Document ID: PHMSA-2008-0186-0003
Agency: phmsa
Document Type: Notice
Title: Pipeline Safety: Applying Safety Regulation to All Rural Onshore Hazardous Liquid Low-Stress Lines
Posted Date: 2010-06-22T04:00Z

[Federal Register: June 22, 2010 (Volume 75, Number 119)]
[Proposed Rules]               
[Page 35366-35375]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22jn10-21]                         

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 195

[Docket PHMSA-2008-0186]
RIN 2137-AE36

 
Pipeline Safety: Applying Safety Regulation to All Rural Onshore 
Hazardous Liquid Low-Stress Lines

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

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: PHMSA is proposing to amend its pipeline safety regulations to 
apply safety regulations to rural low-stress hazardous liquid pipelines 
that are not covered by safety regulations in 49 CFR Part 195. This 
change complies with a mandate in the Pipeline Inspection, Protection, 
Enforcement, and Safety Act of 2006 (PIPES Act).

DATES: Anyone interested in filing written comments on this Notice of 
Proposed Rulemaking (NPRM) must do so by August 23, 2010. PHMSA will 
consider late comments filed so far as practical.

ADDRESSES: Comments should reference Docket No. PHMSA-2008-0186 and may 
be submitted in the following ways:
     E-Gov Web site: http://www.regulations.gov. This Web site 
allows the public to enter comments on any Federal Register notice 
issued by any agency. Follow the instructions for submitting comments.
     Fax: 1-202-493-2251.
     Mail: DOT Docket Management System: U.S. Department of 
Transportation, Docket Operations, M-30, West Building Ground Floor, 
Room W12-140, 1200 New Jersey Avenue, SE., Washington DC, 20590-0001.
     Hand Delivery: DOT Docket Management System; West Building 
Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 
20590-0001 between 9 a.m. and 5 p.m., Monday through Friday, except 
Federal holidays.
    Instructions: You should identify the Docket ID PHMSA-2008-0186 at 
the beginning of your comments. If you submit your comments by mail, 
submit two copies. To receive confirmation that PHMSA received your 
comments, include a self-addressed stamped postcard. Internet users may 
submit comments at http://www.regulations.gov. Note: Comments are 
posted without changes or edits to http://www.regulations.gov, 
including any personal information provided. There is a privacy 
statement published on http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: For technical contents of the NPRM 
contact Mike Israni by phone at 202-366-4571 or by e-mail at 
Mike.Israni@dot.gov. For all other information contact Tewabe Asebe by 
phone at 202-366-4595 or by e-mail at tewabe.asebe@dot.gov.

SUPPLEMENTARY INFORMATION: Until 2008, unless a rural low-stress 
pipeline crossed a commercially navigable waterway, a hazardous liquid 
pipeline operating at low-stress in a rural area was not regulated 
under Federal pipeline safety regulations in 49 CFR Part 195. Section 
195.2 defines a ``rural area'' as outside the limits of any 
incorporated or unincorporated city, town, village, or any other 
designated residential or commercial area, such as a subdivision, a 
business or shopping center, or community development.
    Because of the potential environmental damage a release from these 
lines could pose, in 2006, PHMSA issued a NPRM (71 FR 52504), proposing 
to apply a threat-focused set of safety requirements to larger-diameter 
(8 \5/8\-inches or greater) rural onshore hazardous liquid low-stress 
pipelines located in or within a quarter mile of an ``unusually 
sensitive area (USA).'' USAs are defined in Sec.  195.6 as drinking 
water or other ecological resources that are unusually sensitive to 
environmental damage from a hazardous liquid pipeline release.
    The Pipeline Inspection, Protection, Enforcement, and Safety Act of 
2006 (PIPES Act), was signed into law on December 29, 2006, (Pub. L. 
109-468). Section four of the PIPES Act (codified at 49 U.S.C. 
60102(k)) requires PHMSA to ``issue regulations subjecting low-stress 
hazardous liquid pipelines to the same standards and regulations as 
other hazardous liquid pipelines.'' The Act also provides the new 
regulations could be issued in phases.
    The threat-focused set of requirements PHMSA proposed in the 2006 
NPRM, although drawn from Part 195, would not have satisfied the ``same 
standards and regulations'' requirement in the PIPES Act. PHMSA 
concluded it would be inefficient to finalize that proposal and then 
later impose the rest of the Part 195 requirements.

Implementation of the PIPES Act Mandate

    PHMSA decided to implement the PIPES Act mandate in phases, in part 
because PHMSA did not have complete data on the extent of rural low-
stress

[[Page 35367]]

pipelines that would be covered by the statutory mandate. Phase one 
applied full Part 195 regulation to the higher-risk, larger-diameter 
rural low-stress pipelines (i.e., those low-stress pipelines with a 
diameter of 8\5/8\-inches or greater located in or within one-half mile 
of an unusually sensitive area). These are the rural low-stress 
pipelines that have more potential to cause harm to unusually sensitive 
areas. These were also the rural low-stress pipelines on which PHMSA 
had the most information to prepare a regulatory cost/benefit 
evaluation.
    Once PHMSA had more complete information on the extent of 
unregulated rural low-stress pipelines, phase two would regulate all 
smaller-diameter (less than 8\5/8\-inches diameter) rural low-stress 
pipelines located in or within one-half mile of a USA and all rural 
low-stress pipelines of any diameter located outside the one-half mile 
USA buffer.
    PHMSA presented its plan for phased rulemaking to the Technical 
Hazardous Liquid Pipeline Safety Standards Committee (THLPSSC) \1\ in 
January 2007. PHMSA explained that this phased approach would bring the 
higher-risk pipelines under immediate regulation while PHMSA gathered 
more comprehensive data for later rulemaking concerning the lower-risk 
unregulated rural low-stress pipelines.
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    \1\ The THLPSSC is a statutorily mandated advisory committee 
that advises PHMSA about the technical feasibility, reasonableness 
and cost-effectiveness of its proposed regulations. The committee 
includes representatives of the pipeline industry, government 
regulators, and the public. PHMSA must submit all new regulations 
affecting hazardous liquid pipelines to this Committee for peer 
review before the rules can be published.
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Phase One

    To implement phase one, in 2007 PHMSA modified its 2006 NPRM via a 
supplemental notice of proposed rulemaking (SNPRM) (72 FR 28008) that 
proposed to apply all Part 195 requirements to any rural onshore 
pipeline with a nominal diameter of 8\5/8\ inches or more and located 
in or within one-half mile of a USA. The SNPRM also proposed to apply 
reporting requirements in Subpart B of Part 195 to all rural low-stress 
pipelines. This data was necessary for PHMSA to complete the regulatory 
evaluation for the extension of all safety requirements to the 
remaining rural low-stress pipelines in phase two. PHMSA published the 
final rule on June 3, 2008 (73 FR 31634), which finalized the proposed 
requirements.

