DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Part 195

[Docket No. PS-117; Notice 4]

RIN 2137-AC87

Low-Stress Hazardous Liquid Pipelines Serving Plants and Terminals

AGENCY: Research and Special Programs Administration (RSPA), DOT.

ACTION: Notice of proposed rulemaking.

SUMMARY: This action proposes to exclude from RSPA's safety regulations
for hazardous liquid pipelines low-stress pipelines regulated for safety
by the U.S. Coast Guard and certain low-stress pipelines less than one
mile long serving plants and terminals. Difficulties involving
compliance with RSPA's regulations do not appear warranted by risk and
may cause operating errors that impair safety. It is RSPA's policy
toward effective government to eliminate duplicative and unnecessarily
burdensome regulations.

DATES: RSPA invites interested persons to submit comments by close of
business April 28, 1998. Late comments will be considered as far as
practicable.

ADDRESSES: Send comments in duplicate to the Dockets Unit, Room 8421,
Research and Special Programs Administration, U.S. Department of
Transportation, 400 Seventh St., SW, Washington, D.C. 20590. Comments
should identify the docket and the notice number stated in the heading
of this notice. Persons wishing to receive confirmation of receipt of
their comments must include a self-addressed stamped postcard. All
comments and docketed material will be available for inspection and
copying in Room 8421 between 8:30 a.m. and 5 p.m. each business day.

FOR FURTHER INFORMATION CONTACT: L. M. Furrow at (202) 366-4559 or
furrowl@rspa.dot.gov. For copies of this notice or other material in the
docket, contact the Dockets Unit at (202) 366-5046.

SUPPLEMENTARY INFORMATION:

I. Background

	When RSPA's safety regulations for hazardous liquid  pipelines (49 CFR
part 195) were first published, the regulations did not apply to
low-stress pipelines  (34 FR 15473; Oct. 4, 1969). In recent years,
however, during a time of increased environmental awareness, critical
accidents involving low-stress pipelines led Congress to restrict DOT's
discretion to except these lines from regulation. So, in an amendment to
the pipeline safety laws, Congress directed the Secretary of
Transportation not to except from regulation a hazardous liquid pipeline
facility only because the facility operates at low internal stress (49
U.S.C. §60102(k)).

	In response to this change in the law, RSPA extended the Part 195
regulations to cover certain low-stress pipelines (Docket No. PS-117; 59
FR 35465; July 12, 1994). Except for onshore rural gathering lines and
gravity-powered lines, the following categories of low-stress pipelines
were brought under the regulations: pipelines that transport highly
volatile liquids, pipelines located onshore and outside rural areas,
pipelines located offshore, and pipelines located in waterways that are
currently used for commercial navigation (§195.1(b)(3)). Because the
rulemaking record showed that many low-stress pipelines probably were
not operated and maintained consistent with Part 195 requirements,
operators were allowed to delay compliance of their existing lines until
July 12, 1996 (§195.1(c)).

II. Interfacility Transfer Lines

A. Description

	The largest proportion of low-stress pipelines brought under Part 195
consisted of interfacility transfer lines (about two-thirds of the
pipelines and one-third of the overall mileage). The remainder included
trunk lines and gathering lines located outside rural areas.

	Interfacility transfer lines move hazardous liquids locally between
facilities such as truck, rail, and vessel transportation terminals,
manufacturing plants (including petrochemical plants), and oil
refineries, or between these facilities and associated storage or long-

distance pipeline transportation.  The lines usually are short,
averaging about a mile in length. Typically they are operated in
association with other transfer piping on the grounds of the industrial
plants and terminals they serve.

B. Related Federal Regulations

	Segments of interfacility transfer lines located on the grounds of
industrial plants and transportation terminals are subject to the
Process Safety Management regulations of the Occupational Safety and
Health Administration (OSHA) (29 CFR 1910.119). These regulations, which
involve hazard analysis and control, operating and maintenance
procedures, and personnel training, are intended to reduce the risk of
fires and explosions caused by the escape of hazardous chemicals from
facility processes.

	Although on-grounds segments of interfacility transfer lines generally
are excepted from Part 195 (§195.1(b) (6) and (7)), the on-grounds
segment and regulated off-grounds segment of a line function together as
a unit. Thus, OSHA's Process Safety Management regulations, though
applicable only to on-grounds segments, affect the operation of
off-grounds segments. And, similarly, compliance with part 195 for
off-grounds segments affects operation of the unregulated on-grounds
segments.

