Over the past week and in just the last 24 hours, several federal and state agencies have issued guidance documents and orders impacting the oil and gas pipeline industry. Through this guidance and other orders, federal and state governments are recognizing the oil and gas industry as critical to responding to COVID-19, while at the same time providing for some flexibility in the likelihood that operators will face resource and staffing constraints in executing their pipeline safety compliance obligations.
Beginning with PHMSA, the Agency issued two guidance documents. PHMSA’s “Notice of Enforcement Discretion” provides relief with respect to operator qualification (OQ) and control room hours of service and certain training requirements. The Agency will also consider whether to exercise its discretion with respect to drug and alcohol pre-employment and random testing beyond what is already provided in the regulations. While not addressing the possibility of emergency special permits as an option, the notice indicates that PHMSA will “exercise discretion in its overall enforcement” of other aspects of the regulations, in order to provide “operators with the flexibility to maintain normal operations while ensuring public safety and protection of the environment.” PHMSA stresses that adequate documentation and prompt communication will be key to operators availing themselves of the Agency’s enforcement discretion and provides an email portal for operators notifying PHMSA of compliance issues.
PHMSA also issued “Guidance to State Partners Regarding COVID-19” providing, in contrast to the notice, that PHMSA will work with industry and state partners “to address any emergent need for special permits or State waivers and, if appropriate, reschedule some inspections as a result of the COVID-19 outbreak.” It also states that PHMSA and relevant state partners will nevertheless continue to prioritize “safety-sensitive inspections and investigations.” Notably, the guidance further emphasizes the essential nature of oil and gas pipeline infrastructure by stating that it is “critical to the safety of the transportation and energy supply networks and the economic stability of our Nation.”
Along those same lines, the Cybersecurity and Infrastructure Security Agency (CISA) within the Department of Homeland Security issued “Essential Critical Infrastructure Workers” guidance clarifying that oil and gas pipeline infrastructure are expressly included as part of both the energy and transportation sectors. While the memorandum is advisory in nature, CISA offers guidance on critical infrastructure “to assist prioritizing activities related to continuity of operations and incident response, including the appropriate movement of critical infrastructure workers within and between jurisdictions.” This guidance should be useful to operators, particularly as states announce that non-essential businesses must close. Some states, such as Pennsylvania, expressly excepted oil and gas pipelines from its mandate but others may be less specific.
As state-specific orders increasingly mandate the closure of non-essential businesses, it is likely that more state agencies with pipeline safety jurisdiction will be issuing advisories or orders. The Texas Railroad Commission, for example, already issued specific pipeline safety waiver guidance for intrastate oil and gas pipelines which involves a 60-day review process by the Commission including an “open meeting.” We expect that approach will be modified, however, to be consistent with PHMSA’s state partner guidance and Notice of Enforcement Discretion. In Tennessee, the Public Utility Commission issued an “Ongoing Request for Information” to intrastate utilities, finding that “continued access to critical utility services is a matter of national security and vital to the public health, safety, and welfare,” and requiring ongoing weekly reports of emergency operational and response plans.
Operators should continue to modify and implement their compliance management strategies in the wake of COVID-19, including best practices. It will be important to document justifications for variances from regulatory compliance deadlines and activities in the event that issues are raised in future audits. In addition, there may be higher risk variances that require an emergency special permit application under 49 C.F.R. § 190.341 from PHMSA or a state partner. Operators should also continue to work with relevant PHMSA Regions and state partners directly on these issues and in coordination with the trade groups for alignment in approaches.
Developments across the country are changing quickly, and we will continue to provide relevant updates on issues impacting the oil and gas industry.
For more information on managing compliance during the coronavirus outbreak, contact Catherine Little or Annie Cook.