased safety and environmental
protection that will result from implementation of the final rule.
    PHMSA believes that API and AOPL requested guidelines because the
SNPRM did not include the types of information PHMSA wants operators to
provide in the notification. Therefore, PHMSA has added in this final
rule a list of the topics that must be addressed when notifying us of
an economic burden in Sec.  195.12(c)(2). PHMSA will consider the need
for additional guidance as experience is gained in evaluating these
notifications.
Scope
    a. USA as basis. The North Slope Borough Planning Department
recommended, as they did for rural gathering lines, that part 195
regulations apply to all the pipelines on the North Slope. The North
Slope Borough Planning Department also recommended that PHMSA expand
the USA definition.
Response
    This rulemaking is the first phase that brings a portion of rural
low-stress pipelines under regulation. As discussed above, PHMSA is
acting in phases to meet the statutory mandate that all low-stress
pipelines be made subject to safety regulations. Future phases will
make all low-stress pipelines on the North Slope subject to regulation.
No change in the USA definition is needed to accomplish this.
    b. Residential wells. The OOGA sought assurance that the definition
of regulated rural low-stress pipelines applies only to hazardous
liquid pipelines. The OOGA also requested clarification that the
proposed regulations are not meant to include pipelines within a
quarter mile of individual residential water wells, absent other
triggering features.
Response
    The definition of regulated rural low-stress pipelines is included
in part 195. Part 195 is applicable only to hazardous liquid pipelines.
This definition therefore has no effect on other types of pipelines.
OOGA's comment concerning residential wells applied to both gathering
lines and low-stress pipelines and has been addressed in the gathering
line discussion above.
    c. Potential for jurisdictional confusion. The Oklahoma Independent
Petroleum Association (OIPA) suggested that PHMSA provide additional
clarification about which pipelines are subject to the SNPRM to prevent
confusion within the regulated industry and among state regulatory
agencies and to prevent the requirements from being inadvertently
applied to gathering lines. Additionally, IPAA and IPAMS noted that
some confusion may still exist in the SNPRM concerning applicability of
some requirements to gathering systems. API suggested that to avoid
confusion between rural gathering lines covered under Sec.  195.11 and
rural low-stress pipelines covered under Sec.  195.12, we include a
nominal diameter greater than 8\5/8\ inches as a criterion defining
regulated rural low-stress pipelines.
Response
    We do not think further clarification is needed in the final rule.
We are not adopting API's recommendation to define a low-stress
pipeline as a pipeline with a nominal diameter greater than 8\5/8\
inches. Gathering line is defined in Sec.  195.2 to be a pipeline of
8\5/8\ inches or less nominal outside diameter that transports
petroleum from a production facility. The key characteristic is coming
from a ``production facility.'' A pipeline that comes from a production
facility that is greater than 8\5/8\ inches in diameter is not a
gathering line, but a pipeline in transportation. If this type of line
operates at a pressure that is less than 20% SMYS, it would be subject
to the requirements proposed for low-stress pipelines. There are also
pipelines that are upstream of refining that do not come from a
production facility and are pipelines in transportation. If these
pipelines are greater than 8\5/8\ inches and operate at a pressure that
is less than 20% SMYS, they also would be subject to the requirements
proposed for rural low-stress pipelines.

IV. Comments Outside the Scope of This Rulemaking

    Several commenters raised issues beyond the scope of the NPRM or
SNPRM.
    ADEC suggested we include in Sec.  195.452, a specific requirement
to periodically measure and record the wall thickness of each pipeline
and establish in the regulations a minimum pipe wall ``fit for
service'' standard. ADEC also suggested that the regulations should
require evaluation of flow rates, water content, sediment, and upset
conditions as part of the integrity assessment proposed in the NPRM.
    API recommended that the repair criteria in Sec.  195.452(h) be
revised to relax the requirement to repair dents without metal loss.
API states that dents operating at such low pressures pose a much lower
risk of failure.
    API and Bridger Pipeline LLC suggested that ``petroleum storage''
be added to the list of facilities in proposed Sec.  195.1(b)(4) so
that short (i.e., less than one mile long) low-stress pipelines serving
such facilities would be excluded from regulation. In support of its
comment, API noted that the logic used in a 1997 rulemaking to
establish the other exclusions contained in Sec.  195.1(b)(4) applies
equally well to pipelines serving petroleum storage facilities.