Surveys

    Because PHMSA did not have adequate information on the number of 
operators with rural low-stress pipelines, or on the total mileage of 
these lines in service, we initiated the following actions:
    (1) We revised the Pipeline Safety Regulations to require operators 
of any low-stress line (including those rural low-stress lines not 
brought under safety regulation) to comply with the annual reporting 
requirements and the incident reporting requirements of Part 195.
    (2) On July 31, 2008 (73 FR 44800), OMB Control Number 2137-0623, 
PHMSA published in the Federal Register a notice of OMB-approved survey 
asking each operator of a rural low-stress hazardous liquid pipeline 
for voluntary information concerning the mileage and characteristics of 
these pipelines to assess the costs of subjecting rural low-stress 
pipeline mileage to Part 195 regulation.
    (3) Based on the information received in response to the notice, 
PHMSA conducted two follow-up inquiries: (1) A request for information 
from operators who operate rural low-stress lines to determine the 
potential operating costs they were likely to incur to bring these 
unregulated lines into compliance with Part 195 regulation; and (2) 
Asked States with the majority of rural low-stress lines to identify 
any incident data the State may have collected through the years.

Phase Two

    With the information PHMSA gathered, we are now moving to phase two 
to complete the requirement of the PIPES Act. In phase two, PHMSA is 
proposing to apply Part 195 safety requirements to all rural low-stress 
pipelines not included in the phase one rule. Thus, the pipelines 
addressed by this proposed rule are those rural low-stress pipelines of 
any diameter located more than one-half mile from a USA and those less 
than 8\5/8\ inches in diameter located within one-half mile of a USA.
    This phased approach results in the following distinct groups of 
rural low-stress pipelines:
     Rural low-stress pipelines that cross navigable waterways. 
These are already subject to the safety requirements of Part 195. These 
pipelines are not affected by this rulemaking.
     Rural low-stress pipelines 8\5/8\ inches or greater in 
diameter that are located in or within one-half mile of a USA. The 
requirements of Part 195 were made applicable to these rural pipelines 
in the phase one rule.
     Rural pipelines less than 8\5/8\ inches in diameter that 
are located within one-half mile of a USA.
     Rural low-stress pipelines of any diameter that are 
located more than one-half mile from a USA.
    To implement the compliance dates and requirements for these 
different groups, we are proposing to define several ``categories'' of 
rural low-stress pipelines. These are as follows:
     Category 1: Those rural low-stress pipelines that were 
covered under the phase one rule;
     Category 2: Rural low-stress pipelines of smaller diameter 
(less than 8\5/8\ inches diameter) located in or within one-half mile 
of a USA; and
     Category 3: All other rural low-stress pipelines that were 
not included in phase one.
    This NPRM would retain the compliance deadlines established in 
phase one for Category 1 pipelines. It would subject Category 2 
pipelines to the same Part 195 requirements as those made applicable to 
Category 1 pipelines in phase one but with different compliance 
deadlines. PHMSA also proposes to apply all requirements of Part 195 to 
Category 3 pipelines except for the integrity management requirements 
of Sec.  195.452.
    The phase one rule established a number of compliance deadlines for 
the rural pipelines it addressed. These deadlines varied from 
relatively near term (e.g., identifying all pipeline segments subject 
to the phase one rule by April 3, 2009) to long term (e.g., completing 
baseline integrity management assessments by July 3, 2015). We intend 
to retain these deadlines in the regulations, while establishing new 
compliance deadlines for those rural low-stress pipelines we are 
covering in this phase two NPRM.

Integrity Management

    Section 195.452 addresses integrity management (IM) requirements 
for hazardous liquid pipelines. Operators must identify each pipeline 
segment that could affect a high consequence area (HCA). PHMSA has 
defined HCAs as populated areas, commercially navigable waterways and 
USAs. HCAs are identified and displayed on maps available from the 
National Pipeline Mapping System.
    To comply with IM requirements, pipeline operators must first 
determine which segments of their pipeline could affect an HCA. To do 
this, an operator needs to compare its pipeline's location to the 
locations of HCAs and determine which segments of the pipeline could 
affect an HCA if there were a product release from the segment. These

[[Page 35368]]

comparisons have proven to be considerably more burdensome in practice 
than PHMSA believed when IM rules were initially established. They 
involve more than just comparison of maps of pipeline location to maps 
of HCAs. Operators have had to consider the topography and nature of 
ground cover around their pipelines to estimate the direction and 
distance that released product might flow. Operators have also had to 
consider the potential transport of released product via nearby 
waterways, including such factors as seasonal variations in flow, the 
effect of stream turbulence, and their ability to respond to a release 
and contain further transport of spilled product.
    During the Phase one rulemaking for rural low-stress pipelines, 
PHMSA concluded it would be unnecessarily burdensome to require 
operators of these pipelines to perform a complete ``could affect'' 
analysis to determine which rural low-stress pipeline segments would be 
subject to IM requirements. Rather, PHMSA adopted a one-half mile 
buffer around USAs \2\ as the ``could affect'' area (i.e., any rural 
low-stress pipeline segment within the one-half mile buffer would be 
subject to IM requirements). PHMSA found it unlikely a ``could affect'' 
analysis on a rural low-stress pipeline would result in a larger area 
than the one-half mile buffer for application of IM requirements. 
Available data showed that the largest spill on land from a low-stress 
line traveled no more than two acres from the site of failure. This 
data, coupled with the relatively lower pressure of low-stress 
pipelines, led PHMSA to conclude that a one-half mile buffer was more 
than adequate for application of IM requirements. The majority of 
representatives on the THLPSSC agreed with this approach.
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    \2\ The other component of HCAs, populated areas, was not 
affected by the Phase One rulemaking and is not affected by this 
NPRM since pipelines in populated areas are not, by definition, in 
``rural areas'' and are already regulated.
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    For phase two, PHMSA remains confident that the one-half mile 
buffer continues to be an adequate ``could affect'' area that 
identifies the vast majority (if not all) of rural low-stress pipelines 
that could affect a USA. The smaller-diameter pipelines to which we 
propose to apply integrity management regulation in this phase usually 
release a smaller amount of product in a failure, which travels a 
shorter distance within the environment than would the larger quantity 
released from larger-diameter pipelines.
    As in phase one, PHMSA has included an option for pipeline 
operators to use ``could affect'' analyses in lieu of the one-half mile 
buffer to determine which of their smaller-diameter low-stress 
pipelines would be subject to IM requirements. PHMSA recognizes that 
operators could use this option in circumstances where it is likely the 
``could affect'' analysis would determine that a pipeline segment 
cannot affect a USA (e.g., where the USA is uphill from the pipeline). 
PHMSA concludes it would be unreasonable to exclude this option for 
rural low-stress pipelines, since it can identify instances in which 
application of IM requirements would be unnecessary.
    This NPRM includes, as did the phase one rule, a provision 
addressing newly identified USAs. Such new USAs could result in 
additional pipeline segments meeting criteria for Category 1 or 2 rural 
low-stress pipelines and thus become subject to IM requirements.
    This NPRM would require that pipeline segments identified as 
Category 1 or 2 continue to meet the requirements applicable to those 
categories even if the boundaries of a USA are redefined so that the 
pipeline segment (or portion thereof) is no longer within one-half mile 
of the USA unless the operator determines that the segment could not 
affect the USA. This provision adds no additional burden because 
pipeline operators may simply continue to treat their pipelines as they 
would have without the redefinition of USA boundaries.

