United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 6, 2023 Decided May 16, 2023

No. 22-1148

GPA MIDSTREAM ASSOCIATION AND AMERICAN PETROLEUM 

INSTITUTE,

PETITIONERS

v.

UNITED STATES DEPARTMENT OF TRANSPORTATION AND 

PIPELINE AND HAZARDOUS MATERIALS SAFETY 

ADMINISTRATION,

RESPONDENTS

On Petition for Review of a Final Rule 

of the Department of Transportation

Keith J. Coyle argued the cause for petitioners. With him 

on the briefs was Christina Manfredi McKinley.

Anna O. Mohan, Attorney, U.S. Department of Justice, 

argued the cause for respondent. With her on the brief were 

Brian M. Boynton, Principal Deputy Assistant Attorney 

General, Abby C. Wright, Attorney, Paul M. Geier, Assistant 

General Counsel, U.S. Department of Transportation, and 

Charles E. Enloe, Senior Trial Attorney. 
2

Before: CHILDS, Circuit Judge, and EDWARDS and 

GINSBURG, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge

GINSBURG.

GINSBURG, Senior Circuit Judge: The Pipeline and 

Hazardous Materials Safety Administration (PHMSA)

prescribes safety standards for pipelines on behalf of the 

Secretary of Transportation. 49 U.S.C. § 60102(a)(2); 49 

C.F.R. § 1.97(a)(1). Two oil and gas associations, GPA 

Midstream and the American Petroleum Institute, petition for 

review of a safety standard requiring their members to install 

remote-controlled or automatic shut-off valves in some types 

of new or replaced gas and hazardous liquid pipelines. 87 Fed. 

Reg. 20,940 (2022). The petitioners challenge the standard as 

it applies to “gathering” pipelines used to collect raw gas or

crude oil from a well. They argue the PHMSA unlawfully 

failed to disclose the economic basis for regulating gathering 

pipelines when it proposed the standard, and also failed to 

make a reasoned determination that regulating these pipelines 

was appropriate.

We agree. The PHMSA said nothing about the 

practicability or the costs and benefits of the standard for

gathering pipelines until promulgating the final rule, even 

though the law required it to address those subjects when 

publishing the proposed rule for public comment and peer 

review. The PHMSA also ultimately failed to make a reasoned 

determination that the benefits of regulating gathering 

pipelines would exceed the costs, and that doing so would be 

practicable, as required by law. We therefore grant the petition

for review.
3

I. Background

We begin with some regulatory and factual background.

A. Regulated Gathering Lines

In order to collect raw gas or crude oil from one or more 

wells, oil and gas companies rely upon so-called gathering 

pipelines, which pass mostly through rural areas. 49 C.F.R. 

§§ 192.3, 195.2. Oil and gas companies then rely upon a large 

network of transmission or “main” lines to transport gas, crude 

oil, and petroleum products long distances further down the 

supply chain, as illustrated by this graphic from the PHMSA. 

The PHMSA regulates these pipelines under the 

Secretary’s longstanding authority to “prescribe minimum 

safety standards for pipeline transportation and for pipeline 

facilities.” 42 U.S.C. § 60102(a)(2). Although it has broad 

authority, the agency must follow detailed rulemaking 

procedures. As relevant here, a 1996 law provides the PHMSA 

must (1) “identify the costs and benefits associated with the 

proposed standard” in a risk assessment, and (2) submit this 

risk assessment to an advisory committee of experts for peer 
4

review, and to the public for comment. Accountable Pipeline 

Safety and Partnership Act of 1996, § 4, Pub. L. 104-304, 110 

Stat. 3794, 3795, codified at 49 U.S.C. § 60102(b)(3)(B), (4).

Ultimately, the PHMSA must regulate “only upon a reasoned 

determination that the benefits, including safety and 

environmental benefits, of the intended standard justify its 

costs.” 49 U.S.C. § 60102(b)(5).

Transmission pipelines have long been subject to federal

safety standards. By contrast, for many years, gathering 

pipelines in rural areas were not subject to federal safety 

standards. In the 2000s, however, the PHMSA defined a new 

class of “regulated gathering line” subject to federal safety 

standards in rural areas. See 71 Fed. Reg. 13,289 (2006)

(defining regulated gathering line for gas); 73 Fed. Reg. 31,634 

(2008) (defining regulated rural gathering line for hazardous 

liquids); see also 49 U.S.C. § 60101(b)(2)(A) (authorizing the 

PHMSA to define the term “regulated gathering line”). This

definition depends upon the proximity of a pipeline segment to 

an area where a rupture may cause serious harm.

A gas pipeline carries methane, which is a safety hazard. 

