Offshore Pipelines

DEPARTMENT OF THE INTERIOR

DEPARTMENT OF THE INTERIOR

Minerals Management Service

DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

Offshore Pipelines

AGENCIES: Minerals Management Service (MMS), Interior. Research and

Special Programs Administration (RSPA), Transportation.

ACTION: Notice of proposed revision of memorandum of understanding

(MOU) and public meeting.

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SUMMARY: The Department of the Interior (DOI) and the Department of

Transportation (DOT) are proposing to revise their May 6, 1976, MOU on

their respective responsibilities concerning offshore pipelines. This

action will redefine the boundary lines over which MMS and RSPA

exercise their inspection and enforcement roles, giving MMS greater

inspection responsibilities over offshore pipelines previously

inspected by RSPA. The intent of the new MOU is to put, to the extent

practicable, all flowlines and gathering lines under DOI

responsibility, while transmission lines remain under DOT

responsibility. This will result in more efficient utilization of

government resources for offshore pipeline inspection. DOI and DOT will

hold a public meeting on this proposed revision in New Orleans,

Louisiana, on August 1, 1995.

DATES: Comments must be submitted on or before August 22, 1995.

ADDRESSES: Written comments should be directed concurrently to: (a)

Department of the Interior; Minerals Management Service; Mail Stop

4700; 381 Elden Street; Herndon, Virginia 22070-4817; Attention: Chief,

Engineering and Standards Branch, and (b) Department of Transportation;

Office of Pipeline Safety Regulatory Programs, Research and Special

Programs Administration; 400 Seventh Street SW.; Room 2335; Washington,

D.C. 20590; Attention: L.E. Herrick.

PUBLIC MEETING: DOI and DOT will hold a public meeting to receive

comments and to discuss the proposed MOU on August 1, 1995, 8:30 a.m.

to 5:00 p.m., Room 111; Minerals Management Service; Gulf of Mexico

Outer Continental Shelf Region; 1201 Elmwood Park Boulevard; New

Orleans, Louisiana 70123-2394.

FOR FURTHER INFORMATION CONTACT:

Carl W. Anderson, Engineering and Standards Branch, MMS; telephone

(703) 787-1600; or L.E. Herrick, Office of Pipeline Safety Regulatory

Programs; telephone (202) 366-5523.

SUPPLEMENTARY INFORMATION:

Introduction

There are about 18,300 miles of active Outer Continental Shelf

(OCS) oil and gas pipelines jointly regulated by DOI and DOT under an

MOU agreed upon in 1976 (41 FR 23746; June 11, 1976). Under the

existing MOU, DOI has [[Page 27547]] primary responsibility for about

4,500 miles of these pipelines delegated to the Minerals Management

Service (MMS). DOT has primary responsibility for about 13,800 miles of

these pipelines delegated to RSPA. The MMS regulations for pipelines in

the OCS are in 30 CFR part 250, Subpart J. The RSPA pipeline safety

regulations are in 49 CFR parts 190-199.

The primary concerns with operating pipelines offshore include

protecting life and property offshore, and protecting the OCS from

environmental damage resulting from pipeline spills. These issues are

of paramount importance to both MMS and RSPA. The National Academy of

Sciences reported that while offshore oil and gas production operations

contribute less than 2 percent by volume of the oil that is spilled

into the sea, pipelines accounted for over 97 percent by volume of that

oil spilled from OCS operations. These spills resulted almost entirely

from anchors, construction operations, or fishing trawls that struck

the pipelines and caused them to rupture.

Corrosion-related pipeline spills tend to be minor compared to

spills resulting from external damage; however, because the pipeline

system is extensive and aging, MMS and RSPA are also concerned about

oil spills resulting from corrosion.

Separate MOU on Oil-Spill Response

Under a separate MOU among DOI, DOT, and the U.S. Environmental

Protection Agency pursuant to the Oil Pollution Act of 1990, the

agencies have divided their respective responsibilities for oil-spill

prevention and response according to the definition of ``coast line''

contained in the Submerged Lands Act, 43 U.S.C. 1301(c). (See 59 FR

9494; February 28, 1994.) Nothing herein is intended to affect the

implementation or administration of that MOU.

Background

The DOT and DOI are proposing to revise the current MOU that

delineates DOI's and DOT's respective boundaries with respect to

inspection of offshore pipelines in the OCS. The MOU has never been

updated, even though there have been many legislative, regulatory, and

administrative changes during the past 19 years affecting the

respective inspection responsibilities that each agency performs. These

changes, coupled with the differing regulatory priorities and operating

responsibilities of the two organizations (MMS and RSPA) charged with

promulgating and enforcing regulation over pipeline safety and

environmental protection in the OCS, have rendered the MOU outdated.

