This week’s Pipeliners Podcast episode features Keith Coyle discussing the Pipeline Safety Act provision over preemption and what that means for state versus federal regulations.

In this episode, you’ll learn about preemption, what it means, and the impacts it has on the pipeline industry at the federal, state, and local level.

Pipeline Safety Act Preemption Show Notes, Links, and Insider Terms:

• Keith Coyle is a shareholder and attorney with the law firm of Babst Calland. Mr. Coyle is a member of the firm’s Washington, D.C. office and a Shareholder in the Pipeline and HazMat Safety practice. Connect with Keith Coyle on LinkedIn.
  • Babst Calland’s Energy and Natural Resources attorneys work collaboratively across legal disciplines to serve the needs of energy companies across the United States. Based in Washington, D.C., the Firm’s Pipeline and Hazardous Materials Safety practice represents clients on all types of pipeline safety and hazardous materials transportation matters.
• Letter from PHMSA
• Federal Preemption of State and Local Regulations under the Pipeline Safety Act, Keith Coyle
• PHMSA (Pipeline and Hazardous Materials Safety Administration) is responsible for providing pipeline safety oversight through regulatory rule-making, NTSB recommendations, and other important functions to protect people and the environment through the safe transportation of energy and other hazardous materials.
• Federal Preemption is the invalidation of a U.S. state law that conflicts with federal law.
• Natural Gas Pipeline Safety Act of 1968 (Pipeline Safety Act) was authorized by the Secretary of Transportation to prescribe safety standards for the transportation of natural and other gas by pipeline, and for other purposes. 
• Natural Gas Storage is a facility that can store natural gas for an indefinite period of time. Natural gas storages are typically located underground and are therefore called as well underground gas storages, or UGS.

• 49 USC 60104(c) Preemption.—A State authority that has submitted a current certification under section 60105(a) of this title may adopt additional or more stringent safety standards for intrastate pipeline facilities and intrastate pipeline transportation only if those standards are compatible with the minimum standards prescribed under this chapter. A State authority may not adopt or continue in force safety standards for interstate pipeline facilities or interstate pipeline transportation. Notwithstanding the preceding sentence, a State authority may enforce a requirement of a one-call notification program of the State if the program meets the requirements for one-call notification programs under this chapter or chapter 61.
• Express Preemption occurs when a federal statute or regulation contains language that explicitly says that the law preempts state law.
• Implied Preemption occurs if it can be shown that Congress intended to preempt state law when the federal law was created. 
• Field Preemption is even if a federal law does not expressly preempt state law, a court may find that Congress intended the federal law to occupy the entire “field” of an issue.
• Interstate consists of multiple states.
• Intrastate consists of only one state. 
• FERC (Federal Energy Regulatory Commission) regulates, monitors, and investigates electricity, natural gas, hydropower, oil matters, natural gas pipelines, LNG terminals, hydroelectric dams, electric transmission, energy markets, and pricing.
• 811 (Call Before You Dig) is the federally designated call-before-you-dig phone number, designed to make the notification step of the safe excavation process as easy as possible. A person is required to call the 811 number 48 to 72 hours before beginning any excavation or digging projects to allow time for locators to mark the approximate location of any buried infrastructure before excavation begins. Prior to the implementation of 811, people who dug had to know one-call center’s 800 number, or notify utilities individually.
• Mega Rule or the final rule, first initiated in a 2011 Advanced Notice of Proposed Rulemaking, concludes a trio of pipeline safety rules following PHMSA’s 2016 proposed rulemaking for gas transmission and gathering pipelines. PHMSA issued a 2019 gas transmission final rule which addressed a number of congressional mandates and safety recommendations and a 2021 final rule that significantly expanded the scope of safety and reporting requirements for more than 400,000 miles of previously unregulated gas gathering lines. Today’s final rule also marks a milestone of the completion of three of the six PHMSA measures in the U.S. Methane Reduction Action Plan.
• Type C: operate with an MAOP of 20 percent or greater of SMYS for the metallic lines or above 125 PSIG for the non metallic.
  • Type C gathering lines are gathering lines located in Class 1 locations that have an outer diameter of 8.625 inches or more and operate at higher-stress levels of pressures.
• Type R: include any onshore gas gathering lines in Class 1 or Class 2 locations that do not meet the definition of a Type A, Type B, or Type C line.  Operators of Type R lines must comply with the certain incident and annual reporting requirements.
• SCADA (Supervisory Control and Data Acquisition) is a system of software and technology that allows pipeliners to control processes locally or at remote locations.
• The CRM Rule (Control Room Management Rule as defined by 49 CFR Parts 192 and 195) introduced by PHMSA provides regulations and guidelines for control room managers to safely operate a pipeline. PHMSA’s pipeline safety regulations prescribe safety requirements for controllers, control rooms, and SCADA systems used to remotely monitor and control pipeline operations.
• DOT (Department of Transportation) is a cabinet-level agency of the federal government responsible for helping maintain and develop the nation’s transportation systems and infrastructure.
• GPAC (Gas Pipeline Advisory Committee) is organized by PHMSA to review their proposed regulatory initiatives to assure the technical feasibility, reasonableness, cost-effectiveness, and practicability of each proposal.