When a cloud of methane ignites, the resulting fireball and heat

can kill and burn anything nearby. Since 2006, the PHMSA,

therefore, has regulated segments of gas gathering pipeline

near more than ten buildings intended for human occupancy, 

where burning gas may take lives and destroy property. 49 

C.F.R. §§ 192.8(c)(1), 192.5(b)(2)–(4). The agency no longer 

treats rural and non-rural gas gathering pipelines differently.

Also in 2006, the PHMSA created two tiers of regulated 

gas gathering line—Types A and B—based upon “hoop 

stress,” that is, the force on the wall of a steel pipe as fluid 
5

pushes outward against it.* Hoop stress is an important physical 

variable. When hoop stress exceeds the stress specified by the

manufacturer, the pipe may permanently expand like an 

overstretched rubber band, thus thinning out the wall, which

may eventually burst. This important specification is known as 

the “specified minimum yield strength” (SMYS) of the pipe. 

Thomas O. Miesner & William L. Leffler, Oil and Gas 

Pipelines in Non-Technical Language 232 (2006). A Type A 

line operates at or above 20% of the SMYS of the pipe, while 

a Type B line operates at a lower stress. 49 C.F.R. § 192.8(c).

The PHMSA determined the stress of a Type A line was

“indicative of onshore gathering lines whose operating 

pressure presents a significant enough risk in certain 

circumstances to warrant the same amount of regulation as 

transmission lines,” with exceptions not here relevant. 71 Fed. 

Reg. at 13,296/3; see also 49 C.F.R. § 192.9(c) (“An operator 

of a Type A regulated onshore gathering line must comply with 

the requirements of this part applicable to transmission lines, 

except . . .”). By contrast, a low stress Type B line must meet

fewer safety standards. 49 C.F.R. § 192.9(d).

Hazardous liquid gathering pipelines, which largely

transport crude oil, may contaminate drinking water or natural 

resources. In 2008, the PHMSA therefore regulated rural

gathering pipelines located within a quarter mile of a source of 

drinking water or of an important ecological resource (e.g., a 

wetland frequented by migratory birds or by an endangered 

species), as long as the pipeline falls within a certain diameter

range and operates at or above 20% of the SMYS of the steel 

pipe. Id. § 195.11(a). A regulated rural gathering line must 

* Office of Pipeline Safety, Interpretation Response PI-70-024 

(1970), https://perma.cc/GEW6-SQBQ. Hoop stress is determined 

by S = D × P / 2t, where S is hoop stress, D is diameter, P is internal 

operating pressure, and t is wall thickness. Id.
6

comply with many of the safety standards that apply to a 

transmission line carrying hazardous liquids. See id.

§ 195.11(b); see also 73 Fed. Reg. at 31,640/3 (describing the 

overlapping rules). The PHMSA also continued regulating any 

gathering “pipeline located in a non-rural area.” 49 C.F.R. 

§ 195.1(a)(4)(i). As a result, regulated gathering lines and 

transmission lines are now generally subject to many of the 

same safety standards.

B. The 2011 Act

In 2010, the rupture of a gas transmission pipeline 

destroyed a neighborhood in San Bruno, California. The

ignition blast and fire resulting from the rupture killed eight and

injured 51 persons, and destroyed or damaged more than 100 

homes. It took 95 minutes to stop the flow of gas from the 

rupture, as firefighters struggled to contain the flames. 

The National Transportation Safety Board investigated

and prepared a report. Pacific Gas and Electric Company 

Natural Gas Transmission Pipeline Rupture and Fire, 

NTSB/PAR-11/01 (2011), https://perma.cc/868M-ASNR. As 

relevant here, the Board found property damage could have 

been mitigated had two nearby valves been equipped with

automatic or remote-controlled shut-off valves, which do not 

require dispatching a local mechanic to the site of the valve. Id.

at 103–104, 125. The Board accordingly recommended that the

PHMSA require automatic or remote-control shut-off valves in 

high-consequence areas and high-density locations. Id. at 129.

Within a few months, the Congress passed the Pipeline

Safety, Regulatory Certainty, and Job Creation Act of 2011, § 4 

of which directs the PHMSA to require automatic or remotecontrolled valves “if appropriate” in “transmission pipeline 

facilities”: 
7

Not later than 2 years after the date of enactment of this 

subsection, and after considering the factors specified in 

subsection (b)(2), the [PHMSA], if appropriate, shall 

require by regulation the use of automatic or remotecontrolled shut-off valves, or equivalent technology, 

where economically, technically, and operationally 

feasible on transmission pipeline facilities constructed or 

entirely replaced after the date on which the [PHMSA] 

issues the final rule containing such requirement.

