[Federal Register Volume 62, Number 223 (Wednesday, November 19, 1997)]
[Rules and Regulations]
[Pages 61692-61695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30216]


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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Parts 191, 192 and 195

[Docket No. RSPA 97-2096; Amdt Nos. 191-12; 192-81; 195-59]
RIN 2137-AC99


Pipeline Safety: Regulations Implementing Memorandum of 
Understanding With the Department of the Interior

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

ACTION: Direct final rule.

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SUMMARY: This direct final rule (DFR) would implement a provision of a 
December 10, 1996, Memorandum of Understanding (MOU) between the 
Department of the Interior (DOI) and the Department of Transportation 
(DOT) regarding Outer Continental Shelf (OCS) pipelines by 
redesignating the point at which an OCS pipeline is subject to RSPA 
regulations. Under this rule, RSPA would establish and enforce design, 
construction, operation, and maintenance regulations and investigate 
certain accidents for all pipelines located downstream of the point at 
which operating responsibility for the pipelines transfers from a 
producing operator to a transporting operator.

DATES: This direct final rule takes effect March 19, 1998. If RSPA does 
not receive any adverse comment or notice of intent to file an adverse 
comment by January 20, 1998 the rule will become effective on the date 
specified. RSPA will issue a subsequent notice in the Federal Register 
by February 17, 1998, after the close of the comment period, to confirm 
that fact and reiterate the effective date. 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 
to withdraw the DFR in whole or in part. RSPA may then incorporate the 
adverse comment into a subsequent DFR or may publish a notice of 
proposed rulemaking.

ADDRESSES: Written comments on the subject of this DFR may be submitted 
to the Dockets Facility, U.S. Department of Transportation, 400 Seventh 
Street, SW, Plaza 401, Washington, DC 20590-0001. Comments should 
identify the docket number of this DFR, RSPA-97-2096. Persons should 
submit the original and one copy. Persons wishing to receive 
confirmation of receipt of their comments must include a stamped, self-
addressed postcard. Alternatively, comments may be submitted via e-mail 
to <a href="/cdn-cgi/l/email-protection#0f636a21676a7d7d666c644f7d7c7f6e216b607b21686079"><span class="__cf_email__" data-cfemail="e08c85ce8885929289838ba092939081ce848f94ce878f96">[email protected]</span></a>. The Dockets facility is open from 10:00 
a.m. to 5:00 p.m., Monday through Friday, except on Federal holidays.

FOR FURTHER INFORMATION CONTACT: L.E. Herrick, (202) 366-5523 or e-mail 
<a href="/cdn-cgi/l/email-protection#1e727b30767b6c6c777d755e6c6d6e7f307a716a30797168"><span class="__cf_email__" data-cfemail="a1cdc48fc9c4d3d3c8c2cae1d3d2d1c08fc5ced58fc6ced7">[email protected]</span></a> regarding the subject matter of this DFR, or 
the Dockets Facility, (202) 366-5046, regarding copies of this DFR or 
other information in the docket.

SUPPLEMENTARY INFORMATION:

Background

    Under an MOU dated May 6, 1976, RSPA regulated hazardous liquid, 
carbon dioxide, and natural gas pipelines located downstream of the 
outlet flange of each facility where hydrocarbons are first produced or 
where produced hydrocarbons are first separated, dehydrated, or 
otherwise processed, whichever facility is farther downstream. DOI 
regulated those pipelines located upstream of this point. The 
Departments agreed to change this regulatory boundary with the signing 
of the December 10, 1996, MOU. The 1996 MOU was the result of 
negotiations that began in the summer of 1993, which included a high 
degree of participation from the regulated industry. RSPA and DOI's 
Minerals Management Service (MMS) solicited public comments on a draft 
MOU through a joint Federal Register notice (60 FR 27546; May 24, 
1995). The notice also announced a public meeting at the MMS Gulf of 
Mexico regional office in New Orleans, Louisiana, on August 1, 1995, to 
discuss the proposal. Over 70 people attended the meeting, which 
generated over 100 pages of comments from natural gas and petroleum 
trade organizations; natural gas and oil exploration and production 
companies; transmission companies; offshore construction companies; and 
industry consultants. Twenty-three individuals and organizations 
submitted written comments on the Federal Register notice. A transcript 
of this meeting and copies of the comments are available in Docket No. 
RSPA-97-2096.
    In May 1996, RSPA and MMS met with an industry workgroup 
representing OCS oil and natural gas producers and transmission 
pipeline

