  SEQ CHAPTER \h \r 1 DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 195

[Docket No. PHMSA-2003-15864; Notice 3]

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: Notice of Proposed Rulemaking.

SUMMARY:  We are proposing to extend pipeline safety regulations to
rural onshore hazardous liquid gathering lines and low-stress lines
within a defined buffer of previously defined “unusually sensitive
areas.” These are non-populated areas requiring extra protection
because of the presence of sole source drinking water resources,
endangered species, or other ecological resources.

This proposal will define “regulated rural onshore gathering lines”
and “regulated rural onshore low-stress lines” and require operators
of the lines to comply with certain safety requirements.  These proposed
safety requirements will address the most common threats to the
integrity of these rural lines: corrosion and third-party damage.  This
proposal is intended to provide additional integrity protection for
unusually sensitive areas that could be affected by these lines and
improve public confidence in the safety of hazardous liquid rural
onshore gathering and low-stress lines.

DATES: Persons interested in submitting written comments on the rules
proposed in this document must do so by [INSERT DATE 60 DAYS AFTER
PUBLICATION IN THE FEDERAL REGISTER].  PHMSA will consider late filed
comments so far as practicable.

ADDRESSES: You may send written comments to the docket by any of the
following methods:

	Mail: Dockets Facility, U.S. Department of Transportation, Room
PL-401, 400 Seventh Street, SW., Washington, DC 20590-0001. Anyone
wanting confirmation of mailed comments must include a self-addressed
stamped postcard.

	Hand delivery or courier: Room PL-401, 400 Seventh Street, SW.,
Washington, D.C.  The Dockets Facility is open from 10:00 am to 5:00 pm,
Monday through Friday, except Federal holidays.

	Web site: Go to http://dms.dot.gov, click on
AComments/Submissions” and follow instructions at the site.
Alternatively, go to   HYPERLINK "http://regulations.gov"
http://regulations.gov .

All written comments should identify the docket number and notice number
stated in the heading of this notice.

Docket access.  For copies of this notice or other material in the
docket, you may contact the Dockets Facility by phone<PHONE_NUMBER>) or
go to the hand delivery address.  For Web access to the docket to read
and download filed material, go to http://dms.dot.gov/search.  Then type
in the last five digits of the docket number shown in the heading of
this notice, and click on “Search.”  Anyone can search the
electronic form of all comments filed in any of DOT’s dockets by the
name of the individual filing the comment (or signing the comment, if
filed for an entity such as an association, business, or labor union).
You may review DOT's complete Privacy Act Statement in the April 11,
2000 issue of the Federal Register (65 FR 19477) or go to   HYPERLINK
"http://dms.dot.gov."  http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: DeWitt Burdeaux by phone at
405–954–7220 or by e-mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Background

a. History

Over the past six years, PHMSA has designed and executed a risk- based
system approach to oversight of the national pipeline infrastructure.
This approach is embodied in the “Integrity Management Program” of
the agency and its budget. The program has many elements, including the
data that supports the agency’s decision making, regulatory framework,
enforcement program, training and preparation of Federal and State
inspectors, research and development to advance integrity assessment and
management, and performance measurement and reporting. We have sought
advice on each aspect of the program at the conceptual stage from our
technical advisory committee members and in public meetings.

As to regulatory framework, we undertook rulemaking projects on a
risk-prioritized basis, acting first on those parts of the
infrastructure that posed the greatest risk to people and the
environment. To begin the program, we defined high consequence areas and
mapped the locations on the National Pipeline Mapping System, including
areas unusually sensitive to environmental damage, which we previously
defined in our 2000 regulation.  Since 2000, we have completed and
implemented regulations that provided integrity management protections
for people and the environment that could be affected by a failure from
high pressure, large and small hazardous liquid pipelines and provided
protections to people that could be affected by high pressure gas
transmission pipelines. We recently completed our gas gathering lines
regulation by taking an integrity- related approach to protecting people
from gas gathering lines.   We began consideration of the current
regulatory initiative in 2003 and discussed it during our technical
advisory committee meetings, and at public meetings in 2004.  This is
the remaining element in the regulatory framework designed to protect
unusually sensitive areas from hazardous liquid pipelines in rural
areas.

b. PHMSA’s Safety Rules for Hazardous Liquid Pipelines Exempt Rural
Low-Stress Lines and Gathering Lines

Low-stress lines generally transport hazardous liquid at low-stress
levels for relatively short distances to and from refineries and
terminals, while gathering lines transport petroleum products from
production facilities to downstream locations, such as a refinery or
processing plant.

PHMSA’s safety rules for hazardous liquid pipelines (49 CFR Part 195)
apply to both offshore and onshore gathering and low-stress lines.
PHMSA currently regulates gathering lines in populated areas, and those
in rural areas in the inlets of the Gulf of Mexico.  PHMSA also
regulates low-stress lines that are located in populated areas or cross
commercially navigable waterways.  It also regulates any low-stress line
transporting highly volatile liquids.  These lines are subject to all of
the regulatory requirements in Part 195.

eline 8⅝ inches or less in nominal outside diameter that transports
petroleum from a production facility.  The term “production
facility” is defined as piping or equipment used in the production,
extraction, recovery, lifting, stabilization, separation, or treating of
petroleum or carbon dioxide, and associated storage or measurement.   To
qualify, piping or equipment must be used to extract petroleum or carbon
dioxide from the ground or facilities where petroleum or carbon dioxide
is produced and prepared for transportation by pipeline.  This includes
piping between treatment plants that extract carbon dioxide and
facilities used for the injection of carbon dioxide for recovery
operations.  The term “petroleum” means crude oil, condensate,
natural gasoline, natural gas liquids, and liquefied petroleum gas.
Also, “rural area” means 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.

Part 195 defines “low-stress” as a hazardous liquid pipeline
operated in its entirety at a stress level of 20 percent or less of the
specified minimum yield strength (SMYS) of the line pipe.  SMYS is the
minimum yield strength, expressed in p.s.i. (kPa) gage, prescribed by
the specification under which the material is purchased from the
manufacturer.   Low-stress lines in rural areas are exempt from Part 195
if they transport nonvolatile petroleum products and are located outside
a waterway currently used for commercial navigation.  Under this
proposal, some of these rural lines will no longer be exempt if within a
defined buffer zone of an unusually sensitive area.  This proposal will
not affect other exempt low-stress lines, specifically pipelines subject
to safety regulations of the U.S. Coast Guard, or those pipelines that
serve certain refining and terminal facilities, if the pipeline is less
than 1-mile long (measured outside of facility grounds) and does not
cross an offshore area or a waterway currently used for commercial
navigation.

c. Statutory Authority

Except for a 1991 requirement establishing inspection and burial rules
for pipelines, including rural gathering lines, located in Gulf of
Mexico inlets, from 1979 until 1992, PHMSA did not have statutory
authority to regulate rural gathering lines.  It was not until the
Pipeline Safety Act of 1992 (codified at 49 U.S.C. 60101(a)(22)), that
Congress gave DOT authority to regulate certain rural gathering lines.
This legislation directed DOT to define the term “gathering line” by
October 24, 1994, and the term “regulated gathering line” by October
24, 1995 (49 U.S.C. 60101(b)(1)(A) and (b)(2)(A)).

Four years later, in the Accountable Pipeline Safety and Partnership Act
of 1996 (Pub. L. 104-304), Congress moderated its directive to define
“regulated gathering line” by adding the words “if appropriate”
(49 U.S.C. 60101(b)(2)(A)).  Congress also gave DOT specific authority
to collect information from gathering line operators related to deciding
whether and to what extent to regulate rural gathering lines (49 U.S.C.
60117(b)).  Because of the need to regulate the safety of certain rural
petroleum gathering lines (as explained in section II of this preamble),
we think it is now appropriate to define the term “regulated gathering
line” for hazardous liquid transportation.

In defining “regulated gathering line” for hazardous liquid
transportation, PHMSA is required by statute to consider various
physical characteristics to decide which rural onshore gathering lines
need safety regulation.  These characteristics include location, length
of line from the well site, operating pressure, throughput, and
composition of the transported hazardous liquid (49 U.S.C.
60101(b)(2)(A) and (b)(2)(B)(i)).  Further, the statute states a
“regulated gathering line” may not include “a crude oil
[petroleum] gathering line that has a nominal diameter of not more than
6 inches, is operated at low pressure, and is located in a rural area
that is not unusually sensitive to environmental damage” (49 U.S.C.
60101(b)(2)(B)(ii)).  In other words, in rural areas unusually sensitive
to environmental damage, PHMSA may regulate petroleum gathering lines of
any diameter or operating pressure.  But in other rural areas, PHMSA may
not regulate petroleum gathering lines 6 inches or less in nominal
diameter operating at a low pressure.  Congress did not define “low
pressure” or areas “unusually sensitive to environmental damage.”
PHMSA, however, has defined “unusually sensitive areas” in §§
195.2 and 195.6, and low-stress hazardous liquid pipeline in § 195.2,
as discussed above.  PHMSA considers a low pressure pipeline synonymous
to a low-stress pipeline.

PHMSA has statutory authority under 49 U.S.C. 60102 to prescribe
regulations that provide adequate protection against risks to life and
property posed by pipeline transportation.  This statute requires PHMSA
to develop practicable standards designed to ensure hazardous liquids
are safely transported by pipeline of any stress level, and to protect
people and the environment.  PHMSA’s authority (49 U.S.C. 60102(k))
specifically prohibits it from excepting from regulation a hazardous
liquid pipeline facility only because the facility operates at low
internal stress.

d. Public Participates in Decision Making

1.  Meetings

In 2003, PHMSA invited the public to discuss oil and gas gathering line
issues at meetings in Austin, Texas (68 FR 62555; Nov. 5, 2003) and
Anchorage, Alaska (68 FR 67129; Dec. 1, 2003).  The meetings gave people
an opportunity to comment on what might make regulating the safety of
rural gathering lines appropriate, and what the safety rules should be.
State pipeline safety agencies also actively participated in these
meetings. Transcripts of both meetings are in the docket
(PHMSA-2003-15864-2 and 3).

Following the two public meetings, PHMSA published a notice to clarify
its plans about regulating rural gathering lines (69 FR 5305; Feb. 4,
2004).  In the notice, PHMSA sought comments on a suitable approach to
identifying gathering lines it should regulate.