For example, the current MOU predates the following legislative and

regulatory developments:

(1) The formation of RSPA in 1977,

(2) The 1978 OCS Lands Act Amendments,

(3) The formation of MMS in 1982,

(4) Amendments to the pipeline safety laws (see 49 U.S.C. 60101 et

seq.), and

(5) The Federal Water Pollution Control Act as amended by the Oil

Pollution Act of 1990 and implemented under Executive order 12777 of

October 1991.

Under the current MOU, RSPA is responsible for enforcing its

design, construction, operation, and maintenance requirements on

pipelines transporting hazardous liquids and natural gas ``to the shore

from the outlet flange at----

(i) Each OCS facility where hydrocarbons are produced, or

(ii) Each OCS facility where produced hydrocarbons are first

separated, dehydrated, or otherwise processed, whichever facility is

farther downstream, including subsequent on-line transmission equipment

but not including any subsequent production equipment.''

Also under the current MOU, MMS is responsible for enforcing its

design, construction, operation, and maintenance regulations on

offshore pipelines extending upstream from the outlet flange described

above into each production well in the OCS. In this regard, MMS has

responsibilities for promulgating and enforcing regulations for the

prevention of waste, protection of the environment, conservation of

natural resources, production measurement, and safety of OCS lessee and

right-of-way holder activities.

MMS has regulatory responsibilities relating to activities

performed in the OCS. RSPA has responsibilities for inspecting and

enforcing its regulations over all onshore pipeline systems in the

country. The revised MOU would result in MMS assuming a greater

inspection responsibility for pipelines currently under DOT

responsibility. MMS would integrate these additional pipelines into its

current inspection program.

Because the revised MOU would shift the boundaries being used by

MMS and RSPA in inspecting under their regulations, some OCS pipelines

that are currently subject to DOT regulations governing their design,

construction, maintenance, and operations, would become subject to DOI

regulations governing such requirements. This shift in boundary for

areas of responsibility--generally from the first OCS facility where

hydrocarbons are produced, separated, dehydrated, or otherwise

processed to the last such facility--will require subsequent public

rulemaking changes by both DOT and DOI. Following the final approval

and signing of the revised MOU, DOT and DOI will separately propose

changes to their respective regulations to reflect the new regulatory

boundaries. The principal regulations that would be affected are found

at 49 CFR parts 191.1, 192.1, 195.1 and 199 for DOT and at 30 CFR part

250.150 for DOI.

DOI anticipates that existing offshore pipelines that shift from

DOT to DOI responsibility will not be immediately subject to MMS design

and construction requirements unless: (1) those requirements were a

condition of MMS approval for the right-of-way on which the pipelines

are located, or (2) the pipeline undergoes major repair or

modification. Design and construction requirements are those

requirements that are established when the pipeline is initially

designed and constructed, such as pipe specifications, design of

pipeline components, and welding procedures. Retrofitting existing

pipelines to conform to different design and construction standards can

involve considerable risk to personnel and be extremely costly.

Therefore, DOI will be cautious in imposing changes of this type on

pipeline operators heretofore operating under DOT design and

construction requirements. On the other hand, DOI operation and

maintenance regulations, such as corrosion protection, operation and

maintenance plans, periodic inspections, and periodic tests are

requirements that can be applied to pipelines any time after

construction. There are differences between DOT and DOI regulations

with respect to these types of requirements and their compliance costs.

therefore, any operator currently under DOT responsibility who is

shifted to DOI responsibility--after implementation of the revised MOU

and appropriate changes are promulgated for 30 CFR part 250.150--will

immediately become subject to DOI operation, maintenance, and

inspection requirements.

Operators of pipelines that will become subject to MMS regulatory

responsibility are reminded that MMS has regulatory procedures under

which departures from its requirements may be granted on a case-by-case

basis, provided there is sound engineering analysis that shows the

operation, practice, or situation will provide an equal or greater

level of operational safety or of environmental protection.

Comments are invited concerning (1) the effect that the new MOU

will have [[Page 27548]] on offshore oil and gas lessees and pipeline

operators, (2) the time required for operations currently operating

under DOT regulations to come into compliance with DOI regulations, (3)

regulatory difficulties that may be involved in complying with new

regulations, and (4) changes to the proposed MOU that would facilitate

the implementation of the MOU.