[[Page 61693]]

operators. The workgroup proposed that the agencies allow individual 
operators of production and transportation facilities to define the 
boundaries of their respective facilities. They suggested that 
producers and transporters can best make such decisions based on the 
unique operating characteristics of each facility. Under this rule, 
RSPA would establish and enforce design, construction, operation, and 
maintenance regulations and investigate certain accidents for all OCS 
transportation pipelines beginning downstream of the point at which 
operating responsibility transfers from a producing operator to a 
transporting operator. Producing operators are companies which are 
engaged in the extraction and processing of hydrocarbons on the OCS. 
Transporting operators are companies which are engaged in the 
transportation of those hydrocarbons.

Intent of the Rule

    The intent of this rule is to require OCS production and 
transportation pipeline operators to designate the specific points on 
their pipelines where operating responsibility transfers from a 
producing operator to an adjoining transporting operator. The rule 
would amend 49 CFR parts 191, 192 and 195. Generally, operators will 
have 60 days after the date the rule becomes final to durably mark the 
specific points at which operating responsibility transfers. In most 
cases, the specific transfer points will be easily identifiable because 
of specific valves or flanges where the adjoining operations connect, 
or because of differences in paint used by adjoining operators to 
protect and maintain pipeline coatings or surfaces. For those instances 
in which the transfer points are not identifiable by a durable marking, 
each operator will have 180 days after the final rule becomes effective 
to identify the transfer points on a schematic. The 180-day period will 
give operators time to identify the transfer points during routine 
maintenance. If it is not practicable to durably mark a transfer point, 
and the transfer point is located above water, then the operator must 
depict the transfer point on a schematic maintained near the transfer 
point. Some transfer points may be located underwater. In such cases, 
the operator must identify the transfer point on a schematic which must 
be maintained at the nearest upstream facility and provided to RSPA 
upon request.
    For those instances in which adjoining operators do not or can not 
agree on a transfer point, RSPA's Office of Pipeline Safety (OPS) and 
MMS will make a joint determination of the boundary.
    The OPS and MMS may, through their enforcement agencies and in 
consultation with the affected parties, agree to exceptions to the 
general boundary description (operations transfer point) on a facility-
by-facility or area-by-area basis. Operators may also petition OPS and 
MMS for exceptions to the general boundary description.
    Conversion to service: A pipeline previously used in service and 
not subject to DOT regulations which comes under these regulations as a 
result of this rulemaking qualifies for use under the DOT regulations 
if the operator prepares and follows a written procedure to carry out 
the requirements of 49 CFR 192.14 or 195.5 (Conversion to service 
subject to this part). Pipeline segments designed and constructed under 
DOT regulations before March 19, 1998 may continue to operate under DOT 
design and construction requirements until significant modifications or 
repairs are made to those segments. After March 19, 1998 DOI 
operational and maintenance requirements will apply to those segments.

Rulemaking Analysis

    The December 1996 MOU redefined the DOT/DOI regulatory boundary 
definition from the OCS facility where hydrocarbons are ``first 
produced, separated, dehydrated, or otherwise processed'' to the point 
at which ``operating responsibility for the pipelines transfers from a 
producing operator to a transporting operator''. The MOU places, to the 
greatest extent practicable, producer-operated pipelines under DOI 
regulation and transporter-operated pipelines under DOT regulation. The 
changes in this rule would substantially reduce the regulatory burdens 
currently caused by the overlapping Federal regulatory responsibilities 
and the inconsistencies between the requirements. The changes will 
substantially increase the efficiency of governmental resources on the 
OCS without compromising safety.

Executive Order (E.O.) 12866

    RSPA reviewed this rule under E.O. 12866 and determined that this 
is not an economically significant rule. The Office of Management and 
Budget (OMB) has not asked to review this rule under E.O. 12866.