PHMSA held a public workshop to discuss the need to regulate rural
low-stress lines on June 26, 2006, in Alexandria, Virginia.  This
meeting is discussed further in section C.3. of this document.

2. Comments addressing rural gathering lines

Because of the public meetings and clarification notice, PHMSA received
several comments on regulating rural gathering lines.  Next is a summary
of the significant comments.

The Association of Oil Pipelines (AOPL), a trade association
representing operators of hazardous liquid pipelines, stated gathering
lines usually are in areas of little population and operate at low
pressures.  It said most releases are due to small corrosion leaks and
operators repair the leaks quickly.  AOPL found that 67 percent of these
hazardous liquid leaks resulted in spills of less than five barrels.
Thus, AOPL said, releases were unlikely to have serious public safety or
environmental consequences.  Nevertheless, in recognition of Congress’
safety concerns, AOPL said it would support limited pipeline safety
regulation of certain higher-risk rural gathering lines as a reasonable
balance between costs and risk.  It said comprehensive regulation could
cause oil producers to shut in marginally profitable wells or switch to
riskier truck transport.

AOPL put forward a regulatory plan for rural crude oil gathering lines.
The plan covers any line 6 inches or more in nominal diameter operating
at a hoop stress of more than 20 percent of SMYS if the line could
affect a high consequence area.  SEQ CHAPTER \h \r 1   AOPL said
operators should have discretion in selecting a method to identify which
gathering lines could affect high consequence areas.   (Section 195.450
defines a “high consequence area” as a commercially navigable
waterway, an area of high or concentrated population, or an unusually
sensitive area.  And § 195.6 defines “unusually sensitive area” as
a drinking water or ecological resource unusually sensitive to
environmental damage from a hazardous liquid pipeline release.  Both
sections contain subordinate definitions that further explain the
meaning of “high consequence area” and “unusually sensitive
area.”)

AOPL’s plan recommended certain safety regulations it thought would be
suitable for higher-risk rural gathering lines.  AOPL’s plan includes
the corrosion control rules in subpart H of Part 195.  In addition, to
address excavation damage, AOPL’s plan includes the public education
rules in § 195.440 and the damage prevention program rules in
§ 195.442.  Finally, the plan includes the accident and safety-related
condition reporting rules in subpart B of Part 195.

AOPL also suggested PHMSA regulate nonrural gathering lines in locations
with rural characteristics in the same manner as rural gathering lines.
Although AOPL did not offer a method to identify these lines, the most
likely method would be a population density survey.  Part 195 does not
require operators of nonrural gathering lines to conduct population
density surveys.  Thus, PHMSA believes it would be burdensome for
operators to conduct such surveys just to identify nonrural line
segments in rural-like settings and to discover later changes in
population.  Apart from AOPL’s comment, operators of nonrural
gathering lines have not expressed dissatisfaction with the present
regulatory scheme of Part 195.  Therefore, PHMSA is not proposing to
change how Part 195 applies to nonrural gathering lines.

After filing its written comment, AOPL sent PHMSA data for the years
2001-2003 on 583 gathering line spills collected from five of its member
companies, representing multiple gathering systems.  The origin of the
data was the industry’s Pipeline Performance Tracking System, a
voluntary data collection effort that began in 1999.  Participants
report spills of 5 gallons or more to land and all spills to water from
oil pipelines, whether regulated by Part 195 or not.  AOPL’s data
shows one third of the spills were 5 barrels or more.  The data also
show corrosion (84%) and excavation damage (7%) caused 91 percent of the
reported gathering line spills; pipe material and weld failure, 2
percent; and other identified causes, less than 1 percent.

Arctic Connections, an environmental consulting firm based in Alaska,
urged PHMSA to regulate rural gathering lines in sensitive Alaskan
wetlands and coastal environments because oil spills threaten
subsistence living and have lasting effects in the Arctic.  The Cook
Inlet Regional Citizens Advisory Council, a nonprofit environmental
protection organization, and Cook Inlet Keeper, a nonprofit watershed
protection organization, also supported regulation of unregulated
pipelines that threaten Alaska’s Cook Inlet.   To show the need for
regulation, Arctic Connections and Cook Inlet Keeper filed data from the
Alaska Department of Environmental Conservation (ADEC) and other sources
on releases by various unregulated pipelines in Alaska.  Although the
data do not distinguish pipelines by type, Cook Inlet Keeper said its
review showed most of the oil spills in Cook Inlet between 1998 and 2003
came from unregulated gathering lines.

North Slope Borough, the northernmost county of Alaska, favored
regulation of all high-pressure, large-diameter North Slope lines that
could injure residents or affect subsistence living, the environment, or
traditional use areas.

Delta County Colorado considered regulation of rural gathering lines
essential to assure safe development of oil and gas in areas
experiencing increased pressures of population growth.  Delta County
thought safety rules should apply to all gathering lines (rural and
nonrural), but should be suitable for the risks involved.

Chevron Texaco Upstream and the U.S. Department of Energy (DOE)
suggested PHMSA identify and analyze the risks of rural gathering lines
and target regulations to specific problems.  The Independent Petroleum
Association of America (IPAA) also urged PHMSA to focus on actual –
not speculative – risks.

DOE and IPAA were concerned with the possible increased costs of
gathering crude oil could cause producers to shut in marginally
profitable wells.  They pointed out that added costs would have the
potential to reduce the nation’s oil supply and hinder development of
new wells.  The Interstate Oil & Gas Compact Commission defines marginal
wells, sometimes called “stripper” wells, as wells producing 10
barrels of oil per day or less.  DOE also said some Part 195 rules, such
as integrity management, corrosion control, personnel qualification,
public education, accident reporting, and determining whether a pipeline
could affect a high consequence area, could be too costly for smaller
operators to carry out.  (A discussion of energy impacts is under the
Regulatory Analyses and Notices section of this document.)

The Oklahoma Independent Petroleum Association (OIPA) also expressed
concern about the potential impact on marginal wells of imposing new
safety rules on rural gathering lines.  In addition, OIPA argued PHMSA
should not consider regulating rural gathering lines until it has data
showing the types and scale of safety problems.

3. Comments addressing rural low-stress lines

On June 26, 2006, PHMSA held both a public workshop and meeting of the
Technical Hazardous Liquid Pipeline Safety Standards Committee to
discuss how best to regulate low-stress lines to better protect
unusually sensitive areas from risks from spills.  During this meeting
PHMSA received several significant comments.

API and AOPL presented their proposal, which is discussed in detail in
Section II. b. below.  The majority of the participants agreed that
recent accidents reinforced the need for PHMSA’s plan to regulate
low-stress lines near unusually sensitive areas (USAs), and supported,
for the most part, API’s and AOPL’s regulatory proposal.   API and
AOPL’s proposal recommended low-stress lines located within ¼ mile of
an USA, i.e., buffer, be partially regulated under Part 195.  Their
analysis of the spill data for low-stress pipelines showed that the
¼-mile buffer would contain the spread in 99.6% of the releases.
Several of the commenters questioned whether the proposed ¼- mile
buffer was large enough to provide adequate protection to these critical
areas.  Some commented on whether a larger buffer would encompass too
many lines.   Others questioned the effectiveness of leak detection
methods on these lines. The transcript of this meeting is in the docket
(PHMSA-2003-15864).   PHMSA invites comments on whether the proposed
¼-mile buffer zone is appropriate.

Conoco Phillips noted that most unregulated low-stress pipelines are
less than 1-mile long, and are rarely more than 25 miles.  Conoco
Phillips also noted that the primary threat to the unregulated
low-stress lines is corrosion because many lack an effective coating and
cathodic protection.  Further, it noted that internal corrosion may be
exacerbated by water and microbiological organisms.

The Alaska Department of Environmental Conservation also believes that
government oversight is needed for unregulated low-stress lines, and
shared its proposal on how Alaska plans to address lines not currently
regulated by PHMSA.

II. Need to Regulate

a. Rural Onshore Hazardous Liquid Gathering Lines

Congress recognized some rural gathering lines might pose risks
warranting federal safety regulation and authorized DOT to regulate a
class of rural gathering lines called “regulated gathering lines”
based on risk-related physical characteristics, such as diameter,
pressure, location, and length of line.  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” (H.R.
Report No.102–247—Part 1, 102d Cong., 1st Session, 23 (1991)).  In
PHMSA’s view, Congress wanted to limit “regulated gathering lines”
to lines posing a significant risk and to limit regulation of those
lines to suitable risk-reduction measures.

To get more information about rural crude oil gathering lines PHMSA
asked the public whether these pipelines pose a risk warranting pipeline
safety regulation, and, if so, what those rules should be.  As discussed
in section I of this preamble, commenters largely recognized a need for
PHMSA safety rules to prevent serious accidents and to respond to
Congress’ safety concern.  Most commenters backed rules addressing
known risks of a significant scale.  However, a few commenters expressed
concern that extensive rules could cause producers to shut in marginal
wells or divert transportation to riskier modes – mainly trucks.

A few commenters submitted data about oil pipeline accidents, including
accidents on rural crude oil gathering lines.  AOPL’s data show
corrosion damage and excavation damage were the leading causes of
spills, and 33 percent of the spills were 5 barrels or more.  Although
the data do not separate spills occurring from rural gathering lines
from those occurring from other unregulated liquid lines, the spill
causes are consistent with PHMSA’s accident data on hazardous liquid
pipelines overall.  Also, there is no reason to expect rural gathering
lines are less vulnerable to corrosion, excavation damage, and other
integrity threats than nonrural gathering lines.  They may be even more
vulnerable because they have not been subject to federal safety
regulation to ensure their continued integrity.  While we have limited
data, we think it is reasonable to assume AOPL’s data are
representative of rural crude oil

gathering lines.  A full discussion of the available data is in the
regulatory evaluation for this proposed rulemaking, which can be
obtained in the docket listed above.