Economic Burden

    The phase one rule allowed operators of pipelines meeting specified 
criteria to notify PHMSA if they would incur an excessive economic 
burden in complying with the integrity management assessment 
requirements. The criteria were designed for rural pipelines that carry 
oil from a production facility and where the pipeline would be 
abandoned or shut down as a result of the economic burden associated 
with IM assessments. The phase one rule provides that PHMSA will stay 
compliance with the integrity management assessment requirements while 
it reviews the notification. Based on the outcome of the review, PHMSA 
may grant the operator a special permit imposing alternative safety 
requirements in lieu of an assessment.
    For phase two, PHMSA considered extending the economic compliance 
burden provision to Category 2 pipelines--those smaller diameter rural 
low-stress pipelines located in or within one-half mile of a USA that 
would be under IM regulation. Category 3 low-stress pipelines are not 
subject to the IM requirements. However, PHMSA concluded that this was 
not necessary because no Category 2 low-stress pipeline would meet the 
criteria in the economic burden compliance provision of current Sec.  
195.12(c) and that concerns about preserving oil production or 
minimizing risk of alternative transport of crude oil from wells do not 
apply to these pipelines. PHMSA's reasoning is based on the definition 
of ``gathering line'' in Sec.  195.2. That Section defines any 
``pipeline 219.1 mm (8\5/8\ inch) or less nominal outside diameter that 
transports petroleum from a production facility'' as a gathering line. 
Gathering lines are not subject to the provisions of Sec.  195.12.
    Instead, requirements applicable to regulated gathering lines are 
found in Sec.  195.11, and do not include IM requirements. As a result, 
no low-stress pipeline of 8\5/8\ inch or less nominal diameter that 
carries crude oil from a production facility is subject to IM 
requirements, and it is not necessary to provide an economic burden 
provision for these pipelines to ameliorate unintended impacts on 
production. PHMSA invites comment on this reasoning and whether it is 
necessary to provide an economic compliance burden provision applicable 
to Category 2 low-stress pipelines similar to that included for those 
in Category 1.

Proposed Rule

    The NPRM would revise 49 CFR Part 195 to cover rural onshore low-
stress pipelines with a diameter smaller than 8\5/8\ inches located in 
or within one-half mile of a USA and rural onshore low-stress pipelines 
of any diameter located outside the one-half mile buffer from a USA.

Section-by-Section Analysis

Section 195.1 Which pipelines are covered by this Part?

    Section 195.1 has been revised numerous times over the years to 
include changes to the pipelines covered or excluded from the scope of 
Part 195. Section 195.1 was revised in the phase one rule to provide 
more clarity and to include the phase one rural low-stress pipelines 
within the scope of Part 195. PHMSA is proposing to revise Sections 
195.1(a) and (b) to include the rural low-stress pipelines we are 
proposing to bring under Part 195 regulations in phase two. With the 
exception of the phase two pipelines we are proposing to now regulate, 
this NPRM is not changing any of the other covered or excluded 
pipelines in this Part.
    PHMSA is also proposing to correct an inadvertent error to Sec.  
195.1 that was

[[Page 35369]]

adopted under the phase one rule. The error concerns the long standing 
exception for low-stress pipelines subject to the regulations of the 
U.S. Coast Guard. Under the phase one rule, Sec.  195.1 was incorrectly 
revised to state that Part 195 does not apply to any pipeline subject 
to the safety regulations of the U.S. Coast Guard. In this NPRM, we are 
correcting Sec.  195.1 to state that Part 195 does not apply to any 
low-stress pipeline subject to the safety regulations of the U.S. Coast 
Guard.

Section 195.12 What requirements apply to low-stress pipelines in rural 
areas?

    This Section is being revised to clarify that all previously 
unregulated low-stress pipelines in rural areas are now covered under 
Part 195 regulation. This Section does not apply to rural low-stress 
pipelines that cross a waterway used for commercial navigation because 
they are already regulated under Part 195.
    PHMSA proposes to revise this Section to define three categories of 
rural low-stress pipelines (proposed Section 195.12(b)). Category 1 
lines are those that were regulated in phase one (i.e., rural low-
stress pipelines with a diameter of 8\5/8\ inches or more located in or 
within one-half mile of a USA). Category 2 pipelines would be those 
rural low-stress pipelines of smaller diameter (less than 8\5/8\ inches 
in diameter) located in or within one-half mile of a USA. Category 3 
would be all remaining rural low-stress pipelines except for those that 
cross navigable waterways (which are already regulated).
    Section 195.12(c) would set forth the proposed requirements and 
compliance dates for each category of pipeline. The requirements for 
Category 1 rural low-stress pipelines are not affected. Operators of 
Category 2 rural low-stress pipelines would have to comply with all 
requirements of Part 195, including IM requirements. Operators of 
Category 3 rural low-stress pipelines would be required to comply with 
all requirements of Part 195 except IM requirements.
    Proposed Section 195.12(c) also sets forth the proposed timetables 
for compliance with various portions of Part 195. The compliance 
deadlines established by the phase one final rule for Category 1 rural 
low-stress pipelines remain unchanged. Except for the compliance 
deadlines for the completion of the baseline assessments, we are 
proposing to establish deadlines for Category 2 and Category 3 rural 
low-stress pipelines in this NPRM by applying the same criteria to 
Category 2 and Category 3 rural low-stress pipelines that we applied to 
Category 1. For example, if we required a Category 1 operator to comply 
with a requirement within 12 months of the effective date of the phase 
one final rule, we are proposing the same 12-month time frame for an 
operator of a Category 2 or Category 3 rural low-stress pipeline. In 
phase one, PHMSA adopted compliance dates of seven years and 3\1/2\ 
years, respectively, for the completion of the baseline assessments. 
PHMSA believes that it is appropriate to reduce the compliance 
deadlines for these requirements considering the amount of time that 
has transpired since the passage of the PIPES Act and the relatively 
small number of miles that would be subject to these requirements. 
Thus, we are proposing that operators of Category 2 pipelines complete 
all baseline assessments within five years of the effective date of the 
final rule and that at least 50 percent of the assessments be completed 
within 30 months of the effective date of the final rule.
    PHMSA established the proposed compliance deadlines for Category 2 
and Category 3 pipelines using our judgment on how long it would take 
an operator to implement the requirements without imposing undue 
burden. PHMSA welcomes comment on whether the proposed time frames 
achieve that goal.
    As discussed above, PHMSA did not change the provision allowing 
operators of some Category 1 rural low-stress pipelines to notify PHMSA 
if they conclude that implementing the IM assessment requirements would 
pose such an economic burden that they would abandon their pipelines. 
This provision continues to be limited to Category 1 rural low-stress 
pipelines carrying crude oil from production facilities and where 
shutdown of the pipeline would cause loss of oil supply or a transition 
to truck transportation. PHMSA (with assistance from DOE, as 
appropriate) will review notifications and, if justified, may grant the 
operator a special permit to allow continued operation of the pipeline 
subject to alternative safety requirements. We would like comment on 
whether this provision should be extended to Category 2 pipelines 
meeting the same criteria.