Pipeline Safety Act Preemption Full Episode Transcript:

Russel Treat: Welcome to the “Pipeliners Podcast,” episode 281, sponsored by the American Petroleum Institute, driving safety, environmental protection, and sustainability across the natural gas and oil industry through world class standards and safety programs.

Since its formation as a standard setting organization in 1919, API has delivered more than 800 standards to enhance industry operations worldwide. Find out more about API at API.org.

Announcer: The Pipeliners Podcast, where professionals, Bubba geeks, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations.

Now, your host, Russel Treat.

Russel: Thanks for listening to the Pipeliners Podcast. I appreciate that you’re taking the time. To show the appreciation, we give away a customized YETI tumbler to one listener each episode.

This week, our winner is Tamar Sharabi with PECO. Congratulations, your YETI is on its way. To learn how you can win this signature prize, stick around till the end of the episode.

This week, Keith Coyle from Babst Calland returns to talk to us about Pipeline Safety Act preemption, a rather technical, legal subject, but important for pipeliners to know something about. Keith, welcome back to the Pipeliner’s Podcast.

Keith Coyle: Thanks for having me on again, Russel. It’s been a while. PHMSA has stayed quiet on the rule making front for the past few months. I am not in any way complaining about that lack of activity. It seemed like you and I were talking, maybe, every couple of months. We had a little bit of a lull there, which is good or bad, depending on your perspective.

Russel: Yeah, it’s true. It’s been a while. In fact, I was going through the planning we do to look at guests. I’m like, “Man, it’s been a long time since we talked to Keith. I wonder what he’s up to.”

Keith: I was hiding out, trying to keep up with other things. I’m happy to be back on the show. I love doing this.

Russel: Yeah, ditto. You sent me a really interesting topic. I think, probably for some of the listeners, it’s going to be a little bit of a, “What am I talking about?”  You sent me this topic on preemption. I think probably the best thing to do just to help the listeners understand what we’re going to talk about is, if you would, can you give us a definition of what is preemption?

Keith: Sure. There is a federal preemption provision in the Pipeline Safety Act. It’s in the statute. It’s been there since the beginning. Federal preemption is basically a concept that’s derived from the supremacy clause in the United States Constitution.

It essentially gives the federal government the power, when it makes laws, rules, or regulations, to preempt, prohibit, or displace – you pick your term – the states or local governments from regulating in a particular area or regulating a particular activity.

It’s derived from the Constitution. It’s a concept that’s been developed by the courts over quite a long time. The Pipeline Safety Act has an express preemption provision that’s included in the statute. How that preemption provision interacts with regulations at the state or local level is a very important legal concept. It’s taken on more significance in recent years.

Russel: As the federal regulatory framework specifically around pipelines grows, then things that have historically been in the states’ domain start to leave state jurisdiction. The thing probably most recently where that’s true is with the recent rules around gas storage. That, historically, was subject to state regulation.

Keith: What we see when we have areas of significant development in a particular industry…We’ve seen this with pipelines. We’ve had a lot of pipeline development in the United States as a result of shale gas development over the last few years.

What we see when we have increased activity is increased interest in regulation of that activity. That’s resulted in additional rules and regulations from PHMSA, which is a lot of what we’ve talked about on recent shows, but it also increases interest in regulation at the state or local level as well.

When you have that increased interest in state or local regulation, depending on what rules the states and localities are issuing, that’s when you can run into this concept of preemption, which is basically…

The rule or regulation that the state or locality wants to put in place, is that preempted under federal law? Does it survive under the Pipeline Safety Act’s preemption provision?

