[Federal Register Volume 83, Number 147 (Tuesday, July 31, 2018)]
[Proposed Rules]
[Pages 36861-36871]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16376]


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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 192

[Docket ID: PHMSA-2017-0151]
RIN 2137-AF29


Pipeline Safety: Class Location Change Requirements

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA), 
DOT.

ACTION: Advance notice of proposed rulemaking (ANPRM).

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SUMMARY: PHMSA is seeking public comment on its existing class location 
requirements for natural gas transmission pipelines as they pertain to 
actions operators are required to take following class location changes 
due to population growth near the pipeline. Operators have suggested 
that performing integrity management measures on pipelines where class 
locations have changed due to population increases would be an equally 
safe but less costly alternative to the current requirements of either 
reducing pressure, pressure testing, or replacing pipe. This request 
for public comment continues a line of discussion from a Notice of 
Inquiry published in 2013 and a report to Congress in 2016 regarding 
whether expanding integrity management requirements would mitigate the 
need for class location requirements.

DATES: Persons interested in submitting written comments on this ANPRM 
must do so by October 1, 2018.

ADDRESSES: You may submit comments identified by the Docket: PHMSA-
2017-0151 by any of the following methods:
    E-Gov website: https://www.regulations.gov. This site allows the 
public to enter comments on any Federal Register notice issued by any 
agency. Follow the online instructions for submitting comments.
    Fax: 1-202-493-2251.
    Mail: Hand Delivery: U.S. DOT Docket Management System, West 
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, 
Washington, DC 20590-0001 between 9:00 a.m. and 5:00 p.m., Monday 
through Friday, except Federal holidays.
    Instructions: Identify the Docket ID at the beginning of your 
comments. If you submit your comments by mail, submit two copies. If 
you wish to receive confirmation that PHMSA has received your comments, 
include a self-addressed stamped postcard. Internet users may submit 
comments at https://www.regulations.gov/.
    Note: Comments are posted without changes or edits to https://www.regulations.gov, including any personal information provided. There 
is a privacy statement published on https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:
    Technical questions: Steve Nanney, Project Manager, by telephone at 
713-272-2855 or by email at [email protected].
    General information: Robert Jagger, Technical Writer, by telephone 
at 202-366-4361 or by email at [email protected].

SUPPLEMENTARY INFORMATION:

Outline of This Document

I. Class Location History and Purpose
    A. Class Location Determinations
    B. Class Location--``Cluster Rule'' Adjustments
II. Changes in Class Location Due to Population Growth
III. Class Location Change Special Permits
    A. Special Permit Conditions
IV. Pipeline Safety, Regulatory Certainty, and Job Creation Act of 
2011--Section 5
    A. 2013 Notice of Inquiry: Class Location Requirements
    B. 2014 Pipeline Advisory Committee Meeting, Class Location 
Workshop, and Subsequent Comments
    C. 2016 Class Location Report
V. INGAA Submission on Regulatory Reform--Proposal To Perform IM 
Measures In-Lieu of Pipe Replacement When Class Locations Change
VI. Questions for Consideration
VII. Regulatory Notices

Background

I. Class Location History and Purpose

    The class location concept pre-dates Federal regulation of gas 
transmission pipelines \1\ and was an early method of differentiating 
areas and risks along natural gas pipelines based on the potential 
consequences of a hypothetical pipeline failure. Class location 
designations were previously included in the American Standards 
Association B31.8-1968 version of the ``Gas Transmission and 
Distribution Pipeline Systems'' standard, which eventually became the 
American Society of Mechanical Engineers (ASME) International Standard, 
ASME B31.8 ``Gas Transmission and Distribution Pipeline Systems.'' The 
class location definitions incorporated into title 49, Code of Federal 
Regulations (CFR) Sec.  192.5 were initially derived from the 
designations in this standard and were first codified on April 19, 
1970.\2\ These definitions were like the original ASME B31.8 
definitions for Class 1 through 3 locations but added an additional 
Class 4 definition and, with some modifications, still apply today.
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    \1\ The Department of Transportation first proposed class 
location regulations on March 24, 1970 (35 FR 5012). The proposal 
was part of a series of NPRMs published in response to the Natural 
Gas Pipeline Safety Act of 1968 (Pub. L. 90-481). The NPRMs were 
directed at developing a comprehensive system of Federal safety 
standards for gas pipeline facilities and for the transportation of 
gas through such pipelines. The class location rulemaking was 
finalized on August 19, 1970, as part of a consolidated rulemaking 
establishing the first minimum Federal safety standards for the 
transportation of natural gas by pipelines (35 FR 13248).
    \2\ 35 FR 13248.
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    Gas transmission pipelines are divided into classes from 1 (rural 
areas) to 4 (densely populated, high-rise areas) that are based on the 
number of buildings or dwellings for human occupancy in the area. This 
concept is to provide safety to people from the effects of a high-
pressure natural gas pipeline leak or rupture that could explode or 
catch on fire. PHMSA uses class locations in 49 CFR part 192 to 
implement a graded approach in many areas that provides more 
conservative safety margins and more stringent safety standards 
commensurate with the potential consequences based on population 
density near the pipeline. When crafting the natural gas

[[Page 36862]]

regulations, DOT's Office of Pipeline Safety (OPS) determined that 
these more stringent standards were necessary because a greater number 
of people in proximity to the pipeline substantially increases the 
probabilities of personal injury and property damage in the event of an 
accident. At the same time, the external stresses, the potential for 
damage from third-parties, and other factors that contribute to 
accidents increase along with the population; consequently, additional 
protective measures are often needed in areas with greater 
concentrations of population.
    The most basic and earliest use of the class location concept 
focused on the design (safety) margin for the pipeline. As pipelines 
are designed based, in part, on the population along their pipeline 
route and therefore the class location of the area, it is important to 
decrease pipe stresses in areas where there is the potential for higher 
consequences or where higher pipe stresses could affect the safe 
operation of a pipeline in larger-populated areas. Pipeline design 
factors are derating factors that ensure pipelines are operated below 
100 percent of the maximum pipe yield strength. From an engineering 
standpoint, they were developed based on risk to the public \3\ and for 
piping that may face additional operational stresses.\4\ Pipeline 
design factors vary, ranging from 0.72 in a Class 1 location to 0.40 in 
a Class 4 location. They are used in the pipeline design formula (Sec.  
192.105) to determine the design pressure for steel pipe, and are 
generally reflected in the maximum allowable operating pressure (MAOP) 
based upon a percentage of the specified minimum yield strength (SMYS) 
at which the pipeline can be operated.5 6 Design factors are 
used along with pipe characteristics in engineering calculations 
(Barlow's Formula) to calculate the design pressure and MAOP of a steel 
pipeline. More specifically, the formula at Sec.  192.105 is P = (2St/
D) x F x E x T, where P is the design pressure, S is the pipe's yield 
strength, t is the wall thickness of the pipe, D is the diameter of the 
pipe, F is the design factor per the class location, E is the 
longitudinal joint factor,\7\ and T is the temperature derating 
factor.\8\ The formula in Sec.  192.105 can be used to calculate the 
MAOP of a 1000 psig pipeline with the same operating parameters 
(diameter, wall thickness, yield strength, seam type, and temperature) 
but in different class locations (and therefore different design 
factors), and the MAOP of that pipeline in the different class 
locations would be as follows:
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    \3\ For instance, the number of human dwellings near the 
pipeline or the type of dwelling (hospital, school, playground, 
nursing care facility, etc.).
    \4\ This can include piping at compressor stations, metering 
stations, fabrications, and road or railroad crossings.
    \5\ Design factors for steel pipe are listed in Sec.  192.111. 
Class 1 locations have a 0.72 design factor, Class 2 locations have 
a 0.60 factor, Class 3 locations have a 0.50 factor, and Class 4 
locations have a 0.40 design factor.
    \6\ SMYS is an indication of the minimum stress a pipe may 
experience that will cause plastic, or permanent, deformation of the 
steel pipe.
    \7\ The seam type of a pipeline, per this formula, has a 
limiting effect on the MAOP of the pipeline. While it is typically 
``1.00'' and does not affect the calculation, certain types of 
furnace butt-welded pipe or pipe not manufactured to certain 
industry standards will have factors of 0.60 or 0.80, which will 
necessitate a reduction in design pressure.
    \8\ The temperature derating factor ranges from 1.000 to 0.867 
depending on the operating temperature of the pipeline. Pipelines 
designed to operate at 250 degrees Fahrenheit and lower have a 
factor of 1.000, which does not affect the design pressure 
calculation. Pipelines designed to operate at higher temperatures, 
including up to 450 degrees Fahrenheit, will have derating factors 
that will lower the design pressure of the pipeline.