49 U.S.C. § 60102(n)(1).

C. The Proposed Rule

In 2020, the PHMSA published a notice of proposed 

rulemaking to implement § 4. The agency proposed requiring

automatic or remote-controlled shut-off valves or an equivalent 

technology “on all newly constructed or entirely replaced 

natural gas transmission and hazardous liquid pipelines that 

have nominal diameters of 6 inches or greater.” 85 Fed. Reg. 

7162, 7164/1 (2020). As required by law, the PHMSA also 

prepared a risk assessment purporting to “identify the costs and 

benefits associated with the proposed standard.” 49 U.S.C. 

§ 60102(b)(3)(B). Notably, however, the notice of proposed 

rulemaking and risk assessment said nothing about the costs 

and benefits of applying the standard to gathering pipelines. 

Pursuant to certain pre-existing rules, however, new or

replaced regulated gathering lines would have been subject to 

the proposed standard unless expressly carved out by the rule. 

In their comments, the petitioners accordingly sought an

exemption for gathering pipelines. Among other things, they 

argued the risk assessment lacked the cost-benefit data needed

to justify applying the rule to gathering pipelines.
8

D. The Advisory Committee Recommendation

As required by law, the PHMSA also made the risk 

assessment available for public comment and for peer review 

by two federal advisory committees, one for gas pipelines and 

one for pipelines carrying hazardous liquids. 49 U.S.C. 

§§ 60102(b)(4)(A)–(B), 60115. Because the risk assessment 

said nothing about the costs and benefits of applying the safety 

standard to gathering pipelines in particular, however, the 

public committees had no economic data or analysis about 

gathering pipelines to review and analyze. 

Nevertheless, when the PHMSA presented the proposal to 

the advisory committees, the agency revealed for the first time 

that it would be applying the standard to at least some regulated 

gathering lines. Members of the committees argued this was 

inappropriate because they had been given no analysis or data

for gathering pipelines. Because of this gap, the committees

recommended deferring the safety standard for gathering 

pipelines until a future rulemaking. 

E. The Final Rule

The PHMSA plowed ahead anyway. In the final rule, the 

PHMSA required automatic or remote-controlled shut-off 

valves in many new or replaced pipelines with a diameter of 

six or more inches, including Type A lines and regulated rural 

gathering lines that carry hazardous liquids across a body of 

water wider than 100 feet. 68 Fed. Reg. at 20,941/3, 20,949.

The PHMSA addressed some objections in the preamble

to the final rule. Id. at 20,949. It pointed out that the proposed 

rule never said regulated gathering lines would be exempt—

which is correct because the proposed rule said nothing at all 
9

about gathering lines. Id. at 20,949/1. The PHMSA also said 

regulating Type A lines made sense because “ruptures on these 

pipelines will generally present a higher risk of public safety 

consequences, similar to gas transmission lines.” Id.

The risk assessment accompanying the final rule included

some data about gathering pipelines. To identify the costs, the 

PHMSA estimated the number of new or replaced miles of 

pipeline that would be subject to the standard each year—

including, for the first time, the number of miles of gathering

pipelines. Still, when the PHMSA then estimated the number 

of valves needed, the annualized cost of the equipment, and 

other costs, it used no data for gathering pipelines; nor did it 

discuss the benefits of applying the standard to regulated 

gathering lines. It filled the gap by assuming the methodology

and data for transmission pipelines were also valid for

gathering lines.

The PHMSA said it was “not able to quantify the benefits,”

because “a detailed projection of avoided incidents and avoided 

costs of those incidents is not available”; therefore, it discussed 

benefits in qualitative terms. The PHMSA claimed the standard 

could avoid “significant” property and environmental 

damages. To support this claim, the PHMSA relied upon a

foundational technical study the agency commissioned from 

Oak Ridge National Laboratory, modeling the property and 

environmental damages that could be avoided by using 

automatic or remoted-controlled valves in specific scenarios.

See Studies for the Requirements of Automatic and Remotely 

Controlled Shutoff Valves on Hazardous Liquids and Natural 

Gas Pipelines with Respect to Public and Environmental 

Safety, ORNL/TM-2012/411 (2012), https://perma.cc/QZP7-

6FKX (Oak Ridge). The study, however, covered only 

transmission pipelines. Id. at 6 (“The results of this study apply 

to natural gas and hazardous liquid transmission lines.”).
10

Relying upon this final risk assessment, the PHMSA 

concluded, in the preamble to the final rule, that the 

“(unquantified) public safety, environmental, and equity 

benefits of the final rule . . . justify the costs of the final rule.”