A 1997 report by California’s Office of the State Fire Marshal, “An
Assessment of Low-Pressure Crude Oil Pipelines and Gathering Lines,"
strengthens this assessment.  In California, the State Fire Marshal
regulates intrastate pipelines covered by Part 195.  The report,
available online at   HYPERLINK
"http://osfm.fire.ca.gov/lowpressrpt.html"
http://osfm.fire.ca.gov/lowpressrpt.html , concerns accidents during
1993-1995 on rural gathering lines and other pipelines specifically
exempt from Part 195.  According to the report, the leading causes of
the accidents – corrosion and excavation damage – matched the
leading causes of accidents on regulated pipelines.

b. Rural Onshore Hazardous Liquid Low-stress Lines

The original safety regulations for hazardous liquid pipelines did not
apply to any low-stress pipelines.  Because of their low operating
pressures and minimal accident history, low-stress hazardous liquid
pipelines were thought to pose little risk to public safety.  PHMSA
began rulemaking in this area in 1990 following one of the most
prominent hazardous liquid pipeline accidents on record involving the
spill of approximately 500,000 gallons of heating oil from an underwater
pipeline in Arthur Kill Channel in New York.

To get more information on low-stress lines, in 1990, PHMSA published an
advance notice of proposed rulemaking (ANPRM) (55 FR 45822; October 31,
1990).  In the ANPRM, PHMSA sought information about the costs and
benefits of regulating low-stress lines. The analysis of the data
received in response to the ANPRM showed regulation of all low-stress
pipelines could impose costs disproportionate to benefits. PHMSA,
therefore, focused on those low-stress pipelines posing a higher risk to
people and the environment. The risk factors identified were the
commodity in transportation and the location of the pipeline.   In 1994,
PHMSA extended the hazardous liquid safety requirements to low-stress
pipelines that transport highly volatile liquids (HVL) in all locations,
and other low-stress lines in populated areas and where the pipeline
segments cross navigable waterways.   In this rulemaking, PHMSA deferred
regulating non – HVL low-stress pipelines in rural environmentally
sensitive areas pending development of a suitable definition of
“environmentally sensitive area.”  The agency said it was developing
a better concept of what constitutes an environmentally sensitive area
for purposes of pipeline regulation and this would provide the
groundwork for the future rulemaking on rural low-stress lines. PHMSA
explained that it needed to learn the extent to which low-stress
pipeline spills affect environmentally sensitive areas and the
definition used in Part 194 (Response Plans for Onshore Oil Pipelines)
was too broad for Part 195.

In 2000, PHMSA issued a final rule defining “unusually sensitive
areas” (USAs) (65 FR 246).  The USAs address higher risk
environmentally sensitive areas needing extra protection.  In this rule,
PHMSA noted its 1994 decision to defer regulating nonvolatile products
transported in low-stress pipelines located in rural sensitive areas
until it defined these areas.  The agency reiterated its intention to
reconsider the issue once there was a sensitive area definition.  In
2000, PHMSA defined protection of USAs for most hazardous liquid
pipelines through its integrity management regulations.   As explained
previously in section I.a, this definition was essential to PHMSA’s
completing its series of risk-based rulemakings to provide better
protection to people and the environment from high pressure hazardous
liquid pipelines, high pressure gas transmission pipelines and rural gas
gathering pipelines.  Protecting these areas from rural low-stress lines
is the last of these initiatives.

Since 2000, there have been about 30 hazardous liquid low-stress line
incidents on lines PHMSA currently regulates.  While PHMSA does not have
incident data for non-regulated lines, we believe a comparable number of
incidents have occurred on currently unregulated low-stress lines, some
of which have been significant.  For instance on August 6, 2006, a crude
oil spill occurred on a 30-inch, unregulated low-stress pipeline in the
Eastern Operating Area of the Prudhoe Bay Field on the North Slope of
Alaska.  This spill resulted in the release of at least 20 barrels of
crude oil onto the tundra, and at least another 175 barrels that were
collected in a portable tank.  Previously, on March 2, 2006, a leak from
a 34-inch, unregulated low-stress pipeline was discovered in the Western
Operating Area of the Prudhoe Bay Field.  This leak resulted in the
release of approximately 5,000 barrels of processed crude oil.  Although
we believe these incidents are not representative of the condition of
unregulated rural low-stress lines in the lower 48 states, these
incidents reinforced the necessity for PHMSA to complete this rulemaking
to better protect USAs from any spill that could occur from an
unregulated rural low-stress pipeline.

As PHMSA was developing its proposal on how best to address rural
low-stress lines,

after the March incident, API and AOPL submitted a regulatory proposal
on how PHMSA should address certain currently exempt low-stress
pipelines.  The proposal requests PHMSA:

Add a new subpart in Part 195 to address assessment and control of low
pressure pipelines;

Define regulated low-stress lines as pipelines with a diameter greater
than 8 5/8 inches, operating at 20 percent or less of SMYS, located off
the operator’s property, and located within ¼-mile of an unusually
sensitive area; and

Modify 49 CFR § 195.1(b)(iii) to add petroleum storage facilities to
the list of facilities exempt from regulation, unless a facility crosses
a sole source aquifer in an unusually sensitive area.

Further, API and AOPL propose that PHMSA add programmatic requirements
to require operators of a regulated rural low-stress line to comply with
the reporting requirements in Subpart B, the corrosion control
requirements in Subpart H, the line marker requirements in § 195.410,
and four additional requirements:

Assessment:  The operator should inspect the pipeline using in-line
inspection tools or commensurate technology to assess the pipeline
segment every five years unless the operator performs an engineering
analysis to justify a longer timeframe.

Leak Detection:  The operator should have a means to detect leaks on the
covered pipelines.

Damage Prevention: The operator should put in place basic damage
prevention practices, such as registering facilities with one-call
organizations and excavation monitoring.

Training for Abnormal Operating Conditions:  The operator should be
trained to recognize and respond to abnormal operating conditions.

Lastly, API and AOPL recommend, with the exception of line
identification, operators have up to 5 years after the effective date of
a rule to begin compliance.

As a follow-up to the June 26th public meeting, the Cook Inlet Regional
Citizens Advisory Council submitted comments to the docket.  Cook Inlet
recommends eliminating the low-stress regulatory exemption in 49 CFR §
195.1(b)(3)(i).  Instead, Cook Inlet recommends PHSMA apply its baseline
pipeline regulations to all low-stress transmission pipelines, and its
integrity management program rules to those low-stress transmission
pipelines that may affect High Consequence Areas.

API and AOPL also submitted supplemental information reflecting their
analysis of spill data.  They found that of the 312 large releases of
hazardous liquids (greater than five barrels) between 1999 and 2004,
only 67 (21%) were from low-stress transmission pipelines.  Further,
releases from low-stress lines accounted for only 7% of the total volume
of hazardous liquid releases from all pipeline incidents.  They
determined that corrosion (64%) and third party damage (21%) together
caused 85% of these releases from low-stress pipelines.

c. Conclusion for need to regulate

Based on our consideration of Congress’ safety concern, the public
comments, and the accident data, we believe the potential for future
harm to the public’s health and environment from rural onshore
gathering and rural low-stress lines is clear.  The record shows rural
gathering lines experience the same leading causes of accidents as
hazardous liquid pipelines we now regulate, and releases from
unregulated low-stress lines can affect unusually sensitive areas.
Therefore, we believe it no longer appropriate to continue to exempt
rural onshore gathering lines and rural low-stress lines from nearly all
safety requirements in Part 195.

III. Regulatory Options

In considering what safety rules should apply to “regulated rural
gathering lines” and “regulated rural low-stress lines,” the first
alternative we considered was to collect more information about the
potential hazards of these lines before proposing any specific safety
rules.  We rejected this alternative because we believe we have
sufficient information; collecting more information would be unlikely to
change our current understanding of the risks these lines pose.

The second alternative we considered was to apply all Part 195 rules to
regulated rural gathering lines and, as suggested by Cook Inlet, for
regulated rural low-stress lines. We rejected this alternative because
it could impose significant costs on the industry without offsetting
safety benefits.  Also, the costs could have a significant effect on
U.S. oil supplies by causing production to stop at many marginal oil
wells.  Further, while we understand Cook Inlet’s desire to extend
oversight to all low-stress lines, we believe we should focus on those
posing the most significant threats to USAs, and on the most critical
issues associated with those lines.  Therefore, the proposal only
includes safety requirements that address the most prominent threats to
low-stress lines.  This determination is based on our analysis of the
most critical safety concerns, including the data submitted by API and
AOPL demonstrating that corrosion and third party damage cause the
greatest threat to the integrity of these lines.

The third alternative was to adopt the approaches API and/or AOPL
suggested.  For gathering lines, AOPL’s suggested approach includes
limited operation and maintenance rules and reporting rules for
accidents and safety-related conditions.  The operation and maintenance
rules would be the public education rules in § 195.440, the excavation
damage prevention rules in § 195.442, and the corrosion control rules
in subpart H of Part 195.  The reporting rules would be provisions of
subpart B of Part 195 related to accidents and safety-related
conditions.  The benefit of this alternative is it would focus on the
leading threats to rural gathering lines - corrosion and excavation
damage.  Also the information collected would enable PHMSA to recognize
safety problems and evaluate the effectiveness of adopting only limited
safety rules.

By focusing mainly on the threats of excavation damage and corrosion,
the AOPL approach does not address significant safety issues related to
pipeline design, construction, and testing, such as choice of materials,
qualification of welding procedures, and suitable test pressure.
AOPL’s approach does not include installation and maintenance of line
markers under § 195.410 or operator qualification program requirements
under Part 195, Subpart G.   The use of line markers to warn excavators
of the presence of hazardous liquid pipelines has long been a safety
practice in the hazardous liquid pipeline industry.  Regarding operator
qualifications, Congress mandated PHMSA establish regulations for
operator qualification programs on pipelines.  Congress also directed
pipeline operators to develop and adopt a qualification program should
DOT fail to prescribe standards and criteria.

The fourth alternative to address rural onshore low-stress lines was
also the approach suggested by API and AOPL.  This approach would
subject rural onshore hazardous liquid low-stress lines that have a
diameter greater than 8 5/8 inches, operate at 20 percent SMYS, and are
located within a ¼-mile of an unusually sensitive area to certain
regulatory requirements.  The regulatory approach includes the reporting
requirements of Part 195, Subpart B, the corrosion control rules in Part
195, Subpart H, the damage prevention rules in § 195.442, and
installation of line markers in § 195.410.   The API and AOPL approach
also includes leak detection, assessment, and limited operator
qualification requirements.  We believe the information collected about
threats on non-regulated gathering lines also applies to threats
associated with regulated hazardous liquid lines.  Based on this
information, we believe corrosion and excavation damage are the leading
causes of accidents on low-stress lines.  Thus, the benefit of this
approach is it focuses on these leading threats to rural onshore
low-stress lines.