Upon signing the proposed revised MOU by both the Secretary of the

Interior and Secretary of Transportation, the 1976 MOU will be

terminated and revised MOU will become effective. The revised MOU will

be published final in a subsequent Federal Register Notice.

Dated: April 4, 1995.

Cynthia Quarterman,

Director, MMS.

Dated: May 16, 1995.

D.K. Sharma,

Administrator, RSPA.

The proposed revised MOU is as follows:

Memorandum of Understanding Between the Department of Transportation

and the Department of the Interior Regarding Offshore Pipelines

I. Introduction

This memorandum of Understanding (MOU) replaces the MOU between the

Department of Transportation (DOT) and the Department of the Interior

(DOI) regarding offshore pipelines which was signed and became

effective May 6, 1976, and which terminates as of the effective date of

this MOU. Nothing in this MOU relieves an offshore pipeline owner or

operator from complying with the regulations of any State or Federal

agency.

In recognition of each of the parties' respective regulatory

responsibilities, DOI and DOT agree that an MOU is needed to assure

coordination and consultation during the development and implementation

of regulatory requirements and to facilitate comparable regulatory

requirements for all offshore pipelines whether under DOI or DOT

jurisdiction.

II. Legislative and Regulatory Responsibilities of the Parties

The DOT has the responsibility for promulgating and enforcing

regulations for the safe and environmentally sound transportation of

gases and hazardous liquids by pipeline. DOT administers the following

laws as they relate to pipelines: (1) the pipeline safety laws (49

U.S.C. 60101 et seq.), (2) the Deepwater Port Act of 1974 (33 U.S.C.

1501-1524), and (3) the Federal Water Pollution Control Act (FWPCA) (33

U.S.C. 1251-1375), as amended by the Oil Pollution Act of 1990 (OPA)

(Pub. L. 101-380) and implemented under Executive Order (E.O.) 12777.

The DOI has responsibilities for promulgating and enforcing

regulations for the prevention of waste, protection of the environment,

and conservation of the natural resources of the Outer Continental

Shelf (OCS) as that area is defined in the OCS Lands Act (OCSLA) (43

U.S.C. 1331 et seq.). These responsibilities include production

measurement and safety of OCS lessee and right-of-way holder

activities, including transportation of oil and natural gas by

pipeline. DOI also has certain responsibilities for granting rights-of-

way and rights of use and easement for the construction of pipelines

and associated facilities in the OCS. DOI administers the following

laws as they relate to offshore piplines: (1) the OCSLA for the

production of minerals which includes their transportation to shore,

(2) the Federal Oil and Gas Royalty Management Act of 1982 for oil and

gas production measurement, and (3) the FWPCA, as amended by OPA and

implemented under E.O. 12777.

Under a separate MOU pursuant to the OPA, DOI and DOT have divided

their respective responsibilities for oil-spill prevention and response

according to the definition of ``coast line'' contained in the

Submerged Lands Act, 43 U.S.C. 1301(c).

III. Division of Responsibilities

DOI and DOT agree to the following division of off shore pipeline

regulatory responsibilities with respect to design, construction,

operations, and maintenance regulations for all pipelines in the OCS

pursuant to OCSLA. The Appendix contains nine hypothetical cases to

illustrate how this MOU would be interpreted in practice.

DOI Responsibilities

1. DOI will establish and enforce design, construction, operation,

and maintenance and regulations and investigate significant accidents

pursuant to the OCSLA for all pipelines that connect to downstream

production or processing facilities in the OCS. The DOI area of

responsibility will extend from producing wells to 50 meters (164 feet)

downstream from the base of the departing pipeline riser on the last

OCS production or processing facility (Cases 1, 7, and 9).

Additionally, DOI will have responsibility for the following pipelines:

a. That portion of a pipeline otherwise subject to DOT

responsibility that crosses an OCS production or processing facility

from 50 meters upstream of the base of the incoming riser to 50 meters

downstream of the base of the department riser (Case 2).

b. A pipeline from an OCS producing well or production or

processing facility to the first subsea tie-in with a larger-diameter

pipeline in the OCS (Cases 3, 7, and 9). However, if the first subsea

tie-in with a larger-diameter pipeline is in State waters, DOI

responsibility extends to the Federal-State boundary (Case 6).

c. The OCS portion of a pipeline that connects directly to a

production well or a production or processing facility in State waters

(Cases 4, 8, and 9).

d. The OCS portion of a pipeline from an OCS producing well that

connects directly to production or processing facilities located

onshore (Case 5).

e. OCS production service and water lines.