68 Fed. Reg. at 20,943/1. 

II. Analysis

We begin by considering whether the petition for review 

is timely. Finding it is, we proceed to the merits, applying the 

familiar standards of review in the Administrative Procedure 

Act (APA). 49 U.S.C. § 60119(a)(3). To the extent the 

petitioners argue the safety standard exceeds the PHMSA’s

authority, we deny the petition. We agree, however, that the 

PHMSA prescribed the standard “without observance of 

procedure required by law.” 5 U.S.C. § 706(2)(D). We further 

agree that the PHMSA ultimately failed to show that regulating 

gathering pipelines would be “appropriate.” 49 U.S.C. 

§ 60102(b)(2)(B).

A. The Petition for Review Is Timely

A petition for review of a safety standard must be filed

“not later than 89 days after the regulation is prescribed.” 49 

U.S.C. § 60119(a)(1). A final rule is “prescribed” when it is 

“established authoritatively.” Nat. Res. Def. Council v. Nat’l 

Highway Traffic Safety Admin., 894 F.3d 95, 106 (2d Cir. 

2018) (brackets omitted) (quoting Black’s Law Dictionary 

(10th ed. 2014)). A legislative rule is established 

authoritatively when it is duly fixed and so becomes binding on 

the public, “even if it sets a future effective date.” Humane 

Soc’y v. Dep’t of Agric., 41 F.4th 564, 571 (D.C. Cir. 2022).
11

A final rule is not duly fixed at least until it is filed for

public inspection with the Office of the Federal Register. See

id. at 570. Until then, it may be withdrawn without explanation 

or notice and comment and is “not valid” and enforceable 

against the public at large. 44 U.S.C. § 1507; Humane Soc’y, 

41 F.4th at 575. Because a legislative rule that is unenforceable 

and may be withdrawn at will is not “duly fixed,” we hold a 

standard is not “prescribed” by the PHMSA at least until the

agency files the final rule for public inspection. Cf. James 

Madison, The Federalist, No. 62, at 381 (Clinton Rossiter ed., 

1961) (“Law is defined to be a rule of action; but how can that 

be a rule, which is little known, and less fixed?”).

That was done on April 7, 2022. The petitioners filed their 

petition on July 1, 2022, 85 days later. The petition is therefore 

timely. Because the petition is timely, we have no occasion to 

decide whether the filing clock started running only after the 

rule was first published in the Federal Register, as the 

petitioners argue, citing Natural Resources Defense Council, 

894 F.3d at 106 (“[A] regulation is not ‘prescribed’ until it has 

legal effect, and it does not have legal effect until it is published 

in the Federal Register.”). Nor have we occasion to decide 

whether the 89-day deadline is jurisdictional. 

B. The PHMSA Did Not Exceed Its Legal Authority

In their briefs, the petitioners argued § 4 of the 2011 Act, 

49 U.S.C. § 60102(n)(1), strips the PHMSA of power to require 

automatic or remote-controlled shut-off valves in gathering 

pipelines under its general rulemaking authority. Id.

§ 60102(a)(2). During oral argument, however, counsel for 

petitioners conceded the PHMSA retains this power. Any 

argument to the contrary is, therefore, waived.
12

The petitioners now press a narrower argument. They 

claim the PHMSA needed to find automatic or remotecontrolled shut-off valves “appropriate” for new transmission 

pipelines pursuant to § 4 before it could require them for

gathering pipelines. Now that the PHMSA has made that 

finding under § 4, however, the petitioners concede the agency

may “use [its] general rulemaking authority tomorrow to go out 

and do a rule” for gathering pipelines. In other words, they

argue that § 4 creates only a condition precedent, not a ban.

Section 4 creates neither a condition precedent nor a ban.

As the petitioners themselves explain at length in their opening

brief, § 4 does not apply to gathering pipelines. Section 4 by its

plain terms applies only to “transmission pipeline facilities.”

We do not understand how § 4 could plausibly be read to create 

a condition precedent for a different type of pipeline facility.

Nor do we see any reason to think the condition precedent, if 

there were one, would have to be met through a separate 

rulemaking. More to the point, we have no discretion to order 

a separate rulemaking unless a statute clearly ordains a 

particular sequence of procedures. See Perez v. Mortg. Bankers 

Ass’n, 575 U.S. 92, 102 (2015) (“Agencies are free to grant 

additional procedural rights in the exercise of their discretion, 

but reviewing courts are generally not free to impose them if 

the agencies have not chosen to grant them.” (quoting Vt.

Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc., 

435 U.S. 519, 524 (1978))).

C. The PHMSA Failed To Observe the Rulemaking 

Procedures

Although the PHMSA had the power to regulate, the 

agency had to follow the hybrid rulemaking procedures laid out 

in the APA, 5 U.S.C. § 553(c), and the pipeline safety laws. 49 

U.S.C. § 60102(b)(3)–(4). The petitioners argue the PHMSA 
13

did not follow those procedures because the risk assessment 

made available for peer review and public comment said 

nothing about regulating gathering pipelines. 

