8.130, 8.201, 8.235, 8.310, and 8.315, relating to General Applicability and Standards; Definitions;

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1 Railroad Commission of Texas Page 1 of 16 The Railroad Commission of Texas (Commission) proposes amendments to 8.1, 8.5, 8.101, 8.130, 8.201, 8.235, 8.310, and 8.315, relating to General Applicability and Standards; Definitions; Pipeline Integrity Assessment and Management Plans for Natural Gas and Hazardous Liquids Pipelines; Enforcement; Pipeline Safety Program Fees; Natural Gas Pipelines Public Education and Liaison; Hazardous Liquids and Carbon Dioxide Pipelines Public Education and Liaison; and Hazardous Liquids and Carbon Dioxide Pipelines or Pipeline Facilities Located Within 1,000 Feet of a Public School Building or Facility. The purpose of the amendments is to update federal provisions and citations, to correct the name of the Safety Division to Pipeline Safety Division, and to conform the rules to the statutory changes regarding community liaison activities enacted by House Bill 4300, 81st Legislative Session (Regular Session, 2009). The Commission proposes 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 , 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; 49 CFR Part 193, Liquefied Natural Gas Facilities: Federal Safety Standards; 49 U.S.C , et seq.; 49 CFR Part 195, Transportation of Hazardous Liquids by Pipeline; and 49 CFR Part 199, Drug and Alcohol Testing. The current rule adopts the federal pipeline safety standards as of August 25, 2008; the proposed amendment will show this date as February 12, The federal safety rule amendments that will be captured are summarized in the following paragraphs. Docket No. PHMSA , published at 73 FR 62148, prescribed safety requirements for the operation of certain gas transmission pipelines at pressures based on higher operating stress levels. The result is an increase of maximum allowable operating pressure (MAOP) over that currently allowed

2 Railroad Commission of Texas Page 2 of 16 in the regulations. Improvements in pipeline technology assessment methodology, maintenance practices, and management processes over the past 25 years have significantly reduced the risk of failure in pipelines and necessitate updating the standards that govern the MAOP. The rule will generate significant public benefits by reducing the number and consequences of potential incidents and boosting the potential capacity and efficiency of pipeline infrastructure, while promoting rigorous life-cycle maintenance and investment in improved pipe technology. The final rule was scheduled to take effect November 17, However, a stay of the final rule, published at 73 FR 72737, changed the effective date to December 22, 2008, which was 60 days after the final rule was transmitted to Congress. Docket No. PHMSA , published at 73 FR 79002, amended the design factor and design pressure limits for natural gas pipelines made from new Polyamide-11 (PA-11) thermoplastic pipe. These two changes in the regulations allow pipeline operators to operate certain pipelines constructed of new PA-11 pipe at higher operating pressures than is currently allowed for other plastic pipe materials. The final rule took effect January 23, Docket No. PHMSA , published at 74 FR 2889, adopted with minor modifications an interim final rule issued by PHMSA on March 28, 2008, conforming PHMSA s administrative procedures with the Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006 by establishing the procedures PHMSA will follow for issuing safety orders and handling requests for special permits, including emergency special permits. The rule notifies operators about electronic docket information availability; updates addresses for filing reports, telephone numbers, and routing symbols; and clarifies the time period for processing requests for written interpretations of the regulations. The final rule makes minor amendments and technical corrections to the regulatory text in response to written public comments received after issuance of the interim final rule. The final rule took effect February 17, Docket No. PHMSA , published at 74 FR 17099, incorporated by reference the most recent editions of API Specification 5L "Specification for Line Pipe" and API 1104 "Welding of Pipelines

3 Railroad Commission of Texas Page 3 of 16 and Related Facilities." The purpose of this update is to enable pipeline operators to utilize current technology, materials, and practices to help maintain a high level of safety relative to their pipeline operations. PHMSA is not eliminating the use of the current referenced standards but simply allowing the additional use of these new standards. PHMSA may in the future propose to eliminate the incorporation of the existing referenced standards. The rule took effect April 14, Docket No. PHMSA , Amendment Nos , , , and 198-5, published at 74 FR 62503, corrected editorial errors, made minor changes in the regulatory text, reflected changes in governing laws, and clarified certain provisions in the pipeline safety regulations. The rule was intended to enhance the accuracy and reduce misunderstandings of the specified regulations. The amendments contained in the rule are non-substantive. The effective date of the final rule was January 29, Docket No. PHMSA , Amendment Nos and , published at 74 FR 63310, addressed human factors and other aspects of control room management for pipelines where controllers use supervisory control and data acquisition (SCADA) systems. Affected pipeline operators must define the roles and responsibilities of controllers and provide controllers with the necessary information, training, and processes to fulfill these responsibilities. Operators must also implement methods to prevent controller fatigue. The final rule further requires operators to manage SCADA alarms, assure control room considerations are taken into account when changing pipeline equipment or configurations, and review reportable incidents or accidents to determine whether control room actions contributed to the event. Hazardous liquid and gas pipelines are often monitored in a control room by controllers using computer-based equipment, such as a SCADA system, that records and displays operational information about the pipeline system, such as pressures, flow rates, and valve positions. Some SCADA systems are used by controllers to operate pipeline equipment, while, in other cases, controllers may dispatch other personnel to operate equipment in the field. These monitoring and control

