Adopted Rules Title 16

TITLE 16. ECONOMIC REGULATION

PART 1. RAILROAD COMMISSION OF TEXAS

CHAPTER 8. PIPELINE SAFETY REGULATIONS

The Commission adopts amendments, in Subchapter A, to §8.1, relating to General Applicability and Standards, and, in Subchapter B, to §8.101, relating to Pipeline Integrity Assessment and Management Plans for Natural Gas and Hazardous Liquids Pipelines. The amendments to §8.1 are adopted with changes to the proposed version, and the amendments to §8.101 are adopted without changes to the proposed version. The proposals were published in the October 10, 2008, issue of the Texas Register (33 TexReg 8461).

The Commission adopts the amendments to update the adoption by reference of federal pipeline safety provisions and citations and to address the regulation of pipelines and some production facilities in populated areas.

The Commission received comments on the proposed amendments to §8.1 and §8.101 from nine entities. Five groups or associations submitted comments: Texas Pipeline Association ("TPA"); Texas Independent Producers and Royalty Owners ("TIPRO"); Texas Oil and Gas Association ("TxOGA"); Permian Basin Petroleum Association ("PBPA"); and Texas Coalition of Cities for Utility Issues ("TCCFUI"), whose member cities are Abernathy, Addison, Alamo, Allen, Andrews, Arlington, Balcones Heights, Belton, Benbrook, Big Spring, Bowie, Breckenridge, Brenham, Brookside Village, Brownfield, Brownwood, Buffalo, Canyon, Carrollton, Cedar Hill, Center, Cleburne, Conroe, Corinth, Corpus Christi, Cottonwood Shores, Crockett, Dallas, Denison, Denton, Dickinson, El Lago, Electra, Euless, Fairview, Flower Mound, Fort Worth Fredericksburg, Friendswood, Frisco, Galveston, Grand Prairie, Grapevine, Greenville, Gregory, Henrietta, Huntsville, Irving, La Grange, La Joya, Lampasas, Lancaster, Laredo, League City, Leon Valley, Levelland, Lewisville, Longview, Los Fresnos, Mansfield, McAllen, Midlothian, Missouri City, Newark, Nolanville, North Richland Hills, Oak Point, Palacios, Pampa, Paris, Pearsall, Plainview, Plano, Port Neches, Ralls, Refugio, Reno, Richardson, River Oaks, Rosenberg, San Jacinto City, San Marcos, San Saba, Selma, Seminole, Seymour, Smithville, Snyder, South Padre Island, Spearman, Stephenville, Sugar Land, Sunset Valley, Sweeny, Taylor Lake Village, Terrell, Thompsons, Timpson, Trophy Club, Tyler, University Park, Vernon, Victoria, Waxahachie, Webster, West University Place, and Westlake. Other comments were submitted by CenterPoint Energy Arkla, CenterPoint Energy Entex and CenterPoint Energy Intrastate Pipeline, Inc. (collectively "CenterPoint"); Texas Gas Service ("TGS"); CPS Energy; and one individual.

TPA stated that it appreciates the Commission's efforts to clarify the issues identified last year.

TIPRO commented that it understands the purpose of the proposed changes is to implement new federal regulations governing persons owning or operating pipelines in Texas. By adopting the federal regulation by reference, rules covering pipeline safety in Texas would conform to federal requirements. These rules should be no more or no less stringent than the federal rules. TIPRO agrees with that effort, and with the Commission's authority to regulate all common carrier and common purchaser pipelines in Texas. TIPRO also acknowledged that the Commission has authority to regulate production facilities in Texas, including production and flow lines contained on the lease, but seeks clarification on several specific items contained in the rule proposal.

PBPA stated its full support of the comments provided by TxOGA regarding these proposed rule changes.

TCCFUI stated that, overall, the rules provide a positive revision to the Commission's pipeline safety rules. It is critical to the safety of the general public, and in particular the populations of urban areas, that the Commission continue to examine and amend its pipeline safety rules to put in place a regime that is comprehensive and consistent with federal law, yet efficient in its implementation. Given the increasing production of natural gas in densely populated areas, such as in the Barnett Shale, it is indeed imperative that the Commission update its pipeline safety rules to create orderly and effective mechanisms to handle penalties for violations, leak complaints, and odorization issues with respect to natural gas lines. Public awareness regarding natural gas pipelines is also an important component to pipeline safety, both through public education and public notice. TCCFUI stated that the proposed rules represent an excellent step in this direction.