Section 195.48 Scope

    This Section was added in the phase one final rule. There had not 
previously been a scope Section in Subpart B because all pipelines 
subject to Part 195 were subject to all the reporting requirements in 
Subpart B. This Section was added in phase one because the reporting 
requirements of Subpart B were made applicable to all rural low-stress 
pipelines, even those not subject to the technical requirements of the 
phase one rule. Operators of those rural low-stress pipelines not 
subject to the technical requirements of Part 195 under phase one were 
not required to complete those portions of the annual report form that 
relate to integrity management requirements and inspections.
    With this NPRM, all rural low-stress pipelines are now subject to 
all requirements of Part 195, except that Category 3 pipelines are not 
subject to the IM requirements in Sec.  195.452. The exclusion of 
portions of the annual report form related to IM has therefore been 
modified to apply only to operators of Category 3 pipelines.

Regulatory Analyses and Notices

Executive Order 12866 and DOT Policies and Procedures

    PHMSA considers this NPRM a non-significant regulatory action under 
Section 3(f) of Executive Order 12866 (58 FR 51735; Oct. 4, 1993). The 
NPRM is also non-significant under DOT regulatory policies and 
procedures (44 FR 11034: February 26, 1979). PHMSA has prepared a 
preliminary Regulatory Evaluation, a copy of which has been placed in 
the docket.
    This NPRM affects those rural low- stress pipelines of any diameter 
that are more than one-half mile outside a USA and rural low-stress 
pipelines less than 8\5/8\ inches in diameter that are located in or 
within one-half mile of a USA. The following table presents the 
estimates for the mileage affected by this proposed rulemaking:
     Phase Two Eligible Mileage

------------------------------------------------------------------------
                                           Miles inside    Miles outside
            Pipeline diameter                   USA             USA
------------------------------------------------------------------------
< 8\5/8\''..............................           100.5           443.2
>= 8\5/8\''.............................  ..............           840.6
------------------------------------------------------------------------

    Four sources of mileage data that provide varying levels of detail 
were analyzed to derive these final mileage estimates:
     The Regulatory Analysis for the low-stress I final rule by 
PHMSA published in August 2006.
     A survey of operators of low-stress pipelines.
     The annual mileage data pipeline operators report to 
PHMSA.
     Mileage estimates reported to the National Pipeline 
Mapping System (NPMS).
    The estimate of 5,624 miles of rural low-stress pipeline made in 
the phase

[[Page 35370]]

one regulatory analysis appears to be a high-end estimate. The results 
of the survey PHMSA conducted identifies 1,575 miles and the NPMS 
reports 1,672.9 miles, with the NPMS data excluding both intra-plant 
miles and lines regulated in phase one. The PHMSA annual report 
database includes 1,536 newly reported low-stress rural miles. Since 
the data collected in the survey includes a variety of other 
information used in this analysis, including characteristics of the 
reported mileage, it is used for phase two rural low-stress pipeline 
mileage estimates. Distribution percentages and assumptions relating to 
the three phase two rural low-stress pipeline segments result in a 
slightly lower estimate of miles than the original estimate that 
resulted from the survey data. This final estimate is approximately 
1,384 miles of eligible rural low-stress pipeline.

Costs of the Regulation

    PHMSA estimates the 30-year net present values \3\ of compliance 
costs for this NPRM to be $104.9 million. The operators of the 
pipelines affected by the regulatory changes included in the NPRM are 
expected to incur costs attributable to those changes. The costs of the 
rulemaking will be those associated with bringing the affected 
pipelines into compliance with Part 195, which has the following eight 
Subparts:
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    \3\ A 2.7 real discount rate is applied as suggested by OMB 
Circular No. A-94 for 30-year net present values.
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     Subpart A--General
     Subpart B--Annual, Accident, and Safety-Related Condition 
Reporting
     Subpart C--Design Requirements
     Subpart D--Construction
     Subpart E--Pressure Testing
     Subpart F--Operation and Maintenance
     Subpart G--Qualification of Pipeline Personnel
     Subpart H--Corrosion Control
    In addition, the low-stress pipelines brought under Part 195 would 
also need to comply with 49 CFR Part 199, the alcohol and drug testing 
requirements.

Benefits of the Regulation

    The 30-year net present value of benefits of this NPRM is $326.5 
million. PHMSA expects the proposed regulatory changes to reduce the 
number of incidents and the incident costs and consequences. The 
ability of the NPRM to reduce or avoid these costs is considered to be 
the primary benefit of the regulation and is referred to as traditional 
benefits. Data on incident costs for rural low-stress pipelines are 
generally not available because PHMSA has not regulated these pipelines 
in the past. Moreover, the reduction in costs that the regulation would 
cause is also unknown. The final 30-year net present value of benefits 
of this NPRM is $326.5 million.
    This NPRM also may produce benefits by preventing disruptions in 
the fuel supply caused by pipeline failures. Any interruption in the 
fuel supply impacts the U.S. economy by putting upward pressure on the 
prices paid by businesses and consumers, as recent incidents on Alaskan 
low-stress pipelines feeding major petroleum trunk lines have 
illustrated. Supply disruptions also have national security 
implications because they increase dependence on foreign sources of 
oil.

Regulatory Flexibility Act

    The Regulatory Flexibility Act of 1980, as amended, requires 
Federal agencies to conduct a separate analysis of the economic impact 
of rules on small entities. The Regulatory Flexibility Act requires 
that Federal agencies take small entities' concerns into account when 
developing, writing, publicizing, promulgating, and enforcing 
regulations.

Need for the Proposed Rule

    This NPRM covers certain rural onshore low-stress hazardous liquid 
pipelines. Beginning in 1991, Congress paid greater attention to the 
risks that hazardous liquid and natural gas pipelines pose to the 
environment. In the Pipeline Safety Act of 1992 (Pub. L. 102-508), 
Congress gave DOT greater authority to protect the environment from 
risks that pipelines pose. Congress continued to emphasize the need to 
better protect the environment from the risks pipelines pose in the 
Accountable Pipeline Safety and Partnership Act of 1996 (Pub. L. 104-
304). With the PIPES Act of 2006 (Pub. L. 109-468), Congress went 
further and instructed DOT to apply all Part 195 requirements to 
unregulated rural low-stress pipelines.
    PHMSA decided to apply Part 195 requirements to rural low-stress 
pipelines as a two-phase process. The phase one rulemaking covered 
large diameter pipe (greater than or equal to 8\5/8\ inches in 
diameter) located in or within one-half mile of a USA. These were the 
higher risk rural low-stress pipelines. The second phase, which is 
covered by this NPRM, covers the remaining unregulated onshore rural 
low-stress pipelines. This includes small diameter (less than 8\5/8\ 
inches diameter) pipeline in or within one-half mile of a USA, and any 
diameter rural low-stress pipeline not within one-half mile of a USA.