A disadvantage of the API and AOPL approach for rural gathering lines is
it does not address other significant safety issues related to pipeline
design, construction, and testing, and does not include the public
awareness requirements under § 195.440.  In its petition, API and AOPL
did not explain why these safety requirements were omitted.  Regarding
public awareness, in 49 U.S.C. 60112(c), Congress mandated that pipeline
facility operators establish and carry out continuing public awareness
programs to notify the public about the location of its facilities,
one-call programs and accident procedures.  Further, the API and AOPL
proposal does not fully address the operator qualification requirements.
 Congress mandated PHMSA establish regulations for operator
qualification programs on pipelines.  Congress also directed pipeline
operators to develop and adopt a qualification program should DOT fail
to prescribe standards and criteria.  Although Congress provided some
flexibility in the statute, we believe that the API and AOPL approach is
too limited because it only addresses one of the multiple facets of the
operator qualification requirements.

As a fifth alternative, we considered developing new safety rules for
“regulated rural gathering lines” and “regulated rural low-stress
lines.” We rejected this alternative because we have no reason to
conclude Part 195 safety rules now in effect for non-rural gathering and
low-stress lines would be less effective if applied to rural lines.  Our
experience shows Part 195 rules are effective and should work well for
“regulated rural gathering lines” and “regulated rural low-stress
lines” because the integrity threats involved are similar for all the
lines.

Finally, we considered modified versions of the approaches API and AOPL
suggested for rural gathering and low-stress lines. This approach would
provide integrity protection by focusing on the primary threats to these
lines – corrosion and third-party damage.  For rural gathering, this
alternative would add, line marker requirements under § 195.410 and the
qualification requirements in subpart G for the operator’s personnel.
Markers are a traditional way of alerting excavators to dig carefully in
the presence of hazardous liquid pipelines.   Under 49 U.S.C. 60131, DOT
must require pipeline operators to develop and adopt a qualification
program that complies with the standards DOT develops for such programs.

In addition, the modified version would require operators to establish a
maximum operating pressure for each steel line according to § 195.406,
and to design, construct, and test lines according to applicable Part
195 rules.  A maximum operating pressure would guard against the danger
of accidental overpressure.  Part 195 design, construction, and testing
rules would ensure a minimum standard of integrity for all new,
replaced, and relocated “regulated gathering lines.”  We required
similar rules on markers, operating pressure, design, construction, and
testing for rural gas gathering lines in a final rule published March
15, 2006 (71 FR 13289).  These requirements should not be too
burdensome, because similar safety requirements are in the ASME B31.4
Code, “Pipeline Transportation Systems for Liquid Hydrocarbons and
Other Liquids,” a consensus standard followed widely throughout the
hazardous liquid pipeline industry.

Our modified approach to the API and AOPL suggestion for rural onshore
low-stress lines would include public awareness requirements in §
195.440 and a modified version of the operator qualification
requirements.  These operators are also required under 49 U.S.C.
60102(a) to have public awareness program.  Under 49 U.S.C. 60131(e)(5)
and (f), Congress allowed DOT and State pipeline safety agencies to
waive or modify any operator qualification requirement if not
inconsistent with the pipeline safety laws.   PHMSA believes an approach
similar to the modified approach used for gas gathering would be
appropriate for low-stress lines.  This modification would allow
operators to describe the processes they have in place to ensure
personnel performing operations and maintenance activities are
qualified.

Additionally, the modified version would require operators to establish
a maximum operating pressure for each steel line according to
§ 195.406, and to design, construct, and test lines according to
applicable Part 195 rules.  A maximum operating pressure would guard
against the danger of accidental overpressure.  Part 195 design,
construction, and testing rules would ensure a minimum standard of
integrity for all new, replaced, and relocated “regulated rural
low-stress lines.”  Lastly, the modified version would require an
operator to periodically assess the integrity of the lines to identify
and address any conditions affecting the integrity of the lines, no
matter the cause, and to establish and maintain a leak detection program
based on API’s recommended practice 1130 (API 1130) “Computational
Pipeline Monitoring,” which is currently being used by industry and is
incorporated by reference into our existing regulations.   Because API
1130 only addresses pipelines transporting a stable single phase
product, operators transporting other products will need to develop
another appropriate leak detection method.

Further, our modified version includes additional corrosion control
requirements for onshore rural gathering lines and low-stress lines.
Our proposal includes a requirement to continuously monitor these lines
and based on identified changes to clean and accelerate the corrosion
control program when necessary.

A discussion of the safety rules we are proposing is in section IV of
this preamble.

IV. Proposed Regulations for regulated rural gathering lines

a. Proposed Definition of “Regulated Rural Gathering Line”

 We are defining those rural gathering lines presenting a higher risk to
public health and the environment as regulated rural gathering lines.
PHMSA believes Congress did not think all rural gathering lines subject
people or the environment to a high enough risk to qualify as a
regulated rural gathering line.  This reasoning is based on the various
risk factors the statute requires us to consider, the complete exemption
in most rural areas of low-pressure lines 6 inches or less in nominal
diameter.  Thus, we have determined higher risk rural areas are those
areas we defined in §195.6 as unusually sensitive areas.  These areas
include drinking water and ecological resource areas.

 PHMSA considered whether the present definition of gathering line in
§ 195.2 is acceptable.  This definition represents the typical
function of a crude oil gathering line – to move crude oil away from a
production facility.  It also represents the typically small size of
crude oil gathering lines - 8 5/8 inches or less in nominal outside
diameter.  Since its adoption, the definition has served to identify
which petroleum pipelines in rural areas are exempt from Part 195
because they are gathering lines.  Also, in our experience, operators
and government inspectors have had little difficulty using the
definition for that purpose.  We decided, therefore, the § 195.2
definition of gathering line is acceptable for helping to define a
regulated rural gathering line.   Furthermore, because we are not
changing the coverage of the non-rural gathering lines we now regulate,
we see no reason to change the long-standing definition of a gathering
line.

Congress identified “throughput” and “composition of the
transported hazardous liquid” as two other possible risk factors to
consider in determining which rural gathering lines should be regulated.
 We think it unnecessary to include these factors.  Throughput, or
volume of oil moved in a unit of time, is largely dependent on pipe
diameter and operating pressure.  And the composition of hazardous
liquids transported by gathering lines is chiefly crude oil.

AOPL was the only commenter to offer a definition of “regulated
gathering line.”  Under this definition, a “regulated gathering
line” would be a line 6 inches or more in nominal diameter operating
above 20 percent of SMYS that could affect a high-consequence area.

An advantage of AOPL’s definition is its use of the statutory risk
factors of diameter, operating pressure (expressed as a percentage of
SMYS), and location (could affect a high consequence area) to identify
higher-risk lines.  And we think the definition uses these factors in a
reasonable way.

Our proposed definition of a regulated rural gathering line is based in
part on AOPL’s suggested definition.  AOPL’s definition is based on
gathering lines in high consequence areas.   High consequence areas
include populated areas.  We already regulate onshore gathering lines in
populated areas and are not proposing to change any of the pipeline
safety requirements applicable to these lines.   Therefore, we are
basing our definition on those rural gathering lines meeting certain
criteria and located within a defined zone of an unusually sensitive
area as defined in § 195.6.   Unusually sensitive areas include
drinking water and ecological resource areas.  These areas are unusually
sensitive to environmental damage from a hazardous liquid pipe release
because a release into these areas could substantially impact the
Nation’s supply of drinking water, endanger public health, and create
long-term or irrevocable damage to the habitat of threatened and
endangered species.

 Our proposed definition, like AOPL’s definition, does not use line
length as a defining characteristic of these higher-risk rural lines.
Line length, a statutory risk factor, is relevant to potential spill
volume, because the shorter the line, the less oil there is to drain out
after shutdown.  Part 194 recognizes this risk factor by not requiring
spill response plans for certain small pipelines 10 miles or less in
length.  However, because short lines can cause substantial
environmental harm in vulnerable locations, Part 194 does not allow
operators to use the 10-mile exception for lines proximate to navigable
waters, public drinking water intakes, or environmentally sensitive
areas.

 Instead of using AOPL’s criteria to define a regulated rural
gathering line as one that could affect an unusually sensitive area, we
have decided to use a buffer.   We saw a potential difficulty in
operators determining which lines could affect an unusually sensitive
area.   Part 195 uses the phrase “could affect a high consequence
area” to identify pipelines subject to integrity management rules
(§ 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.” PHMSA believes this would be too burdensome for most operators.
To reduce the burden of making this decision for possibly thousands of
rural line segments, we are proposing a buffer - a distance beyond the
defined area where a rural gathering line presumably could not affect
that area.

PHMSA considered the buffers used in §§ 194.103(c)(4) and (5) of the
Oil Spill response plan requirements.  Those sections require a buffer
of five miles from a public drinking water intake and one mile from an
environmentally sensitive area.  However, after reviewing the incident
data, we concluded those buffer sizes were not warranted.  During the
June 26th public meeting, AOPL clarified it recommended a buffer of
¼-mile for

rural gathering lines because its data revealed the largest on land
spill from a pipeline traveled no more than 2 acres.  The operating
pressure is also a factor when evaluating the potential spill volume
from a pipeline.  Thus, gathering lines operating at lower pressures do
not have the potential to release as much product as those operating at
higher pressures.  Thus, we have determined that gathering lines that
operate above 20% SMYS and that are between 6 5/8 inches and 8 5/8
inches in diameter and are located in or within ¼ -mile of an USA have
the potential to substantially impact public health and the environment.
 We invite comments and supporting technical documentation on whether a
larger buffer is needed to provide better protection for these critical
environmental areas.  PHMSA would also like data on the miles of
gathering lines likely to be affected by any increase in the size of the
buffer.

Thus, we are proposing to add a new section 195.11(a) that would 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
§195.406 that corresponds to a stress level greater than 20 percent of
SMYS or, if the stress level is unknown or the pipeline is not
constructed with steel pipe, at a pressure of more than 125 psig; and

•   Is located in or within ¼-mile of an unusually sensitive area as
defined in § 195.6.