Response

    Each of these comments addresses issues which were not proposed in
the

NPRM or SNPRM, and thus were not subject to public comment. Therefore,
we have not incorporated any of these changes into the final rule.
    With respect to ADEC's comments, the NPRM included limited
requirements for integrity assessment for rural low-stress pipelines as
an alternative to the requirements of Sec.  195.452. In the SNPRM,
PHMSA proposed to substitute the full integrity assessment requirements
of Sec.  195.452. The integrity assessment requirements of Sec.
195.452, imposed on low-stress pipelines by Sec.  195.12(b)(2) of this
final rule, will result in the same type of analysis as ADEC suggests
without the need for modifying Sec.  195.452.
    API's and Bridger Pipeline's comment applies to a paragraph
included in a revision of Sec.  195.1 describing the overall
applicability of part 195. The purpose of the revision in the NPRM was
for clarity and proposed no substantive changes other than to add the
pipelines addressed in this rulemaking. The proposed revision to Sec.
195.1 was repeated in the SNPRM without change. We have not made any
further changes to Sec.  195.1, beyond those proposed, that would
change the scope of part 195.

V. Advisory Committee

    On July 24, 2007, PHMSA convened, via telephone conference, a
meeting of the THLPSSC, which is a statutorily mandated advisory
committee that advises PHMSA about the technical feasibility,
reasonableness and cost-effectiveness of its proposed regulations.
    The purpose of the meeting was to request the committee to vote on
the proposed rules as presented in the NPRM for rural hazardous liquid
gathering lines and in the SNPRM for rural low-stress hazardous liquid
pipelines. PHMSA discussed some of the key comments received in
response to the NPRM (a quarter mile buffer zone and ``continuous
monitoring'' for operators with rural onshore gathering lines) and also
to the SNPRM (half mile buffer zone and the notification process for
operators with rural onshore low-stress pipelines). These comments have
been previously discussed in this document.
    Some members of the committee were concerned that the rulemaking
does not cover all rural low-stress pipelines and does not meet the
mandate from the PIPES Act to have regulations for low-stress pipelines
in place a year from its enactment. The PIPES Act allows PHMSA to phase
in the regulations for low-stress pipelines. PHMSA presented to the
committee in January 2007 its plan to approach regulating rural low-
stress pipelines in two phases. In this initial phase, PHMSA is
implementing full regulation of the higher-risk, larger-diameter rural
low-stress pipelines. PHMSA has not yet proposed adding requirements to
rural low-stress pipelines not addressed in the SNPRM.
    A few members of the committee expressed a concern that the
proposed regulations did not require the operator of a rural low-stress
pipeline to conduct an analysis of the pipeline to determine which
pipeline segments ``could affect'' a USA. As discussed earlier, PHMSA
concludes that the ``buffer'' approach that includes low-stress
pipelines within a half mile of a USA captures the pipeline segments
that could affect USAs. The buffer is intended to approximate the
could-affect analyses based on the risk factors most common for these
rural low-stress pipelines. We have given operators the option of using
a could-affect analysis to determine the exact size of the could-affect
area.
    During the meeting, committee members addressed the API comment
that the repair criteria in Sec.  195.452(h) be revised to relax the
requirement to repair dents without metal loss, stating that dents
operating at such low pressures pose a much lower risk of failure. As
discussed previously, this change to the regulations is beyond the
scope of this rulemaking proceeding. PHMSA plans to review these
criteria as we move into the phase two rulemaking for rural low-stress
pipelines.
    After careful consideration, the THLPSSC voted unanimously to find
the NPRM, SNPRM, and supporting regulatory evaluations technically
feasible, reasonable, practicable, and cost effective. A transcript of
the teleconference is available in Docket ID PHMSA-RSPA-2003-15864.

VI. Final Rule

    The final rule revises 49 CFR part 195 to bring the higher risk,
large diameter rural onshore gathering lines and low-stress pipelines
under its coverage. The final rule also revises the statement of the
scope of part 195 for clarity and revises the instructions for sending
notifications related to integrity management assessments to change the
mailing address (due to DOT headquarters recent move) and to add an
option to submit the notification via the Internet.

Section-by-Section Analysis

Section 195.1 Which pipelines are covered by this part?

    Part 195 has been revised numerous times over the years. These
changes have often included changes to the pipelines covered or
excluded as described in Sec.  195.1. As a result of these piecemeal
changes, this section became somewhat confusing. We have revised this
section to provide more clarity.
    This section identifies the scope of hazardous liquid pipelines to
which part 195 requirements apply. Section 195.1(b) includes a list of
particular types of pipelines that are exempted from the requirements
of part 195.
    This rule also adds certain rural onshore gathering lines and low-
stress pipelines to the list of pipelines for which part 195 is
applicable. This requires a change to Sec.  195.1 to add these
pipelines to the scope. The pipelines added to the scope of part 195
are regulated rural gathering lines (defined in Sec.  195.1(a)(4)(ii)),
rural low-stress pipelines meeting specified criteria (Sec.
195.1(a)(5)(ii)). In addition, we have also added the reporting
requirements for all rural low-stress pipelines (Sec.  195.1(a)(6)).
    There are no other substantive changes.