Indeed, the notice of proposed rulemaking and 

accompanying risk assessment were all about transmission 

lines. They contained no data, analysis, or conjecture about the 

costs and benefits of applying the proposed safety standard to 

gathering facilities. The study by Oak Ridge, upon which the 

agency relied to show the feasibility and benefits of the safety 

standard, also addresses only transmission pipelines. The 

proposed rule did not even make a finding that the standard 

would be “appropriate” for gathering pipelines. Gathering 

pipelines, it seems, were a mere afterthought when they 

surfaced during the advisory committees’ deliberation.

Both the pipeline safety laws and the APA require more. 

Under the former, the PHMSA must consider “the 

appropriateness of the standard for the particular type of 

pipeline transportation or facility.” 49 U.S.C. 

§ 60102(b)(2)(B). To be appropriate for a particular type of 

pipeline facility, the standard must be “practicable,” and the 

benefits must justify the costs. Id. § 60102(b)(1)(A), (5); cf.

Michigan v. EPA, 576 U.S. 743, 752 (2015) (“No regulation is 

‘appropriate’ if it does significantly more harm than good.”). 

The PHMSA, therefore, had to explain why the safety standard 

is practicable and makes sense for regulated gathering lines, but 

it made no effort to do so until issuing the final rule, when there 

could be no peer review or public comment. 

That was a serious error. We have long held that, in order 

to provide the public with a meaningful chance of participating 

in the rulemaking process, as required by the APA, see 5 U.S.C. 

§ 553(c), an agency must disclose critical information 

justifying the proposal in time for public comment. See Owner-
14

Operator Indep. Drivers Ass’n, Inc. v. Fed. Motor Carrier 

Safety Admin., 494 F.3d 188, 199 (D.C. Cir. 2007) (citing 

cases). The procedures required by the pipeline safety laws are 

more specific and still more demanding. As noted above, the 

PHMSA must submit for peer review and make available for 

public comment a risk assessment identifying “the costs and 

benefits associated with the proposed standard.” 49 U.S.C. 

§ 60102(b)(3)(B), (4)(A). It must also “identify technical data 

or other information upon which the risk assessment 

information and proposed standard is based.” Id.

§ 60102(b)(3)(D). In sum, the risk assessment made available 

for comment and peer review had to contain the technical and 

cost-benefit information critically needed to justify the safety 

standard for each type of pipeline transportation and facility. 

The risk assessment did not comply with this requirement 

because it said nothing about the practicability or the costs and 

benefits of regulating the gathering sector of the pipeline 

industry. 

The PHMSA tries to make something out of nothing, but 

that is an impossible task. Cf. Kooritzky v. Reich, 17 F.3d 1509, 

1513 (D.C. Cir. 1994) (“Something is not a logical outgrowth 

of nothing.”).

The agency first argues the analysis for transmission 

pipelines was good enough. The petitioners do not dispute this. 

The agency then points out the methodology and data for 

transmission pipelines were exposed to comment and 

refutation. Again, no dispute. Because it later used the same 

methodology and data to calculate the costs for gathering 

pipelines, the PHMSA argues, in essence, that the final risk 

assessment merely “expands on and confirms data in the 

rulemaking record,” which is permitted under our precedent. 

Competitive Enter. Inst. v. Dep’t of Transp., 863 F.3d 911, 920 
15

(D.C. Cir. 2017); see also Chamber of Commerce v. SEC, 443 

F.3d 890, 900 (D.C. Cir. 2006). 

That is not an accurate account of the final rule. For one, 

the PHMSA’s estimate of the number of miles of gathering line 

subject to the safety standard “was entirely new.” OwnerOperator Indep. Drivers Ass’n, 494 F.3d at 201. That datum is 

critical, as it determines the number of valves needed to comply 

and hence the cost. More important still, the PHMSA had never 

before exposed its methodological assumption that the analysis 

and data regarding transmission lines would be equally 

applicable to gathering lines. This was not a “minor 

modification used to check or confirm prior analysis.” Id. If the 

PHSMSA thought the information for transmission pipelines 

was valid for gathering lines, then it should have said so in time 

for peer review and public comment. By remaining silent about 

this critical assumption until the final risk assessment, the 

PHMSA sandbagged the advisory committees and the public, 

sidestepping the process of public deliberation required by law.

The PHMSA argues the final rule came as no surprise 

because transmission and regulated gathering lines are treated 

alike by default under preexisting rules. That is beside the 

point. The petitioners do not dispute the rule was a logical 

outgrowth of the proposal; they cheerfully concede they knew 

regulated gathering lines would be regulated unless carved out. 