CenterPoint stated its general support of the goal of updating the state rules to achieve consistency with their federal counterparts, and acknowledged that the Commission has both the right and a policy imperative to amplify upon the federal rules and enact stricter rules governing intrastate pipelines.

TGS stated its support of the efforts of the Commission to clarify the rules and increase safety within the industry. TGS supports the concepts contained in the proposed Chapter 8 rules.

CPS Energy agreed with a vast majority of the proposed Chapter 8 rule changes.

Regarding new subparagraph (B) in §8.1(a)(1), one commenter stated that the wording of this paragraph is confusing, because of how it references both gathering and production after the first point of measurement as the beginning of gathering per 49 CFR 192. If the first point of measurement coincides with the endpoint of production and beginning of gathering per 49 CFR 192, then lines after that point are gathering, not production. The end of production is determined by API RP-80 as incorporated by 49 CFR 192, not by the first point of measurement--unless the Commission's intent is to make the State's implementation of 49 CFR 192 more stringent than the revised 49 CFR 192 gas gathering rule. By stating that lines beyond the first point of measurement shall be subject to 49 CFR 192.8 and to the rules as defined as Type A or Type B gathering lines, the commenter assumes that this is simply the Commission implementing 49 CFR 192.8 to determine if a gathering line is a Type A or a Type B, and also if it is a regulated line based on population density.

TIPRO expressed concern with the inclusion of the word "production" in this section of the rule, and seeks clarification on the use of the phrase "and production" in this section of the rule. If the Commission intends to adopt the federal rules by reference and not expand the number or type of pipelines covered by the proposal, TIPRO agrees with the efforts. However, TIPRO believes the inclusion of "production" expands the scope of the federal rules. TIPRO seeks clarification to determine if that expansion is intended. TIPRO stated that it and others negotiated with the Office of Pipeline and Hazardous Material Safety Administration during the development of the federal pipeline safety regulations to ensure that the safety regulations only applied to pipelines downstream of the "first point of measurement." This agreement limits the application of these rules to most of the production and flow lines at production facilities. TIPRO believes that the Commission's efforts should recognize this agreement and the Commission should focus the safety rules to only those lines covered by the federal requirements found generally in 49 CFR Part 192 and specifically at 49 CFR Part 192.8.

TxOGA acknowledges the Commission's authority to regulate production facilities to protect the safety of the public. TxOGA therefore does not oppose appropriate Commission regulation of gas production facilities in populated areas. TxOGA offered alternative wording for this subparagraph, the only substantive change being to make gas production facilities in Class 2, 3, or 4 areas subject only to the regulations defined for Type B gas gathering lines. The remainder of the changes TxOGA suggests are simply clarifications; they are not intended to make any change to the scope of the facilities proposed by the Commission to become subject to safety regulation under its rules. In particular, the proposed deletion of the phrases "pipeline and gathering and" and "The gathering and" removes references to facilities other than production facilities and does not affect the Commission's regulation of gas pipelines (including gas gathering lines), as they are included in §8.1(a)(1)(A) which makes the Commission's regulation applicable to "all gas pipeline facilities and facilities used in the intrastate transportation of natural gas, including master metered systems, as provided in 49 United States Code (U.S.C.) §60101, et seq.; and Texas Utilities Code, §§121.001-121.507." Incorporation of the federal regulations by reference already makes gas gathering lines in Class 2, 3, or 4 areas subject to regulation as Type A or Type B gas gathering lines.

TxOGA's comments state that it was an active participant in the several federal rulemaking efforts that culminated in the adoption of new 49 CFR Part 192 ("Part 192") definitions of gas gathering and regulated gas gathering in March, 2006. The Association agrees that the current federal regulations, as explained by a U. S. Department of Transportation Pipeline and Hazardous Materials Safety Administration ("PHMSA") representative in a number of workshops held in various states during 2006 following the rule adoption, reasonably reflect both the PHMSA and the oil and gas industry understanding as to which facilities should be regulated as pipeline facilities by the states. TxOGA understands that the applicability language in proposed §8.1(a)(1)(B) is intended to apply existing Commission authority to impose new public safety regulation upon certain production facilities and is not intended to suggest that these production facilities are "pipeline facilities" and thus subject to pipeline safety regulation.