Description of Actions

    PHMSA is bringing the remaining rural onshore low-stress pipelines 
not regulated by phase one under the safety regulation of 49 CFR Part 
195. These lines include rural low-stress pipelines with a diameter of 
less than 8\5/8\ inches that are within one-half mile of a USA and 
rural low-stress pipelines of any size diameter that are outside of the 
one-half mile USA buffer.

Related Federal Rules and Regulations

    There are currently no related rules or regulations issued by other 
department or agencies of the Federal Government.

Identification of Potentially Affected Small Entities

    In accordance with size standards published by the Small Business 
Administration, a pipeline transportation business with 1,500 or fewer 
employees is considered a small entity.\4\ Depending on the products 
being transported, low-stress pipeline operators belong to the North 
American Industry Classification System Code (NAICS) 486110, Pipeline 
Transportation of Crude Oil, or NAICS 486910, and Pipeline 
Transportation of Refined Petroleum Products. For both NAICS codes, a 
business with 1,500 or fewer employees is considered a small entity.
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    \4\ U.S. Small Business Administration ``Table of Small Business 
Size Standards Matched to North American Industry Classification 
System Codes. August 22, 2008. http://www.sba.gov/idc/groups/public/
documents/sba_homepage/serv_sstd_tablepdf.pdf.
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    PHMSA made an extensive effort to identify small and other 
operators of rural low-stress lines. PHMSA surveyed these operators to 
get better information about the number of miles and compliance costs 
of rural hazardous liquid low-stress pipelines.
    To ensure that the response rate was maximized, PHMSA publicized 
its plans to conduct the survey in (1) a 60-day Federal Register (FR) 
notice published on September 6, 2006, (71 FR 52504) and (2) a 30-day 
FR notice published on September 7, 2007, (72 FR 51489). No comments 
were submitted to either notice. PHMSA then announced the availability 
of the survey in a FR notice published on July 31, 2008, (73 FR 44800).
    PHMSA delivered the survey and a letter explaining the importance 
of the study via three methods:
    1. A version of the survey that allowed operators to directly input 
responses was posted on the PHMSA

[[Page 35371]]

OPS Online Data Entry Web site (ODES). An e-mail announcing the survey 
was sent to the contact person responsible for each company's most 
recent annual report submission.
    2. Respondents were also able to print an electronic version of the 
survey directly from the e-mail received and mail or fax a completed 
hard copy to the Volpe National Transportation Systems Center (Volpe 
Center).
    3. Finally, in an effort to reach companies that currently operate 
unregulated pipelines exclusively, PHMSA and the Volpe Center worked 
with the American Petroleum Institute, the Association of Oil Pipelines 
and the Independent Petroleum Association of America to announce and 
distribute the survey to their members via their e-mail newsletters.
    Of the 112 operators that responded, 21 reported rural low-stress 
pipeline mileage. PHMSA then conducted additional follow-up with these 
operators. Only 12 of the 20 operators were identified as actually 
having low-stress pipeline mileage eligible for the Phase 2 rulemaking. 
Information on these companies was collected from a compilation of Dun 
& Bradstreet data purchased by PHMSA, online company profiles and 
direct phone calls. The enterprise name, number of employees, revenues, 
profits, compliance costs and affected mileage are listed in Exhibit 5-
1.
[GRAPHIC] [TIFF OMITTED] TP22JN10.004

    Exhibit 5-1 shows that three of the 11 enterprises fall under 1,500 
employees and are thus considered small entities. The cost estimation 
analysis, described in the Regulatory Analysis, concluded that the low-
stress mileage held by two of these operators is already in compliance 
with Part 195. Therefore, these two small entities will not be 
adversely affected by the rulemaking. The other small entity, which has 
four miles of affected low-stress mileage, reports an initial 
compliance cost of $475,000 and recurring costs of $100,000 every five 
years.

Alternate Proposals for Small Businesses

    The Regulatory Flexibility Act directs agencies to establish 
exceptions and differing compliance standards for small businesses, 
where it is possible to do so, and still meet the objectives of 
applicable regulatory statutes.
    The phase two Regulatory Analysis analyzes six regulatory 
alternatives. They are as follows:
    Alternative 1: Apply all Part 195 Requirements to All Eligible 
rural low-stress pipelines.
    Alternative 2: Apply all Part 195 Requirements to Small Diameter 
rural low-stress pipelines located in or within one-half mile of a USA.
    Alternative 3: Apply all Part 195 requirements to rural low-stress 
pipelines equal to or greater than 8\5/8\ inches in diameter located 
farther than one-half mile from a USA.
    Alternative 4: Apply all Part 195 requirements to rural low-stress 
pipelines less than 8\5/8\ inches in diameter outside one-half mile of 
a USA.
    Alternative 5: Apply all Part 195 requirements except Subpart H to 
all rural low-stress pipelines not currently regulated.
    Alternative 6: Apply all Part 195 requirements except the Integrity 
Management Program to all rural low-stress pipelines not currently 
regulated.
    All six alternatives generate a benefit greater than the compliance 
cost. If the proposed Alternative 1, which regulates all eligible rural 
low-stress pipelines, is a significant economic burden to the small 
operator identified in the survey or to any other small entity not 
identified in this Regulatory Flexibility Analysis, PHMSA can consider 
applying one of the other five alternatives to small businesses to 
reduce compliance costs. Alternatives 5 and 6 are designed to eliminate 
the compliance costs associated with Subpart H (Corrosion Control 
Programs) and the Integrity Management Program (IMP). A significant 
portion of the small company's initial costs and all of its recurring 
costs is associated with the

[[Page 35372]]

IMP. Therefore, Alternative 6 may be a viable requirement for such 
operators.
    Alternative 1 is the alternative that PHMSA has selected. This 
alternative not only complies with the statutory requirement but also 
increases the level of safety associated with the transportation of 
hazardous liquids through low-stress pipelines to a level commensurate 
with other pipelines that are already subject to the pipeline safety 
regulations.

Conclusion

    From the information we have gathered, this NPRM will have an 
economic impact on one known small entity. Therefore, under Section 605 
of the Regulatory Flexibility Act, this NPRM will not have a 
significant impact on a substantial number of small entities.