Russel: We should talk about how that works. Can you walk us through what is that preemption provision in the Pipeline Safety Act and how that works?

Keith: Sure. You will find the preemption provision in 49 USC 60104(c). It is an express preemption provision, meaning that it is preemption where Congress has actually specified federal preemption by statute.

There are other forms of preemption, implied preemption, field preemption, that come up under other statutes, but the Pipeline Safety Act has this specific provision that’s built into it, that basically dictates where federal preemption under the Pipeline Safety Act applies.

There are three basic concepts or principles built into the preemption provision. There’s preemption as applied to interstate pipeline facilities. We’ll talk a little bit about that as we evolve the conversation. There’s a different type or a different sort of feature of the preemption provision when you’re dealing with intrastate pipeline facilities.

Then there’s a related concept that comes up when you’re dealing with either interstate or intrastate pipeline facilities, whether state or local authorities that don’t participate in pipeline safety regulation, how does the preemption provision affect them.

Three basic concepts. Interstate facilities, intrastate facilities, and then how those two provisions affect efforts by other state or local authorities to regulate if they aren’t participating in the pipeline safety program.

Russel: How does it work at the state level? How does a state go about determining if they’re going to do pipeline regulation and getting certified?

Keith: The pipeline safety program creates this cooperative federal program where state authorities can obtain the power to regulate intrastate pipeline facilities within their jurisdictions. The way that that works is a particular state authority will submit a request for an annual certification to PHMSA.

As part of that process, they need to submit the request. They need to meet certain basic criteria. If they make that submission, PHMSA will basically certify that state authority to serve as a pipeline safety regulator in their particular jurisdiction.

In exchange for requesting that certification, the state will get grant money from PHMSA for the federal government to support the pipeline safety program at the state level, but the state will also be able to exercise regulatory authority for the intrastate facilities that are covered under their certification.

One of the conditions of getting a certification is that the state authority has to agree to adopt PHMSA’s federal safety standards as the minimum. Those are the threshold requirements. You have to do that. They can also apply additional or more stringent safety standards to intrastate facilities, so long as those state standards are compatible with PHMSA’s federal requirements.

That compatibility part of the test is a form of preemption that comes into play when you’re dealing with intrastate pipeline facilities. Is an additional or more stringent state requirement compatible with the federal regulations?

Russel: How did it come to mind for you that we ought to have this conversation? What’s happening in the regulatory world that this topic of preemption is contemporary?

Keith: PHMSA issued a letter of interpretation – I think it was a couple of weeks ago – to the Pennsylvania Public Utility Commission. They asked a question about whether a proposal that they were considering in a rulemaking proceeding was compatible with PHMSA’s federal regulations.

They basically asked, “Would this provision, if we adopt it, would it be preempted?” PHMSA answered the question. They laid out the basic framework for preemption under the Pipeline Safety Act.

There’s also been a number of court cases that have popped up in recent years that have fleshed out some of these principles related to preemption. There are a couple of significant court proceedings that are underway right now, dealing with preemption issues related to pipeline development, particularly with respect to carbon dioxide pipelines.

We’ve seen increasing development in case law, increasing guidance from PHMSA on these issues related to preemption. You mentioned underground gas storage. That was another area where issues related to preemption popped up because, for a very long time, PHMSA didn’t have any federal rules for underground gas storage. Then they issued those new federal rules.

There were a bunch of new players at the state level that either had to get certifications to regulate underground gas storage or expand their existing programs to pick up gas storage. There were questions related to preemption that popped up in that context as well.

Russel: It’s fascinating to me, Keith, when I think about this. When I think about a large operator, maybe an interstate pipeline, and he’s crossing multiple states or a large operator with multiple storage facilities in multiple states, it’s very advantageous for them to have a common set of requirements they’re working against.

Very difficult, very costly, and actually has safety consequences if I have different standards I’ve got to follow. That being said, I think the other thing that I’m hearing in this conversation is, at least in some areas, the states are taking a more active role and leaning into “What should our authority be, and then how are we going to approach that?”

Keith: I think that’s right. When you’re dealing with interstate facilities, there is that interest in uniformity, having consistent regulations, when you’re dealing with an interstate pipeline facility, so that you’re not following different rules as you cross between different states or different jurisdictions.