 No class location--design factor = 1.0 (none); MAOP = 1000 
psig
 Class 1--design factor = 0.72; MAOP = 720 psig
 Class 2--design factor = 0.60; MAOP = 600 psig
 Class 3--design factor = 0.50; MAOP = 500 psig
 Class 4--design factor = 0.40; MAOP = 400 psig
    As therefore evidenced, pipelines at higher class locations will 
have lower operating pressures and maximum allowable operating 
pressures due to more stringent design factors to protect people near 
the pipeline.
    As natural gas pipeline standards and regulations evolved, the 
class location concept was incorporated into many other regulatory 
requirements, including test pressures, mainline block valve spacing, 
pipeline design and construction, and operations and maintenance (O&M) 
requirements, to provide additional safety to populated areas. In 
total, class location concepts affect 12 of 16 subparts of part 192 and 
a total of 28 individual sections.\9\
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    \9\ Sec. Sec.  192.5, 192.8, 192.9, 192.65, 192.105, 192.111, 
192.123, 192.150, 192.175, 192.179, 192.243, 192.327, 192.485, 
192.503, 192.505, 192.609, 192.611, 192.613, 192.619, 192.620, 
192.625, 192.705, 192.706, 192.707, 192.713, 192.903, 192.933, and 
192.935.
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A. Class Location Determinations

    Pipeline class locations for onshore gas pipelines are determined 
as specified in Sec.  192.5(a) by using a ``sliding mile.'' The 
``sliding mile'' is a unit that is 1 mile in length, extends 220 yards 
on either side of the centerline of a pipeline, and moves along the 
pipeline. The number of buildings \10\ within this sliding mile at any 
point during the mile's movement determines the class location for the 
entire mile of pipeline contained within the sliding mile. Class 
locations are not determined at any given point of a pipeline by 
counting the number of dwellings in static mile-long pipeline segments 
stacked end-to-end.
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    \10\ Per the regulations, a ``building'' is a structure intended 
for human occupancy, whether it is used as a residence, for 
business, or for another purpose. For the purposes of this 
rulemaking, a ``building'' may be interchangeably referred to as a 
``home,'' a ``house,'' or a ``dwelling.''
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    When higher dwelling concentrations are encountered during the 
continuous sliding of this mile-long unit, the class location of the 
pipeline rises commensurately. As it pertains to structure counts, a 
Class 1 location is a class location unit along a continuous mile 
containing 10 or fewer buildings intended for human occupancy, a Class 
2 location is a class location unit along a continuous mile containing 
11 to 45 buildings intended for human occupancy, and a Class 3 location 
is a class location unit along a continuous mile containing 46 or more 
buildings intended for human occupancy.\11\ Class 4 locations exist 
where buildings with four or more stories above ground are prevalent. 
Whenever there is a change in class location that will cause an 
apparent overlapping of class locations, the higher-numbered class 
location applies.
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    \11\ Under Sec.  192.5, Class 1 locations also include offshore 
areas, and Class 3 locations contain areas where the pipeline lies 
within 100 yards of a building or a small, well-defined outside area 
(including playgrounds, recreation areas, and outdoor theaters) that 
is occupied by 20 or more persons at least 5 days a week for 10 
weeks in any 12-month period. The days and weeks need not be 
consecutive.
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B. Class Location--``Cluster Rule'' Adjustments

    After proposing the initial natural gas safety regulations in 1970, 
OPS received several comments stating that the proposed class location 
definitions could create 2-mile stretches of higher class locations for 
the sole protection of small clusters of buildings at crossroads or 
road crossings. Because part 192 regulations become more stringent as 
class locations increase from Class 1 to 4 locations, pipelines in 
higher class location areas such as these can result in increased 
expenditures to the pipeline operator in areas where there is no 
population. When finalizing the class location definitions as a part of 
establishing part 192 on August 19, 1970 (35 FR 13248), OPS added a new 
paragraph to allow operators to adjust the boundaries of Class 2, 3, 
and 4

[[Page 36863]]

locations. Under this provision, operators can choose to end Class 4 
location boundaries 220 yards from the furthest edges of a group of 4-
story buildings, and operators can choose to end Class 2 and 3 
boundaries up to 220 yards upstream and downstream from the furthest 
edges of a group or ``cluster'' of buildings.\12\ ``Clustering,'' 
therefore, is a means of reducing the length of a Class 2, 3, or 4 
location in a sliding mile unit that requires a Class 2, 3, or 4 
location; in other words, it allows operators to cluster or reduce the 
amount of pipe that is subject to the requirements of a higher class 
location.\13\
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    \12\ See Sec.  192.5(c)(1) & (2).
    \13\ For example, if all buildings for human occupancy in a 
sliding mile containing enough buildings to require a Class 3 
location were clustered in the middle of that sliding mile, the 
Class 3 area would end 220 yards from the nearest building (on 
either side of the cluster through which the pipeline passes) rather 
than at the end of the 1-mile class location unit that would 
otherwise be the basis for classification. Thus, if the cluster were 
200 yards in length, the total length of the Class 3 area would be 
640 yards (220 + 200 + 220).
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    It is important to note that while clustering allows for the 
adjustment of the length of class locations in certain areas, it does 
not change the length of class location units themselves nor the method 
by which class location units are determined. Further, clustering does 
not exclude ``buildings for human occupancy'' in a class location unit/
sliding mile, so all buildings within a specified class location unit 
must be protected by the maximum class location level that was 
determined for the entire class location unit. This concept becomes 
especially important when other buildings for human occupancy are built 
within a class location unit/sliding mile where a cluster exists and an 
operator has adjusted the class location length to exclude certain 
lengths of pipe outside of the cluster area.
    For instance, assume there is a class location unit/sliding mile 
containing 47 homes close to one another. The class location unit would 
be a Class 3 location per the definition provided at Sec.  192.5(b). An 
operator can consider these homes a ``cluster'' and appropriately apply 
the adjustment at Sec.  192.5(c) so that the boundaries of the Class 3 
location are 220 yards upstream and downstream from the furthest edges 
of the clustered homes (buildings for human occupancy). Therefore, 
while the entirety of the pipeline is in a Class 3 class location unit, 
the only pipe subject to Class 3 requirements is the length of the 
cluster plus 220 yards on both sides of the cluster. The remaining pipe 
in the class location unit/sliding mile, the pipe that is outside of 
this clustered area, could therefore be operated at Class 1 
requirements rather than at the otherwise-required Class 3 
requirements.
    However, what would happen if new buildings were built within that 
sliding mile but away from that single cluster? If, per the example 
above, there is a cluster of 47 homes at one end of a class location 
unit/sliding mile, and 3 homes are built at the other end of the class 
location unit, the operator must count and treat those 3 homes as a 
second cluster, with the length of the cluster plus 220 yards on both 
sides of the cluster subject to Class 3 requirements. The pipeline 
between these two clusters would still be in a Class 3 location per its 
class location unit, as there would be 50 homes within the sliding 
mile, but the pipeline between the clusters could be operated under 
Class 1 location requirements. If the 220-yard extensions of any two or 
more clusters intercept or overlap, the separate clusters must be 
considered a single cluster for purposes of applying the adjustment.
    An operator must use the clustering method consistently to ensure 
that all buildings for human occupancy within a class location unit are 
covered by the appropriately determined class location requirements. 
Any new buildings for human occupancy built in a class location unit 
where clustering has been used must also be clustered, whether they 
form a new, independent cluster or are added to the existing cluster. 
Note that even a single house could form the basis of a second cluster 
under this requirement, as all buildings within a specified class 
location unit must be protected by the maximum class location level 
that was determined for the entire class location unit.
    PHMSA's interpretation to Air Products and Chemicals, Inc., issued 
on March 11, 2015,\14\ explains and diagrams this concept further.
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    \14\ PHMSA Interpretation #PI-14-0017, available at https://www.phmsa.dot.gov/sites/phmsa.dot.gov/files/legacy/interpretations/Interpretation%20Files/Pipeline/2015/Air_Products_PI_14_0017_10_01_2014_Part_192.5.pdf.
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II. Changes in Class Location Due to Population Growth