Executive Order 13175

    PHMSA has analyzed this NPRM according to the principles and 
criteria in Executive Order 13175, ``Consultation and Coordination with 
Indian Tribal Governments.'' Because this NPPRM would not significantly 
or uniquely affect the communities of the Indian tribal governments or 
impose substantial direct compliance costs, the funding and 
consultation requirements of Executive Order 13175 do not apply.

Paperwork Reduction Act

    Pursuant to 5 CFR 1320.8(d), PHMSA is required to provide 
interested members of the public and affected agencies with an 
opportunity to comment on information collection and recordkeeping 
requests. This proposed rule identifies several information collection 
requests that PHMSA will submit to the Office of Management and Budget 
(OMB) for approval based on the requirements in this proposed rule. 
These information collections are contained in the pipeline safety 
regulations, 49 CFR Parts 190-199.
    PHMSA has developed revised burden estimates to reflect changes in 
this proposed rule. The following information is provided for each 
information collection: (1) Title of the information collection; (2) 
OMB control number; (3) type of request; (4) abstract of the 
information collection activity; (5) description of affected public; 
(6) estimate of total annual reporting and recordkeeping burden; and 
(7) frequency of collection. PHMSA estimates that based on the 
proposals in this rule, the current information collection burden for 
the following information collections will be revised as follows:
    Title of Information Collection: Transportation of Hazardous 
Liquids by Pipeline: Recordkeeping and Accident Reporting.
    OMB Control Number: 2137-0047.
    Type of Request: Revision of a currently approved information 
collection.
    Abstract: Hazardous liquid pipeline operators must keep records to 
ensure that their pipelines are operated safely. Operators must also 
report accidents.
    Type of Respondents: Hazardous Liquid Operators.
    Total Annual Number of Respondents: 300.
    Total Annual Responses: 450.
    Total Annual Burden Hours: 50,507 hours (initial increase of 1,860 
hours).
    Frequency of Collection: On occasion.

    Title of Information Collection: National Pipeline Mapping Program.
    OMB Control Number: 2137-0596.
    Type of Request: Revision of a currently approved information 
collection.
    Abstract: The operator of a pipeline facility (except distribution 
lines and gathering lines) provides information to the PHMSA on the 
characteristics of their pipeline system. The submitted information 
includes updates to annual mapping information for each mile of 
pipeline.
    Type of Respondents: Pipeline Facility Operators (except 
distribution lines and gathering lines).
    Total Annual Number of Respondents: 894.
    Total Annual Responses: 894.
    Total Annual Burden Hours: 16,912 hours (initial increase of 600 
hours).
    Frequency of Collection: Annual.

    Title of Information Collection: Pipeline Integrity Management in 
High Consequence Areas (Operators with less than 500 Miles of Hazardous 
Liquid Pipelines).
    OMB Control Number: 2137-0605.
    Type of Request: Revision of a currently approved information 
collection.
    Abstract: Hazardous Liquid Operators with less than 500 miles of 
Pipelines are required to continual assess and evaluate the integrity 
of their pipeline through inspection or testing. Such operators must 
also implement remedial, preventive, and mitigative actions on these 
pipelines.
    Type of Respondents: Hazardous Liquid Operators (w/less than 500 
miles of pipelines).
    Total Annual Number of Respondents: 132.
    Total Annual Responses: 132.
    Total Annual Burden Hours: 268,560 hours (initial increase of 600 
hours).
    Frequency of Collection: On occasion.

    Title of Information Collection: Public Awareness Program.
    OMB Control Number: 2137-0622.
    Type of Request: Revision of a currently approved information 
collection.
    Abstract: Current regulations require pipeline operators to develop 
and implement public awareness programs. Public awareness and 
understanding of pipeline operations is vital to the continued safe 
operation of pipelines. Upon request, operators must submit their 
completed programs to the PHMSA or, in the case of an intrastate 
pipeline facility operator, the appropriate State agency.
    Type of Respondents: Pipeline Operators.
    Total Annual Number of Respondents: 22,500.
    Total Annual Responses: 22,500.
    Total Annual Burden Hours: 517,720 hours (initial increase of 240 
hours).
    Frequency of Collection: On occasion.
    Requests for copies of these information collections should be 
directed to Cameron Satterthwaite, Office of Pipeline Safety (PHP-30), 
Pipeline Hazardous Materials Safety Administration (PHMSA), 2nd Floor, 
1200 New Jersey Avenue, SE., Washington, DC 20590-0001, Telephone (202) 
366-8553.
    Send comments directly to the Office of Management and Budget, 
Office of Information and Regulatory Affairs, Attn: Desk Officer for 
the Department of Transportation, 725 17th Street, NW., Washington, DC 
20503. Comments should be submitted on or prior to August 23, 2010.

Unfunded Mandates Reform Act of 1995

    This NPRM would not impose unfunded mandates under the Unfunded 
Mandates Reform Act of 1995. It would not result in costs of $141.3 
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 NPRM.

National Environmental Policy Act

    The National Environmental Policy Act (NEPA) requires Federal 
agencies to integrate environmental values into their decision making 
processes by considering the environmental impacts of their proposed 
actions and reasonable alternatives to those actions. PHMSA conducted a 
preliminary environmental assessment of the application of phase two 
safety regulations to rural onshore hazardous liquid pipelines. This 
preliminary environmental assessment examines the environmental impacts 
the

[[Page 35373]]

NPRM, and reasonable alternatives to those actions, would have on the 
environment.
    The preliminary environmental assessment found that the NPRM would 
not significantly affect the quality of the environment. This NPRM 
would require only limited physical modification or other work that 
would disturb pipelines, such as identifying segments of pipelines 
meeting the regulatory definitions, inspection and testing, installing 
and maintaining line markers, implementing corrosion controls, pipeline 
cleaning, and establishing integrity assessment programs. The 
preliminary environmental assessment concludes the expected reductions 
in hazardous liquid spills are a minor to moderate positive 
environmental impact offsetting the negligible negative environmental 
impacts associated with implementing the rulemaking. The full 
preliminary environmental assessment is available for review in the 
public docket.

Executive Order 13132

    PHMSA has analyzed this NPRM according to the principles and 
criteria contained in Executive Order 13132 (``Federalism''). This NPRM 
would not (1) have substantial direct effects on the States, the 
relationship between the national government and the States, or the 
distribution of power and responsibilities among the various levels of 
government; (2) impose substantial direct compliance costs on State and 
local governments; or (3) preempt State law. Therefore, the 
consultation and funding requirements of Executive Order 13132 do not 
apply.

Executive Order 13211

    This NPRM is not a ``significant energy action'' under Executive 
Order 13211. It is not likely to have a significant adverse effect on 
the supply, distribution, or use of energy. Furthermore, this NPRM has 
not been designated by the Administrator of the Office of Information 
and Regulatory Affairs as a significant energy action.

List of Subjects in 49 CFR Part 195

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

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

PART 195--TRANSPORTATION OF HAZARDOUS LIQUIDS BY PIPELINE

    1. The authority citation for Part 195 continues to read as 
follows:

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

    2. Section 195.1 is revised to read as follows:

Sec.  195.1  Which pipelines are covered by this part?

