Friday, December 9, 2016

OMB Approves PHMSA Interim Final Rule on Underground Natural Gas Storage

Yesterday the OMB’s Office of Information and Regulatory Affairs (OIRA) announced that it had approved an interim final rule proposed by DOT’s Pipeline and Hazardous Material Safety Administration (PHMSA) concerning the regulation of underground storage facilities for natural gas. This new rulemaking (first published in the Spring 2016 Unified Agenda) was initiated in response to the Aliso Canyon fiasco.

PHMSA is going directly to an interim final rule on this rulemaking so we have no real sense of the specifics that will be included. According to the Fall 2016 Unified Agenda PHMSA is going to require owners to implement two voluntary standards from the American Petroleum Institute (API RP 1170 and API RP 1171) unless “they provide justification” for deviations from those standards. Key provisions to look for will be the time frame for required implementation and the standards to be used to evaluate the justifications for deviations.

With the late addition of this to the rulemaking process and the move to proceed directly to an interim final rule (which can last practically forever) this rulemaking will almost certainly be suggested for Congressional recision action by the 115th Congress in January.

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