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In&nbsp;<a href="https://www.bakerenergylaw.com/blogs/swimming-upstream-phmsa-extends-reporting-and-safety-regulations-for-onshore-gas-gathering-lines/">our last article</a>, we introduced the recently finalized New Rule of the Pipeline and Hazardous Materials Safety Administration (PHMSA), which expands safety and reporting requirements to previously unregulated onshore gas gathering lines.<a href="#ftnref1">[1]</a>&nbsp;PHMSA has now dubbed those previously unregulated lines Type C, for new safety and reporting requirements, and Type R, for new reporting requirements only. In this article, we focus on some of the practical requirements for operators of Type C and Type R lines implicated by the New Rule – specifically, what must be reported, how and by when.

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Incident and Annual Reports

Under 49 C.F.R. part 191, operators of Type C and Type R lines must now notify PHMSA of incidents and submit incident and annual reports.[<a href="#ftnref2">2</a>]&nbsp;Type R lines, however, remain exempt from reporting certain operational changes and safety-related conditions under sections 191.22(b) and (c) and 191.23.<a href="#ftnref3">[3]</a>

Pertinent to gathering lines, an “incident” is an event that involves the release of gas from a pipeline[<a href="#ftnref4">4</a>]&nbsp;and at least one of the following consequences: (i) a death or a personal injury necessitating inpatient hospitalization; (ii) estimated property damage of $122,000 or more, including loss to the operator and others, or both, but excluding the cost of gas lost (as of 2021, the threshold amount will be adjusted for inflation and posted on PHMSA’s website); or (iii) unintentional estimated gas loss of 3 million cubic feet or more.[<a href="#ftnref5">5</a>]&nbsp;Even if the event does not meet these criteria, it is still an incident if viewed as “significant” in the judgment of the operator.[<a href="#ftnref6">6</a>]

If an incident occurs, the first step is to notify the National Response Center “[a]t the earliest practicable moment following discovery, but no later than one hour after confirmed discovery.”[<a href="#ftnref7">7</a>]&nbsp;The initial notice must include contact information for the operator and person providing notice, the location and time of the incident, any fatalities or personal injuries, and any other significant facts known by the operator that are relevant to the cause of or damage from the incident.[<a href="#ftnref7">8</a>]&nbsp;Within 48 hours of discovering an incident, the operator must revise or confirm the information submitted in its initial report, including an estimate of the amount of gas released.[<a href="#ftnref9">9</a>]

Operators of Type C lines may continue to use the existing incident form for Types A, B and C lines,&nbsp;<a href="https://www.bakerenergylaw.com/wp-content/uploads/sites/35/2022/01/Incident-Report-Type-A_-B-and-C.pdf">here</a>. Operators of Type R lines must use a&nbsp;<a href="https://www.bakerenergylaw.com/wp-content/uploads/sites/35/2022/01/Incident-Report-for-Type-R-Lines.pdf">new form</a>&nbsp;that can be found, with instructions,&nbsp;<a href="https://www.bakerenergylaw.com/wp-content/uploads/sites/35/2022/01/Incident-Report-Form-Instructions-for-Type-R-Lines.pdf">here</a>.[<a href="#ftnref10">10</a>]&nbsp;These forms must be submitted “as soon as practicable but not more than 30 days after detection of an incident.”[<a href="#ftnref11">11</a>]&nbsp;All operators must comply with the new incident reporting requirements beginning on May 16, 2022, the Effective Date of the New Rule.

Annual reports will include general pipeline summary data, such as Operator Identification Number, mileage inspected and actions taken, miles by decade of installation, and number of leaks repaired or scheduled for repair. The annual report form for operators of Type C lines can be found&nbsp;<a href="https://www.bakerenergylaw.com/wp-content/uploads/sites/35/2022/01/Annual-Report-Type-A_-B_-C.pdf">here</a>, and for operators of Type R lines,&nbsp;<a href="https://www.bakerenergylaw.com/wp-content/uploads/sites/35/2022/01/Annual-Report-for-Type-R-Lines.pdf">here</a>. 2022 annual reports for both are due by March 25, 2023.

According to PHMSA, these expanded reporting obligations are necessary to inform the agency on the unknown condition of hundreds of thousands of miles of gas gathering infrastructure, which will allow it to “evaluate the safety risks on gas gathering systems and determine what, if any, additional measures may be warranted to reduce those risks.”[<a href="#ftnref12">12</a>]&nbsp;This foreshadows further regulation by the PHMSA for gas gathering pipelines – as well as further articles delineating the requirements by your friends at BakerHostetler.

While the new reporting requirements may seem ministerial, they come with significant potential enforcement penalties such as compliance orders and civil penalties of up to $225,134 per violation for each day the violation continues, up to a maximum of $2,251,334 for any related series of violations.[<a href="#ftnref13">13</a>]

[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 id.&nbsp;at 63,295 (modifying the scope of reporting requirements to include Type C and Type R lines in the to-be-codified 49 C.F.R. § 191.1).

[3]&nbsp;See id.&nbsp;at 63,295 (exempting Type R lines from certain reporting requirements in the to-be-codified 49 C.F.R. § 191.1(c)).

[4]&nbsp;See&nbsp;49 C.F.R. § 191.3 (“Pipeline or Pipeline System means all parts of those physical facilities through which gas moves in transportation, including, but not limited to, pipe, valves, and other appurtenance attached to pipe, compressor units, metering stations, regulator stations, delivery stations, holders, and fabricated assemblies.”).

[5]&nbsp;49 C.F.R. § 191.3 (defining “incident”).

[8]&nbsp;See&nbsp;49 C.F.R. § 191.5 (immediate notice of certain incidents).

[10]&nbsp;The new annual and incident report forms for Type R lines are not yet finalized and published on the PHMSA website; the linked forms are the most recent drafts that can be found in the supporting documents for the New Rule.

[12]&nbsp;https://www.federalregister.gov/d/2021-24240/p-169.

[13]&nbsp;See&nbsp;49 C.F.R. § 190.223(a); 49 U.S.C. § 60122.

Swimming Upstream Part II: New Incident and Annual Reporting Requirements for Rural Gas Gathering Lines