Regulatory Flexibility Act

    Oil and gas and production and transportation companies are 
classified under Standard Industrial Codes (SIC's) by the Census 
Bureau. The Small Business Administration further classifies ``small 
businesses'' in the various offshore sectors as follows: (1) Oil and 
gas producers that have fewer than 500 employees, (2) liquid pipeline 
companies than have fewer than 1,500 employees; (3) natural gas 
pipeline companies that have gross annual receipts of $25 million or 
less; and (4) offshore oil and gas field exploration service or 
production service companies that have gross annual receipts of $5 
million or less. There are many companies on the OCS that are ``small 
businesses'' by these definitions. However, the technology necessary 
for conducting offshore oil and gas exploration and development 
activities is very complex and costly, and most entities that engage in 
offshore activities have considerable financial resources well beyond 
what would normally be considered ``small business.'' These entities 
customarily conduct their operations by contracting with offshore 
drilling or service companies and therefore tend to have relatively few 
employees compared to the considerable financial resources of their 
operations.
    This rule would affect a substantial number of ``small entities;'' 
however, the economic effects of the rule would not be significant. The 
economic effects on the oil and gas production and transportation 
companies directly affected by the rule would be insignificant because 
of the minimal costs that operators incur during the first year that 
the rule is implemented. (In that year, offshore producers would have 
to identify all points on their pipelines at which operating 
responsibility transfers from a producer to a transporter. In 
succeeding years there would be virtually no economic impact resulting 
from the rule.) The offshore service companies would be indirectly 
affected by the rule through their contractual relationships with the 
primary producing and transporting companies--they would not be 
directly regulated in any way. This rule would not impose any new 
restrictions on small pipeline service companies or manufacturers, nor 
will it cause their business practices to change. To the extent that 
this rule might eventually cause some of the relatively larger OCS 
operators to make modifications to their pipelines, it may have a minor 
beneficial effect of increasing demand for the services and equipment 
of smaller service companies and manufacturers.

Paperwork Reduction Act

    This rule contains a collection of information which RSPA is 
submitting

[[Page 61694]]

to the Office of Management and Budget (OMB) for review and approval 
under section 3507(d) of the Paperwork Reduction Act of 1995. As part 
of RSPA's continuing effort to reduce paperwork and respondent burdens, 
RSPA invites the public and other Federal agencies to comment on any 
aspect of the reporting burden in 49 CFR 192 and 195 as amended by this 
DFR. Submit your comments to the Office of Information and Regulatory 
Affairs; OMB; Attention: Desk Officer for the Department of 
Transportation (Docket No. RSPA 97-2096); Washington, D.C. 20503. Send 
a copy of your comments to L.E. Herrick, Room 2335, 400 Seventh Street, 
Washington, DC 20590-0001. You may obtain a copy of the supporting 
statement for the collection of information by contacting the Dockets 
Facility.
    OMB may make a decision to approve or disapprove this collection of 
information after 30 days from receipt of our request. Therefore, your 
comments are best assured of being considered by OMB if OMB receives 
them within that time period. However, RSPA will consider all comments 
received during the comment period for this direct final rule.
    The Paperwork Reduction Act of 1995 provides that an agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number.
    The title of this collection of information is ``49 CFR 191, 192 
and 195 Pipeline Safety: Regulations Implementing Memorandum of 
Understanding with the Department of the Interior.''
    The collection of information in the DFR and for each transporter 
operating a pipeline consists of: (1) Reviewing existing pipeline maps, 
(2) conferring and agreeing with operators of adjoining production 
pipeline segments concerning the locations of specific transfer points, 
and (3) either marking directly on each pipeline or depicting on a 
schematic the specific point on each pipeline where operating 
responsibility transfers from the producing operator to a transporting 
operator. As stated above under the ``Intent of the Rule'' section, 
specific transfer points will be easily identifiable in most cases, 
either because of specific valves or flanges where the adjoining 
operations connect, or because of differences in paint that adjoining 
operators use to protect and maintain pipeline coatings or surfaces.
    Generally operators will have until 60 days after the date the rule 
becomes final to durably mark the points at which operating 
responsibility transfers. For those relatively few instances where the 
transfer points are not identifiable by durable marking, operators will 
have 180 days after the date the rule becomes final to identify, on a 
schematic, the transfer points. The requirement to identify the 
boundary is mandatory. The RSPA will use the information to determine 
the demarcation where DOT will establish and enforce design, 
construction, operation, and maintenance regulations and investigate 
certain accidents, as distinguished from MMS responsibilities.
    In calculating the burden, RSPA assumed that respondents perform 
most of the requirements and maintain records in the normal course of 
their activities, such as painting their pipelines and maintaining 
valves and flanges. RSPA considers these to be usual and customary 
practices and did not include them in the burden estimates. Commenters 
are invited to provide information if they disagree with this 
assumption and they should tell RSPA what are the burden hours and 
costs imposed by this collection of information (i.e., marking of 
transfer points).
    The regulated community consists of approximately 160 Federal OCS 
oil and gas producers and 70 transportation pipeline operators. There 
are approximately 3,000 points where operating responsibility for 
pipelines transfers from a producer to a transporter. The RSPA assumes 
from discussions with MMS and the operators that about 2,400 
(representing 80 percent) of these transfer points are already marked. 
Therefore, this rulemaking would require a one-time identification and 
marking of about 600 points where operating responsibility for 
pipelines transfers from a producer to a transporter. For the 2,400 
transfer points that are clearly marked, there would be no information 
burden. The 600 unmarked transfer points, on the other hand, would 
require widely-varying times for identification depending on whether a 
painted line or a schematic was used to identify the transfer point.
    The public reporting burden for this information collection 
requirement is estimated to average 5 hours per response for each 
transfer point. This includes the time for reviewing instructions, 
searching existing data sources, gathering and maintaining the data 
needed, and completing the required marking. Based on 600 unmarked 
transfer points, RSPA estimates that the total one-time burden of this 
collection of information to be 3,000 hours total. The average 
annualized burden over a 3-year period would be 1,000 hours. Based on 
$35 per hour, the total burden hour cost to respondents is estimated to 
be $35,000 annually.