A pressure of 125 psig conservatively approximates 20 percent of SMYS
for steel pipe of unknown stress level, based on minimum weight pipe 8
inches in nominal diameter with 24000 psi yield strength.

We invite comments and supporting technical documentation on whether
values other than 125 psig and ¼-mile would be more suitable for the
respective purposes.  We are particularly interested in comment on
whether the proposed ¼-mile buffer is adequate to protect those
drinking water and ecological resources particularly vulnerable to
damage from a hazardous liquid pipeline release, or whether a larger
buffer is needed.   If commenters believe a larger buffer is needed,
data on the pipeline mileage that would be affected would be helpful.

b. Proposed Rewrite of § 195.1

Section 195.1 specifies the hazardous liquid pipeline facilities subject
to the requirements of Part 195 and those exempt from coverage. We
propose to rewrite this section to clarify which lines are subject to
Part 195.  This section clarifies that onshore non-rural gathering lines
are subject to all of Part 195’s requirements.  A regulated rural
gathering line, as defined in this proposal, would be subject to the
limited safety requirements provided in a new § 195.11, discussed
below.

The rewrite of § 195.1 clarifies the present rulemaking does not
affect onshore gathering lines in inlets of the Gulf of Mexico.  Onshore
gathering in these inlets would continue to be subject only to the
inspection and burial rules in § 195.413.  At no point during our
public meetings on regulating onshore gathering lines in rural areas did
anyone comment on the need to expand these rules.

We also have clarified the language in several of the exceptions from
Part 195’s coverage. We have not changed the intent or scope of any of
these.  We have simply cleaned up some of the language to make the
exceptions easier to read.

c. Proposed Safety Requirements for “Regulated Rural Gathering
Lines”

A new § 195.11(b) would be added to the Part 195 regulations to specify
the safety requirements for these lines.  We have developed these
proposed requirements to manage the integrity of rural gathering lines
by providing complete protections to address the known significant
threats and to continue to collect more information about these lines
through the reporting requirements.   Based on our review of the
gathering lines in populated areas and our investigation of the
non-regulated lines in rural areas, we have found that the highest risks
to these lines are corrosion and third party damage.  This proposal
focuses on those threats.  Through continuous monitoring of the lines,
required as part of the corrosion program, the operators will gather
more information about the risk the lines pose.  We seek comments on
whether this proposal should specifically address other threats.    We
also seek comment on whether PHMSA should require all gathering line
operators to submit an annual report and accident reports as required
for regulated operators by §§ 195.49 and 195.59.

Operators would first have to identify all segments of regulated rural
gathering pipeline.  Operators would have to design, install, construct,
initially inspect, and initially test new, replaced, relocated, or
otherwise changed steel lines according to certain existing Part 195
rules.  However, for pipelines converted to hazardous liquid service,
operators would have the option of following the conversion rules in
§ 195.5.

Operators of newly constructed non-steel lines would have to notify
PHMSA at least 90 days before the start of transportation.  The notice
would give PHMSA an opportunity to review the pipeline and order any
changes necessary for safety.

Under the proposal, operators would have to comply with the reporting
requirements in subpart B of Part 195.  The other proposed safety
requirements for these regulated rural lines include:

 Establishing a maximum operating pressure under § 195.406;

  Installing and maintaining line markers under § 195.410;

  Establishing and applying a public education program according to §
195.440;

  Establishing and applying a damage prevention program according to §
195.442;

  For steel lines, controlling and remediating corrosion according to
subpart H of Part 195; to include cleaning, continuous monitoring, and
remediating any problems identified; and

  Establishing and applying an operator qualification program that
describes the processes the operator has in place to ensure the
personnel performing operations and maintenance activities are
qualified.

To address one of the major threats to these lines, we are proposing
operators include these lines in their corrosion control program.  A
corrosion control program under Part 195’s subpart H includes
provisions on how an operator is to remediate corroded pipe.  We are
also proposing additional corrosion control requirements in the form of
continuous monitoring and cleaning.  We seek public comment on whether
the continuous monitoring provision primarily associated with corrosion
control should be as proposed, or extended to other provisions of this
proposed rule.

Although not listed as a specific safety requirement in the rule,
operators are required to continue to comply with the drug and alcohol
testing rules in 49 CFR Part 199.  Part 199 requires operators of
pipelines subject to Part 195 to test personnel for use of prohibited
drugs and misuse of alcohol.  Persons subject to testing are those who
perform a regulated operation, maintenance, or emergency-response
function on a regulated pipeline.

Under § 195.406, the maximum operating pressure of a pipeline is the
lowest pressure applicable to the pipeline among a list of pressures.
However, most of the pressures listed apply only to pipelines subject to
the design and pressure testing rules of Part 195. The only pressure
applicable to pipelines not subject to those rules is in
§ 195.406(a)(2) – the design pressure of any other component of the
pipeline.  Because operators normally do not operate a hazardous liquid
pipeline above its design pressure, compliance with § 195.406(a)(2)
should not be difficult on “regulated rural gathering lines” to
which Part 195 design and pressure testing rules would not apply.
Still, we do not want operators to reduce operating pressure
unnecessarily on any existing line with a history of satisfactory
operation.  So we invite comments on the need to amend § 195.406 to
allow such continued operation and, if so, what that amendment should
be.

The proposal provides, except for the requirements applicable to
newly-constructed pipelines and corrosion control, the safety
requirements apply to all materials of construction.

The proposed time frames for compliance with each proposed safety
requirement are shown in section V.d. of this document. The proposed
compliance deadlines vary according to the safety requirements.  To gain
a better understanding of how different time frames will affect the
costs and feasibility of an operator’s compliance, we have proposed a
range of compliance times. This approach will allow operators longer
time frames for complex activities that are more costly to implement,
and to readily implement less complex safety requirements.  For example,
under the proposal, operators would have six months, 12 months or some
period in between those time frames after the effective date of the
final rule to identify regulated rural gathering pipeline segments and
to comply with the reporting requirements.   The corrosion control
program, including the additional requirements for continuous
monitoring, remediation and cleaning, would have to be in place within
two to three years from the final rule’s effective date.  We believe a
longer time frame for the corrosion control program may be necessary for
pipelines that require major construction to implement new monitoring,
remediation, or cleaning facilities.  Additionally, recoating of the
line involves major construction and a longer planning and construction
cycle may be necessary.

A final rule will require a period somewhere in the proposed ranges. Our
preference is for shorter compliance periods.  But we have proposed a
lower and upper range of compliance periods so that in a final rule we
can set compliance times that can be done quickly enough to address any
problems on these lines but are not cost burdensome, impractical or have
an adverse effect on energy supply.  We seek comments and supporting
documentation to address the effects of these compliance periods on an
operator’s operations.  These comments should address cost,
operational difficulties in complying, technology concerns, and other
issues, such as time needed to secure necessary permits.

d. New Unusually Sensitive Areas

Proposed § 195.11(c) concerns onshore rural gathering lines that become
“regulated rural gathering lines” because of a new unusually
sensitive area.  Operators should at least annually review the National
Pipeline Mapping System (NPMS) to determine if the addition of a new
unusually sensitive area has caused any of their unregulated rural
gathering lines to become “regulated rural gathering lines.”   We
are proposing a range between six months to one year for compliance with
applicable safety requirements when a previously unregulated line
becomes regulated.    We seek comments and supporting documentation that
address the effect of these time frames on the costs and feasibility of
compliance. We want to completely understand the impacts of an
operator’s ability to comply with a shorter or longer time frame.

e. Records

Proposed § 195.11(d) provides record retention requirements. Certain
records, such as the segment identification records, would have to be
retained for the life of the pipe.  Other records would have to be kept
according to the record keeping requirements of the specific section or
subpart referenced.

V. Proposed Rules for “Regulated Rural Low-stress Lines”

a. Proposed Definition of “Regulated Rural Low-stress Lines”

We are proposing to define regulated rural low-stress lines as those
rural low-stress lines presenting a higher risk to the public’s health
and the environment.  Congress directed PHMSA to focus pipeline
regulation on protecting people and the environment against risks
presented by pipeline transportation, but not to exempt pipeline
facilities solely because they operate at low-stress levels.  Thus, as
with rural gathering lines, we determined the higher risk rural areas
that should be protected from a release from a low-stress pipeline are
those areas we defined in § 195.6 as unusually sensitive environmental
areas.  These areas include drinking water and ecological resource
areas.

After evaluating the accident history and the API and AOPL proposed
definition, we believe PHMSA’s definition should focus on rural
low-stress lines with a diameter of 8 5/8 inches or more and operating
at 20 percent or less of SMYS that could cause harm to an USA.    In its
proposed definition, API and AOPL recommended a buffer zone of ¼-mile
from an USA and provided data showing the impact from a spill has not
gone beyond ¼-mile.  Their data showed hazard liquid releases,
regardless of whether the spill has a radius, diameter, or ellipse
formation, will not spread more than ¼-mile.  Based on this data, PHMSA
proposes a ¼-mile buffer as the zone of protection for an USA.  Thus,
if a rural low-stress line meets the above criteria and is within
¼-mile of an USA, it would be regulated.

PHMSA  considered the buffer zones used in § 194.103(c)(4) and (5) of
the Oil Spill  response plan requirements, but after reviewing the
incident data found those buffer sizes were not warranted.  We believe
regulating low-stress pipeline segments located within ¼-mile of an
unusually sensitive area provides a reasonable zone of protection for
these areas from the release of large quantities of hazardous liquids.
We invite comments and supporting technical documentation on whether a
larger buffer is needed to provide better protection for these critical
environmental areas.  PHMSA would also like data on the miles of
low-stress lines likely to be affected by increasing the buffer size.

We are proposing to add a new section § 195.12 (a) to define a
“regulated low-stress line” as an onshore line in a rural area
meeting the following criteria:

A nominal diameter of 8 5/8 inches or more;

Located within ¼-mile of an unusually sensitive area as defined in §
195.6; and

Operates at a maximum pressure established under  §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 an 125 psig.

b. Proposed Rewrite of 195.1

We propose to rewrite this section to clarify which lines are subject to
Part 195.  This section clarifies which low-stress pipelines are subject
to Part 195 and which are exempt.    A regulated rural low-stress line
would be subject to the limited safety requirements provided in a new §
195.12, discussed below.