The issues on the intrastate pipeline facilities are a little bit different because there is an acknowledgment under the statute that states can adopt additional or more stringent requirements, so long as they are compatible with the minimum federal rules.

Then tied into all of these concepts is this broader concept of the Pipeline Safety Act’s preemption provision, the courts have said, only applies to things that qualify as safety standards.

That raises a more interesting or complex issue when you’re dealing with state and local regulation. Just because you have an interstate pipeline facility and there’s preemption under the Pipeline Safety Act, that doesn’t mean that the states and localities can’t regulate you at all. There are all kinds of things that states and localities regulate as to pipeline facilities.

The question for Pipeline Safety Act preemption is generally, what type of facility am I dealing with? Is it an interstate facility or an intrastate facility? Then the next question becomes, is the state or local authority trying to do something that qualifies as a safety standard? If they are, then there are concerns related to preemption that come into play.

Russel: I guess the other thing too is what’s the definition of safety.

Keith: The courts have said, “What is a safety standard?” There’s a Fifth Circuit case out there that basically says something that has a direct and substantial effect on safety or something like that.

A lot of the court cases are most helpful because they point you into directions of things that do qualify as safety standards or things that don’t qualify as safety standards. An example of something that the courts have said is not a safety standard would be zoning laws that deal with development of areas.

There was a case that came up with a setback requirement for a compressor station that was designed to preserve neighborhood aesthetics. In both of those cases, the court said that those were not safety standards within the meaning of the Pipeline Safety Act. Those two types of provisions survived preemption analysis.

Examples of things that the courts have found as being preempted are a case involving a Texas regulation where they wanted an interstate pipeline operator to comply with rules for hydrogen sulfide. The court said, “No, that’s clearly an issue that’s related to safety.”

There have been other cases where the courts have said that states or localities can’t impose regulations that directly cover things that are already regulated under PHMSA’s rules, things like depth of cover or operation and maintenance requirements, construction, things that are already addressed in the federal rules or pretty easily fall within the category of things that would be preempted.

Russel: I’m thinking about environmental regulation and where is the line between environmental regulation and pipeline safety regulation.

Keith: It took you like 10 minutes to come into one of the [laughs] hardest questions that comes up.

Russel: That’s what I do, man. I ask a lot of questions.

Keith: Thanks for that.

Russel: I don’t have any good answers, but I’ve got lots of great questions.

Keith: I came on the show for the softballs. You hit me with the fastball high and tight here.

One of the things that has evolved is that PHMSA is required to consider the environment in promulgating its rules and regulations. That’s one of the considerations that’s embedded in the Pipeline Safety Act.

There are also clearly environmental things that environmental regulators at the federal level or at the state level can do, that are not preempted or at least have not been challenged as preempted, when you’re dealing with waterway crossings, erosion and sediment plans, all kinds of environmental things.

There are a lot of difficult or tricky questions that you get into when you’re dealing with, is something properly characterized as a safety standard, or is it really some other type of regulation that’s not otherwise preempted, something dealing with the environment or some other topic that’s not clearly outside the scope of the Pipeline Safety Act?

Russel: There’s a lot of room for argument in that question, I think, is my takeaway. In the paper that you wrote and shared with me – for the listeners, we’ll link this up on the website so that anybody that’s interested can download it and read it – you ask some interesting questions.

One of them was, can a state’s authority allow them to regulate pipelines containing hydrogen sulfide for an interstate pipeline?

Keith: That was an actual case that was decided out of the Fifth Circuit. I think it was back in the ’80s. That was a case involving preemption for interstate pipeline facilities under the Pipeline Safety Act. That’s, I guess, the strongest or the easiest flavor of preemption under the Pipeline Safety Act to understand.

The first question that you ask there is, am I dealing with an interstate pipeline facility? When you’re dealing with gas pipelines, the answer is usually pretty easy. The way that interstate is defined in the Pipeline Safety Act for gas means subject to the jurisdiction of the Federal Energy Regulatory Commission under the Natural Gas Act.

If you’re dealing with a FERC jurisdictional pipeline, you’re dealing with interstate preemption. On the liquid side, it’s a little more complicated. The definition in the Pipeline Safety Act doesn’t provide as much help.

What PHMSA has said is if you have a FERC tariff on the oil side, they’re generally going to use that as a rule of thumb to treat you as interstate. Under the preemption provision for interstate facilities, basically the way the statute reads is, “State authorities can not regulate the safety of interstate pipeline facilities except for purposes of administering One Call damage prevention programs, 811.”