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

    This final rule adds this new section. This section defines the
rural gathering lines newly subject to safety regulation (Sec.
195.11(a)). These are rural gathering lines from 6\5/8\ to 8\5/8\
inches in diameter that are located in or within a quarter mile of a
USA as defined in Sec.  195.6, and that operate at greater than 20
percent SMYS (or more than 125 psi (861 kPa) gage for non-steel pipe).
USAs include areas requiring extra protection because of the presence
of sole source drinking water, endangered species, or other ecological
resources that could be damaged by oil leaks.
    This section also defines the regulatory requirements applicable to
regulated rural gathering lines (Sec.  195.11(b)) and timeframes for
implementation. All new rural gathering lines meeting the criteria in
paragraph (a) must be designed, installed, constructed, and tested in
accordance with the requirements of part 195. The maximum operating
pressure for regulated rural gathering lines must be established in
accordance with the requirements of Sec.  195.406. These pipelines must
also be marked and must be addressed by a public education and a damage
prevention program. Steel pipelines must be protected from corrosion in
accordance with the requirements of subpart H. Operators must also
develop and implement a program to continuously assess operating
conditions (e.g., flow rate) that could lead to internal corrosion, to
clean their lines accordingly, and to begin or

modify the use of corrosion inhibitors as needed. Finally, operators
must be able to demonstrate that personnel who perform activities on
these pipelines are qualified for such tasks.

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

    This section is also newly added in this final rule. It applies to
low-stress pipelines 8\5/8\ inches and greater in diameter that are
located in, or within a half mile of, a USA as defined in Sec.  195.6,
and that operate at less than 20 percent of SMYS (or less than 125 psi
(861 kPa) gage for non-steel pipe). Affected operators must comply with
all requirements of part 195, as required by the PIPES Act. This
section identifies the timeframes in which operators must comply with
various portions of part 195 (Sec.  195.12(b)). The timeframes are
based on PHMSA's judgment concerning how long it will take an operator
to implement the requirements without imposing undue burden.
    This section also includes a provision allowing operators of
affected pipelines meeting certain criteria to notify PHMSA if they
conclude that implementing the integrity management assessment
requirements will pose such an economic burden that they would abandon
their pipelines. This provision is limited to 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.
    This section does not apply to rural low-stress pipelines that
cross a waterway used for commercial navigation because they are
currently regulated under this part. This rule makes no change to the
applicability of part 195 requirements to these pipelines.

Section 195.48 Scope

    There has not previously been a scope section in subpart B, because
all pipelines subject to part 195 were subject to all the requirements
in subpart B. This section is added as part of this final rule to
define the scope of pipelines now subject to subpart B reporting
requirements. All pipelines that have previously been subject to part
195 must still meet all subpart B reporting requirements. In addition,
all rural low-stress pipelines (including those not meeting the
criteria in Sec.  195.12(a)) must follow the reporting requirements
beginning six months after the effective date of the final rule.
Subpart B thus now applies to some pipelines (i.e., rural low-stress
pipelines not meeting the criteria of Sec.  195.12(a)) that are not
otherwise subject to part 195. This is a first step towards applying
all the requirements of part 195 to all rural low-stress pipelines, as
required by the PIPES Act, and is intended to generate information that
will be necessary for future regulatory analysis. Rural low-stress
pipelines not now subject to the other requirements of part 195 are not
required to complete those portions of the annual report form that
relate to integrity management requirements and inspections.

Section 195.452 Pipeline Integrity Management in High Consequence Areas

    The substantive integrity management requirements in this section
are not changed. The only change is to paragraph (m), which informs
operators where and how to submit notifications that are required under
this section. DOT headquarters has moved to a different location in
Washington, DC, and the mailing address in this paragraph is changed
accordingly. Paragraph (m) has also been modified to provide the option
for operators to submit notifications via the Internet. PHMSA would
prefer that operators use Internet submission.

VII. Regulatory Analyses and Notices

Executive Order 12866 and DOT Policies and Procedures

    PHMSA considers the final rule a significant regulatory action
under Section 3(f) of Executive Order 12866 (58 FR 51735; Oct. 4,
1993). The rulemaking is also significant under DOT regulatory policies
and procedures (44 FR 11034: February 26, 1979). PHMSA has prepared a
final Regulatory Evaluation, a copy of which has been placed in the
docket.
    Both rural onshore gathering lines and rural onshore low-stress
pipelines will be affected by the regulatory changes included in the
final rule. The following table presents the estimates of the mileage
affected by the final rule.