We also have clarified the language in several of the exceptions from
Part 195’s coverage. We have not changed the intent or scope of any of
these.  We have simply cleaned up some of the language to make the
exceptions easier to read.   PHMSA is not adopting AOPL’s suggestion
to exempt petroleum storage facilities in § 195.1 because the proposal
is unclear as to which storage facilities should be exempt.  For
example, regulated tanks are tanks that are used to relieve surges in a
pipeline system or used to receive and store hazardous liquid
transported by a pipeline for reinjection and continued transportation
by pipeline.  API/AOPL, in their proposal and presentation at the public
meeting, did not explain why these facilities should be exempted.

c. Proposed Safety Requirements for “Regulated Rural Low-Stress
Pipelines”

A new § 195.12(b) would be added to Part 195 regulations to specify the
safety requirements for regulated rural low-stress lines.  As we did
with rural gathering lines, we have developed these safety protections
to address the known threats to the integrity of these lines.  Based on
our review of regulated low-stress lines and our investigation of
non-regulated lines in rural areas, we have found that the highest risks
to these lines are corrosion and third party damage.  Although this
proposal focuses on those threats, operators will gather additional
information through the reporting requirements, the continuous
monitoring required as part of the corrosion program, and the integrity
assessment that includes identification and remediation of any condition
presenting a threat to the integrity of these lines, no matter the
cause.   We seek comments on whether this proposal should specifically
address other threats.    We seek comment on whether PHMSA should
require all operators of low-stress lines to submit an annual report as
required by § 195.49.

Operators would have to identify all segments of regulated rural
low-stress lines.  They would also have to design, install, construct,
initially inspect and test new, replaced, relocated, or otherwise
changed steel lines according to certain existing Part 195 requirements.
  However, for pipelines converted to hazardous liquid service,
operators would have the option of following the conversion rules in §
195.5.

Under the proposal, operators would have to comply with the reporting
requirements in subpart B of Part 195.  The other proposed safety
requirements for these regulated rural lines include:

  Establishing a maximum operating pressure under § 195.406;

  Installing and maintaining line markers under § 195.410;

 Establishing  and  applying a public education program according to §
195.440;

  Establishing and applying a damage prevention program according to §
195.442;

  For steel lines, controlling and remediating corrosion according to
Part 195, subpart H, and cleaning and continuous monitoring to identify
and remediate problems;

 Establishing and applying a modified operator qualification program to
allow an operator to describe the processes the operator has in place to
ensure personnel performing operations and maintenance activities are
qualified under Part 195, subpart G;

  Establishing and applying a program to assess at continuing intervals
the integrity of the low-stress lines.  The purpose of this assessment
is to determine and remediate any condition presenting a threat to the
integrity of these regulated segments. These conditions are not limited
to those caused by corrosion or third-party damage. The proposal allows
an operator to use in-line inspection tests and pressure testing as
assessment methods.  An operator could also use alternative technology,
such as direct assessment, if the operator demonstrates the technology
can provide an equivalent understanding of the line pipe.  If an
operator uses direct assessment, PHMSA would expect the methodology to
follow that required for using direct assessment in the gas integrity
management regulations; and

 Establishing and applying a leak detection program based on API 1130,
or other appropriate method suitable for the commodity being
transported.

To address one of the major threats to these lines, we are proposing
operators include these lines in their corrosion control program.  A
corrosion control program under Part 195’s subpart H includes
provisions on how an operator is to remediate corroded pipe.  We are
also proposing additional corrosion control requirements in the form of
continuous monitoring, cleaning and remediating problems identified from
the continuous corrosion monitoring.  We seek public comment on whether
the continuous monitoring provision associated primarily with corrosion
control should be as proposed or extended to other provisions of this
proposed rule.

Although not listed as a specific safety requirement in the proposed
rule, operators are required to continue to comply with the drug and
alcohol testing rules in 49 CFR Part 199, which requires operators to
test personnel for use of prohibited drugs and misuse of alcohol.
Individuals subject to testing are those who perform a regulated
operation, maintenance, or emergency-response function on a regulated
pipeline.

The proposed compliance deadlines vary according to the safety
requirements, and are listed below.  To gain a better understanding of
how different time frames will affect the costs and feasibility of an
operator’s compliance, we have proposed a range of compliance times.
API and AOPL recommended that compliance begin for all requirements
within 5 years, but we believe a phased approach is more appropriate.
This approach will allow operators longer time frames for complex
activities that are more costly and time consuming to implement, and to
readily implement less complex requirements.  For example, under the
proposal, operators would have six months, 12 months or some period in
between those ranges after the effective date of the final rule to
identify regulated rural low-stress pipeline segments and to comply with
the reporting requirements.  The proposal would have an operator
establish an integrity assessment program within one year to two years
from the final rule’s effective date, and allow 5 years to 7 years to
complete the integrity assessment of all regulated rural low-stress
segments, with half of those segments having to be completed within
three to four years from the final rule’s effective date.   The
proposed time frame for the integrity assessment takes into account the
time necessary to address physical changes to the pipeline for the use
of internal inspection devices, and any extensive planning and
construction.  The corrosion control program, including the additional
requirements for continuous monitoring and cleaning, would have to be in
place within two to three years from the final rule’s effective date.

A final rule will require a completion period somewhere in the proposed
ranges. Our preference is for shorter compliance periods.  Shorter
periods should be feasible because operators currently comply with many
of these requirements and would merely be adding low-stress lines to
their current operations.  But we have proposed a lower and upper range
of compliance periods so that in a final rule we can set compliance
times that can be completed quickly enough to address any problems on
these lines but are not cost burdensome, impractical or have an adverse
effect on energy supply. We seek comments and supporting documentation
to address the effects of these compliance periods on an operator’s
operations.  These comments should address cost, operational
difficulties in complying, technology concerns, and other issues, such
as time needed to secure necessary permits. We also seek comment on
whether there are simpler and more immediate methods an operator could
use to identify the condition of these regulated rural low-stress
pipelines.

d. Compliance Time Frames for Gathering Lines and Low-Stress Lines

Unless otherwise indicated the time frames shown in the chart below are
applicable to both onshore rural gathering lines and low-stress lines.

Safety Requirement	Time Frame

Identification of Line Segments	6 months -12 months following effective
date of rule.

Design, Construction, and Testing of Steel Pipelines  	1 year - 2 years
following effective date of rule.

Reporting Requirements	6 months -12 months following effective date of
rule.

Maximum Operating Pressure	12 months - 18 months following effective
date of rule.

Installation of Line Markers	12 months - 18 months following effective
date of rule for existing lines.

Public Education Program	12 months - 18 months following effective date
of rule for existing lines.

Damage Prevention Program	12 months - 18 months following effective date
of rule for existing lines.

Corrosion Control Program	2 years - 3 years following effective date of
rule.

Operator Qualification Program	1 year - 2 years following effective date
of rule.

Integrity Assessment Program**	1 year - 2 years following effective date
of rule.

Integrity Assessment – 50% completed **	3 years - 4 years following
effective date of rule.

Completed Integrity Assessments**	5 years - 7 years following effective
date of rule.

Leak Detection Program	2 years - 3 years following effective date of
rule.

e. New Unusually Sensitive Areas

Proposed § 195.12(c) concerns onshore rural low-stress lines that
become “regulated rural low-stress lines” because of a new unusually
sensitive area.   Operators should, at least annually, review the NPMS
to determine whether their unregulated low-stress lines have become
“regulated rural low-stress lines.”  We are proposing a range of
time periods for compliance with applicable safety requirements when a
previously unregulated line becomes regulated.  We would establish a
period between six months to one year for operators to comply with all
proposed requirements except the integrity assessment, and two to three
years to do the integrity assessment. We request comment and supporting
documentation that addresses the effect of these time frames on the
costs and feasibility of compliance.  We want to completely understand
the impacts of an operator’s ability to comply with a shorter or
longer time frame.

f. Records

Proposed § 195.12(d) provides record retention requirements. Certain
records such as the segment identification records would have to be
retained for the life of the pipe.  Other records would have to be kept
according to the record keeping requirements of the specific section or
subpart referenced.

g. Minor Changes to Existing Rules

A few corrosion control rules in Subpart H of Part 195 address
procedures under § 195.402(c)(3).   Under the requirements proposed
for regulated rural gathering and low-stress lines, operators would have
to establish corrosion control procedures under § 195.11 (b)(9), not
under § 195.402(c)(3).  So in existing §§ 195.555, 195.565,
195.573(d), and 195.579(d), we are proposing to replace
“§ 195.402(c)(3)” with “§§ 195.11(b)(9), 195.12(b)(8) or
§ 195.402(c)(3).”

Existing §§ 195.557(a) and 195.563(a) refer to pipelines
“constructed, relocated, replaced, or otherwise changed after the
applicable date in §195.401(c),” the deadline for compliance with
Part 195.   Comparable deadlines for “regulated rural gathering lines
and regulated rural low-stress lines are in proposed §§ 195.11(b)(9)
and 195.12(b)(8) respectively.  Thus, in §§ 195.557(a) and
195.563(a), we are proposing to replace “§ 195.401(c)” with
“§§ 195.11(b)(9), 195.12(b)(8) or 195.401(c).”

V. Regulatory Analyses and Notices

Executive Order 12866 and DOT Policies and Procedures. PHMSA considers
this proposed rulemaking to be a significant regulatory action under
Section 3(f) of Executive Order 12866 (58 FR 51735; Oct. 4, 1993).
Therefore, the Office of Management and Budget (OMB) has received a copy
of this proposed rulemaking to review.  This proposed rulemaking is also
significant under DOT regulatory policies and procedures (44 FR 11034:
February 26, 1979).

PHMSA prepared a draft Regulatory Evaluation of the proposed rule.  A
copy is in Docket No. PHMSA-2003-15864.  If you have comments about the
Regulatory Evaluation, please file them as described under the
“ADDRESSES” heading of this document.

For the purpose of the Regulatory Evaluation, PHMSA estimates 599 of the
2,722 miles of onshore rural hazardous liquid gathering lines would be
newly defined as regulated rural gathering lines as a consequence of the
proposed regulatory changes.  Since these lines operate at greater than
20 percent of SMYS (or 125 psig), PHMSA assumes major pipeline firms
operate these lines.