Their gripe is with the agency’s failure to do an adequate risk 

assessment in time for peer review and public comment. The 

agency may not avoid these “troublesome rulemaking 

procedures . . . simply by announcing its independence in a 

general rule.” United States v. Picciotto, 875 F.2d 345, 347 

(D.C. Cir. 1989).

The PHMSA argues it satisfied the requirements, at least 

for Type A pipelines, because of its longstanding judgment that 
16

Type A lines present “a significant enough risk in certain 

circumstances to warrant the same amount of regulation as 

transmission lines.” 71 Fed. Reg. at 13,296/3. The petitioners 

do not quibble with this general proposition about a similarity 

in risk, and it may have support in the record. Operating at 20% 

of the SMYS may increase the risk of a rupture. See, e.g., 87 

Fed. Reg. at 20,960/2 (“PHMSA is aware of data that would 

indicate that pipelines operating at pressures lower than 20 

percent of SMYS are at less risk of rupturing.”). Hoop stress is 

also related to internal pressure and diameter, which increase 

the rate of gas flow and thus the magnitude of the expected 

harm of a rupture. See Oak Ridge at 8, 11. If a finding that a 

Type A line presents a risk comparable to that of a transmission 

line were enough, then perhaps the PHMSA would be in the 

clear. 

A similarity in risk, operating pressures, or diameters, 

however, does not mean the safety standard is practicable or 

has similar benefits and costs when applied to a different sector 

of the pipeline industry. For example, according to the 

PHMSA’s risk assessment, the cost of the equipment needed to 

comply with the final rule doubles when a pipeline operator 

must upgrade from a manual valve rather than from a valve 

already equipped with an “automating actuator” (a motor or 

equivalent device, which still requires adding a 

communications system to operate a valve remotely or 

automatically). If gathering operators use actuators at a lower 

rate than do transmission operators, then they would face 

greater costs per mile to upgrade their equipment in order to 

comply with the standard, regardless of similarity in risk, 

operating pressure, or diameter.

Finally, the PHMSA argues it actually did say something 

about gathering pipelines in its proposal. Here the PHMSA 

points to a Leak Detection Study, which it cited in the preamble
17

to the proposal, that discusses past accidents in both 

transmission and gathering pipelines. The study expressly says, 

however, it “does not address th[e] issue of shut-off valves.”

David Shaw et al., Leak Detection Study 2-2 (Dec. 2012), 

https://perma.cc/SNG6-6GAQ; see also 87 Fed. Reg. at 

20,945/2–3 (summarizing the report). A report that does not 

address the relevant safety technology is not a starting point for 

a risk assessment of the proposed standard. 

We conclude that, although the PHMSA was required by 

law to identify the costs and benefits of requiring automatic or 

remote-controlled shut-off valves for gathering pipelines in a 

risk assessment of the proposed rule, it did not even attempt to 

do so. By remaining mum, the PHMSA flouted the pipeline 

safety laws and a cardinal rule of administrative law.

D. The PHMSA’s Procedural Error Is Prejudicial

The petitioners have shown the PHMSA erred, but they 

also must show the error is prejudicial to them, as we do not 

right wrongs that make no difference. 5 U.S.C. § 706. To show 

prejudice, the petitioners must raise a credible argument about 

the merits of the rule. Owner-Operator Indep. Drivers Ass’n, 

Inc., 494 F.3d at 202. They need not show the agency, had it 

adhered to the procedural requirements of the law, “would have 

reached a different result.” Chamber of Commerce, 443 F.3d at

905. They need only show they “had something useful to say.”

Id.

We are convinced the petitioners do have something useful 

to say to the PHMSA, and that they raise a credible argument 

on the merits. Indeed, as we explain next, the petitioners have 

shown the final rule was arbitrary and capricious, so they 

necessarily have satisfied their burden of proof. See OwnerOperator Indep. Drivers Ass’n, Inc., 494 F.3d at 202–03
18

(finding the procedural error prejudicial because the petitioners 

also showed the agency did not reasonably explain the analysis 

in the final rule).

E. The PHMSA Failed To Make a Reasoned 

Determination

Apart from following the statutory procedures, the 

PHMSA was ultimately required to show regulating gathering 

pipelines would be “appropriate.” 49 U.S.C. § 60102(b)(2)(B).

To do so reasonably, it had to consider the relevant factors and

explain why regulating gathering pipelines would be 

practicable, and show that the benefits would justify the costs. 

It did not do so.

The PHMSA claims it satisfied its statutory duty by 

asserting in a footnote of the final risk assessment that 

regulated gathering lines are similar to transmission lines “in 

terms of design and operating characteristics, and risks to 

public safety and the environment,” and therefore “similar 

behavior by operators is expected.” It argues we must defer to 

this “general analysis based on informed conjecture.” Chamber 

of Commerce v. SEC, 412 F.3d 133, 142 (D.C. Cir. 2005). 