2. DOI will consult with DOT during the development of regulatory

requirements and will send a copy of each draft notice of proposed

rulemaking (NPR) concerning offshore pipelines to DOT for review at

least 30 days before the NPR is published in the Federal Register.

Publication of the NPR by DOI is not contingent upon the concurrence of

DOT with the proposal contained in the NPR.

3. Upon approval of right-of-way applications for pipelines under

DOT responsibility, DOI will provide copies of its approval letters to

DOT. When DOI grants rights-of-way for pipelines which are under DOT

responsibility, DOI will condition its approval on the pipelines being

designed, constructed, operated, and maintained in compliance with DOT

regulations.

4. The DOI will allow DOT to utilize, on a reimbursable basis, DOI-

contracted helicopters for the inspection of offshore pipelines,

subject to helicopter availability.

5. For pipelines under DOT responsibility, DOI will report to DOT

in writing any apparent violation of DOT regulations that is identified

during the course of DOI inspections.

DOT Responsibilities

1. DOT will establish and enforce design, construction, operation,

and maintenance regulations and investigate significant accidents for

all offshore pipelines beginning 50 meters (164 feet) downstream from

the base of the departing pipeline riser on the last OCS production or

processing facility, except as provided for in paragraphs 1, 1(a),

1(b), 1(c), 1(d), and 1(e) under ``DOI Responsibilities;'' and

paragraph 7 under ``Joint Responsibilities.'' [[Page 27549]]

2. DOT will consult with DOI during the development of regulatory

requirements and will send a copy of each draft NPR concerning offshore

pipelines to DOI for review at least 30 days before the NPR is

published in the Federal Register. Publication of the NPR by DOT is not

contingent upon the concurrence of DOI with the proposal contained in

the NPR.

3. For pipelines under DOI responsibility, DOT will report to DOI

in writing any apparent violation of DOI regulations that is identified

during the course of DOT inspections.

Joint Responsibilities

1. DOI and DOT will consult and coordinate all of their respective

rulemaking efforts affecting offshore pipelines. Supporting regulatory

analyses (e.g., Determination of Effects of Rules, Regulatory Impact

Analyses, and information collection burdens, etc.) will also be

coordinated, although the analyses will be appropriate for each agency

and the industry segments it regulates.

2. DOI and DOT will coordinate all of their respective research and

development projects concerning offshore pipelines.

3. DOI and DOT may perform joint inspections of pipeline segments

that are subject to both DOI and DOT regulations.

4. DOI and DOT may perform joint or independent investigations of

accidents involving offshore pipeline segments that are subject to

either or both DOI and DOT responsibility.

5. DOI and DOT will provide each other with any agreement or MOU

with any Federal or State agency concerning offshore pipelines.

6. At least once each calendar year, DOI and DOT will jointly

review existing standards, regulations, orders, operating practices,

and environmental and safety issues concerning offshore pipelines.

7. The DOI and DOT may, through their enforcement agencies, agree

to exceptions to this MOU on a facility by facility or area by area

basis. Affected parties shall be notified of such exceptions.

IV. Implementation

Within 120 days of the signing of this MOU, DOI and DOT will

develop and initiate a joint implementation plan. The plan will take

into account differences in the regulatory requirements of DOI and DOT

that could cause regulatory conflicts or incompatible requirements for

those offshore pipeline segments that are subject to both DOI and DOT

jurisdiction.

The respective points of contact for the provisions of this MOU

are:

Associate Administrator for Pipeline Safety, Research and Special

Programs Administration, Department of Transportation, 400 7th Street,

SW., Washington, D.C. 20590

Associate Director for Offshore Minerals Management, Minerals

Management Service, Mail Stop 4000, 1849 C Street, NW., Washington,

D.C. 20240

Thereafter, DOI and DOT will meet periodically to review and update

the joint implementation plan and to review this MOU for any needed

revisions.

V. Modification

Either party to this agreement may propose modifications by

submitting them in writing to the head of the other Department. No

modification may be adopted except with the consent of both parties.

Both parties shall indicate their consent to or disagreement with any

proposed modification within 60 days of receipt. Upon the request of

either party, representatives of both parties shall meet for the

purpose of considering modifications to this agreement.

VI. Termination

This MOU may be terminated by either party upon 60-day written

notice to the other party.

VII. Administration

This MOU will be administered by DOI's Minerals Management Service

and DOT's Research and Special Programs Administration or such

successor agencies as may be designated by the respective Secretaries.

VIII. Effective Date

This MOU is in effect upon signature.

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