trending Market Intelligence /marketintelligence/en/news-insights/trending/TRX7v9w61XsJ-14e2an7YA2 content esgSubNav
In This List

US pipe safety regulator increases warnings, pursues fewer corrective orders

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


US pipe safety regulator increases warnings, pursues fewer corrective orders

Almost a full year into a new administration, the federal pipeline safety regulator has given operators more warnings and initiated fewer corrective-action orders than was typical over the previous eight years.

The U.S. Pipeline and Hazardous Materials Safety Administration has set in motion more than 200 enforcement cases in 2017. Relative to the preceding eight years, the first 11 months of 2017 have included a higher proportion of warnings or notices requiring pipeline operators to make changes to their plans and procedures. A smaller portion of the agency's enforcement cases have so far included corrective-action requirements, notices of probable violations or proposed safety orders compared to 2009-2016 averages.

SNL Image

The pipeline practice of the law firm Troutman Sanders LLP highlighted the shift in a recent note on changes at PHMSA between the Obama administration and Trump administration. "While PHMSA enforcement has continued under the Trump administration, it has included more warning letters and notices of amendment, which do not carry proposed civil penalties or compliance orders," the practice said in the Nov. 13 note.

In 2009-2016, there were about 75 warning letters per year, accounting for an average of about 37% of the enforcement cases that PHMSA launched annually. Through Nov. 27, the agency pursued 91 warning-letter cases, or 45% of the enforcement cases PHMSA has initiated in 2017. PHMSA uses warning letters to notify pipeline operators that they may be in violation of certain rules, giving the operators a chance to fix the problems or face further enforcement action.

"We cannot yet conclude whether the increase in issuance of warning letters and notices of amendments in 2017 signals a lighter touch by the agency for enforcement under the Trump administration (including whether new enforcement has slowed), or if it is a function of other factors," Catherine Little, an attorney with Troutman Sanders, said in a Nov. 27 email.

PHMSA spent much of 2017 without a Senate-confirmed administrator. The new agency head, Howard Elliott, was confirmed in October, and the agency's deputy administrator, Drue Pearce, was appointed in August.

The number of cases PHMSA has launched involving corrective-action orders, notices of probable violations and notices of proposed safety orders in 2017 is down 88%, 20% and 33%, respectively, compared with the average number of each of those types of cases initiated annually in 2009-2016. Corrective-action orders have so far made up 0.5% of the agency's enforcement cases in 2017, down from 5.5% in 2016.

Corrective-action orders are typically used to deal with imminently hazardous circumstances. Notices of probable violation come into play after inspections, incident investigations or other oversight activity, and indicate that the regulator believes the pipeline operator broke specific rules. Notices of proposed safety orders direct operators to fix problems on their systems that are not immediately hazardous but do require near-term attention.

Inspection findings and safety concerns fluctuate over time, independent of administration changes. In 2010, warning letters accounted for roughly 50% of the agency's enforcement case initiations but represented less than 30% of PHMSA's launched cases the next year. Given these variables, the changes in enforcement numbers may not be connected to changes in policy or strategy.

"What is clear is that the agency, like many other federal agencies, has or is still experiencing … budget cutbacks and significant delay in posting new leadership," Little said. "The result is an atmosphere of uncertainty both within the agency and within the regulated community. Such uncertainty is not typically good for business."

PHMSA did not comment on the record for this article.