    Class locations can change as the population living or working near 
a pipeline grows and, as outlined earlier, are specifically determined 
based on the density of dwellings within the 440-yard-wide (quarter-
mile-wide) sliding mile down the pipeline centerline. Class locations 
are used to determine a pipeline's design factor, which is a component 
of the design formula equation at Sec.  192.105 and ultimately factors 
into the pressure at which the pipeline is operated. As population 
around a pipeline increases and the pipeline's class location 
increases, the numeric value of the design factor decreases, which 
translates, via the formula at Sec.  192.105, into a lower MAOP for the 
pipeline. To illustrate this, a Class 4 location containing a 
prevalence of 4-or-more-story buildings has a safety factor of 0.4, 
whereas a Class 2 location containing 11 to 45 dwellings has a safety 
factor of 0.6. If a Class 2 location is very quickly developed to a 
point where there is a prevalence of 4-or-more story buildings, the 
corresponding difference in safety factor when the class location 
changes, from a 0.6 to a 0.4, equates to a 33% reduction in MAOP per 
the design formula equation.
    A change in class location requires operators to confirm safety 
factors and to recalculate the MAOP of a pipeline. If the MAOP per the 
newly determined class location is not commensurate with the present 
class location, current regulations require that pipeline operators (1) 
reduce the pipe's MAOP to reduce stress levels in the pipe; (2) replace 
the existing pipe with pipe that has thicker walls or higher yield 
strength to yield a lower operating stress at the same MAOP; or (3) 
pressure test at a higher test pressure if the pipeline segment has not 
previously been tested at the higher pressure and for a minimum of 8 
hours.\15\ Depending on the pipeline's test pressure and whether it 
meets the requirements in Sec. Sec.  192.609 and 192.611 (``Change in 
class location: Required study,'' and ``Change in class location: 
Confirmation or revision of maximum allowable operating pressure,'' 
respectively), an operator can base the pipeline's MAOP on a certain 
safety factor times the test pressure for the new class location as 
long as the corresponding hoop stress of the pipeline does not exceed 
certain percentages of the specified minimum yield strength (SMYS) of 
the pipe.\16\

[[Page 36864]]

This is often referred to as a ``one-class bump,'' as an operator can 
use this method when class locations change from a Class 1 to 2, a 
Class 2 to a 3, or a Class 3 to a 4.
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    \15\ See Sec.  192.611 as appropriate to one-class changes 
(e.g., Class 1 to 2 or Class 2 to 3 or Class 3 to 4). As an example, 
for a Class 1 to Class 2 location change, the pipeline segment would 
require a pressure test to 1.25 times the MAOP for 8 hours. 
Following a successful pressure test, the pipeline segment would not 
need to be replaced with new pipe, but the existing design factor of 
0.72 for a Class 1 location would be acceptable for a Class 2 
location.
    \16\ See Sec.  192.611. Specifically, if the applicable segment 
has been hydrostatically tested for a period of longer than 8 hours, 
the MAOP is 0.8 times the test pressure in Class 2 locations, 0.667 
times the test pressure in Class 3 locations, or 0.555 times the 
test pressure in Class 4 locations. The corresponding hoop stress 
may not exceed 72% of SMYS of the pipe in Class 2 locations, 60% of 
SMYS in Class 3 locations, or 50% of SMYS in Class 4 locations.
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    The Sec. Sec.  192.5 and 192.611 requirements to change-out pipe, 
re-pressure test, or de-rate pipe to a lower MAOP when population 
growth occurs and requires a class location change are the most 
significant reasons that operators request that class locations be 
revised or eliminated. Throughout the process of considering class 
location changes,\17\ comments PHMSA received from the trade 
associations state that reducing a pipeline's operating pressure below 
that at which the pipeline historically operated may unacceptably 
restrict deliveries to natural gas customers. These same commenters 
suggest that pressure testing pipelines may be practicable in select 
cases, but the test pressure required for higher class locations may 
exceed what a pipeline is designed to accommodate. Operators also 
contend that they should not have to change out pipe when a class 
location change occurs if the operator can prove that the pipe segment 
is fit for service through integrity assessments.\18\
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    \17\ See Section IV of this document. In the context of this 
rulemaking, PHMSA has been considering issues related to class 
location requirements since publishing an ANPRM on the gas 
transmission regulations in 2011. Following that, PHMSA published a 
notice of inquiry soliciting comments on expanding gas IM program 
requirements and mitigating class location requirements (78 FR 
46560; August 1, 2013) and held a public meeting on the notice of 
inquiry topics on April 16, 2014 (both actions under Docket Number 
PHMSA-2013-0161). PHMSA also received comments on the issues 
discussed in this rulemaking in the docket titled ``Transportation 
Infrastructure: Notice of Review of Policy, Guidance, and 
Regulations Affecting Transportation Infrastructure Projects'' which 
was noticed in the Federal Register on June 8, 2017 (82 FR 26734; 
Docket Number OST-2017-0057).
    \18\ Operators did not outline the type of integrity assessments 
that would be appropriate from their perspective nor the factors 
that should be considered to determine whether a pipeline segment is 
fit for service (such as pipe, pipe seam, or coating conditions; O&M 
history; material properties; pipe depth of cover; non-destructive 
testing of girth welds; type pipe coatings used and if they shield 
cathodic protection; seam type; failure or leak history; and 
pressure testing or acceptance criteria and any re-evaluation 
intervals).
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III. Class Location Change Special Permits

    As population growth occurs around pipelines that were formerly in 
rural areas, some operators have applied for special permits to prevent 
the need for pipe replacement or pressure reduction when the class 
location changes. A special permit is an order issued under Sec.  
190.341 that waives or modifies compliance with regulatory requirements 
if the pipeline operator requesting it demonstrates a need and PHMSA 
determines that granting the special permit would be consistent with 
pipeline safety. PHMSA performs extensive technical analysis on special 
permit applications and typically grants special permits on the 
condition that operators will perform alternative measures to provide 
an equal or greater level of public safety. PHMSA publishes a notice 
and request for comment in the Federal Register for each special permit 
application received and tracks issued, denied, and expired special 
permits on its website.
    Since 2004, PHMSA has approved over 15 class location special 
permits based on operators adopting additional conditions, including 
certain operating safety criteria and periodic integrity 
evaluations.19 20 Generally, the additional conditions PHMSA 
requires are designed to identify and mitigate integrity issues that 
could threaten the pipeline segment and cause failure, especially given 
the fact that the majority of class location special permits it 
receives and reviews are for older pipelines that may have 
manufacturing, construction, or ongoing maintenance issues, such as 
seam or pipe body cracking, poor external coating, insufficient soil 
cover, lack of material records, dents, or repairs not made to class 
location design safety factors.
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    \19\ Special permit conditions are implemented to mitigate the 
causes of gas transmission incidents and are based on the type of 
threats pertinent to the pipeline. The conditions are generally more 
heavily weighted on identifying: Material, coating and cathodic 
protection issues, pipe wall loss, pipe and weld cracking, depth of 
pipe cover, third party damage prevention, marking of the pipeline 
and pipeline right-of-way patrols, pressure tests and documentation, 
data integration of integrity issues, and reassessment intervals.
    \20\ Examples of PHMSA's class location special permit 
conditions can be found at: https://primis.phmsa.dot.gov/classloc/docs/SpecialPermit_ExampleClassLocSP_Conditions_090112_draft1.pdf, 
and more information about PHMSA's special permit process for class 
location changes can be found at: https://primis.phmsa.dot.gov/classloc/documents.htm
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    Typically, PHMSA requires operators to incorporate the affected 
segments into the company's O&M procedures and integrity management 
plan, perform additional assessments for threats to the pipeline 
segments identified during an operator's risk assessment, perform 
additional cathodic protection \21\ and corrosion control measures, and 
repair any discovered anomalies to a specified schedule. Therefore, the 
additional monitoring and maintenance requirements PHMSA prescribes 
through this process help to ensure the integrity of the pipe and 
protection of the population living near the pipeline segment at a 
comparable margin of safety and environmental protection throughout the 
life of the pipe compared to the regulations as written. The class 
location change special permits that PHMSA has granted have allowed 
operators to continue operating the pipeline segments identified under 
the special permits at the current MAOP based on the previous class 
locations. PHMSA notes that it developed its class location special 
permit process by adapting Integrity Management (IM) concepts and 
published the typical considerations for class location change special 
permit requests in the Federal Register in 2004.\22\ Based on its 
experiences when renewing some of the earliest class location change 
special permits, PHMSA has extended the expiration date of its class 
location change special permits from 5 years to 10 years. This 
extension should provide additional regulatory certainty to operators 
that apply for these permits. Further, throughout the renewal process 
of existing special permits, PHMSA has not significantly changed the 
original conditions imposed on individual operators. While PHMSA can 
make modifications to its special permit conditions when it is in the 
interest of safety and the public to do so, PHMSA has determined that 
the present special permit conditions and process are consistent with 
public safety.
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    \21\ Cathodic protection is a technique used to control the 
corrosion of a metal surface by making it the cathode of an 
electrochemical cell. This can be achieved with a special coating on 
the external surface of the pipeline along with an electrical system 
and anodes buried in the ground or with a ``sacrificial'' or 
galvanic metal acting as an anode. In these systems, the anode will 
corrode before the protected metal will.
    \22\ Federal Register (69 FR 38948, June 29, 2004). Additional 
guidance is provided online at: http://primis.phmsa.dot.gov/classloc/index.htm. Public notices were published in Federal 
Register: 69 FR 22115 and 69 FR 38948, dated April 23, 2004 and June 
29, 2004: Docket No. RSPA-2004-17401--Pipeline Safety: Development 
of Class Location Change Waiver (Special Permit).
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A. Special Permit Conditions