Those 811 programs, they’re carved out from preemption. When you’re dealing with interstate pipeline facilities, you’re basically like, “OK, this is interstate. The only question I have to ask myself is, is the state or local rule that’s being applied a safety standard?”

In that case involving the rules for hydrogen sulfide, the court pretty much got to that answer pretty easily. They were like, “This clearly is a safety standard. The state is clearly trying to apply it to an interstate pipeline facility.

It doesn’t matter if the state rule or regulation is consistent with the federal rules or regulations. It doesn’t matter if it would impose a minimal burden or a maximum burden. You can’t do it. It’s safety. It’s to an interstate pipeline. That’s the end of the issue.”

Russel: One of the other questions – I think it’s a bit more interesting – in your paper is, can a state authority apply its standards for underground natural gas storage? You cite a case from 2010. I’m wondering if the relatively new storage rules out of PHMSA impact that. Has there been any cases that would have looked at that?

Keith: That case was interesting on a couple of different levels. This was a district court case out of Kansas in 2010. What was going on in that case was the state of Kansas was trying to apply state statutes and regulations to a FERC jurisdictional interstate underground natural gas storage facility.

What was one of the things that was interesting about that case was that at the time PHMSA had no safety standards in place for underground natural gas storage facilities at all, but it was still an interstate facility. What the state of Kansas was trying to apply were state based, state developed safety standards to that interstate facility.

What the district court found in that case was that this is preempted. The fact that PHMSA hadn’t established any safety standards of its own at the time didn’t really matter under the statute.

All the statute really asks is, “Is this an interstate facility?” – it was, because it was FERC jurisdictional – and “What the state was trying to apply to that facility, is that a safety standard?” It clearly was. The court was like, “It doesn’t matter that PHMSA isn’t actively regulating safety. All that matters is the state is trying to regulate safety, so it’s preempted.”

What that District Court decision highlighted was a gap in the federal safety standards that has since been filled. PHMSA came out with underground gas storage facility rules subsequent to that District Court decision.

That decision itself was one of the things that started the conversation within PHMSA about “Should we start developing rules for interstate underground natural gas storage facilities?” There was another event in Aliso Canyon, a couple of years later, that accelerated the process, but this was one of those cases that highlighted the gap that needed to be addressed.

Russel: I think the thing for me, as an engineer, when I’m listening to this is I understand the rationale for the decision from a legal perspective. At the same time, if I’m the state of Kansas, I’m like, “Yeah, but that leaves a pretty significant hole from a safety perspective and in terms of my duty to protect the public because there are no federal guidelines.”

Keith: That’s how the state came at it in that case. At the time, PHMSA didn’t have rules. This facility is…

Russel: You’re not going to let me regulate them, but the people that are supposed to aren’t. That seems to be a problem. It’s interesting. I understand the legal answer, but in the moment…Of course, since that time, that’s been addressed, which is a good thing.

I don’t know. It’s just fascinating to me. It’s one of those places where understanding the law and understanding engineering and safety, it’s just from what framework am I answering the question. Really, the work we try to do is unify that stuff.

Keith: The tension on the policy side is the state of Kansas clearly thought what it was doing was necessary to protect the safety of its citizens. That’s a necessary aspect of all these preemption cases.

Generally, it’s usually a state or locality is doing something that it thinks is necessary for safety purposes. Some of them are for other purposes. Maybe their hearts aren’t necessarily in the wrong place.

Then you have this federal statute. It was put in place for a reason, particularly for the interstate facilities, to ensure uniformity and effective administration of the program on a transportation that’s clearly occurring across state lines.

In that case, Kansas did what he thought it needed to do for its citizens, but I think the federal judge got it right in saying, “The law is pretty clear here. This is preempted.” PHMSA came along afterwards and filled the gap with rules and regulations.

Russel: It’s fascinating. As we’re sitting here talking, I’m scanning this paper. There’s a lot of really interesting specific questions, one of which is around what is a city’s authority to enforce a provision.

Keith: There were some interesting cases that came up. I think the one you’re referring to, there was a Ninth Circuit case where the city had a franchise agreement with a pipeline company that allowed the pipeline to pass through the city limits or whatever. As a condition of the franchise agreement, the pipeline was required to do certain things.