TxOGA recognizes that the subset of federal gas gathering line safety regulations applicable to Type B gas gathering lines addresses the issues identified by PHMSA and the Commission as the primary causes of gas pipeline failures or other incidents. Application of the Type B regulations to gas production facilities in regulated areas means that all such facilities will have to apply the federal regulations for corrosion control (for metallic pipelines), for establishment of damage prevention and public education programs, for installation and maintenance of line markers, and for determination of maximum allowable operating pressure ("MAOP"). In addition, if a line is new, replaced, relocated, or otherwise changed, the design, installation, construction, initial inspection, and initial test must be in accordance with federal gas pipeline safety regulations. TxOGA agrees that these public safety protection regulations are appropriate for application to onshore gas production facilities in Class 2, 3, or 4 areas.

In its comments on the Commission's 2007 proposal, TxOGA did not object to the imposition of Type A gathering line regulations on certain higher pressure production operations. In making those comments, it was TxOGA's understanding--as reflected in its recommendation for a written definition of the "first point of measurement"--that gas production facility regulation would begin at "the point at which natural gas is measured, after the first point of separation, for the purpose of reporting monthly production to the Commission as required by §3.27(a), (b), and (e) (relating to Gas To Be Measured and Surface Commingling of Gas), but does not include prior measurement of gas vented, flared, or used on the lease or unit or to prior measurement for well testing or reservoir management purposes." TxOGA expected that there would be very few facilities to which Type A regulation would apply given this clarification of the starting point for production facility regulation.

TxOGA now understands the Commission's intent in the current proposal to be that the beginning of production regulation would begin much further upstream--at the point at which gas production is measured for any purpose. TxOGA does not object to this change, provided that regulation of production facilities is limited to the rules applicable to Type B gas gathering lines. Application of Type A gas gathering line regulations to production operations would unreasonably impose new regulatory requirements on operations for which such requirements could not have been foreseen and that were not designed to be regulated in that manner.

TxOGA pointed out that many producers have used new technology in their upstream operations, including new flow line and production line materials. An example is various brands of non-metallic composite piping, designed for applications which, in the past, would have required steel pipe. This piping is not only less expensive to install and maintain, it is corrosion-resistant by nature. The design specifications for these lines make them appropriate for this use, but published reference standards for these materials have not yet been incorporated in the federal pipeline safety regulations. Such a standard for at least one popular brand of composite pipe is reportedly nearing PHMSA acceptance, but other equally or even more appropriate materials are certain to be developed and need to be available for producers to use. Such "non-metallic" lines for which there is not an approved reference standard and for which the maximum allowable operating pressure ("MAOP") exceeds 125 psig will be classified as Type A lines under the Commission's proposed rule, unless the operators are able to obtain relief through a cumbersome, site-specific waiver process.

TxOGA stated that, generally, operators do not have the detailed records to establish the actual hoop stress that is the specified minimum yield strength ("SMYS") for existing steel production lines. Not only was there never any need for such records to be maintained in the past, many producers operate properties obtained from other producers (via purchase or trade), and any such records or institutional memory as to the design specifications of the pipe are no longer available. Because the destructive testing needed to accurately determine the actual yield strength is both expensive and time-consuming, producers must rely on the very conservative default yield strength value in the federal regulation as the value to plug into the hoop stress equation. This low "default" yield strength value is expected to cause some existing production lines--upstream of the first point of measurement previously recommended by TxOGA--to be artificially classified as Type A lines.

TxOGA commented that the nominal size of most of the line pipe used in production operations is in the two-inch to four-inch range (even though it can be as high as six-inches in a few instances). While the default yield strength may cause the MAOP to exceed 20% of the calculated SMYS for some of these lines, the pressures in such pipes in production operations will be well within acceptable safety tolerances (and most likely will actually be below 20% of the actual SMYS). There is little (if any) benefit to be derived from imposing Type A gas gathering regulation on these facilities.

TxOGA stated that gas gathering line operations tend to be more extensive in areal scope than production operations. Type A gathering line regulation includes comprehensive facility survey, re-testing, and record-keeping requirements. The Operator Qualification and Operations and Maintenance Manual requirements are especially onerous. The radically different economies of scale for the much smaller production operations would make the additional requirements of Type A regulation unduly burdensome for producers, particularly since no need for this additional level of regulation has been demonstrated. TxOGA does not believe that it is necessary or appropriate to apply the Type A gas gathering line regulations to production operations. The Commission is certainly not required to do so by any part of its agreement to administer the federal pipeline safety regulations, since this agreement does not apply to regulation of production operations. Application of the Type B gas gathering line regulations to production facilities will provide the public the necessary level of protection. These regulations can always be supplemented at a later date should the Commission deem necessary.