	In addition, most transfer lines between vessels and marine
transportation-related facilities are subject to safety regulations of
the U.S. Coast Guard (33 CFR parts 154 and 156). The Coast Guard applies
these regulations to transfers of hazardous liquid from the dock loading
arm or manifold up to the first valve after the line enters the Spill
Prevention Control and Countermeasure (SPCC) containment or secondary
containment if the facilities are not protected by SPCC plans.

C. Compliance Difficulties

	Information we received in response to Notice 1 of Docket PS-117 (55 FR
45822; Oct. 31, 1990) showed that bringing interfacility transfer lines
into full compliance with part 195 would be difficult for many
operators. The primary difficulty is that their lines are not installed
and operated on the basis of part 195 standards. For example,
considering the short length and low operating stress of the lines,
additional pipe wall thickness is often used instead of cathodic
protection to resist expected corrosion. But, regardless of this
feature, under part 195, cathodic protection systems would have to be
developed and installed as required. Other part 195 requirements that
may not bring commensurate benefits for short, low-stress transfer lines
involve modifying operations and maintenance manuals, installing
pressure control equipment, and establishing programs to carry out drug
and alcohol rules under 49 CFR part 199. Also, operating personnel would
have to be trained to carry out part 195 requirements.

	After publication of the Final Rule in Docket PS-117, we learned about
another significant compliance difficulty. Transfer line operators and
their representatives said that coping with the separate federal
regulatory regimes of RSPA, OSHA, and the Coast Guard over transfer
lines was a strain on resources. As explained above, OSHA's Process
Safety Management regulations and RSPA's part 195 standards have an
overlapping effect on operation of interfacility transfer lines. This
overlap results in analogous administrative costs for records,
procedures, and manuals. Worse yet it creates opportunities for mistakes
when operating personnel have to meet different requirements with
similar objectives.

	For transfers between vessels and marine transportation-related
facilities, the Coast Guard safety regulations compound the RSPA-OSHA
overlap problem. Moreover, applying part 195 to these marine terminal
transfer lines duplicates agency efforts within DOT. It also leaves the
industry uncertain which DOT safety standards apply to particular
facilities. So the upshot of these separate regulatory regimes of RSPA,
OSHA, and the Coast Guard is not only the added costs of meeting
separate requirements directed at similar safety objectives, but also
possible confusion of operating personnel.

	The low-stress pipeline regulations also present RSPA and its
cooperating State agencies with related compliance difficulties.
Carrying out adequate compliance inspections on interfacility transfer
lines would require a significant increase in resources. We estimate
that about 11,000 miles of low-stress pipelines are now under part 195,
with over a third of the mileage composed of short interfacility
transfer lines. Just the job of finding and educating the many operators
of these short lines would likely be a major, protracted effort.

D. Stay of Enforcement

	We weighed these industry and government compliance difficulties
against the need for risk reduction on low-stress interfacility transfer
lines. Our conclusion was that the potential benefits of complying with
part 195 do not justify the compliance difficulties if the line is short
and does not cross an offshore area or a commercially navigable
waterway, or if the line is regulated by the Coast Guard. There were
several reasons for this decision. First, RSPA's pipeline safety data do
not show that short interfacility transfer lines have been a source of
significant safety problems. Another reason was that the low operating
hoop stress of interfacility transfer lines is itself a safeguard
against several accident causes. And, from the consequence perspective,
a short length means the potential spill volume would be limited should
an accident occur. Also, public exposure is typically limited in the
industrial areas where most low-stress interfacility transfer lines are
located. For marine transfer lines, the risk is reduced even further by
the Coast Guard regulations and inspection force. At the same time,
except for Coast Guard regulated lines, the potential of transfer lines
crossing offshore or a commercially navigable waterway to cause
environmental harm tipped the scale toward continued compliance with
part 195.

	In view of the above considerations, we became concerned that the
continued application of part 195 to Coast Guard regulated lines and
other short interfacility transfer lines not crossing an offshore area
or a commercially navigable waterway was not in the public interest.
Consequently, we announced a stay of enforcement of part 195 against
these lines (61 FR 24245; May 14, 1996). The stay applies to low-stress
pipelines that are regulated by the Coast Guard or that extend less than
1 mile outside plant or terminal grounds without crossing an offshore
area or any waterway currently used for commercial navigation. The stay
will remain in effect until modified or until the part 195 regulations
are finally revised as a result of the present action.