PHMSA estimates 684 of the 5,000 miles of onshore rural hazardous liquid
low-stress lines would be newly defined as regulated rural low-stress
lines as a consequence of this proposal.  Although these lines operate
at lower than 20 percent of SMYS, PHMSA believes the affected operators
also are major pipeline firms.

PHMSA acknowledges these mileage figures are estimates.  PHMSA invites
comments on the reasonableness of those estimates.

Overall, the initial costs of the proposed regulatory changes are
expected to be approximately $5 million, the recurring annual costs are
expected to be $2 million during years 2 through 6, and the recurring
annual costs are expected to be $1 million for years 7 and beyond.  The
present value of the NPRM over 20 years using a 3 percent discount rate
would be $21 million, while its present value over 20 years using a 7
percent discount rate would be $17 million.

Evidence suggests the two most significant safety problems on onshore
rural hazardous liquid gathering lines and low-stress lines are
corrosion and excavation damage.  The proposed regulatory changes
address both.  Consequently, the intended benefits of the proposed
regulatory changes are that they will reduce both.

It is difficult to quantify the benefits that would result from the
proposed regulatory changes.  Information that could be used to estimate
the benefits attributable to improved safety through reduced incidents
and incident consequences on gathering lines is difficult to quantify.
Benefits due to improved safety can be estimated for low-stress lines,
however.  Those benefits are $3.3 million per year.  The present value
of those benefits over 20 years using a 3 percent discount rate would be
$49 million, while their present value over 20 years using a 7 percent
discount rate would be $35 million.  PHMSA invites public comment on its
cost and benefit estimates.

In addition to any reduction in incidents that might be attributable to
the proposed regulatory changes, we expect the proposed changes to
improve public confidence in the safety of onshore hazardous liquid
gathering lines and low-stress lines in rural areas.  This we believe
would be a significant benefit of the proposed regulatory changes.

The proposed rules also may produce public benefits by preventing
disruptions in fuel supply caused by pipeline failures. Any interruption
in fuel supply impacts the U.S. economy by putting upward pressure on
the prices paid by businesses and consumers. Supply disruptions also
have national security implications, because they increase dependence on
foreign sources of oil. In most cases, we would not expect failures of
onshore rural gathering lines to have significant impacts on fuel
supply. However, low-stress pipelines in Alaska feeding major liquid
pipelines are important links in the fuel supply chain, as recent
incidents have illustrated.

Other additional benefits expected to result from the proposed rule
include avoided environmental and other damage from pipeline spills.
These benefits can be significant.  For example, on January 1, 1990, a
low-stress pipeline operated by Exxon ruptured and eventually spilled
567 thousand gallons of No. 2 fuel oil into the Arthur Kill, which
separates Staten Island from New Jersey.  The incident has a known cost
of nearly $84 million (in 2005 dollars).  While the figure includes
costs attributable to the spill response by the responsible parties, the
natural resources damage assessment, penalties, and “Other”, it does
not include any public response costs or 3rd party claims against the
responsible parties.  Even though the proposed rule does not include
such costs in its cost estimates, if the rule would prevent only one
incident similar to the Arthur Kill spill during the first 20 years, the
overall benefits of the proposed rule could potentially increase by
between 95% and 166%.

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.

PHMSA assumes major pipeline firms operate the lines that will be
regulated under this proposal.  These operators are already subject to
Part 195 because they operate pipelines covered by Part 195.  These
operators will experience slight added costs because they will be
required to fold their newly regulated rural gathering lines into their
existing Part 195 compliance programs.

PHMSA consulted the International Petroleum Association of America
(IPAA), which represents over 6,000 independent crude oil and natural
gas producers throughout the U.S., and IPAA believes small operators
would not be impacted.  PHMSA also consulted with the Small Business
Administration, which also believes this proposal will not impact small
entities.   Therefore, PHMSA does not expect the proposed rules to
impact any small entities.

Based on these facts, I certify that a small number of major operators
will experience increased costs, but this impact will not be a
significant economic impact on a substantial number of small entities.
PHMSA invites public comment on its estimate of the number of small
entities that would become subject to Part 195 for the first time as a
result of this rulemaking.

Executive Order 13175. PHMSA has analyzed this proposed rulemaking
according to the principles and criteria contained in Executive Order
13175, “Consultation and Coordination with Indian Tribal
Governments.”  Because the proposed rulemaking would not significantly
or uniquely affect the communities of the Indian tribal governments nor
impose substantial direct compliance costs, the funding and consultation
requirements of Executive Order 13175 do not apply.

Paperwork Reduction Act.   This proposed rulemaking contains information
collection requirements applicable to operators of hazardous liquid
gathering lines and low-stress lines in rural areas.  As required by the
Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), PHMSA has submitted
a paperwork analysis to the Office of Management and Budget for its
review.

Operators of rural gathering lines and low-stress lines proposed to be
regulated would have to comply with Part 195 information collection
requirements regarding corrosion control, damage prevention programs,
public education programs, and accident reporting.   These operators
would also have to comply with the information collection requirements
in 49 CFR Part 199 concerning drug and alcohol testing.

Certain gathering lines and low-stress lines in nonrural areas are
currently subject to Part 195.  The number of gathering line and
low-stress 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 nonrural locations.  If the proposed rules become final,
this number also may vary as changes occur in the boundaries of
unusually sensitive areas.

PHMSA currently has an OMB approved information collection request
(2137-0047) for hazardous liquid operators under its jurisdiction.
PHMSA currently has an OMB approved information collection request
(2137-0047) for hazardous liquid operators under its jurisdiction.
This proposed rule, if adopted, will not increase the number of
operators under PHMSA jurisdiction and will only marginally increase the
burden hours currently approved under OMB No. 2137-0047.  We estimate
that this proposal will require an additional burden of 8 hours.  This
is for all impacted operators.  The total cost of this operator burden
is approximately $520.56 ( = $65.07 x 8 hours, assuming a senior
engineer costing $65.07 fully loaded is preparing the incident reports).

 Type of Information Collection Request: Revision of an Existing
Collection.

Title of Information Collection: Transportation of Hazardous Liquids by
Pipeline.

Recordkeeping and Accident Reporting Requirements Respondents: estimated
0 new operators.

Estimated Total Annual Burden on New Respondents: 0 hours.

PHMSA invites comments on the above estimates.

Unfunded Mandates Reform Act of 1995. This proposed rulemaking does not
include unfunded mandates under the Unfunded Mandates Reform Act of
1995.  It would not result in costs of $100 million or more (adjusted
for inflation) to either State, local, or tribal governments, in the
aggregate, or to the private sector, and it is the least burdensome
alternative that achieves the objective of the proposed rulemaking.

National Environmental Policy Act. PHMSA has analyzed the proposed
rulemaking for purposes of the National Environmental Policy Act (42
U.S.C. 4321 et seq.).  PHMSA has preliminarily determined that the
proposed rulemaking is unlikely to significantly affect the quality of
the human environment.

The proposed rulemaking would require only limited physical modification
or other work that would disturb pipeline rights-of-way, 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 and leak detection programs.  All of these
activities result in negligible to minor negative environmental impact.
PHMSA also believes that many of these safety measures (for example,
implementing corrosion control and installing and maintaining line
markers) are already being undertaken for a large portion of the
pipeline mileage that would become regulated under the proposed rules.
Furthermore, by requiring these and other safety rules such as accident
reporting, implementing public education and damage prevention programs,
and establishing operator qualification programs, it is likely the
number of spills on rural gathering lines and low-stress lines will be
reduced, thereby resulting in minor to moderate positive environmental
impact that would offset the negative environmental impacts.

An environmental assessment document is available for review in Docket
No. PHMSA-2003-15864.  A final determination on environmental impact
will be made following the close of the comment period.  If you have any
comments about this draft and environmental assessment, please submit
them as described under the “ADDRESSES” heading of this document.

Executive Order 13132. PHMSA has analyzed the proposed rulemaking
according to the principles and criteria contained in Executive Order
13132 (“Federalism”).  None of the proposed regulatory requirements
(1) has 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)
imposes substantial direct compliance costs on State and local
governments; or (3) preempts state law.  Therefore, the consultation and
funding requirements of Executive Order 13132 do not apply.

Although the state consultation requirements do not apply to this
proposed regulatory action because there are no preemption issues, PHMSA
has involved state pipeline safety personnel in discussing approaches on
regulating rural gathering and low-stress pipelines.  PHMSA
representatives met on several occasions with the National Association
of Pipeline Safety Representatives (NAPSR), an organization of state
pipeline safety personnel, to discuss regulation of rural onshore
gathering pipelines.  In September 2003 and February 2004, PHMSA met
with the NAPSR gathering pipeline committee and also gave presentations
at the national NAPSR meetings in 2004 and 2005.  In 2003, PHMSA
discussed the potential impact of a regulation on rural liquid gathering
pipelines with State officials in West Virginia and Louisiana.  In April
2006, PHMSA looked at the impact of the regulation on rural gathering
and low-stress pipelines in West Virginia and Ohio.  PHMSA also met with
State officials at the Texas Railroad Commission in April 2002 to gather
data on rural low-stress lines in Texas.  Further, PHMSA talked to the
Alaska Department of Environmental Conservation about low-stress lines
in Alaska.

Executive Order 13211.   The transportation of hazardous liquids through
rural gathering lines and low-stress lines has a substantial aggregate
effect on the nation’s available energy supply.   However, after
analysis, PHMSA has determined this proposed rulemaking 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.  It is possible avoiding future spills may have a
positive effect on the supply of energy.  We invite comments on the
Energy Impact Analysis, which is available for review in the docket.

List of Subjects in 49 CFR Part 195

Carbon dioxide, Crude Oil, Petroleum, Pipeline safety, Reporting and
recordkeeping requirements.

For the reasons discussed in the preamble, PHMSA proposes to amend 49
CFR Part 195 as follows:

PART 195 – TRANSPORTATION OF HAZARDOUS LIQUIDS BY PIPELINE

    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.

      2.   Amend  §195.1 to revise the section heading and to revise
paragraphs (a)  and (b), to redesignate paragraph (c) as paragraph (d)
and to add a new paragraph (c) to read as follows:

 § 195.1  Which pipelines are covered by this part?

(a)  Except for the pipelines listed in paragraph (c) 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).

