Pipeline valve victory for GPA Midstream and API in federal court

A panel of U.S. District Court appellate judges ruled for GPA Midstream and the American Petroleum Institute on litigation over rules on installing automatic or remotely operated safety valves on gas gathering lines.

On May 16, three judges agreed with the plaintiffs that the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration didn't disclose the economic considerations in regulating gas gathering pipelines.

"The PHMSA said nothing about the practicability or the costs and benefits of the standard for gathering pipelines until promulgating the final rule, even though the law required it to address those subjects when publishing the proposed rule for public comment and peer review," wrote Senior Circuit Judge Douglas Ginsburg in the court's 24-page opinion. "The PHMSA also ultimately failed to make a reasoned determination that the benefits of regulating gathering pipelines would exceed the costs, and that doing so would be practicable, as required by law."

In 2020, PHMSA's Gas Pipeline Advisory Committee unanimously recommended that the agency either exclude the gas gathering pipelines from the rule or address them in a separate rulemaking proceeding.

The GPA Midstream Association and API pointed out, at the time, that the congressional mandate being followed by PHMSA was intended for high-pressure transmission lines and not gathering lines. What's more, the agency's estimate of the cost to the industry of applying the rule to gathering lines was estimated at about $3 million, which was in contradiction to a decades-old study that showed it would cost more than $600 million to implement.

Despite the recommendations of the Gas Pipeline Advisory Committee and the Liquid Pipeline Advisory Committee, the agency kept gas gathering lines in the final rule.

"The PHMSA plowed ahead anyway," the federal court wrote in their ruling. "In the final rule, the PHMSA required automatic or remote-controlled shut-off valves in many new or replaced pipelines with a diameter of six or more inches, including Type A lines and regulated rural gathering lines that carry hazardous liquids across a body of water wider than 100 feet."

The court vacated the parts of the federal valve rule as it pertained to gas gathering and granted the petition for a review.

‍