Finally, TxOGA presumes that any request for waiver of the construction standards applicable to MAOP determinations or to the construction of new, replaced, or relocated production facilities would be subject to the procedures of §8.125 (relating to Waiver Procedure), which states that an application for waiver of a pipeline safety rule is generally site-specific. Because of the various pipe materials, such as various brands and grades of non-metallic composite pipe, that are now in common use in production operations but for which reference standards have not yet been adopted by PHMSA, it would be very desirable for an operator (or even the industry as a whole) to be able to get a blanket waiver for use of particular brands and grades of non-metallic pipe in specified (e.g., maximum pressure, temperature range, product, etc.) applications. TxOGA recommends that this be considered by the Commission in a future pipeline safety rulemaking.

In response to these comments regarding the wording of new subparagraph (B) in §8.1(a)(1), the Commission disagrees with suggestions and requests for clarification that would limit the scope of the Commission's safety regulatory authority to the limits in the federal rules. The Commission confirms its intent to include in its safety regulations those gathering and production lines beyond the first point of measurement. The Commission intends that its safety regulation be more comprehensive than the standard imposed under the federal rules. The Commission finds that applying the federal concepts, which are based on pipeline operating pressures and population densities, to these upstream facilities ensures that they will be regulated in a manner that is consistent with a risk-based approach. Generally speaking, historically, oil and gas exploration and production have taken place well away from densely populated areas. Now, however, as such operations are increasingly close to or in urban areas, it is consistent with the federal risk model that production and gathering lines be regulated, using a risk-based model, all along their lengths. The notion that regulation of production facilities should be limited to the rules applicable to Type B gas gathering lines because application of Type A gas gathering line regulations to production operations would unreasonably impose new regulatory requirements on operations for which such requirements could not have been foreseen and that were not designed to be regulated in that manner is inconsistent with information provided by the industry to the Commission, specifically, that such pipelines are already designed to meet national industry standards.

The Commission agrees that producers using new technology may need to secure site-specific waivers using the process set forth in §8.125. The Commission will address these on a case-by-case basis. In addition, there is agency precedent for securing a general waiver. In 1996, the Commission approved the petition of several intrastate pipelines for waivers from the standards of 49 C.F.R. §192.485 and §192.713(a) to allow use by the applicants of a proprietary composite reinforced (CR) sleeve material, the Clock Spring Wrap. The Commission recognizes that because standards have not yet been adopted by PHMSA for composite pipe materials, obtaining a waiver from the Commission would be an opportunity for the Texas pipeline industry to secure approval for the use of these materials.

With respect to proposed new subsection (g) in §8.1, which relates to compliance deadlines to establish the time by which operators must comply with pipeline safety requirements, TxOGA commended the Commission for its proposal of reasonable deadlines for newly regulated operators to come into compliance with its rules. The deadlines are generally consistent with those in the federal pipeline safety rules for newly regulated gas gathering line operators. TxOGA's only recommendation in regard to the wording of the proposal is to delete the proposed §8.1(g)(2)(F) references to other provisions applicable to Type A gathering lines. The Commission disagrees with this comment for the reasons set forth in foregoing paragraphs.

TxOGA also recommended that the Commission employ an aggressive education outreach to producers through Notices to Operators, publications (including Frequently Asked Questions), and several workshops for oil and gas producers. Many producers who have never operated "pipelines" and never been subject to the Commission's pipeline safety rules are likely to have overlooked this proposal and be unaware that the Commission is about to adopt public safety rules applicable to producers. The Commission agrees with this recommendation and will be utilizing all available opportunities to disseminate this information throughout the industry.

The Commission's proposal to exclude gathering lines from the requirements of §8.101(b), relating to the deadlines for integrity testing for natural gas and hazardous liquids pipelines, garnered comments in support. TPA supports this narrowing of the applicability of the Commission's pipeline integrity rule. This change will provide the greatest focus on the pipeline facilities most likely to pose the greatest risk. This change also brings the Commission's rule into alignment with the new federal approach on regulated gathering lines, which is being incorporated into the Commission's rules in this rulemaking. TxOGA supports the Commission's proposed changes to §8.101 to align the Commission's pipeline safety regulations with federal requirements, which will allow operators to focus their resources where there is the most benefit to the public in terms of public safety protection using a risk-based approach. TxOGA believes that recognizing the lower risks posed by gas gathering lines and focusing integrity management requirements on gas transmission and hazardous liquid pipelines is the correct and prudent approach. TxOGA requests that the Commission issue gathering line operators a blanket stay of enforcement for these Commission integrity management requirements pending adoption of this rule change. The Commission agrees with these comments, but declines to include any blanket declarations of enforcement because that is outside the scope of the rulemaking.

