Industry lauds shift in pipeline safety enforcement; Public Citizen rips changes

Two recent US policy changes for penalties and enforcement prompted praise from pipeline groups and sharp criticism from a consumer rights organization.

The changes, laid out in two internal memos, have gone into effect and will ensure due process, the US Pipeline and Hazardous Materials Safety Administration (PHMSA) said in a June 4 news release. There will be access to more data from the agency, including potentially exculpatory evidence, for companies involved in potential safety violations.

The changes will enable companies to see more information from the government while potential violations are pending — something pipeline owners, including Energy Transfer, have sought for years.

"[Companies] subject to agency enforcement actions will have fair access to the agency's records in order to mount an effective defense," PHMSA said. Any proposed penalties will be subject to the penalty structure in place at the time of an alleged violation, not at the end of a proceeding.

PHMSA, industry emphasize transparency

"These long-overdue reforms will refocus our enforcement program, so the law is applied fairly, transparently and in a way that respects the core legal principle of due process," Ben Kochman, acting administrator at PHMSA, said in the news release.

The Interstate Natural Gas Association of America (INGAA) and the Liquid Energy Pipeline Association (LEPA) are encouraged by the development. The change "should add more transparency to the process by requiring PHMSA to disclose all pertinent agency records," said Amy Andryszak, president and CEO of INGAA.

"LEPA is gratified PHMSA is finally choosing to follow the law, a departure from the previous administration, to ensure its enforcement proceedings respect a respondent's fundamental due process rights, as originally required by the PIPES Act of 2020," Andy Black, president and CEO of LEPA, said in a June 9 email.

Consumer group decries 'disturbing' changes

Public Citizen views the changes as catering to the preferences of the industry, and Energy Transfer in particular, given Energy Transfer Chairman Kelcy Warren's financial support for the campaign of President Donald Trump. "This is a clear case of Energy Transfer holding undue influence over PHMSA regulations, and that's disturbing," said Tyson Slocum, director of the energy program at Public Citizen.

The list of Energy Transfer's enforcement actions and alleged safety violations at PHMSA dates back more than 10 years. They include a 2022 plea agreement involving construction on the Mariner East 2 liquids pipeline and a 2018 explosion of the Revolution Pipeline gas system in Beaver County, Pennsylvania.

Earlier this year, an Energy Transfer subsidiary filed a lawsuit against PHMSA in US District Court for the Northern District of Texas, challenging the enforcement and penalty provisions at PHMSA based on a 2020 accident on the Panhandle Eastern Pipe Line in Kansas and a 2023 notice of probable violation from PHMSA. That lawsuit claimed the enforcement process at PHMSA is unconstitutional and that the company was denied access to information needed to fairly present its defense.

Panhandle Eastern actually moved to dismiss the case (Panhandle Eastern v. PHMSA, 2:25-cv-00023) because it is pursuing its claim in a separate court, and the district court obliged in a May 15 dismissal.

PHMSA, part of the Department of Transportation, told the district court that the agency "published new guidance on its internal enforcement actions that addresses many of the due process concerns [the] plaintiff complains of here. This action is therefore moot."

In one of the memos, PHMSA Chief Counsel Keith Coyle directed the Office of Pipeline Safety (OPS) on May 29 to develop a new procedure for determining the contents of a case file in pipeline safety enforcement proceedings to include all pertinent agency records. The OPS generally would limit access to certain information until a notice of probable violation or a proposed penalty was issued.

The memos direct OPS to apply the new procedures "in all cases that are currently pending before PHMSA and in all future pipeline safety enforcement proceedings."

The changes will enable pipeline companies to limit safety enforcement and penalty provisions from PHMSA, Slocum of Public Citizen said June 5, specifically mentioning Energy Transfer.

PHMSA's reforms come amid a broader push within the Trump administration to ease restrictions on energy producers and carry out an "energy dominance" theme, but "it's not energy dominance to allow companies to pollute and put people in harm's way," Slocum said.

Energy Transfer did not respond to requests for comment.

'Long overdue' provisions for due process

Joseph Hainline, a partner at Van Ness Feldman who was at PHMSA from 2016 to 2023, disputed the notion that PHMSA tailored the enforcement policy change to benefit Energy Transfer.

The updated due process provisions — including use of the PHMSA penalty structure in place at the time of any violation instead of a final completion — "are long overdue" to be in compliance with statutory language, Hainline said during a June 9 interview. Anyone facing government enforcement actions should be entitled to any and all data and worksheets, Hainline said, asserting that the changes are a step in the right direction for transparency at PHMSA.

PHMSA is capped on the financial amount of a penalty it can impose, and it rarely approaches that cap for most penalty cases, Hainline said. Although a final penalty would have been subject to annual inflation adjustments in an enforcement case that drags out several years under the previous structure, the updated policy is unlikely to result in a major reduction in possible financial penalties, he said.

In its announcement of the change, PHMSA said that before the memos were issued, parties in a PHMSA enforcement proceeding only received certain agency records specified in a 2013 regulation. In 2020 pipeline safety legislation, Congress directed PHMSA to provide all agency records pertinent to the matters of fact and law. "PHMSA will ensure that it complies with this mandate," it said.