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The Pipeline and Hazardous Materials Safety Administration (PHMSA) recently finalized the second of three gas transmission and gathering-line safety rules, originating out of a nearly 10-year rulemaking.[<a href="#ftnref1">1</a>]&nbsp;The focus of the New Rule: extending reporting and, for certain specifications, safety requirements to previously unregulated onshore gas gathering lines. Practically, the rule will shift regulatory requirements normally imposed on the midstream industry further upstream to exploration and production companies that own their own gathering systems.

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The New Rule contains plenty to unpack. For example: Which previously unregulated gathering lines are now regulated? What are the reporting requirements and deadlines? What are the safety requirements? Where do production and gathering begin and end? As the first in a series, this post will break down PHMSA’s expansion of regulated gathering lines.

Since 2006, the Federal Pipeline Safety Regulations[<a href="#ftnref2">2</a>]&nbsp;have delineated PHMSA’s regulation of gathering lines primarily on their “class location unit” – i.e., “an onshore area that extends 220 yards (200 meters) on either side of the centerline of any continuous 1-mile (1.6 kilometers) length of pipeline”[<a href="#ftnref3">3</a>]&nbsp;– and features.[<a href="#ftnref4">4</a>]&nbsp;The regulations create four class locations.[<a href="#ftnref5">5</a>]&nbsp;Class 1 – “[a]ny class location unit that has 10 or fewer buildings intended for human occupancy”[<a href="#ftnref6">6</a>]&nbsp;– was previously exempt from both reporting and safety regulations in 49 C.F.R. parts 191-92.[<a href="#ftnref7">7</a>]&nbsp;In the New Rule, PHMSA removed the exemption.

Why remove the exemption for gathering lines in rural areas? Well, according to PHMSA, the success and technological advancement of shale development since 2006 and, in certain basins, the collision of typically rural oil and gas development with expanding suburban and urban communities required a regulatory update. PHMSA believes that many Class 1 gathering lines now share similar features with regulated gathering lines and even transmission lines. Even if in rural areas, PHMSA reasons these changes require increased safety standards. Further, PHMSA claims it lacks adequate data on an estimated 400,000 miles of Class 1 gathering lines, which justifies increased reporting. PHMSA plans to use the data to determine risk and, most likely, future regulatory action.

The New Rule expands the previous definition of “regulated onshore gathering pipeline” from just two types, A and B, to four – adding C and R.[<a href="#ftnref8">8</a>]&nbsp;While the New Rule subjects Type C gathering lines to additional safety and reporting regulations, it adds only reporting for Type R lines.

Type C gathering lines are those in Class 1 locations with an outside diameter greater than or equal to 8.625 inches and any of the following: (1) metallic and the maximum allowable operating pressure (MAOP) produces a hoop stress of 20 percent or more of specified minimum yield strength; (2) if the stress level is unknown, metallic and the MAOP is more than 125 psig (862 kPa); or (3) nonmetallic and the MAOP is more than 125 psig (862 kPa).[<a href="#ftnref9">9</a>]&nbsp;In other words, Type C gathering lines are those in rural areas with specifications that PHMSA believes could create a public safety risk in the event of an incident.[<a href="#ftnref10">10</a>]

Type R includes all other gathering lines.[<a href="#ftnref11">11</a>]

While the New Rule has been foreshadowed for a decade, it now imposes regulatory requirements for new subsets of gathering lines for which upstream and midstream companies.

[1]&nbsp;See&nbsp;Pipeline Safety: Safety of Gas Gathering Pipelines: Extension of Reporting Requirements, Regulation of Large, High-Pressure Lines, and Other Related Amendments, 86 Fed. Reg. 63,266 (Nov. 15, 2021) (New Rule).

[2]&nbsp;See&nbsp;49 C.F.R. pts. 190-99 (2020);&nbsp;see&nbsp;86 Fed. Reg. at 63,270 (discussing regulatory history of Federal Pipeline Safety Regulations).

[3]&nbsp;See&nbsp;49 C.F.R. § 192.5(a)(1) (2020).

[4]&nbsp;86 Fed. Reg. at 63,296 (identifying “features” for gathering lines in Table 1 to Paragraph (c)(2) of the to-be-codified 49 C.F.R. § 192.8).

[5]&nbsp;See&nbsp;49 C.F.R. § 192.5 (2020) (defining Class 1-4 locations); 86 Fed. Reg. at 63,266 (discussing location of pipes in densely populated and rural areas as primary driver for regulation).

[7]&nbsp;86 Fed. Reg. at 63,266 (“Unlike transmission lines, which are regulated regardless of location, gathering lines in rural Class 1 locations are exempt from Federal pipeline safety and reporting regulations in parts 191 and 192.”).

[8]&nbsp;86 Fed. Reg. at 63,295 (revising previous regulations at 49 C.F.R. § 191.3 to add “Regulated onshore gathering&nbsp;means a Type A, Type B, or Type C gas gathering pipeline system as determined in §192.8 of this chapter”);&nbsp;id.&nbsp;(revising previous regulations at 49 C.F.R. § 191.3 to add “Reporting regulated gathering&nbsp;means a Type R gathering line as determined in §192.8 of this chapter”).

[9]&nbsp;86 Fed. Reg. at 63,296 (identifying “features” for gathering lines in Table 1 to Paragraph (c)(2) of the to-be-codified 49 C.F.R. § 192.8).

[10]&nbsp;See id.&nbsp;at 63,268 (discussing risks from incidents on Type C gathering lines).

[11]&nbsp;See id.&nbsp;at 63,296 (outlining Type R as “[a]ll other onshore gathering lines”).

Swimming Upstream: PHMSA Extends Reporting and Safety Regulations for Onshore Gas Gathering Lines