In §8.1(a)(1), the Commission adopts amendments to remove the word "natural" in subparagraph (A) and to add new subparagraph (B) to address onshore pipeline and gathering and production facilities in designated Class 2, Class 3, and Class 4 locations. In response to an earlier proposal, the Commission received comments concerning the removal of the word "natural" in subparagraph (A), which originally was proposed to clarify that LPG distribution systems are also regulated under the safety rules. The new proposal would add LPG distribution systems as a separate type of facility as was done with master meter operators in that same subparagraph.

In §8.1(b), the Commission adopts a change in the effective date from July 1, 2005, to August 25, 2008, to reflect a new date for the adoption by reference of federal pipeline safety statutes, and adds new wording in paragraphs (3) and (4) to add references to 49 CFR Part 40 and to another Commission rule, 16 TAC §3.70, relating to Pipeline Permits Required.

The Commission adopts the amendments in §8.1(b) to update the minimum safety standards and to adopt by reference the United States Department of Transportation's (USDOT) pipeline safety standards found in 49 U.S.C. §§60101, et seq.; 49 Code of Federal Regulations (CFR) Part 40, Procedures for Transportation Workplace Drug and Alcohol Testing Programs; 49 CFR Part 191, Transportation of Natural and Other Gas by Pipeline; Annual Reports, Incident Reports, and Safety-Related Condition Reports; 49 CFR Part 192, Transportation of Natural and Other Gas by Pipeline: Minimum Federal Safety Standards; 49 CFR Part 193, Liquefied Natural Gas Facilities: Federal Safety Standards; 49 U.S.C. §§60101, et seq.; 49 CFR Part 195, Transportation of Hazardous Liquids by Pipeline; and 49 CFR Part 199, Drug and Alcohol Testing. The rule adopts the federal pipeline safety standards as of August 25, 2008. The federal safety rule amendments that are captured are summarized in the following paragraphs.

USDOT's Amendment No. 192-101(102) and 195-85(86), published at 70 Federal Register (FR) 61571, addressed current regulations governing integrity management of gas transmission lines where an operator using direct assessment to evaluate corrosion risks must carry out the direct assessment according to PHMSA standards. In response to a statutory directive, the final rule prescribes similar standards operators must meet when they use direct assessment on certain other onshore gas, hazardous liquid, and carbon dioxide pipelines. PHMSA stated that broader application of direct assessment standards will enhance public confidence in the use of direct assessment to assure pipeline safety. The final rule took effect November 25, 2005.

USDOT's Amendment No. 192-102, published at 71 FR 13289, adopted a consensus standard to distinguish onshore gathering lines from other gas pipelines and from production operations. In addition, it established safety rules for certain onshore gathering lines in rural areas and revised current rules for certain onshore gathering lines in non-rural areas. Operators will use a new risk-based approach to determine which onshore gathering lines are subject to PHMSA's gas pipeline safety rules and which of these rules the lines must meet. PHMSA intended the action to reduce disagreements over classifications of onshore gathering lines, increase public confidence in the safety of onshore gathering lines, and provide safety rules consistent with the risks of onshore gathering lines. The final rule took effect April 14, 2006.

Amendment Nos. 192-103, 193-19, and 195-86, published at 71 FR 33402, updated the pipeline safety regulations to incorporate by reference all or parts of new editions of voluntary consensus technical standards to enable pipeline operators to utilize current technology, materials, and practices, and took effect July 10, 2006.

Docket OST-2007-26828, published at 72 FR 1298, was an interim final rule regarding the National Highway Transportation Safety Administration's (NHTSA's) recently approved new breath tube alcohol screening device which will qualify for use in DOT agency-regulated testing once it appears on NHTSA's conforming products list. The interim final rule provides a procedure for use of the new device and removes procedures for a previously approved breath tube alcohol screening device which is no longer being manufactured. The interim final rule took effect January 11, 2007.

Amendment Nos. 192-103 and 195-86, published at 72 FR 4655, addressed PHMSA's amendment of a final rule published in the Federal Register on June 9, 2006, which updated the pipeline safety regulations to incorporate by reference all or parts of new editions of voluntary consensus technical standards to enable pipeline operators to utilize current technology, materials, and practices. The final rule took effect March 5, 2007.

Docket No. PHMSA-2005-22642, published at 72 FR 20055, concerned a final rule requiring operators to use design and construction features in new and replaced gas transmission pipelines to reduce the risk of internal corrosion. The design and construction features required by the rule will reduce the risk of internal corrosion and related pipeline failures by reducing the potential for accumulation of liquids and facilitating operation and maintenance practices that address internal corrosion. The final rule took effect May 23, 2007.