    (a) Covered. Except for the pipelines listed in paragraph (b) of 
this section, this part applies to pipeline facilities and the 
transportation of hazardous liquids or carbon dioxide associated with 
those facilities in or affecting interstate or foreign commerce, 
including pipeline facilities on the Outer Continental Shelf (OCS). 
Covered pipelines include, but are not limited to:
    (1) Any pipeline that transports a highly volatile liquid (HVL);
    (2) Any pipeline segment that crosses a waterway currently used for 
commercial navigation;
    (3) Except for a gathering line not covered by paragraph (a)(4) of 
this Section, any pipeline located in a rural or non-rural area of any 
diameter regardless of operating pressure;
    (4) Any of the following onshore gathering lines used for 
transportation of petroleum:
    (i) A pipeline located in a non-rural area;
    (ii) A regulated rural gathering line as provided in Sec.  195.11; 
or
    (iii) A pipeline located in an inlet of the Gulf of Mexico as 
provided in Sec.  195.413.
    (b) Excepted. This Part does not apply to any of the following:
    (1) Transportation of a hazardous liquid transported in a gaseous 
state;
    (2) Transportation of a hazardous liquid through a pipeline by 
gravity;
    (3) Transportation of a hazardous liquid through any of the 
following low-stress pipelines:
    (i) A pipeline subject to safety regulations of the U.S. Coast 
Guard; or
    (ii) A pipeline that serves refining, manufacturing, or truck, 
rail, or vessel terminal facilities, if the pipeline is less than one 
mile long (measured outside facility grounds) and does not cross an 
offshore area or a waterway currently used for commercial navigation;
    (4) Transportation of petroleum through an onshore rural gathering 
line that does not meet the definition of a ``regulated rural gathering 
line'' as provided in Sec.  195.11. This exception does not apply to 
gathering lines in the inlets of the Gulf of Mexico subject to Sec.  
195.413;
    (5) Transportation of hazardous liquid or carbon dioxide in an 
offshore pipeline in State waters where the pipeline is located 
upstream from the outlet flange of the following farthest downstream 
facility: The facility where hydrocarbons or carbon dioxide are 
produced or the facility where produced hydrocarbons or carbon dioxide 
are first separated, dehydrated, or otherwise processed;
    (6) Transportation of hazardous liquid or carbon dioxide in a 
pipeline on the OCS where the pipeline is located upstream of the point 
at which operating responsibility transfers from a producing operator 
to a transporting operator;
    (7) A pipeline segment upstream (generally seaward) of the last 
valve on the last production facility on the OCS where a pipeline on 
the OCS is producer-operated and crosses into State waters without 
first connecting to a transporting operator's facility on the OCS. 
Safety equipment protecting PHMSA-regulated pipeline segments is not 
excluded. A producing operator of a segment falling within this 
exception may petition the Administrator, under Sec.  190.9 of this 
chapter, for approval to operate under PHMSA regulations governing 
pipeline design, construction, operation, and maintenance;
    (8) Transportation of a hazardous liquid or carbon dioxide through 
onshore production (including flow lines), refining, or manufacturing 
facilities or storage or in-plant piping systems associated with such 
facilities;
    (9) Transportation of a hazardous liquid or carbon dioxide:
    (i) By vessel, aircraft, tank truck, tank car, or other non-
pipeline mode of transportation; or
    (ii) Through facilities located on the grounds of a materials 
transportation terminal if the facilities are used exclusively to 
transfer hazardous liquid or carbon dioxide between non-pipeline modes 
of transportation or between a non-pipeline mode and a pipeline. These 
facilities do not include any device and associated piping that are 
necessary to control pressure in the pipeline under Sec.  195.406(b); 
or (10) Transportation of carbon dioxide downstream from the applicable 
following point:
    (i) The inlet of a compressor used in the injection of carbon 
dioxide for oil recovery operations, or the point where recycled carbon 
dioxide enters the injection system, whichever is farther upstream; or
    (ii) The connection of the first branch pipeline in the production 
field where the pipeline transports carbon dioxide to an injection well 
or to a header or manifold from which a pipeline branches to an 
injection well.
    (c) Breakout tanks. Breakout tanks subject to this Part must comply 
with requirements that apply specifically to breakout tanks and, to the 
extent

[[Page 35374]]

applicable, with requirements that apply to pipeline systems and 
pipeline facilities. If a conflict exists between a requirement that 
applies specifically to breakout tanks and a requirement that applies 
to pipeline systems or pipeline facilities, the requirement that 
applies specifically to breakout tanks prevails. Anhydrous ammonia 
breakout tanks need not comply with Sec. Sec.  195.132(b), 195.205(b), 
195.242(c) and (d), 195.264(b) and (e), 195.307, 195.428(c) and (d), 
and 195.432(b) and (c).
    3. Section 195.12 is revised to read as follows:

Sec.  195.12  What requirements apply to low-stress pipelines in rural 
areas?