Following an incident that happened on the pipeline, the city wanted to put hydrostatic pressure testing requirements, things that were clearly safety standards, into this franchise agreement, that the pipeline operator needed to operate the pipeline within the bounds of the city.

The pipeline operator challenged that proposed clause in the franchise agreement and said it was preempted. The Ninth Circuit agreed. In that case, the wrinkle was that the court assumed that it was not an interstate pipeline, that it was an intrastate pipeline, but the city was not the certified state authority that was authorized to regulate pipeline safety in the state.

It was in the state of Washington. Washington Utilities and Transportation Commission, I think, was the certified state authority. What the court said was the only state authority that can apply safety standards to intrastate facilities in Washington is this commission.

The city is not the commission, so the city can’t insert safety standards into a franchise agreement because that’s not allowed under the statute. You have to have a certification.

Russel: As we’re talking this through, Keith, one of the questions that’s coming up for me…I apologize because you’re probably not going to want to answer this question. [laughs] I apologize in advance for the question I’m about to ask.

I’m thinking about what’s been referred to as the Mega Rule and all of the gathering pipelines that are getting gobbled up, if you will, into federal jurisdiction. How does that impact this preemption issue?

Keith: That is a very interesting, I would say, multi-level question. The first thing that it will impact is lines that are becoming regulated are now going to be treated as jurisdictional under the Pipeline Safety Act and under the rules.

For some of these new categories, like the Type C onshore gas gathering lines that’s a subset of gathering lines in Class 1, those are now clearly jurisdictional under the Pipeline Safety Act, clearly regulated by PHMSA. Preemption should attach to those Type C lines.

I’m not sure how it would work with the Type R lines. I think that’s a more difficult question, as to whether the information collection effort that’s applying to Type R lines, how would that apply for preemption purposes. That’s more of an open question.

On the Type C lines, those lines are clearly jurisdictional now. The other thing with most gathering lines is they’re not FERC jurisdictional interstate lines. You’re usually dealing with intrastate, which means you’re usually dealing with a state authority that’s going to be regulating those gathering lines.

Then you’re going to come into the state authority. They have to adopt these news Type C rules. Where does that stand at the state level? Are they going to do additional or more stringent requirements beyond the Type C rules? If they do, are they compatible with PHMSA’s rules?

Then the other question that becomes equally as interesting is, what about other state authorities in the state or localities that try to impose rules or regulations on these gathering lines? Are they going to be preempted? Are they going to qualify as safety standards that are preempted under the Pipeline Safety Act?

Russel: To me, it’s a fascinating question. We’re probably, as an industry, a ways away from clarifying these answers. I’m thinking about some of the states that I’m aware of what’s going on. Different states have different capabilities. They have different levels and types of stakeholder engagement and different reactions to all that.

Some states, like Colorado, that’s applying pipeline safety rules to things that are outside of current PHMSA jurisdiction, like produced water systems. Then you’ve got other places where they have historically had rules around gathering.

Now those rules are going to be on the jurisdictional pipeline. It’s a tough time to be an operator of pipelines in that domain. I’ll just say that.

Keith: I think your first question is a very good one. To even be talking about preemption under the Pipeline Safety Act, we have to be dealing with a pipeline that is jurisdictional under the Pipeline Safety Act.

You talked about produced water lines. PHMSA has been pretty consistent that if you’re not moving gas or hazardous liquid, you’re not a pipeline facility, at least for purposes of the Pipeline Safety Act.

There are also some other interesting jurisdictional wrinkles that come into play on preemption when you start dealing with when transportation ends in a pipeline system when you’re dealing with deliveries to customers.

There have been some cases involving preemption for regulations of things dealing with distribution of gas to homeowners or residences. There’s some interesting preemption issues there. Very interesting type questions when you’re dealing with if the activity is jurisdictional. It has to be jurisdictional for us to even be talking about preemption.

Then when we get into now we’ve got a jurisdictional activity, by the way, PHMSA has just expanded its jurisdiction to bring in this new category of underground natural gas storage facility or Type C gas gathering lines.

What you’re going to find, probably, is somebody has been regulating something in that space that’s probably safety related, for a while. It never really came up before because it wasn’t an issue. Now it’s an issue.

We’ve seen that, with underground gas storage as a good example, where there were state environmental authorities or other authorities. They never participated in the PHMSA program. There were never any PHMSA rules. It wasn’t an issue. Now you’ve got these new PHMSA rules.