4 Railroad Commission of Texas Page 4 of 16 actions, whether via SCADA system commands or direction to field personnel, are a principal means of managing pipeline operations. The rule improves the opportunities to reduce risk through more effective control of pipelines and further requires the statutorily mandated human factors management. The regulations will enhance pipeline safety by coupling strengthened control room management with improved controller training and fatigue management. The effective date of the final rule was February 1, However, at 75 FR 5536, PHMSA made corrections regarding certain dates, both in the preamble and in the amendments. The effective date of the corrections was February 1, Docket No. PHMSA-RSPA , Amendment , published at 74 FR 63906, requires operators of gas distribution pipelines to develop and implement integrity management (IM) programs to enhance safety by identifying and reducing pipeline integrity risks. The IM programs required by this rule are similar to those required for gas transmission pipelines, but tailored to reflect the differences in and among distribution pipelines. Based on the required risk assessments and enhanced controls, the rule also allows for risk-based adjustment of prescribed intervals for leak detection surveys and other fixed-interval requirements in the agency s existing regulations for gas distribution pipelines. To further minimize regulatory burdens, the rule establishes simpler requirements for master meter and small liquefied petroleum gas operators, reflecting the relatively lower risk of these small pipelines. The rule also requires operators to install excess flow valves on new and replaced residential service lines, subject to feasibility criteria outlined in the rule. The final rule addressed statutory mandates and recommendations from the USDOT s Office of the Inspector General and stakeholder groups. The final rule took effect February 2, Following that action, PHMSA corrected the effective date of the final rule and made a minor correction in terminology, published at 75 FR The revised effective date was February 12, The amendments proposed in and conform these rules to the revised wording enacted in Texas Utilities Code, (c) and (d), and in Texas Natural Resources Code, (i)

5 Railroad Commission of Texas Page 5 of 16 and (j) by House Bill 4300 regarding the process by which the operators of natural gas, hazardous liquids, and carbon dioxide pipelines conduct community liaison activities with fire, police, and other appropriate public emergency response officials. The liaison activities must be conducted in person, except as provided by statute. The revised statutory language permits pipeline operators to dispense with having to make multiple efforts to conduct face-to-face meetings; if a pipeline operator is unable to arrange a meeting in person, the operator may conduct liaison activities either by telephone conference call or by delivering liaison information by certified mail, return receipt requested. The proposed amendments in and mirror the statutory wording. The remaining proposed amendments merely correct the name of the Pipeline Safety Division. Mary McDaniel, P.E., Director, Pipeline Safety Division, has determined that for the first five years the amendments will be in effect, there will be minimal fiscal implications for state and local governments as a result of enforcing or administering the proposed amendments. Texas intrastate pipeline operators already must comply with the federal pipeline safety requirements; the Commission s proposed amendments merely update the references to those federal statutes. Changing the name of the division from "Safety Division" to "Pipeline Safety Division" creates no fiscal implications for state or local governments. The changes proposed in and regarding the way pipeline operators conduct public education and liaison activities will have no fiscal implications for state government, and may result in cost savings for local governments. Because pipeline operators will not be required to make multiple efforts to schedule face-to-face community liaison meetings with fire, police, and other appropriate public emergency response officials, and may conduct liaison activities either by telephone conference call or by delivering liaison information by certified mail, return receipt requested, important information will be delivered to emergency response officials without delay. Ms. McDaniel has determined that for each year of the first five years that the amendments will be in effect, the primary public benefit will be accurate references to federal pipeline safety standards