Takings Implication Assessment

    The DOT certifies that the rule does not represent a governmental 
action capable of interference with constitutionally protected property 
rights. Thus, a Takings Implication Assessment need not be prepared 
pursuant to E.O. 12630, Government Action and Interference with 
Constitutionally Protected Property Rights.

Unfunded Mandates Reform Act of 1995

    This rule does not contain any unfunded mandates to State, local, 
or tribal governments, nor would it impose significant regulatory costs 
on the private sector. Anticipated costs to the private sector will be 
far below the $100 million annual threshold that was established by the 
Unfunded Mandates Reform Act.

E.O. 12988

    The DOT has certified to OMB that this regulation meets the 
applicable civil justice reform standards provided in Sections 3(a) and 
3(b)(2) of E.O. 12988.

National Environmental Policy Act

    The DOT has determined that this action does not constitute a major 
Federal action significantly affecting the quality of the human 
environment. Therefore, preparation of an Environmental Impact 
Statement is not required.

List of Subjects

49 CFR Part 191

    Gas, Pipeline safety, Reporting and recordkeeping requirements.

49 CFR Part 192

    Pipeline safety, Reporting and recordkeeping requirements.

49 CFR Part 195

    Anhydrous ammonia, Carbon dioxide, Petroleum, Pipeline safety, 
Reporting and recordkeeping requirements.

    For the reasons set out in the preamble, RSPA amends 49 CFR parts 
191, 192 and 195 as follows:

PART 191--[AMENDED]

    1. The authority citation for part 191 continues to read as 
follows:

    Authority: 49 U.S.C. 5121, 60102, 60103, 60104, 60108, 60117, 
60118, and 60124; and 49 CFR 1.53.


[[Page 61695]]


    2. Section 191.1 is amended by adding paragraph (b)(3) to read as 
follows:


Sec. 191.1  Scope.

* * * * *
    (b) * * *
    (3) On the Outer Continental Shelf upstream of the point at which 
operating responsibility transfers from a producing operator to a 
transporting operator.
    3. Section 191.3 is amended by adding a definition in alphabetical 
order to read as follows:


Sec. 191.3  Definitions.