Because we conclude the PHMSA’s conjecture was not 

“informed,” we do not defer to it.

At best, the record shows regulated gathering lines and 

transmission pipelines pose a comparable risk. As we have 

already explained, however, this does not mean gathering 

pipelines are similar in all important respects. Indeed, the

petitioners point out the PHMSA failed to consider how 

gathering pipelines are different from transmission pipelines in 

a number of other respects. For example, they submit 

declarations with their opening brief stating that regulated 

segments of gathering line are typically short and regulated 
19

only intermittently, which they argue will make compliance far 

more difficult and expensive than the PHMSA recognized. The 

PHMSA never considered this aspect of the problem during the 

rulemaking and never disputed the merits of this argument in 

its brief, so we assume it is true. During oral argument, counsel 

for the PHMSA did say the agency could take these difficulties

into account later because the rule authorizes site-specific 

exemptions when an operator shows compliance is not feasible. 

See 49 C.F.R. §§ 192.179(g); 195.258(e). Because this 

argument would impermissibly shift the burden of proof to the 

petitioners and other operators, we must reject it. 

The operators point to several other differences between 

gathering and transmission lines. They tell us, for example, that 

transmission pipelines are run from “evolved control rooms”

that complement automatic or remote-controlled shut-off 

valves, whereas the gathering sector is made up of smaller 

players that rely more upon on-site personnel. They also tell us 

gas transmission operators behave differently because they are

price-regulated public utilities, while the gas gathering sector 

relies upon market prices to recover costs. Although we cannot 

fully evaluate the importance of these asserted differences 

precisely because the agency failed to develop an adequate

administrative record in time for comment, they surely seem 

relevant to the agency’s decision making, and at a minimum 

show the agency’s procedural error was prejudicial.

The PHMSA concedes there may be a difference in cost. 

In particular, it concedes gathering operators may install 

automatic or remote-controlled shut-off valves at lower rates, 

or not at all. By contrast, many transmission operators already 

install compliant valves, and their high baseline rate of 

compliance means they will incur little additional cost for 

equipment. A lower baseline rate of compliance for gathering 

pipelines, therefore, “could in turn increase compliance costs 
20

for those lines,” as the PHMSA conceded in a footnote to its 

final risk assessment. This would seem a relevant factor as 

well. The PHMSA nonetheless downplayed its significance on 

the ground that few gathering pipelines will be subject to the 

rule, so the increase in the total cost of the final rule will be 

small and, if the baseline rate of compliance is lower for 

gathering lines, then “the benefits of the rulemaking would be 

higher.”

We are not reassured. The relevant question under the law 

is whether the benefits of regulating gathering lines justify the 

costs, and that question cannot be answered by comparing costs 

against costs. As to the “higher” benefits, we would perhaps 

find this assertion more persuasive had the agency made the 

requisite “thorough” assessment of the benefits it claims to 

have made. Far from finding the assessment “thorough,” 

however, we find it inadequate, and conclude the agency failed 

to make a “reasoned determination that the benefits, including 

safety and environmental benefits, of the intended standard 

justify its costs.” 49 U.S.C. § 60102(b)(5).

The risk assessment does not quantify any of the benefits 

of the standard. This is troubling enough, as a reasoned 

decision would explain why any unquantified benefits cannot 

reasonably be quantified. Id. § 60102(b)(2)(D), (b)(5); see also 

Bus. Roundtable v. SEC, 647 F.3d 1144, 1149 (D.C. Cir. 2011) 

(agency “failed adequately to quantify the certain costs or to 

explain why those costs could not be quantified”). Quantifying 

benefits always requires making projections, so it is no answer 

to say “a detailed projection of avoided incidents and avoided 

costs is not available.” The agency even conceded “it could be 

possible [to] estimate the benefit of this rule for hazardous 

pipelines,” and still, it did not do so. Without quantified 

benefits to compare against costs, it is not apparent just how 
21

the agency went about weighing the benefits against the costs. 

49 U.S.C. § 60102(b)(5). 

Even the qualitative discussion of the benefits does not say 

anything about gathering pipelines. The risk assessment relies 

upon estimates of avoided damages modeled in the Oak Ridge 

study but, as mentioned above, that study by its terms does not 

cover gathering pipelines. The PHMSA now argues the same 

results and hypothetical pipeline configuration would be 

representative for gathering pipelines of a similar pressure and 

diameter, but that is not obvious; the study relies upon a 

“hypothetical” pipeline configuration where, among other 

things, “pump stations are located at 100 mile intervals along 

the pipeline.” Oak Ridge at 34, 150. That may be typical of

long-distance transmission pipelines, but it would seem highly 

unusual among gathering pipelines. Be that as it may, the 

agency did not make this point in the administrative record so 

for us to consider it would “contradict[] the foundational 

principle of administrative law that a court may uphold agency 

action only on the grounds that the agency invoked when it 

took the action.” Michigan, 576 U.S. at 758 (citing SEC v. 