    In the special permit conditions and criteria PHMSA published in 
the Federal Register on June 29, 2004, PHMSA outlines several 
``threshold conditions'' pipelines must meet to be considered for a 
special permit when class locations change. For instance, PHMSA does 
not consider any pipeline segments for a special permit where the class 
location those segments are in changes to a Class 4 location. 
Typically, PHMSA receives special permit requests

[[Page 36865]]

for pipeline segments where the class location is changing from Class 1 
to Class 3. PHMSA also does not consider for class location change 
special permits any segments that have bare pipe or wrinkle bends. 
Other manufacturing- and construction-related items PHMSA considers 
include whether the applicable segments have certain seam types that 
may be more prone to defects and failures, whether the pipe has certain 
coating types that provide an adequate level of cathodic protection, 
and the design strength of the pipe.
    There are also operation and maintenance factors that PHMSA 
considers when evaluating pipeline segments for class location change 
special permit feasibility. For example, PHMSA doesn't consider for a 
Class 1 to Class 3 location change special permit any pipe segments 
that operate above 72 percent SMYS. Operators also need to produce a 
hydrostatic test record showing the segment was tested to 1.25 times 
the MAOP. Also, operators are required to have pipe material records to 
document the pipelines diameter, wall thickness, strength, seam type 
and coating type. For operators who do not have these records, PHMSA 
requires they make these records per the special permit conditions. 
PHMSA often requires operators to operate each applicable segment at or 
below its existing MAOP as well.
    As part of the special permit conditions, operators are required by 
PHMSA to incorporate the applicable pipeline segments into their IM 
program and inspect them on a regular basis according to the operator's 
procedures. As an extension of this requirement, operators must perform 
in-line inspections on the applicable segments, and the segments must 
not have any significant anomalies that would indicate any systemic 
problems. Additionally, PHMSA's published special permit criteria 
defines a ``waiver inspection area,'' also known as a ``special permit 
inspection area,'' as up to 25 miles of pipe on either side of the 
applicable segment. Operators must incorporate these areas into their 
IM programs as well and inspect and repair them per the operator's IM 
program procedures. Some of the factors PHMSA uses when deciding the 
length of special permit inspection areas are based on factors 
including what class location the surrounding pipe is in and whether 
class location ``clustering'' has been used. For both the special 
permit segments and the special permit inspection areas, PHMSA also 
typically requires operators to perform assessments and surveys to 
identify pipe that may be susceptible to certain issues, especially 
seam or cracking issues in the pipe seam or pipe body, based on the 
coating type, vintage, or manufacturing of the pipe. Pipelines in the 
special permit segments or in the special permit inspection areas that 
have had a leak or failure history are also taken into consideration 
when PHMSA develops an individual special permit's conditions so as to 
prevent similar issues in the future. Further, PHMSA looks at the 
enforcement history of an operator applying for a special permit as a 
benchmark for how the operator has followed the Federal Pipeline Safety 
Regulations when developing the conditions following a special permit 
request.
    In class location change special permit requests, PHMSA also 
ensures that integrity threats to pipelines in special permit segments 
and special permit inspection areas are addressed in operator 
operations and management plans, including a systematic, ongoing 
program to review and remediate pipeline safety concerns. Some of the 
typical integrity and safety threats PHMSA would expect operators to 
address include pipe coating quality, cathodic protection 
effectiveness, stress corrosion and seam cracking, and any long-term 
pipeline system flow reversals. To this end, PHMSA often requires 
coating condition surveys, the remediation of coating, and cathodic 
protection systems for pipelines where the operator has requested a 
class location change special permit. Any data gathered on the special 
permit area and special permit inspection area would have to be 
incorporated into the operator's greater IM program.
    PHMSA incorporates these conditions into class location change 
special permit requests to ensure that operators meet or exceed the 
threshold requirements with equivalent safety to the provisions in the 
Federal Pipeline Safety Regulations that are being waived and ensure 
that granting the special permit will not be inconsistent with safety.

IV. Pipeline Safety, Regulatory Certainty, and Job Creation Act of 
2011--Section 5

    On January 3, 2012, the Pipeline Safety, Regulatory Certainty, and 
Job Creation Act of 2011 (Pub. L. 112-90) was enacted. Among the many 
provisions of the Act, Section 5 required PHMSA to evaluate whether IM 
system requirements, or elements thereof, should be expanded beyond 
high-consequence areas (HCA) and, with respect to gas transmission 
pipeline facilities, whether applying IM program requirements, or 
elements thereof, to additional areas would mitigate the need for class 
location requirements. PHMSA was required to report the findings of 
this evaluation to Congress and was authorized to issue regulations 
pursuant to the findings of the report following a prescribed review 
period.

A. 2013 Notice of Inquiry: Class Location Requirements

    In August 2013, through a Notice of Inquiry, PHMSA solicited 
comments on whether expanding IM requirements would mitigate the need 
for class locations in line with the Section 5 mandate of the 2011 
Pipeline Safety Act.\23\ Several topics were discussed, including 
whether class locations should be eliminated and a single design factor 
used, whether design factors should be increased for higher class 
locations, and whether pipelines without complete material records 
should be allowed to use a single design factor if class locations were 
to be eliminated.\24\
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    \23\ Federal Register (78 FR 46560, August 1, 2013).
    \24\ Regarding these questions, PHMSA received 30 comment 
letters, available at www.regulations.gov at docket PHMSA-2013-0161.
---------------------------------------------------------------------------

    There was broad consensus among PHMSA's stakeholders that 
eliminating class locations entirely would not lead to improvement to 
pipeline safety. Further, commenters noted that establishing a single 
design factor in lieu of class location designations might be too 
complicated to implement. Many commenters noted that any changes in 
class location requirements would impact not only the classifications 
of many pipelines but would also possibly create several unintended 
consequences within part 192, as the class location requirements are 
referenced or built upon throughout the natural gas regulations.
    Several industry trade groups had suggestions for changing the 
class location regulations, and these suggestions were developed 
further through subsequent discussions at advisory committee meetings 
and at public workshops. The Interstate Natural Gas Association of 
America (INGAA) noted that IM should be extended beyond HCAs with the 
caveat that PHMSA should examine the effects of such a change on other 
areas of the pipeline safety regulations. Along with this, it suggested 
that PHMSA revise certain operations and maintenance requirements that 
may no longer be necessary given technological advances and IM 
activities.