Amendment Nos. 192-104 and 195-87, published at 72 FR 39012, modified the integrity management regulations for hazardous liquid and natural gas transmission pipelines. The modifications included adding an eight-month window to the period for reassessing hazardous liquid pipelines; modifying notification requirements for operators of hazardous liquid and natural gas pipelines; repealing a requirement for gas operators to notify local authorities; and allowing alternatives in calculating pressure reduction when making an immediate repair on a hazardous liquid pipeline. The action was intended to improve pipeline safety by clarifying the integrity management regulations and providing operators with increased flexibility in implementing their integrity management programs. The final rule was effective August 16, 2007.

Federal Register Docket No. 07-55511, published at 72 FR 54600, contained a correction in the heading in 49 CFR Part §40.209. In PHMSA Docket 2003-15852, published at 72 FR 70808, the rules for public awareness were relaxed for master meter operators and operators of small LPG distribution systems, effective January 14, 2008. These operators typically manage property and incidentally provide gas service to customers located on the property. The change provided a less burdensome means for the operators to comply with the public education and awareness programs.

Docket No. PHMSA-2007-0033, published at 73 FR 16562, conformed PHMSA's administrative procedures with the Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006 (PIPES Act) by establishing the procedures PHMSA will follow in issuing safety orders and handling requests for special permits, including emergency special permits. The interim final rule also notified operators about electronic docket information availability; updated addresses, telephone numbers, and routing symbols; and clarified the time period for processing requests for written interpretations of the regulations. The interim final rule did not impose any new operating, maintenance, or other substantive requirements on pipeline owners or operators. The interim final rule was effective April 28, 2008.

Docket OST-2008-0184, published at 73 FR 33735, amended the drug and alcohol testing procedures to authorize employers to disclose to State commercial driver licensing (CDL) authorities the drug and alcohol violations of employees who hold CDLs and operate commercial motor vehicles (CMVs), when a State law requires such reporting. The rule also permitted third-party administrators (TPAs) to provide the same information to State CDL licensing authorities where State law requires the TPAs to do so for owner-operator CMV drivers with CDLs. The interim final rule was effective June 13, 2008.

Docket ID PHMSA-RSPA-2003-15875, published a 73 FR 31634, amended the pipeline safety regulations to extend added protection to certain environmentally sensitive areas that could be damaged by failure of a rural onshore hazardous liquid gathering line or low-stress pipeline. Building on PHMSA's existing regulatory framework, the rule was intended to protect designated "unusually sensitive areas" (USAs), which are locations requiring extra protection because of the presence of sole-source drinking water, endangered species, or other ecological resources. The rule defined "regulated rural onshore hazardous liquid gathering lines" and required operators of these lines to comply with safety requirements that address the most common threats to the integrity of these pipelines: corrosion and third-party damage. In accordance with the PIPES Act of 2006, the rule also significantly narrowed the regulatory exception for rural onshore low-stress hazardous liquid pipelines by extending all existing safety regulations, including integrity management requirements, to large-diameter low-stress pipelines within a defined "buffer" area around a USA. The final rule required operators of these, and all other low-stress pipelines, to comply with annual reporting requirements, furnishing data needed for further rulemaking required by the PIPES Act. The final rule was effective July 3, 2008.

Docket No. OST-2003-15245, published at 73 FR 35961, amends certain provisions of USDOT's drug and alcohol testing procedures to change instructions to collectors, laboratories, medical review officers, and employers regarding adulterated, substituted, diluted, and invalid urine specimen results. These changes are intended to create consistency with specimen validity requirements established by the U.S. Department of Health and Human Services, and to clarify and integrate some measures taken in two interim final rules. The final rule makes specimen validity testing mandatory within the regulated transportation industries. The final rule was effective August 25, 2008.