Chenery Corp., 318 U.S. 80, 87 (1943)). 

Because the PHMSA invites us to rely upon the estimates 

of avoided damages in the Oak Ridge study, we note two 

additional problems lest the agency overlook them in any

further rulemaking applying the safety standard to gathering 

lines.

First, the avoided damages touted by the agency ignore the 

probability of a rupture. Oak Ridge modeled avoided damages 

“based on the premise that the releases occur (100% failure 

likelihood),” and, to boot, assuming the worst type of rupture—

a “guillotine” break that slices a pipeline, exposing the entire 

diameter of the pipe. Oak Ridge at 34, 150. As Oak Ridge 
22

carefully noted, however, the benefit of the technology is also 

“a function” of the “probability of failure,” and the probability 

of a rupture, let alone the worst type of rupture, “is low.” Id. at 

33. In order to identify the expected benefits of avoiding a 

rupture, a rational analysis would have to consider the 

probability of a rupture, not just the magnitude of the harm 

avoided. Cf. Cass Sunstein, Worst-Case Scenarios 2 (2007) 

(“People who are sensible, or even sane, do not treat a 1 percent 

risk of loss the same as a certainty of a loss.”). The agency

keeps detailed data on the frequency of pipeline accidents, so 

the limitations of the Oak Ridge study do not excuse the 

agency’s failure to consider the low probability of a rupture

when reporting avoided costs.

Second, and more important still, the study does not help 

justify the standard for gas gathering pipelines. Far from it. 

According to Oak Ridge, the cost-benefit ratio for automatic or 

remote-controlled shut-off valves on gas pipelines is generally 

“negative” because most of the severe damage from a gas fire 

happens “before valve closure can isolate the damaged pipeline 

and begin limiting the amount of natural gas that escapes and 

burns.” Oak Ridge at 181. Even assuming the worst type of 

rupture occurs with certainty, id. at 34, Oak Ridge found no net 

safety benefit in any scenarios it modeled for a gas pipeline 

(even for a high-pressure, large-diameter gas transmission 

pipeline located in a densely populated area) unless the valves 

close within “10 minutes or less after the break.” Id. at 184. 

The final rule gives operators 30 minutes to close the 

valves “measured from an operator’s identification of a rupture 

after notification of a potential rupture,” which may be well 

after the rupture occurred. 68 Fed. Reg. at 20,941/3, codified at

49 C.F.R. § 192.636(b). As the PHMSA itself observed, 

“potential property damages are likely to be largely complete 

before the 30-minute limit.” The PHMSA says it expects 
23

operators will overcomply, but it does not explain why or by 

how much, or whether they will usually be able to shut off 

valves within 10 minutes after a break. Therefore, even if the 

results of the Oak Ridge study applied to gathering pipelines, 

the agency fails adequately to explain why the study supports 

the agency’s position on the merits. 

Considering asserted differences between transmission 

and gathering pipelines with respect to their operations and the 

cost of compliance; the PHMSA’s failure to quantify any 

benefits; its weak qualitative analysis; and the record as a 

whole, we conclude the agency has not reasonably explained 

why the rule is appropriate for gathering pipelines. 

F. The Remedy Is a Limited Vacatur

That leaves the question of remedy. The petitioners argue 

for vacatur of the rule only as it applies to gathering pipelines. 

The PHMSA agrees with the proposed remedy, asking us, 

should we find a prejudicial error, to “sever the portion of the 

rule applicable to transmission lines and vacate the rule only as 

applied to gathering lines.” Although the text of the final rule 

is not divisible in this way, we may “invalidate only some 

applications even of indivisible text.” Nat. Res. Def. Council v. 

Wheeler, 955 F.3d 68, 81 (D.C. Cir. 2020). We therefore vacate 

the rule in its entirety as it applies to gathering pipeline 

facilities. 

III. Conclusion

As the Supreme Court has said, “the Government should 

turn square corners in dealing with the people.” Dep’t of 

Homeland Sec. v. Regents of the Univ. of Cal., 140 S. Ct. 1891, 

1909 (2020). The PHMSA did not turn square corners here. It 

cut corners to the prejudice of the petitioners, the 
24

administrative process, and thus the public. We therefore grant 

the petition for review and vacate the final rule as it applies to 

gathering pipeline facilities. 

So ordered.