[[Page 36866]]

B. 2014 Pipeline Advisory Committee Meeting, Class Location Workshop, 
and Subsequent Comments

    On February 25, 2014, PHMSA hosted a joint meeting of the Gas and 
Liquid Pipeline Advisory Committees.\25\ At that meeting, PHMSA updated 
the committees on its activities regarding the Section 5 mandate of the 
2011 Pipeline Safety Act, and committee members and members of the 
public provided their comments.
---------------------------------------------------------------------------

    \25\ The Pipeline Advisory Committees are statutorily mandated 
advisory committees that advise PHMSA on proposed safety standards, 
risk assessments, and safety policies for natural gas and hazardous 
liquid pipelines (49 U.S.C. 60115). These Committees were 
established under the Federal Advisory Committee Act (Pub. L. 92-
463, 5 U.S.C. app. 1-16) and the Federal Pipeline Safety Statutes 
(49 U.S.C. chap. 601-603). Each committee consists of 15 members, 
with membership divided among Federal and State agency 
representatives, the regulated industry, and the public.
---------------------------------------------------------------------------

    INGAA, reinforcing its comments on the 2013 Notice of Inquiry, 
noted that the original class location definitions in ASME B31.8 were 
intended to provide an increased margin of safety for locations of 
higher population density and stated that IM is a much better risk 
management tool than class locations. INGAA reiterated that it intends 
for its members to perform elements of IM on pipelines outside of HCAs.
    On April 16, 2014, PHMSA sponsored a Class Location Workshop to 
solicit comments on whether applying the gas pipeline IM program 
requirements beyond HCAs would mitigate the need for gas pipeline class 
location requirements. Presentations were made by representatives from 
PHMSA, the National Energy Board of Canada (NEB), National Association 
of Pipeline Safety Representatives (NAPSR), pipeline operators, 
industry groups, and public interest groups.\26\
---------------------------------------------------------------------------

    \26\ Meeting presentations are available online at: http://primis.phmsa.dot.gov/meetings/MtgHome.mtg?mtg=95.
---------------------------------------------------------------------------

    During the workshop, INGAA representatives noted that the current 
class location regulations require changes that result in the 
replacement of ``good pipe,'' and the special permit process for class 
location changes should be embedded in part 192. Representatives from 
the American Gas Association (AGA) noted that applying the current 
class location change requirements can cost more than $1 million per 
change. AGA claimed the special permit process for class location 
changes is burdensome, the renewal process is increasingly complex, and 
the outcome is uncertain.\27\ Therefore, AGA suggested eliminating the 
special permit process for class location changes and incorporating 
specific requirements for special permits into part 192 as part of the 
base regulations. AGA recommended two approach methods, one based on IM 
and the other using the current class location approach.
---------------------------------------------------------------------------

    \27\ PHMSA notes that the special permit process is outlined in 
Sec.  190.341 and is no different for the class location regulations 
than for any other pipeline safety regulation. Of the 18 special 
permits up for renewal from 2010-2017, 9 of them were for class 
location changes. When reviewing the class location change permits 
up for renewal, PHMSA found no safety reason to extensively modify 
any of the prior permits and made no major revisions to any of the 
previously imposed safety conditions.
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    Public interest groups including Accufacts and the Pipeline Safety 
Trust (PST) pointed out how deeply the concept of class locations is 
embedded in part 192, while also noting that IM requirements and class 
locations overlap in densely populated areas to provide a redundant, 
but necessary, safety regime. The PST also suggested that, in time, the 
older class location method potentially could be replaced with an IM 
method for regulation. However, the PST noted that incidents and data 
suggest there is room for improvement in the IM regulations, as data 
shows higher incident rates in HCAs than in non-HCAs, and noted that 
pipe installed after 2010 has a higher incident rate than pipe 
installed a decade earlier. Similarly, Accufacts noted that the 
incident at San Bruno, CA, exposed weaknesses in the operator's IM 
program and demonstrated that the consequences resulting from the 
incident spread far beyond the potential radius in which they were 
expected to occur.\28\ Therefore, Accufacts suggested that shifting the 
class location approach to solely an IM approach might decrease the 
protection of public safety.
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    \28\ The potential impact radius for the ruptured pipe segment 
involved in the San Bruno incident was calculated at 414 feet. 
However, the NTSB, in its accident report (NTSB/PAR-11/01), noted 
that the subsequent fire damage extended to a radius of about 600 
feet from the blast center.
---------------------------------------------------------------------------

    Following the Class Location Workshop, INGAA submitted additional 
comments to the docket stating that advancements in IM technology and 
processes have superseded the need for mandatory pipe replacement 
following a class location change. It noted that, in the past, it was 
logical to replace a pipeline when class locations changed because of 
the widespread belief that thicker pipe would take longer to corrode 
and would withstand greater external forces, such as damage from 
excavators, before failure. However, given current technology, 
improvements in pipe quality, and ongoing regulatory processes such as 
IM, operators can mitigate most threats without the need for pipe 
replacement. Therefore, INGAA offered an approach to class locations 
changes to not require pipe replacement for existing pipelines if pipe 
segments meet certain requirements that are in line with current IM 
requirements. Specifically, INGAA suggested that pipelines meeting a 
``fitness for service'' standard in 18 categories of requirements could 
address potential safety concerns and preclude the need for pipe 
replacement.\29\ The 18 categories are very similar to the special 
permit conditions that PHMSA uses for a Class 1 to 3 location special 
permit as noted in the 2004 Federal Register notice.\30\
---------------------------------------------------------------------------

    \29\ Those 18 categories were as follows: Baseline Engineering 
and Record Assessments--Girth Weld Assessment, Casing Assessment, 
Pipe Seam Assessment, Field Coating Assessment, Cathodic Protection, 
Interference Currents Control, Close Interval Survey, Stress 
Corrosion Cracking Assessments, In-line Inspection Assessments, 
Metal Loss Anomaly Management, Dent Anomaly Management, Hard Spots 
Anomaly Management. Ongoing Requirements--Integrity Management 
Program, Root Cause Analysis for Failure or Leak, Line Markers, 
Patrols, Damage Prevention Best Practices, Recordkeeping & 
Documentation.
    \30\ See also: http://primis.phmsa.dot.gov/classloc/index.htm.
---------------------------------------------------------------------------

C. 2016 Class Location Report

    The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 
2011 required that PHMSA evaluate whether IM should be expanded beyond 
HCAs and whether such expansion would mitigate the need for class 
location requirements. In its report titled ``Evaluation of Expanding 
Pipeline Integrity Management Beyond High-Consequence Areas and Whether 
Such Expansion Would Mitigate the Need for Gas Pipeline Class Location 
Requirements,'' \31\ which was submitted to Congress in April 2016 
concurrently with the publication of the NPRM titled ``Safety of Gas 
Transmission and Gathering Pipelines'' (81 FR 20722), PHMSA noted that 
the application of IM program elements, such as assessment and 
remediation timeframes, beyond HCAs would not warrant the elimination 
of class locations.
---------------------------------------------------------------------------

    \31\ https://www.regulations.gov/document?D=PHMSA-2011-0023-0153.
---------------------------------------------------------------------------

    PHMSA notes that class locations affect all gas pipelines and are 
integral to determining MAOPs; design pressures; pipe wall thickness; 
valve spacing; HCAs, in certain cases; and O&M inspection, 
surveillance, and repair intervals. While IM measures are a critical 
step towards pipeline safety and are important to mitigate risk, the 
assessment and remediation of defects do not adequately compensate for 
these other aspects of class locations. Thus, as outlined in the 
report, PHMSA determined the existing class location

[[Page 36867]]

requirements were appropriate for maintaining pipeline safety and 
should be retained. Therefore, any revisions to the class location 
requirements would have to be forward-looking (i.e., applying to 
pipelines constructed after a certain effective date) and would have to 
comport with the existing regulatory regime to provide commensurate 
safety if any changes are made to aspects of pipeline safety related to 
design and construction, which is where key safety benefits of class 
locations are realized.\32\
---------------------------------------------------------------------------

    \32\ In its comments following the public workshop on Class 
Locations in 2014, INGAA noted that, after further analysis, it 
appears that applying the Potential Impact Radius (PIR) method to 
existing pipelines may be unworkable.
---------------------------------------------------------------------------

    As a part of the continuing discussion on class location changes 
and subsequent pipe replacement, PHMSA summarized at the end of the 
Class Location Report the concerns operators expressed regarding the 
cost of replacing pipe in locations that change from a Class 1 to a 
Class 3 location or a Class 2 to a Class 4 location. As discussed 
throughout the document, operators submitted that the safe operation of 
pipelines constructed in Class 1 locations that later change to Class 3 
locations can be achieved using current IM practices.
    However, over the past decade, PHMSA observed problems with pipe 
and fitting manufacturing quality, including low-strength material; 
\33\ construction practices; welding; field coating practices; IM 
assessments and reassessment practices; 34 35 and record 
documentation practices.36 37 These issues give PHMSA pause 
in considering approaches allowing a two-class bump (Class 1 to 3 or 
Class 2 to 4) without requiring pipe replacement, especially for 
higher-pressure transmission pipelines.
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    \33\ PHMSA has documented pipe material low-strength issues 
through an advisory bulletin and the following website link: http://primis.phmsa.dot.gov/lowstrength/index.htm.
    \34\ IM and operational procedures and practices were issues in 
the Pacific Gas & Electric (PG&E) San Bruno, CA, rupture in 
September 2010 and the Enbridge Marshall, MI, rupture in July 2010.
    \35\ PHMSA issued Advisory Bulletins ADB-11-01 and ADB-2012-10 
to operators regarding IM meaningful metrics and assessments on 
January 10, 2011, and December 5, 2012, respectively, which can be 
reviewed at: http://phmsa.dot.gov/pipeline/regs/advisory-bulletin.
    \36\ PHMSA issued Advisory Bulletin, ADB-12-06, concerning 
documentation of MAOP on May 7, 2012, which can be reviewed at: 
http://phmsa.dot.gov/pipeline/regs/advisory-bulletin.
    \37\ Also note PHMSA's Advisory Bulletin titled ``Deactivation 
of Threats,'' issued March 16, 2017 (82 FR 14106).
---------------------------------------------------------------------------