                   Table.--Summary of Affected Mileage
------------------------------------------------------------------------
                          Category                              Miles
------------------------------------------------------------------------
                          Rural Gathering Lines
------------------------------------------------------------------------
Gathering line mileage affected............................          599
------------------------------------------------------------------------
                       Rural Low-Stress Pipelines
------------------------------------------------------------------------
Low-stress mileage brought under part 195 safety                     803
 requirements..............................................
Additional low-stress mileage for which annual, accident,          3,921
 and safety-related condition reports must be filed........
------------------------------------------------------------------------

    The primary quantifiable benefits expected from the final rule are
improved safety performance and reliability for the pipeline mileage
brought under part 195. That is, the final rule is expected to reduce
the number of incidents and the incident consequences (including
deaths, injuries, property damage, product loss, environmental damage,
and environmental spill cleanup activities). The final rule is expected
to generate benefits from both the affected gathering lines and the
affected low-stress pipelines.
    Overall, the benefits of the final rule are expected to be
approximately $4 million annually. This includes only a portion of the
total benefits, since benefits from improved safety of gathering lines
could not be quantified. The present value of the benefits that could
be quantified for a 20-year period using a 3-percent discount rate is
approximately $58 million, while the present value for a 20-year period
using a 7-percent discount rate is approximately $41 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 recent 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.
    The operators of the pipelines affected by the regulatory changes
included in the final rule are expected to incur costs attributable to
those changes. Both the affected gathering lines and the affected low-
stress pipelines are expected to incur costs attributable to the final
rule.
    With respect to rural gathering lines, the following activities
required by the final rule are those most likely to give rise to new
costs:
     Determine whether the pipelines are within a quarter mile
of a USA.

     Implement corrosion control for steel pipes.
     Continuously identify operating conditions that could
contribute to internal corrosion.
     Install and maintain pipeline line markers.
     Implement a damage prevention program.
     Implement a public education program.
     Establish a maximum operating pressure (MOP) for steel
pipes.
     Report accidents and safety-related conditions and make
annual reports.
     Meet design, construction, and testing requirements for
steel gathering lines constructed, replaced, relocated, or otherwise
changed.
     Meet drug and alcohol testing requirements.
     Demonstrate compliance with operator qualification
requirements.
    With respect to rural low-stress pipelines, the costs of the rule
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, the low-stress pipelines brought under part 195 would
also need to comply with 49 CFR part 199, which deals with alcohol and
drug testing.
    Overall, the costs of the final rule are expected to be
approximately $6 million in the first year, $3 million in the second
through the sixth years, and $2 million in all subsequent years. The
present value of this cost over 20 years using a 3-percent discount
rate is approximately $39 million, while its present value over 20
years using a 7-percent discount rate is approximately $29 million.
    Comparing the benefits and costs indicates the final rule is cost-
beneficial. Net benefits (the excess of benefits over costs) for the
final rule are approximately $20 million using a 3-percent discount
rate and $13 million using a 7-percent discount rate. When considering
these results, it should be kept in mind that many benefits associated
with the final rule could not be quantified.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), PHMSA
must consider whether its rulemaking actions would have a significant
economic impact on a substantial number of small entities.
    Based on consultations with the IPAA, which represents over 6,000
independent crude oil and natural gas producers throughout the U.S. and
with the Small Business Administration, PHMSA expects a very few small
operators to be affected by the rule. Rather, PHMSA expects that the
rule will affect major petroleum pipeline companies with more than
1,500 employees.
    Based on available information, PHMSA expects that major petroleum
pipeline companies operate the gathering lines operating at more than
20% of SMYS (or alternatively at 125 psi (861 kPa) gage). In total, 35
major petroleum pipeline companies were estimated to operate these
gathering lines. PHMSA's information also indicates that major
petroleum pipeline companies are expected to operate the low-stress
lines with a nominal diameter of 8\5/8\ inches or greater. The exact
number of major petroleum pipeline companies operating these pipelines
is unknown, although it is estimated to be between 30 and 40.
    PHMSA notes that the requirement for all operators of low-stress
pipelines to submit annual, accident, and safety-related condition
reports will affect small operators. The costs associated with this
reporting, however, will be minor (see the summary of the Paperwork
Reduction Act analysis, which is presented below). Therefore, based on
this information showing that the economic impact of this rule on small
entities will be minor, I certify under section 605 of the Regulatory
Flexibility Act that these regulations 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 will 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