    (a) General. This section sets forth the requirements for each 
category of low-stress pipeline in a rural area set forth in paragraph 
(b) of this section. This section does not apply to a rural low-stress 
pipeline regulated under this part as a low-stress pipeline that 
crosses a waterway currently used for commercial navigation.
    (b) Categories. An operator of a rural low-stress pipeline must 
meet the applicable requirements and compliance deadlines for the 
category of pipeline set forth in paragraph (c) of this section. For 
purposes of this section, a rural low-stress pipeline is a Category 1, 
2, or 3 pipeline based on the following criteria:
    (1) A Category 1 rural low-stress pipeline:
    (i) Has a nominal diameter of 8-5/8 inches (219.1 mm) or more;
    (ii) Is located in or within one-half mile (.80 km) of an unusually 
sensitive area (USA) as defined in Sec.  195.6; and
    (iii) Operates at a maximum pressure established under Sec.  
195.406 corresponding to:
    (A) A stress level equal to or less than 20-percent of the 
specified minimum yield strength of the line pipe; or
    (B) If the stress level is unknown or the pipeline is not 
constructed with steel pipe, a pressure equal to or less than 125 psi 
(861 kPa) gauge.
    (2) A Category 2 rural pipeline:
    (i) Has a nominal diameter of less than 8-5/8 inches (219.1mm);
    (ii) Is located in or within a half mile (.80 km) of an unusually 
sensitive area (USA) as defined in Sec.  195.6; and
    (iii) Operates at a maximum pressure established under Sec.  
195.406 corresponding to:
    (A) A stress level equal to or less than 20-percent of the 
specified minimum yield strength of the line pipe; or
    (B) If the stress level is unknown or the pipeline is not 
constructed with steel pipe, a pressure equal to or less than 125 psi 
(861 kPa) gauge.
    (3) A Category 3 rural low-stress pipeline:
    (i) Has a nominal diameter of any size and is not located in or 
within a half mile (.80 km) of an unusually sensitive area (USA) as 
defined in Sec.  195.6; and
    (ii) Operates at a maximum pressure established under Sec.  195.406 
corresponding to a stress level equal to or less than 20-percent of the 
specified minimum yield strength of the line pipe; or
    (iii) If the stress level is unknown or the pipeline is not 
constructed with steel pipe, a pressure equal to or less than 125 psi 
(861 kPa) gauge.
    (c) Applicable requirements and deadlines for compliance. An 
operator must comply with the following compliance dates depending on 
the category of pipeline determined by the criteria in paragraph (b) 
(1) of this section:
    (1) An operator of a Category 1 pipeline must:
    (i) Identify all segments of pipeline meeting the criteria in 
paragraph (b)(1) of this section before April 3, 2009.
    (ii) Beginning no later than January 3, 2009, comply with the 
reporting requirements of subpart B of this part for the identified 
segments.
    (iii) Integrity management requirements--
    (A) Establish a written program that complies with Sec.  195.452 
before July 3, 2009, to assure the integrity of the pipeline segments. 
Continue to carry out such program in compliance with Sec.  195.452.
    (B) An operator may conduct a determination per Sec.  195.452(a) in 
lieu of the half mile buffer.
    (C) Complete the baseline assessment of all segments in accordance 
with Sec.  195.452(c) before July 3, 2015, and complete at least 50-
percent of the assessments, beginning with the highest risk pipe, 
before January 3, 2012.
    (iv) Comply with all other safety requirements of this part, except 
subpart H, before July 3, 2009. Comply with the requirements of subpart 
H before July 3, 2011.
    (2) An operator of a Category 2 pipeline must:
    (i) Identify all segments of pipeline before [date 9 months 
following effective date of final rule].
    (ii) Beginning no later than January 3, 2009, comply with the 
reporting requirements of subpart B of this part for the identified 
segments.
    (iii) Integrity management requirements--
    (A) Establish a written integrity management program that complies 
with Sec.  195.452 before [date 12 months following effective date of 
final rule] to assure the integrity of the pipeline segments. Continue 
to carry out such program in compliance with Sec.  195.452.
    (B) An operator may conduct a determination per Sec.  195.452(a) in 
lieu of the half mile buffer.
    (C) Complete the baseline assessment of all segments in accordance 
with Sec.  195.452(c) before [date 60 months following the effective 
date of final rule] and complete at least 50-percent of the 
assessments, beginning with the highest risk pipe, before [date 30 
months following the effective date of final rule].
    (iv) Comply with all other safety requirements of this part, except 
subpart H, before [date 12 months following effective date of final 
rule]. Comply with subpart H of this part before [date 36 months 
following effective date of final rule].
    (3) An operator of a Category 3 pipeline must:
    (i) Identify all segments of pipeline before [date 9 months 
following effective date of final rule].
    (ii) Comply with all safety requirements of this part, except the 
requirements in Sec.  195.452, subpart B, and the requirements in 
subpart H, before [date 12 months following effective date of final 
rule].
    (A) Comply with subpart B of this part by January 3, 2009.
    (B) Comply with subpart H of this part before [date 36 months 
following effective date of final rule].
    (d) Economic compliance burden.
    (1) An operator may notify PHMSA in accordance with Sec.  
195.452(m) of a situation meeting the following criteria:
    (i) The pipeline is a Category 1 rural low-stress pipeline;
    (ii) The pipeline carries crude oil from a production facility;
    (iii) The pipeline, when in operation, operates at a flow rate less 
than or equal to 14,000 barrels per day; and
    (iv) The operator determines it would abandon or shut-down the 
pipeline as a result of the economic burden to comply with the 
assessment requirements in Sec.  195.452(d) or 195.452((j).
    (2) A notification submitted under this provision must include, at 
minimum, the following information about the pipeline: Its operating, 
maintenance and leak history; the estimated cost to comply with the 
integrity assessment requirements (with a brief description of the 
basis for the estimate); the estimated amount of production from 
affected wells per year, whether wells will be shut in or alternate 
transportation used, and if alternate transportation will be used, the 
estimated cost to do so.
    (3) When an operator notifies PHMSA in accordance with paragraph 
(d)(1) of

[[Page 35375]]

this section, PHMSA will stay compliance with Sec. Sec.  195.452(d) and 
195.452 (j)(3) until it has completed an analysis of the notification. 
PHMSA will consult the Department of Energy, as appropriate, to help 
analyze the potential energy impact of loss of the pipeline. Based on 
the analysis, PHMSA may grant the operator a special permit to allow 
continued operation of the pipeline subject to alternative safety 
requirements.
    (e) Changes in unusually sensitive areas.
    (1) If, after June 3, 2008, an operator identifies a new USA that 
causes a segment of pipeline to meet the criteria in paragraph (b) of 
this section as a Category 1 or Category 2 rural low-stress pipeline, 
the operator must:
    (i) Comply with the integrity management program requirement in 
paragraph (c)(1)(iii)(A) or (c)(2)(iii)(A) of this section, as 
appropriate, within 12 months following the date the area is identified 
regardless of the prior categorization of the pipeline; and
    (ii) Complete the baseline assessment required by paragraph 
(c)(1)(iii)(C) or (c)(2)(iii)(C) of this section, as appropriate, 
according to the schedule in Sec.  195.452(d)(3).
    (2) If a change to the boundaries of a USA cause a Category 1 or 
Category 2 pipeline segment to no longer be within one-half mile of a 
USA, an operator must continue to comply with paragraph (c)(1)(iii) or 
paragraph (c)(2)(iii) of this section, as applicable, with respect to 
that segment unless the operator determines that a release from the 
pipeline could not affect the USA.
    (f) Record Retention. An operator must maintain records 
demonstrating compliance with each requirement applicable to the 
category of pipeline according to the following schedule.
    (1) An operator must maintain the segment identification records 
required in paragraph (c)(1)(i), (c)(2) (i) or (c)(3)(i) of this 
section for the life of the pipe.
    (2) An operator must maintain the records necessary to demonstrate 
compliance with each applicable requirement set forth in paragraph (c) 
of this section according to the record retention requirements of the 
referenced section or subpart.
    4. Section 195.48 is revised to read as follows:

Sec.  195.48  Scope.

    This subpart prescribes requirements for periodic reporting and for 
reporting of accidents and safety-related conditions. This subpart 
applies to all pipelines subject to this part. An operator of a 
Category 3 rural low-stress pipeline meeting the criteria in Sec.  
195.12 is not required to complete those parts of the hazardous liquid 
annual report form PHMSA F 7000-1.1 associated with integrity 
management or high consequence areas.

    Issued in Washington, DC, on June 16, 2010.
Jeffrey D. Wiese,
Associate Administrator for Pipeline Safety.
[FR Doc. 2010-14998 Filed 6-21-10; 8:45 am]
BILLING CODE 4910-60-P