	Since announcement of the stay, we have not received any request to
lift it. More important, we have explained this new enforcement policy
at two public meetings of the Technical Hazardous Liquid Pipeline Safety
Advisory Committee, a statutory panel that reviews RSPA's pipeline
safety program. We also explained our plan to revise the part 195
regulations consistent with the stay. Neither the Committee members nor
the public attendees raised any significant objection to the enforcement
policy or planned rule change. Further, State agencies who cooperate
with RSPA in enforcing safety standards over interfacility transfer
lines have not objected to the stay.

E. Direct Final Rule

	Following publication of the stay of enforcement, we issued a direct
final rule to expand the low-stress pipeline exclusion under
§195.1(b)(3) to include interfacility transfer lines that are covered
by the stay (62 FR 31364; June 9, 1997).

	The direct final rule changed §195.1(b)(3) to read as follows:

	(b) This part does not apply to--

*	 * 	* 	* 	*

	(3) Transportation through the following low-stress pipelines:

	(i) An onshore pipeline or pipeline segment that--

	(A) Does not transport HVL;

	(B) Is located in a rural area; and

	(C) Is located outside a waterway currently used for commercial
navigation;

	(ii) A pipeline subject to safety regulations of the U.S. Coast Guard;
and

	(iii) A 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;

*	 * 	* 	* 	*

	The procedures governing issuance of direct final rules are in 49 CFR
190.339. These procedures provide for public notice and opportunity for
comment subsequent to publication of a direct final rule. They also
provide that if an adverse comment or notice of intent to file an
adverse comment is received, RSPA will issue a timely notice in the
Federal Register to confirm that fact and withdraw the direct final rule
in whole or in part. Under the procedures, RSPA may then incorporate the
adverse comment into a subsequent direct final rule or may publish a
notice of proposed rulemaking.

	Four persons submitted comments on the direct final rule: American
Petroleum Institute (API), California Department of Fish and Game
(CDF&G), California Independent Petroleum Association (CIPA), and
Western States Petroleum Association (WSPA). API made an editorial
comment, while CIPA and WSPA argued that the direct final rule should be
expanded to also exclude from part 195 short low-stress pipelines
serving production shipping facilities in urban areas.

	However, CDF&G opposed the direct final rule. This State agency
contended the Coast Guard's regulations are not an adequate substitute
for RSPA's because the Coast Guard regulations do not specify a hold
time for pressure tests, do not apply to transfer lines that only serve
small vessels (less than 250 barrels of cargo capacity), and do not
require cathodic protection to guard against corrosion. CDF&G also said
the exclusion of short plant and terminal transfer lines should apply
only if a discharge would not impact marine waters of the United States.

	Because of the adverse comment from CDF&G, we withdrew the direct final
rule (62 FR 52511; October 8, 1997). As a result, §195.1(b)(3) remains
as it was before issuance of the direct final rule. In the withdrawal
notice, we said we would follow up the withdrawal with a notice of
proposed rulemaking based on the direct final rule and the comments we
received on it. The present action is that notice of proposed
rulemaking.

F. Proposed Rule

	In commenting on the direct final rule, API suggested we clarify that a
low-stress pipeline would be excluded from part 195 if it comes under
any one of the three categories of excluded low-stress pipelines ((i),
lines previously excluded; (ii), lines subject to Coast Guard
regulations; and (iii), certain lines serving plants and terminals). API
further suggested that replacing the word "and'' between categories (ii)
and (iii) with the word "or'' would accomplish this objective. In
addition to adopting this comment, to avoid any further
misunderstanding, we are proposing to modify the introductory phrase of
§195.1(b)(3) to read "transportation through any of the following
low-stress pipelines.''

	CIPA and WSPA argued that our rationale for excluding certain short
transfer lines serving refineries, manufacturing plants, and truck,
rail, or vessel terminals applies equally to similar transfer lines
serving production shipping facilities in urban areas. These two
commenters also said that until the direct final rule was published,
many of their members thought the stay of enforcement covered these
transfer lines (otherwise known as gathering lines) located in urban
areas because of the reference to low-stress pipelines outside "plant''
grounds in the operative words of the stay.