The Commission adopts new §8.1(g) relating to compliance deadlines to establish the time by which operators must comply with pipeline safety requirements. One purpose of the new subsection is to clarify that operators of a pipeline and/or pipeline facility that is new, replaced, relocated, or otherwise changed must ensure compliance with the applicable requirements of this section at the time the pipeline and/or pipeline facility goes into service. However, the main purpose of the new subsection, as proposed in paragraph (2), is to assist those operators whose pipeline or pipeline facilities have become newly subject to regulation as a result of the changed definition in 49 CFR Part 192 by stating clearly the deadline by which their facilities must be in compliance with the various requirements of 49 CFR Part 192. An operator whose pipeline and/or pipeline facility was not previously regulated but has become subject to regulation pursuant to the changed definition in 49 CFR Part 192 and §8.1(a)(1)(B) must comply with the applicable requirements no later than the stated date, which is the period of time that was specified in the proposed rule. Different deadlines are specified to allow operators enough time to comply with the new requirements, based on the type of changes they would need to make to ensure compliance. As stated in the proposal preamble, the Commission adopts §8.1(g)(2)(A) - (F) with amended wording to substitute dates certain for the compliance deadlines instead of stating them as a particular number of months or years from the effective date of the rule.

In §8.101(b), the Commission removes the word "gathering" from the description of intrastate transmission lines and from the title of Table 1 in subsection (b)(2).

SUBCHAPTER A. GENERAL REQUIREMENTS AND DEFINITIONS

16 TAC §8.1

The Commission adopts the amendments under Texas Natural Resources Code, §81.051 and §81.052, which give the Commission jurisdiction over all common carrier pipelines in Texas, persons owning or operating pipelines in Texas, and their pipelines and oil and gas wells, and authorize the Commission to adopt all necessary rules for governing and regulating persons and their operations under the jurisdiction of the Commission as set forth in §81.051, including such rules as the Commission may consider necessary and appropriate to implement state responsibility under any federal law or rules governing such persons and their operations; Texas Natural Resources Code, §81.0531, which requires the Commission to adopt by rule guidelines to be used in determining the amount of the penalty for a violation of a provision of Title 3 of the Texas Natural Resources Code, or a rule, order, license, permit, or certificate that relates to pipeline safety; Texas Natural Resources Code, §§117.001 - 117.102, which give the Commission jurisdiction over all pipeline transportation of hazardous liquids or carbon dioxide and over all hazardous liquid or carbon dioxide pipeline facilities as provided by 49 United States Code Annotated, §§60101, et seq.; and Texas Utilities Code, §§121.201 - 121.210, which authorize the Commission to adopt safety standards and practices applicable to the transportation of gas and to associated pipeline facilities within Texas to the maximum degree permissible under, and to take any other requisite action in accordance with, 49 United States Code Annotated, §§60101, et seq.; §121.251 and §121.252, which authorize the Commission to regulate the use of malodorants in natural gas; and §§121.5005 - 121.507, which give the Commission authority to regulate the testing of natural gas piping systems in school facilities.

Texas Natural Resources Code, §§81.051, 81.052, 81.0531, and 117.001 - 117.102; Texas Utilities Code, §§121.201 - 121.211, 121.251, 121.252, and 121.5005 - 121.507; and 49 United States Code Annotated, §§60101, et seq., are affected by the amendments.

Statutory authority: Texas Natural Resources Code, §§81.051, 81.052, 81.0531, and 117.001 - 117.102; Texas Utilities Code, §§121.201 - 121.211, 121.251, 121.252, and 121.5005 - 121.507; and 49 United States Code Annotated, §§60101, et seq.

Cross-reference to statute: Texas Natural Resources Code, Chapters 81 and Chapter 117; Texas Utilities Code, Chapter 121; and 49 United States Code Annotated, Chapter 601.

Issued in Austin, Texas, on February 10, 2009.

§8.1.General Applicability and Standards.

(a) Applicability.

(1) The rules in this chapter establish minimum standards of accepted good practice and apply to:

(A) all gas pipeline facilities and facilities used in the intrastate transportation of gas, including LPG distribution systems and master metered systems, as provided in 49 United States Code (U.S.C.) §60101, et seq.; and Texas Utilities Code, §§121.001 - 121.507;

(B) onshore pipeline and gathering and production facilities, beginning after the first point of measurement and ending as defined by 49 CFR Part 192 as the beginning of an onshore gathering line. The gathering and production beyond this first point of measurement shall be subject to 49 CFR Part 192.8 and shall be subject to the rules as defined as Type A or Type B gathering lines as those Class 2, 3, or 4 areas as defined by 49 CFR Part 192.5;

(C) the intrastate pipeline transportation of hazardous liquids or carbon dioxide and all intrastate pipeline facilities as provided in 49 U.S.C. §60101, et seq.; and Texas Natural Resources Code, §117.011 and §117.012; and

(D) all pipeline facilities originating in Texas waters (three marine leagues and all bay areas). These pipeline facilities include those production and flow lines originating at the well.