6 Railroad Commission of Texas Page 6 of 16 enforced by the Commission; accurate references to the Commission s administrative division assigned to administer and enforce pipeline safety standards; and a potentially faster delivery of information by pipeline operators to public emergency response officials. The Commission anticipates that there will be no additional cost to individuals, small businesses, or micro-businesses of complying with the proposed amendments. The proposed amendment to 8.1 would simply change the date as of which the Railroad Commission has adopted by reference the federal pipeline safety rules. Texas pipelines are already required to comply with the federal rules. Under 49 U.S.C , et seq., the Railroad Commission is authorized to enforce pipeline safety laws so long as the state s scheme of regulation is as strict as or stricter than the federal system. In order to be considered "as strict as or stricter than" the federal scheme of regulation, the state must adopt every federal rule; there are no exceptions for rules of limited application. Therefore, even though the rules already apply in Texas, the Railroad Commission must also adopt the rules for its own system. The Commission anticipates that there is no cost to individuals, small businesses, or micro-businesses of complying with a change of the division name, and that there will be either no additional cost or perhaps reduced costs of compliance with the proposed amendments to and regarding liaison activities. Because the rules no longer would require a pipeline operator to make multiple efforts to schedule a face-to-face meeting to conduct community education and liaison activities, and may conduct liaison activities either by telephone conference call or by delivering liaison information by certified mail, return receipt requested, there will likely be some savings in time and personnel costs for all Texas intrastate pipeline operators. Texas Government Code, , relating to Adoption of Rules with Adverse Economic Effect, requires that as a part of the rulemaking process, a state agency prepare an economic impact statement that assesses the potential impact of a proposed rule on small businesses and micro-businesses, and a regulatory flexibility analysis that considers alternative methods of achieving the purpose of the rule

7 Railroad Commission of Texas Page 7 of 16 if the proposed rule will have an adverse economic effect on small businesses or micro-businesses. Because the Commission has determined that the proposed amendments will not have an adverse economic effect on individuals, small businesses, or micro-businesses, the economic impact statement and regulatory flexibility analysis described in Texas Government Code, , are not required. Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas ; online at or by electronic mail to rulescoordinator@rrc.state.tx.us. The Commission will accept comments until noon (12:00 p.m.) on Monday, July 26, 2010, which is 31 days after publication in the Texas Register; comments should refer to GUD No The Commission finds that this comment period is reasonable because the proposal and an online comment form will be available on the Commission s web site more than two weeks prior to Texas Register publication of the proposal, giving interested persons additional time to review, analyze, draft, and submit comments. The Commission encourages all interested persons to submit comments no later than the deadline. The Commission cannot guarantee that comments submitted after the deadline will be considered. For further information, call Ms. McDaniel at (512) The status of Commission rulemakings in progress is available at The Commission proposes the amendments under Texas Natural Resources Code, and , 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 , 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, , as amended by House Bill 4300, 81st Legislative Session (Regular Session, 2009), which give the

8 Railroad Commission of Texas Page 8 of 16 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 U.S.C. Section 60101, et seq.; and Texas Utilities Code, , as amended by House Bill 4300, 81st Legislative Session (Regular Session, 2009), 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. Texas Natural Resources Code, , , and , as amended by House Bill 4300, 81st Legislative Session (Regular Session, 2009); Texas Utilities Code, , as amended by House Bill 4300, 81st Legislative Session (Regular Session, 2009); and , ; and 49 United States Code Annotated, 60101, et seq., are affected by the proposed amendments. Statutory authority: Texas Natural Resources Code, , , and , as amended by House Bill 4300, 81st Legislative Session (Regular Session, 2009); Texas Utilities Code, , as amended by House Bill 4300, 81st Legislative Session (Regular Session, 2009); and , ; and 49 United States Code Annotated, 60101, et seq. Cross-reference to statute: Texas Natural Resources Code, Chapter 81 and Chapter 117; Texas Utilities Code, Chapter 121; and 49 United States Code Annotated, Chapter General Applicability and Standards. (a) (No change.) (b) Minimum safety standards. The Commission adopts by reference the following provisions, as modified in this chapter, effective February 12, 2010 [August 25, 2008]. (1)-(4) (No change.)

9 Railroad Commission of Texas Page 9 of 16 (c) (No change.) (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 Pipeline Safety Division. (e)-(g) (No change.) 8.5. Definitions. In addition to the definitions given in 49 CFR Parts 40, 191, 192, 193, 195, and 199, the following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) (No change.) (2) Applicant--A person who has filed with the Pipeline Safety Division a complete application for a waiver to a pipeline safety rule or regulation, or a request to use direct assessment or other technology or assessment methodology not specifically listed in 8.101(b)(1), of this title (relating to Pipeline Integrity Assessment and Management Plans for Natural Gas and Hazardous Liquids Pipelines). (3)-(6) (No change.) (7) Director--The director of the Pipeline Safety Division or the director s delegate. (8) Division--The Pipeline Safety Division of the Commission. (9)-(29) (No change.) Pipeline Integrity Assessment and Management Plans for Natural Gas and Hazardous Liquids Pipelines. (a) (No change.)