* * * * *
    Outer Continental Shelf means all submerged lands lying seaward and 
outside the area of lands beneath navigable waters as defined in 
Section 2 of the Submerged Lands Act (43 U.S.C. 1301) and of which the 
subsoil and seabed appertain to the United States and are subject to 
its jurisdiction and control.
* * * * *

PART 192--[AMENDED]

    1. The authority citation for part 192 continues to read as 
follows:

    Authority: 49 U.S.C. 5103, 60102, 60104, 60108, 60109, 60110, 
60113, and 60118; 49 CFR 1.53.

    2. Section 192.1 is amended by adding paragraph (b)(5) to read as 
follows:


Sec. 192.1  Scope of part.

* * * * *
    (b) * * *
    (5) On the Outer Continental Shelf upstream of the point at which 
operating responsibility transfers from a producing operator to a 
transporting operator.
    3. Section 192.3 is amended by adding a definition in alphabetical 
order to read as follows:


Sec. 192.3  Definitions.

* * * * *
    Outer Continental Shelf means all submerged lands lying seaward and 
outside the area of lands beneath navigable waters as defined in 
Section 2 of the Submerged Lands Act (43 U.S.C. 1301) and of which the 
subsoil and seabed appertain to the United States and are subject to 
its jurisdiction and control.
* * * * *
    4. Section 192.10 is added to read as follows:


Sec. 192.10  Outer continental shelf pipelines.

    Operators of transportation pipelines on the Outer Continental 
Shelf (as defined in the Outer Continental Shelf Lands Act; 43 U.S.C. 
1331) must identify on all their respective pipelines the specific 
points at which operating responsibility transfers to a producing 
operator. For those instances in which the transfer points are not 
identifiable by a durable marking, each operator will have until 
September 15, 1998 to identify the transfer points. If it is not 
practicable to durably mark a transfer point and the transfer point is 
located above water, the operator must depict the transfer point on a 
schematic located near the transfer point. If a transfer point is 
located subsea, then the operator must identify the transfer point on a 
schematic which must be maintained at the nearest upstream facility and 
provided to RSPA upon request. For those cases in which adjoining 
operators have not agreed on a transfer point by September 15, 1998 the 
Regional Director and the MMS Regional Supervisor will make a joint 
determination of the transfer point.

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. Section 195.1 is amended by adding a new paragraph (b)(6) and 
redesignating paragraphs (b)(6) through (b)(8) as paragraphs (b)(7) 
through (b)(9) to read as follows:


Sec. 195.1  Applicability.

* * * * *
    (b) * * *
    (6) Transportation of hazardous liquid or carbon dioxide in Outer 
Continental Shelf pipelines which are located upstream of the point at 
which operating responsibility transfers from a producing operator to a 
transporting operator.
* * * * *
    3. Section 195.2 is amended by adding a definition in alphabetical 
order to read as follows:


Sec. 195.2  Definitions.

* * * * *
    Outer Continental Shelf means all submerged lands lying seaward and 
outside the area of lands beneath navigable waters as defined in 
Section 2 of the Submerged Lands Act (43 U.S.C. 1301) and of which the 
subsoil and seabed appertain to the United States and are subject to 
its jurisdiction and control.
* * * * *
    4. Section 195.9 is added to read as follows:


Sec. 195.9  Outer continental shelf pipelines.

    Operators of transportation pipelines on the Outer Continental 
Shelf must identify on all their respective pipelines the specific 
points at which operating responsibility transfers to a producing 
operator. For those instances in which the transfer points are not 
identifiable by a durable marking, each operator will have until 
September 15, 1998 to identify the transfer points. If it is not 
practicable to durably mark a transfer point and the transfer point is 
located above water, the operator must depict the transfer point on a 
schematic maintained near the transfer point. If a transfer point is 
located subsea, the operator must identify the transfer point on a 
schematic which must be maintained at the nearest upstream facility and 
provided to RSPA upon request. For those cases in which adjoining 
operators have not agreed on a transfer point by September 15, 1998 the 
Regional Director and the MMS Regional Supervisor will make a joint 
determination of the transfer point.

    Issued in Washington D.C. on November 12, 1997.
Richard B. Felder,
Associate Administrator for Pipeline Safety.
[FR Doc. 97-30216 Filed 11-18-97; 8:45 am]
BILLING CODE 4910-60-P


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