	Despite the parallels these commenters drew, we are not proposing to
exclude from part 195 short low-stress pipelines serving production
shipping facilities in urban areas. First of all, we never intended the
stay to apply to urban gathering lines.<SUP>5</SUP> Our notice of the
stay discussed part 195 compliance problems associated with short
transfer lines that interconnect refineries; manufacturing plants;
petrochemical plants; truck, rail, or vessel transportation terminals;
and long-distance pipelines. It is within this context that the term
"plant'' was used. Also, when the notice of the stay referred to
gathering lines, the context distinguished gathering lines from other
kinds of transfer lines. Moreover, the primary reason for the stay, as
well as the direct final rule, was the overlapping effect of part 195
and OSHA's Process Safety Management regulations (29 CFR 1910.119) on
plant and terminal transfer lines. However, these OSHA regulations do
not apply to oil production operations. So, although there may be
similarities between urban gathering lines and transfer lines covered by
the stay, the absence of an overlap with the OSHA regulations
significantly weakens CIPA's and WSPA's argument for excluding short
urban gathering lines from part 195. Not only do the OSHA regulations
not compound the difficulties these lines may have in meeting part 195,
neither can the OSHA regulations be counted on to lower the risk of the
lines. And this latter point is even more important because urban
gathering lines are not as likely to exist in uninhabited industrial
areas as are the transfer lines covered by the stay.

	We share CDF&G's concern that any exclusion of plant and terminal
transfer lines not increase the risk to marine waters. But we do not
agree that the Coast Guard's regulations do not afford as much
protection as RSPA's. Although the Coast Guard's regulations do not
specify a hold time for pressure tests and do not require cathodic
protection, they do require that existing transfer lines be pressure
tested annually to at least 150 percent of the pipeline's maximum
allowable working pressure. This requirement is more rigorous than
RSPA's pressure testing standard (subpart E of part 195) for low-stress
pipelines. Not only does the RSPA standard exempt most existing low-

stress pipelines (49 CFR 195.302(b)(3)), low-stress transfer lines that
are subject to testing under the standard only have to be tested once to
no more than 125 percent of maximum operating pressure. We also believe
the higher safety margin of the Coast Guard test (50% above maximum
allowable working pressure) and the higher frequency of testing, with
on-scene Coast Guard inspection, makes the lack of a cathodic protection
requirement less important. As to the concern over transfers to small
capacity vessels, any low-stress marine transfer lines that are not
subject to Coast Guard regulations would continue to be covered by part
195, unless they are otherwise excluded under §195.1(b)(3).

	In light of CDF&G's comment about the impact on marine waters of plant
and terminal transfer lines, we also considered broadening in this
notice the provision in the direct final rule that kept under part 195
short lines crossing offshore or commercially navigable waters. As
mentioned above, our reason for not excluding these short pipelines from
regulation was their potential for environmental harm. This potential is
increased by the presence of the lines in important water resources and
by the vulnerability of the lines to outside force damage. In weighing
the need for risk reduction against the difficulties of compliance with
part 195, we decided this increased potential for environmental harm was
reason enough to keep the lines under part 195. CDF&G's suggestion to
exclude short lines only if a discharge would not impact marine waters
would possibly keep even more lines under part 195; for example, lines
that are proximate to, but do not cross, marine waters. But unlike lines
crossing offshore or commercially navigable waterways, we do not believe
that as a whole these additional short lines pose a level of risk that
outweighs their compliance difficulties. Therefore, the proposed rule
would exclude from part 195 the same low-stress pipelines that were
covered by the direct final rule.

III. Regulatory Analyses and Notices

A. Executive Order 12866 and DOT Policies and Procedures

	The Office of Management and Budget (OMB) does not consider this action
to be a significant regulatory action under Section 3(f) of Executive
Order 12866 (58 FR 51735; October 4, 1993). Therefore, OMB has not
reviewed this final rule document. DOT does not consider this action
significant under its regulatory policies and procedures (44 FR 11034;
February 26, 1979).

	RSPA prepared a study of the costs and benefits of the Final Rule that
extended part 195 to cover certain low-stress pipelines (Final
Regulatory Evaluation, Docket No. PS-117). That study, which encompassed
short or Coast Guard regulated interfacility transfer lines, showed that
the Final Rule would result in net benefits to society, with a benefit
to cost ratio of 1.5.

