• PHMSA & OSHA Issue Guidance on Midstream Facilities
  • September 30, 2015 | Author: Michael D. Caples
  • Law Firm: Butler Snow LLP - Ridgeland Office
  • The Pipeline and Hazardous Materials Safety Administration (PHMSA) and the Occupational Safety and Health Administration (OSHA), at meetings in Washington D.C. at the end of August 2015, issued guidance on the jurisdiction of PHMSA and OSHA relating to midstream facilities. The guidance was intended to clear up gaps or overlaps in the regulatory oversight, since presently both PHMSA and OSHA have regulations that apply to midstream facilities. The proposed guidance was developed to help agencies determine whether piping and facilities, including compressor stations and processing and treating facilities, are subject to regulatory oversight by PHMSA or OSHA. The proposed guidance does not constitute a regulation and does not create a legally enforceable right or obligation, but is intended to address common questions regarding regulation and jurisdiction in the midstream sector.

    At present PHMSA provides regulatory oversight “in transportation”, including transmission or mainlines entering and exiting midstream facilities or storage units. See 49 C.F.R. Parts 192 and 195. OSHA regulations provide oversight within midstream facilities under the Process Safety Management regulations. See 29 C.F.R. Part 1910. Finally, EPA regulates certain aspects of midstream facilities through its Risk Management Program (RMP) and Spill Prevention, Controls and Countermeasures (SPCC) program. See 40 C.F.R. Part 68 and 40 C.F.R. Part 112.

    The guidance clarifies that PHMSA oversight will not include pipelines downstream of the first pressure control device entering the processing facility, and upstream of the last pressure control device leaving the processing facility. Such pipelines would be subject to OSHA oversight, as they are characterized as “within” midstream facilities and not “in transportation”. However, with everything there are exceptions and in this case there is at least one. The main exception to the rule involves piping that “predominantly” bypasses the first pressure control device. In that case PHMSA will retain regulatory oversight. In the absence of bypass, or if the piping is only occasionally used to bypass the first pressure control device, OSHA will have regulatory oversight.

    The guidance defines a midstream processing facility broadly, and clarifies that individual units having a processing function and meeting the applicability of OSHA meet the definition. A processing function is defined as the treatment of products, including but not limited to, dehydration, removal of contaminants by separation or filtration, blending with other products, and heating or cooling units that separate or purify products and remove condensate by distillation.

    Piping that is associated with underground storage used for the “purpose of managing processing facility inventory” will be subject to the regulatory oversight of OSHA. However, piping associated with storage used for transportation is subject to the oversight of PHMSA. Nevertheless, underground storage tanks will continue to be regulated by the States that have underground storage laws and by EPA. The purpose for the storage is therefore critical in determining regulatory oversight of underground storage facilities.

    The guidance does not affect existing statutory or regulatory authority, but is an attempt by the federal agencies to reflect policy and priorities for inspections and enforcement. The guidance has been posted on the PHMSA website, http://www.phmsa.dot.gov/ .