    PHMSA stated in the conclusion of its Class Location Report that it 
would further evaluate the feasibility and the appropriateness of 
alternatives to address issues pertaining to pipe replacement 
requirements, continue to reach out to and consider input from all 
stakeholders, and consider future rulemaking if a cost-effective and 
safety-focused approach to adjusting specific aspects of class location 
requirements could be developed to address the issues identified by 
industry. In doing so, PHMSA would evaluate alternatives in the context 
of other issues it is addressing related to new construction quality- 
and safety-management systems and will also consider inspection 
findings, IM assessment results, and lessons learned from past 
incidents. Therefore, PHMSA has initiated this rulemaking to gain 
further information on analyzing the current requirements resulting in 
pipe replacement and alternatives to that practice.

V. INGAA Submission on Regulatory Reform--Proposal To Perform IM 
Measures in Lieu of Pipe Replacement When Class Locations Change

    On July 24, 2017, INGAA submitted comments to a DOT docket 
regarding regulatory review actions (Docket No. OST-2017-0057). In its 
submission, INGAA estimated that gas transmission pipeline operators 
incur annual costs of $200-$300 million \38\ nationwide replacing pipe 
solely to satisfy the class location change regulations and requested 
PHMSA consider revising the current class location change regulations 
to include an alternative beyond pressure reduction, pressure testing, 
or pipe replacement.
---------------------------------------------------------------------------

    \38\ PHMSA requests further substantiation of this estimate. In 
extrapolating the national data, PHMSA estimates this number is the 
cost incurred for all pipe replacement projects on transmission 
lines, not just those projects triggered in response to class 
location changes.
---------------------------------------------------------------------------

    INGAA's proposed alternate approach focuses on recurring IM 
assessments that would leverage advanced assessment technologies to 
determine whether the pipe condition warrants pipe replacement in areas 
where the class location has changed. INGAA states that such an 
approach would further promote IM processes and principles throughout 
the nation's gas transmission pipeline network, improve economic 
efficiency by reducing regulatory burden, and help fulfill the purposes 
of Section 5 of the 2011 Pipeline Safety Act.
    INGAA claims that the current alternatives to pipe replacement 
following a class location change do not reflect the substantial 
developments in IM processes, technologies, and regulations over the 
past 15-plus years. More specifically, in-line inspection (ILI) 
technologies, such as high-resolution magnetic flux leakage tools, can 
precisely assess the presence of corrosion and other potential defects, 
allowing an operator to establish whether a pipeline segment requires 
remediation or replacement.\39\
---------------------------------------------------------------------------

    \39\ PHMSA notes that ILI and in-the-ditch evaluation 
technologies for crack identification are under development and 
could further be improved.
---------------------------------------------------------------------------

    INGAA further notes that PHMSA's proposed rulemaking titled 
``Safety of Gas Transmission and Gathering Pipelines'' aims to expand 
IM assessments to newly defined ``Moderate Consequence Areas'' 
(proposed Sec.  192.710), and such an expansion provides a framework 
for developing an alternative for managing class location changes. 
INGAA suggests that the costs saved from avoiding pipe replacement 
using such an alternative could mitigate, to some degree, part of the 
costs of the proposed rulemaking. Additionally, INGAA notes that the 
proposed rulemaking contains several new provisions that will require 
operators to better manage the integrity of their pipelines by 
implementing more preventative and mitigative measures to manage the 
threat of corrosion. INGAA states that the inclusion of such corrosion 
control measures as a part of a program for managing the integrity of 
pipeline segments, including ones that have experienced class location 
changes, would further justify the development of an IM-focused 
alternative to class location changes.
    Based on those statements, INGAA recommends PHMSA develop an 
alternative approach to Sec.  192.611 that leverages the proposed Sec.  
192.710 for areas outside of HCAs and the IM requirements at Sec.  
192.921 to require recurring IM assessments and incorporation of those 
affected pipeline segments into IM programs. Further, INGAA suggests 
this approach require operators to reconfirm pipeline MAOP in a changed 
class location for any pipeline segment without traceable, verifiable, 
and complete records of a hydrostatic pressure test supporting the 
segment's previous MAOP.
    PHMSA acknowledges that the class location change regulations 
predate the development of modern pipeline inspection technology such 
as ILI, above-ground surveys, and modern integrity management 
processes. In fact, it wasn't until the mid-1990s that PHMSA, following 
models from other industries such as nuclear power, started to explore 
whether a risk-based approach to regulation could improve public and 
environmental safety. PHMSA finalized the IM regulations for gas 
transmission pipelines on December

[[Page 36868]]

15, 2003,\40\ in response to tragic incidents on pipelines in 
Bellingham, WA, in 1999 and near Carlsbad, NM, in 2000, which killed 3 
people and 12 people, respectively. The IM regulations designated HCAs 
where operators would perform periodic assessments of the condition of 
their pipelines and make necessary repairs within specific timeframes 
if discovered anomalies met certain criteria. More specifically, the IM 
regulations outline the risk-based processes that pipeline operators 
must use to identify, prioritize, assess, evaluate, repair, and 
validate the integrity of gas transmission pipelines.
---------------------------------------------------------------------------

    \40\ 68 FR 69778; Pipeline Safety: Pipeline Integrity Management 
in High Consequence Areas (Gas Transmission Pipelines).
---------------------------------------------------------------------------