(b)  This part applies to:

	(1)  Any pipeline that transports a highly volatile liquid (HVL);

	(2)  Transportation through any pipeline, other than a gathering line,
that has  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 pipelines:

		(i)  A pipeline located in a non-rural area;

		(ii)  A regulated rural gathering pipeline defined in §195.11.  The
requirements for these lines are provided in §195.11; or

(iii)  A pipeline located in an inlet of the Gulf of Mexico.  These
lines are only subject to the requirements in   SEQ CHAPTER \h \r 1
§195.413;

	(5)  Transportation of a hazardous liquid or carbon dioxide through a
low-stress pipeline in a non-rural area; or

	(6)  Transportation of a hazardous liquid through a regulated
low-stress pipeline in a rural area as defined in §195.12.  The
requirements for these lines are provided in §195.12.

(c)  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
1-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 49 CFR § 190.9, 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 §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.

 (d)  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 §§ 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).

3.  Amend § 195.3(c) by revising item B. (12) of the 49 CFR Reference
table to read “§§ 195.12 (b)(11), 195.134, 195.444.”

 4. Add §195.11 and §195.12 to read as follows:

§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 between 6 5/8 inches (168 mm) and 8 5/8
inches (219.1 mm);

(2) Is located in, or within ¼-mile (.40 km) of an unusually sensitive
area as defined in §195.6; and

(3) Operates at a maximum pressure established under §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) and (b)(9) of
this section, the safety requirements are applicable to all materials of
construction.

(1) Identify all segments of regulated rural gathering pipeline within
[6 months - 12 months following effective date of final rule].

(2) For steel pipelines constructed, replaced, relocated, or otherwise
changed after [1 year - 2 years following effective date of final rule],
design, install, construct, initially inspect, and initially test the
pipeline according to this part, unless the pipeline is converted under
§195.5.

(3) For non-steel pipelines constructed after [1 year following
effective date of final rule], notify the Administrator according to §
195.8.

(4) Beginning [6 months - 12 months following effective date of final
rule], comply with the reporting requirements in subpart B of this part.

(5) Establish the maximum operating pressure of the pipeline according
to §195.406 before transportation begins, or if the pipeline exists on
[effective date of final rule], before [12 months - 18 months following
effective date of final rule].

(6) Install and maintain line markers according to §195.410 before
transportation begins, or if the pipeline exists on [effective date of
final rule], before [12 months - 18 months following effective date of
final rule].

(7) Establish and apply a public education program according to
§195.440 before transportation begins, or if the pipeline exists on
[effective date of final rule], before [12 months - 18 months following
effective date of final rule].

(8) Establish and apply a damage prevention program according to
§195.442 before transportation begins, or if the pipeline exists on
[effective date of final rule], before [12 months - 18 months following
effective date of final rule].

(9) For steel pipelines, control and remediate corrosion according to
subpart H of this part, except corrosion control is not required for
pipelines existing on [effective date of final rule] before [2 years - 3
years following effective date of final rule]. In addition to the
requirements in subpart H, continuously monitor to identify and
remediate any changes in operating conditions that could necessitate
cleaning the lines and accelerating the corrosion control program.

 (10) Demonstrate compliance with the Operator Qualification program
requirements in subpart G of this part by describing the processes used
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 [effective date of
final rule], before [1 year - 2 years following the effective date of
the final rule].

 (c) New Unusually Sensitive Areas.  If, after [effective date of final
rule], a new unusually sensitive area is identified and a segment of
pipeline becomes regulated as a result, the operator must implement the
requirements in paragraphs (b)(2) through (b)(10) of this section within
[ six months - one year] for the affected segment.

(d)   Records.  An operator must maintain the segment identification
records required in paragraph (b)(1) of this section for the life of the
pipe.  For the requirements in paragraphs (b)(2) through (b)(10) of this
section, an operator must maintain the records necessary to demonstrate
compliance with each requirement according to the record retention
requirements of the referenced section or subpart.

§195.12  Which low-stress lines in rural areas are regulated and what
requirements apply?

Each operator of a regulated low-stress line in a rural area, 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 low-stress line in
a rural area means an onshore line in a rural area that meets all of the
following criteria:

(1) Has a nominal diameter of 8 5/8 inches (219.1 mm) or more;

(2) Is located in, or within ¼-mile (.40 km) of, an unusually sensitive
area as defined in §195.6; and

(3) Operates at a maximum pressure established under § 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) 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) and (b)(8) of
this section, the safety requirements in this section are applicable to
all materials of construction.

(1) Identify all segments of regulated low-stress pipeline in rural
locations before [6 months - 12 months following effective date of final
rule].

(2) For steel pipelines constructed, replaced, relocated, or otherwise
changed after [1 year - 2 years following effective date of final rule],
design, install, construct, initially inspect, and initially test the
pipeline according to this part, unless the pipeline is converted under
§ 195.5.

(3) Beginning [6 months - 12 months following effective date of final
rule], comply with the reporting requirements in subpart B of this part.

(4) Establish the maximum operating pressure of the pipeline according
to § 195.406 before transportation begins, or if the pipeline exists on
[effective date of final rule], before [12 months - 18 months following
effective date of final rule].

(5) Install and maintain line markers according to §195.410 before
transportation begins, or if the pipeline exists on [effective date of
final rule], before [12 months - 18 months following effective date of
final rule]

(6) Establish and apply a public education program according to
§195.440 before transportation begins, or if the pipeline exists on
[effective date of final rule], before [12 months - 18 months following
effective date of final rule].

(7) Establish and apply a damage prevention program according to
§195.442 before transportation begins, or if the pipeline exists on
[effective date of final rule], before [12 months - 18 months following
effective date of final rule].

(8) For steel pipelines, control and remediate corrosion according to
subpart H of this part, except corrosion control is not required for
pipelines existing on [effective date of final rule] before [2 years - 3
years following effective date of final rule]. In addition to the
requirements in subpart H, continuously monitor to identify and
remediate any changes in operating conditions that could necessitate
cleaning the lines and accelerating the corrosion control program.

 (9)  Demonstrate compliance with the Operator Qualification program
requirements in subpart G of this part by describing the processes used
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 [effective date of
final rule], before [1 year - 2 years following the effective date of
the final rule].

(10) Establish and apply a program to assess the integrity of the
regulated pipeline segments to determine and remediate any condition
presenting a threat to the integrity of these segments before [12 months
to 24 months following effective date of final rule]. These conditions
are not limited to those caused by corrosion and third- party damage.
An operator may use in-line inspection tools, pressure testing conducted
in accordance with subpart E of this part, or other technology the
operator demonstrates can provide an equivalent understanding about the
condition of line pipe.  An operator must prioritize the regulated rural
low-stress segments for the integrity assessment and conduct the
integrity assessment of at least 50 percent of these segments before [36
months - 48 months following effective date of final rule], and complete
the assessment for all regulated segments before [60 months - 84 months
following effective date of final rule].  An operator must establish
reassessment intervals for continually assessing the pipe segments.  The
intervals must be as frequent as necessary to ensure the continued
integrity of  each pipe segment, but may not exceed 68 months  An
operator may be able to justify an engineering basis for a longer
assessment interval on a segment of line pipe. The justification must be
supported by a reliable engineering evaluation.

 (11) Establish and apply a program, based on API 1130, or other
appropriate method suitable for the commodity being transported to
detect leaks on the regulated segments before [24 months - 36 months
following effective date of the final rule].   The leak detection method
cannot be based solely on field personnel’s visual and olfactory
senses. The program must evaluate the capability of the leak detection
means.  The evaluation must consider the following factors:

(i) Length and diameter of the pipeline;

(ii) Product transported;

(iii) Timeliness of detection capability; and

(iv) Proximity of response personnel and equipment.

(c)  New Unusually Sensitive Areas.  If, after [effective date of final
rule], a new unusually sensitive area is identified and a segment of
pipeline becomes regulated as a result, the operator must take the
following actions:

(1) Implement the requirements in paragraphs (b)(2) through (b)(9) and
(b) (11) of this section within six months - one year from the date the
area is identified; and

 (2) Complete the assessment required by paragraph (b)(10) of this
section within two years - three years from the date the area is
identified.

(d) Records.   An operator must maintain the segment identification
records required in paragraph (b)(1) of this section for the life of the
pipe.  For the requirements in paragraphs (b)(2) through (b)(9) of this
section, an operator must maintain the records necessary to demonstrate
compliance with each requirement according to the record retention
requirements of the referenced section or subpart.  For the integrity
assessment program required in paragraph (b)(10) and the leak detection
program required in paragraph (b)(11), an operator must maintain the
records for the life of the pipe.

5.    Amend §§ 195.555, 195.565, 195.573(d), and 195.579(d) by
removing “§ 195.402(c)(3)” and adding, in its place,
“§§ 195.11(b)(9), 195.12(b)(8) or § 195.402(c)(3).”

6. Amend §§195.557(a) and 195.563(a) by removing “§195.401(c)”
and adding in its place, “§§195.11(b)(9), 195.12((b)(8)) or
§ 195.401(c).”

Issued in Washington, DC on _______________________________.

Jeffrey D. Wiese,

Acting Deputy Associate Administrator for Pipeline Safety.

 Although these lines are not regulated under Part 195, PHMSA’s rules
for onshore oil spill response plans (49 CFR Part 194) cover many rural
crude oil gathering lines and low-stress lines.  Part 194 regulations
apply to oil pipelines that could cause substantial harm to the
environment by spilling oil into or on any navigable water of the United
States or adjoining shoreline.

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搒Ǡက related specifically to regulated gathering lines, under the
Federal pipeline safety law, PHMSA must consider various other factors
in prescribing pipeline safety rules (see 49 U.S.C. 60102(b)).

 Marginal wells account for 16 percent of US oil production (Interstate
Oil and Gas Compact Commission, “Marginal Oil and Natural Gas:
American Energy for the American Dream, 2005).

 Although the statute directs us to define a regulated gathering line,
for purposes of this rulemaking, we are proposing to define “regulated
rural gathering line.”  Non rural onshore gathering is already
regulated under Part 195 and we are not proposing to change regulation
of these currently regulated lines.  This rulemaking focuses on certain
rural onshore gathering not presently regulated.

 The compliance timeframe applies only to onshore rural low-stress
lines.

This EA considers the pipeline safety actions proposed for rural onshore
gathering and low-stress pipelines. This EA does not consider other
actions that operators are required to take to comply with other
statutory authorities, such as the Clean Water Act.

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