What are your choices? You have to go get a certification and participate in the program, or the rules that you’ve been applying for a while, they could end up being preempted under the federal law.

Russel: It’s a big challenge for the states as well. [laughs] I guess change keeps us busy.

Keith: Change is always a good thing for the lawyers. I’m not sure [laughs] it’s a good thing for everybody else who’s trying to to run the railroads on time.

Russel: What I see, at least in my experience, is a lot of the operators are really striving to get control of their programs and understand, holistically, this is my program. Then this is how the program is applied to different facilities. That’s probably an easier approach than coming at it…What facilities do I have? What programs do I need to implement?

Keith: Most of the questions we deal with on preemption are when a regulator comes knocking at a client’s door. Doesn’t usually knock at their door, but now they’re knocking. They’re asking questions about a program that the client hasn’t been aware of or maybe has tacitly been following for a while.

Now there’s been some concerns that are raised, usually in the form of something that this new regulator is asking me to do is running afoul of some other program that I have in place or some other requirement that I have to meet in PHMSA land.

Then the question becomes, do we have a preemption issue here? Even if you have a preemption issue, it’s a whole different ball of wax of what am I going to do about it. In a lot of cases, yeah. Do you have a preemption argument? Sure, but people have a lot of arguments.

What are you going to do with it? Where do you go? Do you go back to the regulator, try to talk to them? Do you go to PHMSA, try to get some assistance from PHMSA like the PUC did on the interpretation request? Do you go to federal court?

Just because you have a potential preemption question, it doesn’t necessarily mean that there’s an easy path to clearing it up. It’s a lot more difficult than that in most cases.

Russel: I have learned a whole lot, as I often do in these conversations with you, Keith, about why I’m not an attorney.

Keith: You are not unique in that respect. For personal sanity, quality of life, a lot of people forgo the profession.

Russel: I will say that as I’ve gotten to the latter part of my career, I have spent more time working with attorneys and some very good, talented attorneys like yourself that are not just good attorneys. They also understand pipelining and the technology around it. These conversations often become quite fascinating.

Keith: One of the things that’s been most interesting for me is when I started doing this, it was before a lot of the shale gas development. PHMSA was this sleepy agency. People weren’t taking pipeline cases to the Supreme Court.

As the world around me has changed with all these rules and regulations and interest in pipelines, I’ve grown up. It’s allowed me to grow up at the same time. It’s been a great and rewarding experience. I’ve grown as all of this has grown around me. It’s really challenging. It’s really challenging.

Russel: My experience is very similar. Prior to about 2007, I was pretty much just working in measurement automation, SCADA, that sort of thing, and trying to build systems of value for customers but really with no exposure to any kind of PHMSA regulations or requirements.

Then the Control Room Management Rule came out. I went to school to understand not just what was in the rule but what was the science and the human factor science and the incidents behind why the rule was coming. I really got excited about the business again. Like, “Oh, this is no longer about just being a technical geek. This is about improving pipeline safety.”

Keith: People used to say, “You do what for who?” I’d be like, “I work over at the Department of Transportation doing pipelines.” They’d say, “DOT does pipelines?” Now, it’s totally different. You talk to people and like, “Oh, you do pipelines?” It’s just more of an interesting topic.

Russel: Yeah, that’s true. That’s true. Well, listen this has been a pleasure as always, Keith. We need to not go so long between conversations. I’ve missed having you on and talking about this stuff.

Keith: No, I’ve appreciated my brief hiatus here from the PHMSA rulemaking process. I’m sure they’re going to pay it forward and come out with some new and interesting rules. The Gas Pipeline Leak Detection and Repair Rule, that’s in the queue.

I think it’s over at the Office of Management Budget. PHMSA is hoping to get that one out pretty soon, at least as a proposed rule. I think we’ll probably return to our regular programming sometime soon.

Russel: If we do and we have another GPAC meeting, I’ll have to get together with you for a cocktail in DC.

Keith: That sounds like a plan.

Russel: All right, sir. Good to talk to you. Look forward to having you back.

Keith: Thanks, Russel. Talk to you soon.

Russel: I hope you enjoyed this week’s episode of the Pipeliners Podcast and our conversation with Keith. Just a reminder before you go. You should register to win our customized Pipeliners Podcast YETI tumbler. Just visit PipelinePodcastNetwork.com/Win and enter yourself in the drawing.

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Transcription by CastingWords