(2) The regulations do not apply to those facilities and transportation services subject to federal jurisdiction under: 15 U.S.C. §§717, et seq.; or 49 U.S.C. §§60101, et seq.

(b) Minimum safety standards. The Commission adopts by reference the following provisions, as modified in this chapter, effective August 25, 2008.

(1) Natural gas pipelines, including LPG distribution systems and master metered systems, shall be designed, constructed, maintained, and operated in accordance with 49 U.S.C. §60101, et seq.; 49 Code of Federal Regulations (CFR) Part 191, Transportation of Natural and Other Gas by Pipeline; Annual Reports, Incident Reports, and Safety-Related Condition Reports; 49 CFR Part 192, Transportation of Natural and Other Gas by Pipeline: Minimum Federal Safety Standards; and 49 CFR Part 193, Liquefied Natural Gas Facilities: Federal Safety Standards.

(2) Hazardous liquids or carbon dioxide pipelines shall comply with 49 U.S.C. §§60101, et seq.; and 49 CFR Part 195, Transportation of Hazardous Liquids by Pipeline.

(3) All operators of pipelines and/or pipeline facilities shall comply with 49 CFR Part 199, Drug and Alcohol Testing, and 49 CFR Part 40, Procedures for Transportation Workplace Drug and Alcohol Testing Programs.

(4) All operators of pipelines and/or pipeline facilities, other than master metered systems and distribution systems, shall comply with §3.70 of this title (relating to Pipeline Permits Required).

(c) Special situations. Nothing in this chapter shall prevent the Commission, after notice and hearing, from prescribing more stringent standards in particular situations. In special circumstances, the Commission may require the following:

(1) Any operator which cannot determine to its satisfaction the standards applicable to special circumstances may request in writing the Commission's advice and recommendations. In a special case, and for good cause shown, the Commission may authorize exemption, modification, or temporary suspension of any of the provisions of this chapter, pursuant to the provisions of §8.125 of this title (relating to Waiver Procedure).

(2) If an operator transports gas and/or operates pipeline facilities which are in part subject to the jurisdiction of the Commission and in part subject to the Department of Transportation pursuant to 49 U.S.C. §§60101, et seq. the operator may request in writing to the Commission that all of its pipeline facilities and transportation be subject to the exclusive jurisdiction of the Department of Transportation. If the operator files a written statement under oath that it will fully comply with the federal safety rules and regulations, the Commission may grant an exemption from compliance with this chapter.

(d) Concurrent filing. A person filing any document or information with the Department of Transportation pursuant to the requirements of 49 CFR Parts 190, 191, 192, 193, 195, or 199 shall file a copy of that document or information with the Safety Division.

(e) Penalties. A person who submits incorrect or false information with the intent of misleading the Commission regarding any material aspect of an application or other information required to be filed at the Commission may be penalized as set out in Texas Natural Resources Code, §§117.051 - 117.054, and/or Texas Utilities Code, §§121.206 - 121.210, and the Commission may dismiss with prejudice to refiling an application containing incorrect or false information or reject any other filing containing incorrect or false information.

(f) Retroactivity. Nothing in this chapter shall be applied retroactively to any existing intrastate pipeline facilities concerning design, fabrication, installation, or established operating pressure, except as required by the Office of Pipeline Safety, Department of Transportation. All intrastate pipeline facilities shall be subject to the other safety requirements of this chapter.

(g) Compliance deadlines. Operators shall comply with the applicable requirements of this section according to the following guidelines.

(1) Each operator of a pipeline and/or pipeline facility that is new, replaced, relocated, or otherwise changed shall comply with the applicable requirements of this section at the time the pipeline and/or pipeline facility goes into service.

(2) An operator whose pipeline and/or pipeline facility was not previously regulated but has become subject to regulation pursuant to the changed definition in 49 CFR Part 192 and subsection (a)(1)(B) of this section shall comply with the applicable requirements of this section no later than the stated date:

(A) for cathodic protection (49 CFR Part 192), March 1, 2012;

(B) for damage prevention (49 CFR 192.614), September 1, 2010;

(D) for line markers (49 CFR 192.707), March 1, 2011;

(E) for public education and liaison (49 CFR 192.616), March 1, 2011; and

(F) for other provisions applicable to Type A gathering lines (49 CFR 192.8(c)), March 1, 2011.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on February 10, 2009.

TRD-200900539

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: March 2, 2009

Proposal publication date: October 10, 2008

For further information, please call: (512) 475-1295

SUBCHAPTER B. REQUIREMENTS FOR ALL PIPELINES

16 TAC §8.101