    This final rule contains information collection requirements
applicable to operators of hazardous liquid gathering lines and low-
stress pipelines in rural areas. The information collection required by
this rulemaking is already approved under OMB Control No. 2137-0047.
With an estimated additional 35 operators subject to these
requirements, this rulemaking will add an additional 873 burden hours
in the first year of implementation and 453 burden hours in subsequent
years. Renewal of the existing information collection with the
additional burden is pending.
    Operators of regulated rural onshore hazardous liquid gathering
lines will be required to comply with 49 CFR part 195 information
collection requirements for demonstration of operator qualification,
public awareness, drug and alcohol testing, and annual, accident, and
safety-related condition reporting. Operators of certain gathering
lines in non-rural areas are currently subject to part 195. The number
of gathering line operators subject to regulation may vary as lines are
brought into and taken out of service and as changes occur in the
boundaries of non-rural locations. The number may also vary as changes
occur as new USAs are identified. The final rule is not expected to
substantially increase the number of operators under PHMSA jurisdiction
and will only marginally increase the burden hours for all information
collections requirements.
    The burden hours will remain the same for the operator
qualification and drug and alcohol reporting requirements because
regulated rural onshore gathering line operators may continue to use
their existing cadre of personnel to address the requirements in this
final rule, and this rule will not require operators to modify their
existing programs. Regarding operator qualification, operators only
need to demonstrate that they are complying with the operator
qualification requirements. Therefore, no additional employees will be
tested or be required to qualify to perform covered pipeline duties.
There will be a slight increase in burden hours for operators adding
gathering lines to their public awareness, damage prevention, and
corrosion control programs, and subpart B reporting requirements. Most,
if not all, of the operators of these pipelines already have to comply
with these existing program requirements and only need to add these
regulated rural onshore gathering lines to their existing programs. It
should take each operator no more than an additional eight burden hours
to include the gathering lines into its public awareness program, and
four burden hours to modify its damage prevention program. The final
rule will require operators to modify their corrosion control programs
to establish comprehensive programs for continuously identifying
operating

conditions that could contribute to internal corrosion; this should
take each operator no more than an additional ten burden hours
annually. Lastly, it will require no more than an additional eight
hours for an operator to comply with the annual, accident, and safety-
related condition reporting requirements in subpart B. These burden
hour estimates are based on data for currently regulated pipelines.
    Therefore, this final rule marginally increases the burden hours
for regulated rural onshore gathering line operators. This rule adds
1,050 additional burden hours to affected regulated onshore rural
gathering lines operators the first year, and 630 burden hours each
subsequent year. The associated cost of these annual burden hours is
$67,987.50 in the first year and $40,792.50 every year thereafter.
    Operators of hazardous liquid low-stress lines will be required to
comply with all information collection requirements in part 195.
Further, operators of low-stress lines that will remain unregulated
must comply with the reporting requirements in subpart B, i.e., annual,
accident, and safety-related condition reports. The operators of
certain low-stress lines in non-rural areas are currently subject to
part 195. Like gathering line operators, the number of low-stress
pipeline operators subject to regulation also may vary as lines are
brought into and taken out of service and as changes occur in the
boundaries of non-rural locations. This final rule also may vary as
changes occur as new USAs are identified. Except for the subpart B
reporting requirements, this final rule is not expected to increase the
number of operators under PHMSA jurisdiction complying with part 195.
    The burden hours will remain the same for operator qualification
and drug and alcohol reporting requirements because low-stress
operators may continue to use their existing cadre of personnel to
address the requirements in this final rule, and this rule will not
require operators to modify their existing programs. Therefore, no
additional employees will be tested or required to qualify to perform
covered pipeline duties. There will be a slight increase in burden
hours for operators adding rural low-stress lines to their integrity
management, national pipeline mapping, public awareness, damage
prevention, and corrosion control programs. Operators of these lines
already have to comply with these existing program requirements and
only need to add these rural low-stress pipelines to their existing
programs. It should take each operator an additional 20 burden hours to
include its rural low-stress pipelines into its existing integrity
management program, and 20 burden hours for all operators to provide
mapping information to PHMSA on the characteristics of its pipeline
system. It should take each operator an additional eight burden hours
to include the rural low-stress pipelines in its public awareness
program, and four burden hours to modify its damage prevention program.
The final rule will require operators to modify their corrosion control
programs, which should take each operator no more than an additional
ten burden hours annually. The increase associated with these
information collection requirements is 2,170 burden hours the first
year, and 1,330 hours each subsequent year. The associated cost of
these annual burden hours is $140,507.50 in the first year and
$86,117.50 in each subsequent year.
    This final rule also requires all operators of regulated and
unregulated low-stress pipelines to comply with the reporting
requirements in subpart B for annual, accident, and safety-related
condition reports. Operators of unregulated rural low-stress pipelines
that currently are not required to follow part 195 will take an
additional 892 burden hours to comply with these reporting requirements
in the first year after implementation and 420 burden hours in each
subsequent year. The total cost of the added burden hours in the first
year is estimated to be $57,757 and $27,195 in each subsequent year.
These calculations are based on 4,724 miles of previously unregulated
rural low-stress pipeline. This mileage includes 803 miles of low-
stress pipeline within a half mile of a USA that will be regulated
under this rule and an estimated additional 3,921 miles of rural low-
stress pipeline that would be subject only to subpart B reporting
requirements. Most of the burden hours will be generated by operators
previously unregulated. For those operators that currently have
regulated pipelines under part 195, the burden hour increase will be
minimal.
    Except for the subpart B reporting requirements, this final rule is
estimated to marginally increase the burden hours for rural low-stress
operators. This rule adds 954 additional burden hours to affected rural
low-stress pipeline operators the first year, and 458 burden hours each
subsequent year. The associated cost of these annual burden hours is
$61,771.50 in the first year and $23,655.50 every year thereafter.
    In total, this final rule will slightly increase the paperwork
burden for affected regulated rural onshore gathering line and rural
low-stress pipeline operators. In the first year after implementation,
this final rule is expected to add 984 burden hours, which is expected
to cost $63,724. In subsequent years, the final rule is expected to add
476 burden hours, which is expected to cost $24,820.50