    For many years, the pipeline industry used internal steel brush 
devices (``cleaning pigs'') moved by product flow to clean the inside 
of their pipelines. This pigging concept was later adapted through the 
application of technology to measure and record irregularities in the 
pipe and welds that may represent corrosion, cracks, deformations, and 
other defects. Now operators use ILI technology (``smart pigging or 
ILI'') as a backbone of the modern IM program. ILI tools are inserted 
into pipelines at locations, such as near valves or compressor 
stations, that have special configurations of pipes and valves where 
the ILI tools can be loaded into launchers, the launchers can be closed 
and sealed, and the flow of the product the pipeline is carrying can be 
directed to launch the tool down the pipeline. A similar setup is 
located downstream where the tool is directed out of the main line into 
a receiver so that an operator can remove the tool and retrieve the 
recorded data for analysis and reporting. ILI tools come in several 
different varieties that have distinct advantages and disadvantages 
over other methods of pipeline assessment. For instance, while some ILI 
tools might be able to reliably determine whether a pipeline has 
internal corrosion, the same tool might not be able to determine 
whether the pipeline has any crack indications. In selecting the tools 
most suitable for inline inspections, pipeline operators must know the 
type of threats that are applicable to the pipeline segment. Threats 
that ILI tools can identify typically include existing pipe wall 
thickness, pipe wall changes, pipe wall loss, cracking, and dents.
    At the time the class location regulations were promulgated, it was 
logical to replace a pipeline when population growth resulted in a 
class location change in order to restore the safety margin appropriate 
for that location because the industry did not have the technology that 
is available today to learn the in situ material condition of the pipe. 
Further, since the existing pipe would not achieve a similar safety 
margin as replaced pipe, operators would need to use applicable 
inspection technology and pressure testing to ensure pipe has the 
correct wall thickness; strength; seam condition; toughness; no 
detrimental cracking or corrosion in the pipe body or seam; and a pipe 
coating that has not deteriorated or shields cathodic protection 
currents to allow corrosion or cracking issues such as girth weld 
cracking, stress corrosion cracking, or selective seam weld corrosion.
    Currently, operators are not required to inspect pipelines or 
otherwise perform IM on those portions of pipelines unless they are 
within high consequence areas (HCAs) or the operator otherwise 
voluntarily assesses them and performs remediation measures for threats 
to the pipeline. As such, while prudent operators may know the 
characteristics and conditions of their pipelines outside of HCAs and 
can be confident that they can manage class location change 
expectations through the performance of IM measures, some operators may 
not.
    PHMSA notes that while class locations and HCAs both provide 
additional protection to areas with high population concentrations, 
they were designed for different purposes. Unlike class locations, 
which provide blanket levels of safety throughout the nation's pipeline 
network at all locations by driving MAOP and design, construction, 
testing, and O&M requirements, the purpose of the IM regulations is to 
provide a structure for operators to focus their resources on improving 
pipeline integrity in the areas where a failure would have the greatest 
impact on public safety. Whereas over time the safety margins that 
class locations provide can be reduced due to corrosion or other types 
of pipe degradation, IM requirements provide a continuing minimum 
safety margin for more densely populated areas because operators are 
required to inspect and repair those applicable pipelines at a minimum 
of every 7 years and more frequently based upon risk assessments of 
threats to the segment in the HCA.
    PHMSA acknowledges that applying modern IM assessments and 
processes could potentially be a comparable alternative to pipe change-
outs. PHMSA notes that if operators perform integrity assessments on 
significant portions of non-HCA pipe mileage, PHMSA could further 
consider operators using such assessments to determine whether pipe in 
a changed class location is fit for service rather than having to 
replace it.
    PHMSA is concerned, however, that some issues that result in 
pipeline failures, including poor construction practices \41\ and 
operational maintenance threats, are not always being properly assessed 
and mitigated by operators, whether due to lack of technology or other 
causes. Further, as the incident at San Bruno in 2010 showed, operators 
may not have traceable, verifiable, and complete records of pipe 
properties, such as pipe material yield strength, pipe wall thickness, 
pipe seam type, pipe and seam toughness, and coating quality, that are 
critical and necessary for IM processes and pipeline safety in Class 3 
and 4 locations and HCAs where there are higher population densities. 
PHMSA also points out that there might be instances where a pipeline 
may be in ``good condition'' from a visual standpoint, but it may not 
have the initial pipe manufacturing, pipe strength, construction 
quality, and O&M history requirements that add the extra level of 
safety required by the regulations for the higher population density 
area and the MAOP.\42\ Section 192.611 already allows a ``one-class 
location'' bump for pipeline class locations that are in satisfactory 
physical condition and have the required pressure test.
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    \41\ PHMSA has met with operators constructing new pipelines on 
several occasions to discuss issues found during inspection. To 
reach out to all members of the pipeline industry, PHMSA hosted a 
public workshop in collaboration with our State partners, the 
Federal Energy Regulatory Commission (FERC) and Canada's National 
Energy Board (NEB) in April 2009. The objective of the workshop was 
to inform the public, alert the industry, review lessons learned 
from inspections, and to improve new pipeline construction practices 
prior to the 2009 construction season. This website makes available 
information discussed at the workshop and provides a forum in which 
to share additional information about pipeline construction 
concerns. This workshop focused on transmission pipeline 
construction. http://primis.phmsa.dot.gov/construction/index.htm.
    \42\ Note that the potential impact radius (PIR) in Integrity 
Management (IM) does not give any criteria to establish the 
pipelines operating pressure, anomaly repair criteria, safety 
surveys for leaks, 3rd party encroachments, etc. When Class 
locations change (from additional dwellings for human occupancy) 
from one-level to a higher level there are cut-off levels that may 
require a different design factor, pressure test, or maintenance 
criteria. For pipe to be replaced the class location change would 
have to be from a Class 1 to 3 or Class 2 to 4, which is a large 
increase in dwellings along the pipeline.
---------------------------------------------------------------------------

    Because of these factors, PHMSA seeks comment on the potential 
safety consequences of altering the current class location methodology 
and moving to an IM-only method in certain areas.

[[Page 36869]]

VI. Questions for Consideration

    PHMSA is requesting comments and information that will be used to 
determine if revisions should be made to the Federal Pipeline Safety 
Regulations regarding the current requirements operators must meet when 
class locations change. The list of questions below is not exhaustive 
and represents an effort to help in the formulation of comments. Any 
additional information that commenters determine would be beneficial to 
this discussion is also welcomed.
    Q1--When the population increases along a pipeline route that 
requires a class location change as defined at Sec.  192.5, should 
PHMSA allow pipe integrity upgrades from Class 1 to Class 3 locations 
by methods other than pipe replacement or special permits? \43\ Why or 
why not?
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    \43\ Sections involving class location requirements include 
Sec. Sec.  192.5, 192.609, 192.611, 192.619 and 192.620.
---------------------------------------------------------------------------

    1a.--Should part 192 continue to require pipe integrity upgrades 
when class locations change from Class 1 to Class 3 locations or Class 
2 to 4 locations? Why or why not?
    1b.--Should part 192 continue to require pipe integrity upgrades 
from Class 1 to Class 3 locations for the ``cluster rule'' (see Sec.  
192.5(c)) when 10 or fewer buildings intended for human occupancy have 
been constructed along the pipeline segment? Why or why not?
    1c.--Should part 192 continue to require pipe integrity upgrades 
for grandfathered pipe (e.g., pipe segments without a pressure test or 
with an inadequate pressure test, operating pressures above 72% SMYS, 
or inadequate or missing material records; see Sec.  192.619(c))? Why 
or why not?
    Q2--Should PHMSA give operators the option of performing certain IM 
measures in lieu of the existing measures (pipe replacement, lower the 
operating pressure, or pressure test at a higher pressure; see Sec.  
192.611) when class locations change from Class 1 to Class 3 due to 
population growth within the sliding mile? Why or why not?
    2a.--If so, what, if any, additional integrity management and 
maintenance approaches or safety measures should be applied to offset 
the impact on safety these proposals might create?
    Q3--Should PHMSA give operators the option of performing certain IM 
measures in lieu of the existing measures (pipe replacement with a more 
conservative design safety factor or a combination of pressure test and 
lower MAOP) when class locations change due to additional structures 
being built outside of clustered areas within the sliding mile, if 
operators are using the cluster adjustment to class locations per Sec.  
192.5(c)(2)? Why or why not?
    3a.--If so, what, if any, additional integrity management and 
maintenance approaches or safety measures should be applied to offset 
the impact on safety these proposals might create?
    3b.--At what intervals and in what timeframes should operators be 
required to assess these pipelines and perform remediation measures?
    Q4--If PHMSA allows operators to perform certain IM measures in 
lieu of pipe replacement when class locations change from Class 1 to 
Class 3, should some sort of ``fitness for service'' standard determine 
which pipelines are eligible? Why or why not?
    4a.--If so, what factors should make a pipeline eligible or 
ineligible?
    (i) Should grandfathered pipe (lacking records, including pressure 
test or material records) or pipe operating above 72% SMYS be eligible? 
Why or why not?
    (ii) Should pipe that has experienced an in-service failure, was 
manufactured with a material or seam welding process during a time or 
by a manufacturer where there are now known integrity issues or has 
lower toughness in the pipe and weld seam (Charpy impact value) be 
eligible? Should pipe with a failure or leak history be eligible? Why 
or why not?
    (iii) Should pipe that contains or is susceptible to cracking, 
including in the body, seam, or girth weld, or having disbonded coating 
or CP shielding coatings be eligible? Are there coating types that 
should disqualify pipe? Should some types of pipe, such as lap-welded, 
flash-welded, or low-frequency electric resistance welded pipe be 
ineligible? Should pipe where the seam type is unknown be ineligible? 
Why or why not?
    (iv) Should pipe with significant corrosion (wall loss) be eligible 
for certain IM measures, or should it be replaced? Why or why not?
    (v) Should anomalies be repaired similar to IM, allowed to grow to 
only a 10-percent safety factor \44\ (Sec.  192.933(d)) before 
remediation in high population areas such as Class 2, 3 and 4 
locations, or should they have an increased safety factor for 
remediation should these class location factors be eliminated? Why or 
why not?
---------------------------------------------------------------------------

    \44\ Section 192.933 has anomaly repair requirements based upon 
a predicted failure pressure being less than or equal to 1.1 times 
the MAOP.
---------------------------------------------------------------------------