10 Railroad Commission of Texas Page 10 of 16 (b) By February 1, 2002, operators of intrastate transmission lines subject to the requirements of 49 CFR Part 192 or 49 CFR Part 195 shall have designated to the Commission on a system-by-system or segment within each system basis whether the pipeline operator has chosen to use the risk-based analysis pursuant to paragraph (1) of this subsection or the prescriptive plan authorized by paragraph (2) of this subsection. Hazardous liquid pipeline operators using the risk-based plan shall complete at least 50% of the initial assessments by January 1, 2006, and the remainder by January 1, 2011; operators using the prescriptive plan shall complete the initial integrity testing by January 1, 2006, or January 1, 2011, pursuant to the requirements of paragraph (2) of this subsection. Natural gas pipeline operators using the risk-based plan shall complete at least 50% of the initial assessments by December 17, 2007, and the remainder by December 17, 2012; operators using the prescriptive plan shall complete the initial integrity testing by December 17, 2007, or December 17, 2012, pursuant to the requirements of paragraph (2) of this subsection. appropriate for each segment: (1) The risk-based plan shall contain at a minimum: (A)-(B) (No change.) (C) assessment of pipeline integrity using at least one of the following methods (i)-(ii) (No change.) in this paragraph after approval by the [Safety Division] director. (iii) direct assessment after approval by the [Safety Division] director; or (iv) other technology or assessment methodology not specifically listed (D)-(E) (No change.) (2) (No change.) (c)-(f) (No change.)

11 Railroad Commission of Texas Page 11 of Enforcement. (a) Periodic inspection. The [Safety] Division shall have responsibility for the administration and enforcement of the provisions of this chapter. To this end, the [Safety] Division shall formulate a plan or program for periodic evaluation of the books, records, and facilities of gas companies and liquids companies operating in Texas on a sampling basis, in order to satisfy the Commission that these companies are in compliance with the provisions of this chapter. (b) Scope of inspection. Upon reasonable notice, the [Safety] Division or its authorized representative may, at any reasonable time, inspect the books, files, records, reports, supplemental data, other documents and information, plant, property, and facilities of a gas company or a liquids company to ensure compliance with the provisions of this chapter. (c) Company obligations. (1) Each operator, officer, employee, and representative of a gas company or a liquids company operating in Texas shall cooperate with the [Safety] Division and its authorized representatives in the administration and enforcement of the provisions of this chapter; in the determination of compliance with the provisions of this chapter; and in the investigation of violations, alleged violations, accidents or incidents involving intrastate pipeline facilities. (2) Each operator, officer, employee, and representative of a gas company or a liquids company operating in Texas shall make readily available all company books, files, records, reports, supplemental data, other documents, and information, and shall make readily accessible all company plant, property, and facilities as the [Safety] Division or its authorized representative may reasonably require in the administration and enforcement of the provisions of this chapter; in the determination of compliance with the provisions of this chapter; and in the investigation of violations, alleged violations, accidents or incidents involving intrastate pipeline facilities.

12 Railroad Commission of Texas Page 12 of Pipeline Safety Program Fees. (a) (No change.) (b) The Commission hereby assesses each operator of a natural gas distribution system an annual pipeline safety program fee of $0.70 for each service (service line) reported to be in service at the end of each calendar year by each system operator on the Distribution Annual Report, Form F , to be filed on March 15 of each year. (1)-(3) (No change.) (4) No later than 90 days after the last billing cycle in which the pipeline safety program fee surcharge is billed to customers, each operator of a natural gas distribution system shall file with the Commission s Gas Services Division and the Pipeline Safety Division a report showing: (A)-(D) (No change.) (5)-(6) (No change.) (c) The Commission hereby assesses each master meter system an annual inspection fee of $100 per master meter system. (1)-(3) (No change.) (4) No later than 90 days after the last billing cycle in which the pipeline safety program fee surcharge is billed to customers, each master meter operator shall file with the Commission s Gas Services Division and the Pipeline Safety Division a report showing: (d) (No change.) (A)-(D) (No change.) Natural Gas Pipelines Public Education and Liaison. (a)-(b) (No change.) (c) Alternative methods [Conference call]. If the operator or operator s representative cannot