Unfunded Mandates Reform Act of 1995

    This rulemaking does not impose unfunded mandates under the
Unfunded Mandates Reform Act of 1995. It does not result in costs of
$100 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 proposed rulemaking.

National Environmental Policy Act

    PHMSA has analyzed this rulemaking for purposes of the National
Environmental Policy Act (42 U.S.C. 4321, et seq.). PHMSA has
determined that this rulemaking will not significantly affect the
quality of the human environment. This rulemaking will require only
limited physical modification or other work that would disturb pipeline
rights-of-way resulting in negligible to minor negative environmental
impact from activities 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. Based on the
comments from the THLPSSC and the testimony provided by operators
during the 2006 Congressional hearings, PHMSA believes that many of
these safety measures, such as implementing corrosion control and
installing and maintaining line markers, have already been implemented
on a large portion of the pipeline mileage that will become regulated
under this final rule. Furthermore, by requiring activities such as
accident reporting, implementing public education and damage prevention
programs, and establishing operator qualification programs, it is
likely that the number of spills from rural onshore hazardous liquid
gathering and low-stress lines will be reduced. Reductions in hazardous
liquid spills are a minor to moderate positive environmental impact
offsetting the negligible negative environmental impacts. A final
environmental assessment document is in the docket.

Executive Order 13132

    PHMSA has analyzed this final rule according to the principles and
criteria contained in Executive Order 13132 (``Federalism''). This rule
does 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
rulemaking 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.

0
Accordingly, 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).
This includes:
    (1) Any pipeline that transports a highly volatile liquid (HVL);
    (2) Transportation through any pipeline, other than a gathering
line, that has a maximum operating pressure (MOP) greater than 20-
percent of the specified minimum yield strength;
    (3) Any pipeline segment that crosses a waterway currently used for
commercial navigation;
    (4) Transportation of petroleum in any of the following onshore
gathering lines:
    (i) A pipeline located in a non-rural area;
    (ii) To the extent provided in Sec.  195.11, a regulated rural
gathering line defined in Sec.  195.11; or
    (iii) To the extent provided in Sec.  195.413, a pipeline located
in an inlet of the Gulf of Mexico.
    (5) Transportation of a hazardous liquid or carbon dioxide through
a low-stress pipeline or segment of pipeline that:
    (i) Is in a non-rural area; or
    (ii) Meets the criteria defined in Sec.  195.12(a).
    (6) For purposes of the reporting requirements in subpart B, a
rural low-stress pipeline of any diameter.
    (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) A pipeline subject to safety regulations of the U.S. Coast
Guard;
    (4) A low-stress pipeline that serves refining, manufacturing, or
truck, rail, or vessel terminal facilities, if the pipeline is less
than one mile long (measured outside facility grounds) and does not
cross an offshore area or a waterway currently used for commercial
navigation;
    (5) Transportation of hazardous liquid or carbon dioxide in an
offshore pipeline in State waters where the pipeline is located
upstream from the outlet flange of the following farthest downstream
facility: The facility where hydrocarbons or carbon dioxide are
produced or the facility where produced hydrocarbons or carbon dioxide
are first separated, dehydrated, or otherwise processed;
    (6) Transportation of hazardous liquid or carbon dioxide in a
pipeline on the OCS where the pipeline is located upstream of the point
at which operating responsibility transfers from a producing operator
to a transporting operator;
    (7) A pipeline segment upstream (generally seaward) of the last
valve on the last production facility on the OCS where a pipeline on
the OCS is producer-operated and crosses into State waters without
first connecting to a transporting operator's facility on the OCS.
Safety equipment protecting PHMSA-regulated pipeline segments is not
excluded. A producing operator of a segment falling within this
exception may petition the Administrator, under Sec.  190.9 of this
chapter, for approval to operate under PHMSA regulations governing
pipeline design, construction, operation, and maintenance;
    (8) Transportation of a hazardous liquid or carbon dioxide through
onshore production (including flow lines), refining, or manufacturing
facilities or storage or in-plant piping systems associated with such
facilities;
    (9) Transportation of a hazardous liquid or carbon dioxide:
    (i) By vessel, aircraft, tank truck, tank car, or other non-
pipeline mode of transportation; or
    (ii) Through facilities located on the grounds of a materials
transportation terminal if the facilities are used exclusively to
transfer hazardous liquid or carbon dioxide between non-pipeline modes
of transportation or between a non-pipeline mode and a pipeline. These
facilities do not include any device and associated piping that are
necessary to control pressure in the pipeline under Sec.  195.406(b);
or
    (10) Transportation of carbon dioxide downstream from the
applicable following point:
    (i) The inlet of a compressor used in the injection of carbon
dioxide for oil recovery operations, or the point where recycled carbon
dioxide enters the injection system, whichever is farther upstream; or
    (ii) The connection of the first branch pipeline in the production
field where the pipeline transports carbon dioxide to an injection well
or to a header or manifold from which a pipeline branches to an
injection well.
    (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. Add Sec. Sec.  195.11 and 195.12 to read as follows:

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

    Each operator of a regulated rural gathering line, as defined in
paragraph (a) of this section, must comply with the safety requirements
described in paragraph (b) of this section.
    (a) Definition. As used in this section, a regulated rural
gathering line means an onshore gathering line in a rural area that
meets all of the following criteria--

    (1) Has a nominal diameter from 6\5/8\ inches (168 mm) to 8\5/8\
inches (219.1 mm);
    (2) Is located in or within one-quarter mile (.40 km) of an
unusually sensitive area as defined in Sec.  195.6; and
    (3) Operates at a maximum pressure established under Sec.  195.406
corresponding to--
    (i) A stress level greater than 20-percent of the specified minimum
yield strength of the line pipe; or
    (ii) If the stress level is unknown or the pipeline is not
constructed with steel pipe, a pressure of more than 125 psi (861 kPa)
gage.
    (b) Safety requirements. Each operator must prepare, follow, and
maintain written procedures to carry out the requirements of this
section. Except for the requirements in paragraphs (b)(2), (b)(3),
(b)(9) and (b)(10) of this section, the safety requirements apply to
all materials of construction.
    (1) Identify all segments of pipeline meeting the criteria in
paragraph (a) of this section before April 3, 2009.
    (2) For steel pipelines constructed, replaced, relocated, or
otherwise changed after July 3, 2009, design, install, construct,
initially inspect, and initially test the pipeline in compliance with
this part, unless the pipeline is converted under Sec.  195.5.
    (3) For non-steel pipelines constructed after July 3, 2009, notify
the Administrator according to Sec.  195.8.
    (4) Beginning no later than January 3, 2009, comply with the
reporting requirements in subpart B of this part.
    (5) Establish the maximum operating pressure of the pipeline
according to Sec.  195.406 before transportation begins, or if the
pipeline exists on July 3, 2008, before July 3, 2009.
    (6) Install line markers according to Sec.  195.410 before
transportation begins, or if the pipeline exists on July 3, 2008,
before July 3, 2009. Continue to maintain line markers in compliance
with Sec.  195.410.
    (7) Establish a continuing public education program in compliance
with Sec.  195.440 before transportation begins, or if the pipeline
exists on July 3, 2008, before January 3, 2010. Continue to carry out
such program in compliance with Sec.  195.440.
    (8) Establish a damage prevention program in compliance with Sec.
195.442 before transportation begins, or if the pipeline exists on July
3, 2008, before July 3, 2009. Continue to carry out such program in
compliance with Sec.  195.442.
    (9) For steel pipelines, comply with subpart H of this part, except
corrosion control is not required for pipelines existing on July 3,
2008 before July 3, 2011.
    (10) For steel pipelines, establish and follow a comprehensive and
effective program to continuously identify operating conditions that
could contribute to internal corrosion. The program must include
measures to prevent and mitigate internal corrosion, such as cleaning
the pipeline and using inhibitors. This program must be established
before transportation begins or if the pipeline exists on July 3, 2008,
before July 3, 2009.
    (11) To comply with the Operator Qualification program requirements
in subpart G of this part, have a written description of the processes
used to carry out the requirements in Sec.  195.505 to determine the
qualification of persons performing operations and maintenance tasks.
These processes must be established before transportation begins or if
the pipeline exists on July 3, 2008, before July 3, 2009.
    (c) New unusually sensitive areas. If, after July 3, 2008, a new
unusually sensitive area is identified and a segment of pipeline
becomes regulated as a result, except for the requirements of
paragraphs (b)(9) and (b)(10) of this section, the operator must
implement the requirements in paragraphs (b)(2) through (b)(11) of this
section for the affected segment within 6 months of identification. For
steel pipelines, comply with the deadlines in paragraph (b)(9) and
(b)(10).
    (d) Record Retention. An operator must maintain records
demonstrating compliance with each requirement according to the
following schedule.
    (1) An operator must maintain the segment identification records
required in paragraph (b)(1) of this section and the records required
to comply with (b)(10) of this section, for the life of the pipe.
    (2) An operator must maintain the records necessary to demonstrate
compliance with each requirement in paragraphs (b)(2) through (b)(9),
and (b)(11) of this section according to the record retention
requirements of the referenced section or subpart.