    (vi) Should pipe that has been damaged (dented) or has lost ground 
cover due to 3rd party activity (excavation or other) be eligible? Why 
or why not?
    (vii) Should pipe lacking cathodic protection due to disbonded 
coating be eligible? Why or why not?
    (viii) Should pipe with properties such as low frequency electric 
resistance weld (LF-ERW), lap welded, or other seam types that have a 
history of seam failure due to poor manufacturing properties or seam 
types that have a derating factor below 1.0 be eligible? Why or why 
not?
    4b.--Should PHMSA base any proposed requirements off its criteria 
used for considering class location change waivers (69 FR 38948; June 
29, 2004), including the age and manufacturing and construction 
processes of the pipe, and O&M history? Why or why not?
    4c.--In the 2004 Federal Register notice (69 FR 38948), PHMSA 
outlines certain requirements pipelines must meet to be eligible for 
waiver consideration, including no bare pipe or pipe with wrinkle 
bends, records of a hydrostatic test to at least 1.25 times MAOP, 
records of ILI runs with no significant anomalies that would indicate 
systemic problems, and agreement that up to 25 miles of pipe both 
upstream and downstream of the waiver location must be included in the 
operator's IM program and periodically inspected using ILI technology. 
Further, the criteria provides no waivers for segments changing to 
Class 4 locations or for pipe changing to a Class 3 location that is 
operating above 72% SMYS. Should PHMSA require operators and pipelines 
to meet the threshold conditions outlined earlier in this document 
(Section 3A; ``Class Location Change Special Permits--Special Permit 
Conditions) or other thresholds to be eligible for a waiver when class 
locations change? Why or why not?
    Q5--As it is critical for operators to have traceable, verifiable, 
and complete (TVC) records to perform IM, should operators be required 
to have TVC records as a prerequisite for performing IM measures on 
segments instead of replacing pipe when class locations change? Why or 
why not?
    5a.--If so, what records should be necessary and why? Should 
records include pipe properties, including yield strength, seam type, 
and wall thickness; coating type; O&M history; leak and failure 
history; pressure test records; MAOP; class location; depth of cover; 
and ability to be in-line inspected?
    5b.--If operators do not have TVC records for affected segments and 
TVC records were a prerequisite for performing IM measures on pipeline

[[Page 36870]]

segments in lieu of replacing pipe, how should those records be 
obtained, and when should the deadline for obtaining those records be?
    Q6--Should PHMSA incorporate its special permit conditions 
regarding class location changes into the regulations, and would this 
incorporation satisfy the need for alternative approaches? Why or why 
not? (Examples of typical PHMSA class location special permit 
conditions can be found at https://primis.phmsa.dot.gov/classloc/documents.htm.)
    6a.--What, if any, special permit conditions could be incorporated 
into the regulations to provide regulatory certainty and public safety 
in these high population density areas (Class 2, 3, and 4)?
    Q7--For all new and replaced pipelines, to what extent are 
operators consulting growth and development plans to avoid potentially 
costly pipe change-outs in the future?
    Q8--What is the amount of pipeline mileage per year being replaced 
due to class location changes for pipelines: (1) Greater than 24 inches 
in diameter, (2) 16-24 inches in diameter, and (3) less than 16 inches 
in diameter?
    8a.--Of this mileage, how much is being replaced due to class 
locations changing when additional structures for human occupancy are 
built near clustered areas, if operators are using the cluster 
adjustment to class locations per Sec.  192.5(c)(2)?
    8b.--At how many distinct locations are pipe replacements occurring 
due to class location changes and that involve pipe with these 
diameters?
    8c.--What is the average amount of pipe (in miles) being replaced 
and cost of replacement at the locations described in question 8b. and 
for these diameter ranges due to class location changes?
    Q9--Should any additional pipeline safety equipment, preventative 
and mitigative measures, or prescribed standard pipeline predicted 
failure pressures more conservative than in the IM regulations be 
required if operators do not replace pipe when class locations change 
due to population growth and perform IM measures instead? Why or why 
not?
    9a.--Should operators be required to install rupture-mitigation 
valves or equivalent technology? Why or why not?
    9b.--Should operators be required to install SCADA systems for 
impacted pipeline segments? Why or why not?
    Q10--Should there be any maximum diameter, pressure, or potential 
impact radius (PIR) limits that should disallow operators from using IM 
principles in lieu of the existing requirements when class locations 
change? For instance, PHMSA has seen construction projects where 
operators are putting in 42-inch-diameter pipe designed to operate at 
up to 3,000 psig. The PIR for that pipeline would be over 1,587 feet, 
which would mean the total blast diameter would be more than 3,174 
feet.

VII. Regulatory Notices

A. Executive Order 12866, Executive Order 13563, Executive Order 13771, 
and DOT Regulatory Policies and Procedures

    Executive Orders 12866 and 13563 require agencies to regulate in 
the ``most cost-effective manner,'' to make a ``reasoned determination 
that the benefits of the intended regulation justify its costs,'' and 
to develop regulations that ``impose the least burden on society.'' 
Executive Order 13771 (``Reducing Regulation and Controlling Regulatory 
Costs''), issued January 30, 2017, provides that ``it is essential to 
manage the costs associated with the governmental imposition of private 
expenditures required to comply with Federal regulations.'' One way to 
manage the costs of rulemakings is to propose new regulations that are 
deregulatory in nature, i.e. regulations that reduce the cost of 
regulatory compliance. PHMSA seeks information on whether this 
rulemaking could result in a deregulatory action under E.O. 13771, 
meaning that a potential final rule could have ``total costs less than 
zero.'' \45\ We therefore request comments, including specific data if 
possible, concerning the costs and benefits of revising the pipeline 
safety regulations to accommodate any of the changes suggested in the 
advance notice.
---------------------------------------------------------------------------

    \45\ See OMB Memorandum M-17-21, ``Guidance Implementing 
Executive Order 13771, Titled `Reducing Regulation and Controlling 
Regulatory Costs,' '' (April 5, 2017).
---------------------------------------------------------------------------

B. Executive Order 13132: Federalism

    Executive Order 13132 requires agencies to assure meaningful and 
timely input by State and local officials in the development of 
regulatory policies that may have a substantial, direct effect on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. PHMSA is inviting comments on the effect 
a possible rulemaking adopting any of the amendments discussed in this 
document may have on the relationship between national government and 
the States.

C. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et 
seq.), PHMSA must consider whether a proposed rule would have a 
significant impact on a substantial number of small entities. ``Small 
entities'' include small businesses, not-for-profit organizations that 
are independently owned and operated and are not dominant in their 
fields, and governmental jurisdictions with populations under 50,000. 
If your business or organization is a small entity and if adoption of 
any of the amendments discussed in this ANPRM could have a significant 
economic impact on your operations, please submit a comment to explain 
how and to what extent your business or organization could be affected 
and whether there are alternative approaches to the regulations the 
agency should consider that would minimize any significant negative 
impact on small business while still meeting the agency's statutory 
objectives.

D. National Environmental Policy Act

    The National Environmental Policy Act of 1969 requires Federal 
agencies to consider the consequences of Federal actions and that they 
prepare a detailed statement analyzing them if the action significantly 
affects the quality of the human environment. Interested parties are 
invited to address the potential environmental impacts of this ANPRM, 
including comments about compliance measures that would provide greater 
benefit to the human environment or any alternative actions the agency 
could take that would provide beneficial impacts.

E. Executive Order 13175: Consultation and Coordination with Indian 
Tribal Governments

    Executive Order 13175 requires agencies to assure meaningful and 
timely input from Indian Tribal Government representatives in the 
development of rules that ``significantly or uniquely affect'' Indian 
communities and that impose ``substantial and direct compliance costs'' 
on such communities. We invite Indian Tribal governments to provide 
comments on any aspect of this ANPRM that may affect Indian 
communities.

F. Paperwork Reduction Act

    Under 5 CFR part 1320, PHMSA analyzes any paperwork burdens if any 
information collection will be required by a rulemaking. We invite 
comment on the need for any collection of

[[Page 36871]]

information and paperwork burdens related to this ANPRM.

G. Privacy Act Statement

    Anyone can search the electronic form of comments received in 
response to any of our dockets by the name of the individual submitting 
the comment (or signing the comment, if submitted on behalf of an 
association, business, labor union, etc.). DOT's complete Privacy Act 
Statement was published in the Federal Register on April 11, 2000 (65 
FR 19477).

    Issued in Washington, DC, on July 25, 2018, under authority 
delegated in 49 CFR 1.97.
Alan K. Mayberry,
Associate Administrator for Pipeline Safety.
[FR Doc. 2018-16376 Filed 7-30-18; 8:45 am]
 BILLING CODE 4910-60-P


