PIPES Act of 2016 & PHMSA Penalties Increased

Two major regulatory developments occurred in the summer of 2016 that every pipeline operator needs to be aware of: the signing of the PIPES Act of 2016 and a significant increase in PHMSA's maximum civil penalties.

The PIPES Act of 2016

President Obama signed the Protecting Our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2016 on June 22, 2016. This landmark legislation includes more than 40 specific requirements for PHMSA, Congress, and the pipeline industry. Among the key provisions:

• Directs PHMSA to complete numerous long-delayed rulemakings
• Strengthens requirements for gas transmission pipeline integrity management
• Requires PHMSA to update regulations for underground natural gas storage facilities
• Addresses leak detection, emergency response, and public awareness programs
• Requires PHMSA to study and report on expanding the use of automatic or remote-controlled shut-off valves
• Enhances requirements for control room management
• Sets deadlines for PHMSA to finalize pending rulemakings, including the OQ rule

PHMSA Maximum Civil Penalties Increased

Separately, PHMSA published an Interim Final Rule on June 30, 2016 increasing its maximum civil penalty amounts. The changes took effect immediately:

• Maximum penalty per violation per day: Increased to $205,638
• Maximum penalty for a related series of violations: Increased to $2,056,380

These increases are part of a federal government-wide adjustment for inflation under the Federal Civil Penalties Inflation Adjustment Improvements Act of 2015. Operators should factor these increased penalty amounts into their compliance risk assessments.

For more information on how these regulatory changes may impact your organization, contact EWN.