[[Page 9996]]

	The Final Regulatory Evaluation determined costs and benefits of the
Final Rule on a mileage basis. But while costs were evenly distributed,
most of the expected benefits were projected from accident data that did
not involve short or Coast Guard regulated interfacility transfer lines.
Since the present action affects only these lines, it is reasonable to
believe the action will reduce more costs than benefits. Thus, the
present action should enhance the net benefits of the Final Rule.
Because of this likely economic effect, a further regulatory evaluation
of the Final Rule in Docket No. PS-117 or of the present action is not
warranted.

B. Regulatory Flexibility Act

	Low stress interfacility transfer lines covered by the present action
are associated primarily with the operation of refineries, petrochemical
and other industrial plants, and materials transportation terminals. In
general, these facilities are not operated by small entities.
Nonetheless, even if small entities operate low-stress interfacility
transfer lines, their costs will be lower because this action reduces
compliance burdens. Therefore, based on the facts available about the
anticipated impact of this rulemaking action, I certify, pursuant to
Section 605 of the Regulatory Flexibility Act (5 U.S.C. 605), that this
rulemaking action will not have a significant economic impact on a
substantial number of small entities.

C. Executive Order 12612

	RSPA has analyzed this action in accordance with the principles and
criteria contained in Executive Order 12612 (52 FR 41685). RSPA has
determined that the action does not have sufficient federalism
implications to warrant preparation of a Federalism Assessment.

D. Paperwork Reduction Act

	This action reduces the pipeline mileage and number of operators
subject to part 195. Consequently, it reduces the information collection
burden of part 195 that is subject to review by OMB under the Paperwork
Reduction Act of 1995. OMB has approved the information collection
requirements of part 195 through May 31, 1999 (OMB No. 2137-

0047).

E. Unfunded Mandates Reform Act of 1995

	This proposed rule does not impose unfunded mandates under the Unfunded
Mandates Reform Act of 1995. It does not result in costs of $100 million
or more to either State, local, or tribal governments, in the aggregate,
or to the private sector, and is the least burdensome alternative that
achieves the objective of the rule.

List of Subjects in 49 CFR Part 195

	Ammonia, Carbon dioxide, Petroleum, Pipeline safety, Reporting and
recordkeeping requirements.

	In consideration of the foregoing, RSPA proposes to amend 49 CFR part
195 as follows:

PART 195--[AMENDED]

	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. In §195.1, the introductory text of paragraph (b) is republished,
and paragraph (b)(3) would be revised to read as follows:

§195.1  Applicability.

*	*	*	*	*

	(b) This part does not apply to--

*	*	*	*	*

	(3) Transportation through any of the following low-stress pipelines:

	(i) An onshore pipeline or pipeline segment that--

	(A) Does not transport HVL;

	(B) Is located in a rural area; and

	(C) Is located outside a waterway currently used for commercial
navigation;

	(ii) A pipeline subject to safety regulations of the U.S. Coast Guard;
or

	(iii) A 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;

*	*	*	*	*

	Issued in Washington, D.C. on February 23, 1998.

Richard B. Felder,

Associate Administrator for Pipeline Safety.

[FR Doc. 98-5115 Filed 2-26-98; 8:45 am]

BILLING CODE 4910-60-P

  "Hazardous liquid'' means petroleum, petroleum products, or anhydrous
ammonia.

  "Low-stress pipeline'' means a hazardous liquid pipeline that is
operated in its entirety at a stress level of 20 percent or less of the
specified minimum yield strength (SMYS) of the line pipe.

 The interfacility transfer lines did not include piping that connect
high-stress pipelines with surge tanks located at plants and terminals.
This piping was already subject to the part 195 regulations as part of
the pipeline systems for which the tanks relieve surges.

 Segments of interfacility transfer lines on plant or terminal grounds
are subject to Part 195 if the segment connects a regulated pipeline
(including off-grounds segments of interfacility transfer lines) to a
surge tank or other device necessary to control the operating pressure
of the regulated pipeline.

 Rural gathering lines are excluded from part 195 by §195.1(b)(4).

PS-117, NPRM, # 4

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Federal Register / Vol. 63, No. 39 / Friday, February 27, 1998

Pages 9993 - 9996

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PS-117, NPRM, # 4