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

    (a) General. 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. An
operator of a rural low-stress pipeline meeting the following criteria
must comply with the safety requirements described in paragraph (b) of
this section. The pipeline:
    (1) Has a nominal diameter of 8\5/8\ inches (219.1 mm) or more;
    (2) Is located in or within a half mile (.80 km) of an unusually
sensitive area (USA) as defined in Sec.  195.6; and
    (3) Operates at a maximum pressure established under Sec.  195.406
corresponding to:
    (i) A stress level equal to or less than 20-percent of the
specified minimum yield strength of the line pipe; or
    (ii) If the stress level is unknown or the pipeline is not
constructed with steel pipe, a pressure equal to or less than 125 psi
(861 kPa) gage.
    (b) Requirements. An operator of a pipeline meeting the criteria in
paragraph (a) of this section must comply with the following safety
requirements and compliance deadlines.
    (1) Identify all segments of pipeline meeting the criteria in
paragraph (a) of this section before April 3, 2009.
    (2) Beginning no later than January 3, 2009, comply with the
reporting requirements of subpart B for the identified segments.
    (3)(i) Establish a written program in compliance with Sec.  195.452
before July 3, 2009, to assure the integrity of the low-stress pipeline
segments. Continue to carry out such program in compliance with Sec.
195.452.
    (ii) To carry out the integrity management requirements in Sec.
195.452, an operator may conduct a determination per Sec.  195.452(a)
in lieu of the half mile buffer.
    (iii) 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.
    (4) Comply with all other safety requirements of this part, except
subpart H, before July 3, 2009. Comply with subpart H before July 3,
2011.
    (c) Economic compliance burden. (1) An operator may notify PHMSA in
accordance with Sec.  195.452(m) of a situation meeting the following
criteria:
    (i) The pipeline meets the criteria in paragraph (a) of this
section;
    (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. 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
(c)(1) of this section, PHMSA will stay compliant 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 (DOE), 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.
    (d) New unusually sensitive areas. If, after July 3, 2008, an
operator identifies a new unusually sensitive area and a segment of
pipeline meets the criteria in paragraph (a) of this section, the
operator must take the following actions:
    (1) Except for paragraph (b)(2) of this section and the
requirements of subpart H, comply with all other safety requirements of
this part before July 3, 2009. Comply with subpart H before July 3,
2011.
    (2) Establish the program required in paragraph (b)(2)(i) within 12
months following the date the area is identified. Continue to carry out
such program in compliance with Sec.  195.452; and
    (3) Complete the baseline assessment required by paragraph
(b)(2)(ii) of this section according to the schedule in Sec.
195.452(d)(3).
    (d) Record Retention. An operator must maintain records
demonstrating compliance with each requirement according to the
following schedule.
    (1) An operator must maintain the segment identification records
required in paragraph (b)(1) of this section for the life of the pipe.
    (2) An operator must maintain the records necessary to demonstrate
compliance with each requirement in paragraphs (b)(2) through (b)(4) of
this section according to the record retention requirements of the
referenced section or subpart.

0
4. Add Sec.  195.48 in subpart B 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 and, beginning January 5,
2009, applies to all rural low-stress hazardous liquid pipelines. An
operator of a rural low-stress pipeline not otherwise subject to this
part is not required to complete Parts J and K of the hazardous liquid
annual report form (PHMSA F 7000-1.1) required by Sec.  195.49 or to
provide the estimate of total miles that could affect high consequence
areas in Part B of that form.

0
5. Revise 195.452(m) to read as follows:

Sec.  195.452  Pipeline integrity management in high consequence areas.

* * * * *
    (m) How does an operator notify PHMSA? An operator must provide any
notification required by this section by:
    (1) Entering the information directly on the Integrity Management
Database Web site at http://primis.phmsa.dot.gov/imdb/;
    (2) Sending the notification to the Information Resources Manager,
Office of Pipeline Safety, Pipeline and Hazardous Materials Safety
Administration, 1200 New Jersey Avenue, SE., Washington, DC 20590; or
    (3) Sending the notification to the Information Resources Manager
by facsimile to<PHONE_NUMBER>.

    Issued in Washington, DC on May 23, 2008.
Carl T. Johnson,
Administrator.
 [FR Doc. E8-12099 Filed 6-2-08; 8:45 am]

BILLING CODE 4910-60-P