13 Railroad Commission of Texas Page 13 of 16 arrange a meeting in person after complying with subsection (b) of this section, the operator or the operator s representative shall [make an effort to] conduct community liaison activities by [means of a telephone conference call with the officials by] one of the following methods: (1) holding [mailing a written request for] a telephone conference with [to] the appropriate officials [by certified mail, return receipt requested]; or (2) delivering the community liaison information requested to be conveyed by certified mail, return receipt requested; [sending a request for a telephone conference to the appropriate officials by facsimile transmission; or] [(3) making one or more telephone calls or message transmissions to the appropriate officials to request a telephone conference.] [(4) If a scheduled telephone conference call does not take place, the operator or operator s representative shall make an effort to re-schedule the community liaison telephone conference call with the officials using one of the methods in paragraphs (1) - (3) of this subsection before proceeding to mail the liaison information pursuant to subsection (d) of this section.] [(d) Mailing liaison information. If the operator or the operator s representative has made the efforts required by subsections (b) and (c) but has not successfully arranged and held either a meeting in person or a telephone conference, the community liaison information required to be conveyed may be delivered by mailing the information by certified mail, return receipt requested.] (d) [(e)] Proximity to public school. Each owner or operator of a natural gas pipeline or natural gas pipeline facility any part of which is located within 1,000 feet of a public school building or public school recreational area shall notify the Commission by filing with the Safety Division, no later than January 15 of every even-numbered year, the following information: (1) the name of the school; (2) the street address of the school; and

14 Railroad Commission of Texas Page 14 of 16 (3) the identification (system name) of the pipeline. (e) [(f)] Records. The operator shall maintain records documenting compliance with the liaison activities required by this section. Records of attendance and acknowledgment of receipt by the emergency response officials shall be retained for five years from the date of the event that is commemorated by the record. Records of certified mail and/or telephone transmissions undertaken in compliance with subsections (b) and (c) of this section satisfy the record-keeping requirements of this subsection Hazardous Liquids and Carbon Dioxide Pipelines Public Education and Liaison. (a)-(b) (No change.) (c) Alternative methods [Conference call]. If the operator or operator s representative cannot arrange a meeting in person after complying with subsection (b) of this section, the operator or the operator s representative shall [make one of the following efforts to] conduct community liaison activities by one of the following methods [means of a telephone conference call with the officials]: (1) holding [mailing a written request for] a telephone conference with [to] the appropriate officials [by certified mail, return receipt requested]; or (2) delivering [sending a request for a telephone conference to the appropriate officials by facsimile transmission; or] [(3) making one or more telephone calls or message transmissions to the appropriate officials to request a telephone conference.] [(4) At any time the operator makes contact with the appropriate officials and schedules a telephone conference call, no further attempts to make contact under this section are necessary. However, if a scheduled telephone conference call does not take place, the operator or operator s representative shall make an effort to re-schedule the telephone conference call with the officials using one of the

15 Railroad Commission of Texas Page 15 of 16 methods in paragraphs (1)-(3) of this subsection before proceeding to mail the liaison information pursuant to subsection (d) of this section.] [(d) Mailing liaison information. If the operator or the operator s representative has made all of the efforts required by subsections (b) and (c) but has not successfully arranged either a meeting in person or a telephone conference,] the community liaison information required to be conveyed [may be delivered by mailing the information] by certified mail, return receipt requested. (d) [(e)] Records. The operator shall maintain records documenting compliance with the liaison activities required by this section. Records of attendance and acknowledgment of receipt by the emergency response officials shall be retained for five years from the date of the event that is commemorated by the record. Records of certified mail and/or telephone transmissions undertaken in compliance with subsections (b) and (c) of this section satisfy the record-keeping requirements of this subsection Hazardous Liquids and Carbon Dioxide Pipelines or Pipeline Facilities Located Within 1,000 Feet of a Public School Building or Facility. (a)-(b) (No change.) (c) Each pipeline owner and operator to which this section applies shall, for each pipeline or pipeline facility any part of which is located within 1,000 feet of a public school building containing classrooms, or within 1,000 feet of any other public school facility where students congregate, file with the [Commission s Safety] Division, no later than January 15 of every odd numbered year, the following information:

16 Railroad Commission of Texas Page 16 of 16 (1)-(3) (No change.) (d)-(f) (No change.) This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency s authority to adopt. Issued in Austin, Texas on June 9, Filed with the Office of the Secretary of State on June 9, 2010.

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