Petroleum Products and Low-Stress Pipelines

DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Part 195

Petroleum Products and Low-Stress Pipelines

AGENCY: Research and Special Programs Administration, (RSPA), DOT.

ACTION: Interpretation and partial stay of enforcement of regulation.

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SUMMARY: This document interprets the definition of ``petroleum

product'' under RSPA's safety regulations for hazardous liquid 1

pipelines. The definition has been applied to petrochemical products

that the regulations were not intended to cover. The interpretation

should reduce confusion in deciding which low-stress pipelines 2

are subject to the regulations.

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1 ``Hazardous liquid'' means petroleum, petroleum

products, or anhydrous ammonia. (Sec. 195.2)

2 Low-stress pipeline means a hazardous liquid pipeline

that is operated in its entirety at a stress level of 20 percent or

less of the specified minimum yield strength of the line pipe.

(Sec. 195.2)

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In addition, this document stays enforcement of the regulations

against low-stress pipelines regulated by the U.S. Coast Guard, and

against certain short low-stress pipelines that serve plants and

transportation terminals. Application of the regulations to these lines

would cause undue burdens for industry and government. The stay should

ease difficulties in applying the regulations to low-stress pipelines.

EFFECTIVE DATE: May 14, 1996.

FOR FURTHER INFORMATION CONTACT:

L. M. Furrow, (202) 366-4559.

SUPPLEMENTARY INFORMATION:

Background

In response to a Congressional directive,3 RSPA extended its

hazardous liquid pipeline safety regulations (49 CFR Part 195) to cover

certain low-stress pipelines other than rural gathering lines and

gravity-powered lines (59 FR 35465; July 12, 1994). That rulemaking

action affected low-stress pipelines that transport highly volatile

liquids, low-stress pipelines that are located onshore in non-rural

areas, and low-stress pipelines that are located offshore or in

waterways that are navigable in fact and currently used for commercial

navigation (Sec. 195.1(b)(3)).

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3 The Secretary of Transportation may not provide an

exception from regulation for a hazardous liquid pipeline facility

only because the facility operates at low internal stress. (49

U.S.C. Sec. 60102(k))

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Transfer lines comprised the largest proportion of low-stress

pipelines brought under Part 195 (about two-thirds of the pipelines and

one-third of the mileage). The remainder included trunk lines and non-

rural gathering lines. Transfer lines are used to transport hazardous

liquid locally between facilities such as transportation terminals,

manufacturing plants, petrochemical plants, and oil refineries, or to

connect these facilities to associated storage or long-distance

pipeline transportation. Because the rulemaking action affected the

current operating practices of many companies unfamiliar with Part 195,

we allowed operators to delay compliance of

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existing low-stress pipelines until July 12, 1996 (Sec. 195.1(c)).

Meaning of Petroleum Product

The impact of the rulemaking action intensified last fall,

particularly for petrochemical companies, when RSPA interpreted the

definition of ``petroleum product.'' Part 195 defines ``petroleum

product'' as ``flammable, toxic, or corrosive products obtained from

distilling and processing of crude oil, unfinished oils, natural gas

liquids, blend stocks and other miscellaneous hydrocarbon

compounds''4 (Sec. 195.2). The Hoechst Celanese Corporation had

asked us whether two of its products come under this definition.

Focusing on the ``miscellaneous hydrocarbon compounds'' aspect of the

definition, we said the products, ethylene glycol and formic acid, were

petroleum products because they are, respectively, flammable and toxic,

and are produced by processing hydrocarbon compounds. Upon further

consideration, however, we now believe that interpretation was too

broad in light of the historical context of Part 195.

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\4\ Hydrocarbon compounds are chemical compounds composed solely

of hydrogen and carbon.

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Since its inception, Part 195 has applied to petroleum products

transported in liquid form by pipeline (34 FR 15473; Oct. 4, 1969).

Only recently, while trying to clarify Part 195 requirements and reduce

the burden of government regulation, did we adopt the present

definition of petroleum product (59 FR 33395; June 28, 1994).

Previously, both RSPA and the hazardous liquid pipeline transportation

industry identified petroleum products as hydrocarbon compounds derived

from processing natural gas or petroleum. This processing typically

occurs at oil refineries, gas processing plants, and gasoline

plants.5

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5 Part 195 was based largely on voluntary standards contained

in the 1966 edition of ``Code for Pressure Piping, Liquid Petroleum

Transportation Piping Systems,'' (designated USAS B31.4-1966)

prepared and published by the American Society of Mechanical

Engineers. A diagram on page 2 of the code shows that the code

applies to pipelines that run between production facilities,

refineries, gasoline plants, gas processing plants, terminals, and

bulk plants.

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Petroleum products include butane, propane, gasoline, heating oil,

aviation fuel, kerosine, and diesel fuel. Also included are hydrocarbon

feedstocks, such as ethylene and propylene, that are the basis of

hundreds of petrochemical products, including paints, plastics,

synthetic fibers, and fertilizers. Prior to the definition, we did not

consider the intermediate and finished products manufactured at

petrochemical plants by further processing hydrocarbon feedstocks to be

petroleum products. These petrochemical products are characterized by

the addition of chemicals, such as chlorine, nitrogen, or oxygen, to

the hydrocarbon feedstocks.

In adopting the definition of petroleum product, we did not seek to

expand this prior understanding of the term, only to clarify it.6

For this reason, the definition of petroleum product must be applied

consistent with its regulatory background. Thus, petrochemical products

that are made by chemical means using petroleum products as a raw

material do not come under the definition. Ethylene glycol, which is

used in car antifreeze and other finished products, is an example of a

petrochemical product that does not come under the Part 195

regulations.

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6 In the Federal Register document concerning petroleum

product and other terms that RSPA proposed to define, RSPA said

``[t]he proposed new definitions and definition change would not

compromise pipeline safety because they would not alter the intended

application of the existing part 195 regulations.'' (57 FR 56306;

Nov. 27, 1992)

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Stay of Enforcement of 49 CFR Part 195 Against Certain Low-stress

Pipelines

As mentioned above, Part 195 applies to certain low-stress

pipelines used to transfer hazardous liquids locally. These transfer

lines link long-distance pipelines and truck, rail, and vessel

transportation terminals with various industrial plants, including

manufacturing plants, petrochemical plants, and oil refineries. Many of

the lines interconnect the plants themselves. These local transfer

lines are generally short, averaging about a mile in length. They are

usually operated in association with transfer piping on the grounds of

the plants and terminals. Some transfer lines that serve industrial

plants or terminals may be operated by long-distance pipeline

operators.

Transfer lines or segments of lines on the grounds of industrial

plants and transportation terminals generally are excepted from Part

195 (Sec. 195.1(b) (6) and (7)).7 However, this excepted piping is

subject to Occupational Safety and Health Administration (OSHA) safety

standards, including, when 10,000 pounds or more of flammable liquid

are involved, the Process Safety Management regulations (29 CFR

1910.119) issued under the Clean Air Act Amendments of 1990. These

regulations are designed to reduce the risk of fires and explosions

caused by the escape of hazardous chemicals from facility processes. In

addition, transfer lines between vessels and marine transportation-

related facilities are subject to safety requirements of the U.S. Coast

Guard (33 CFR Parts 154 and 156). These requirements apply to transfer

lines from the dock loading arm or manifold up to the first valve after

the line enters the Spill Prevention Control and Countermeasure (SPCC)

containment or secondary containment if the facilities are not

protected by SPCC plans.

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7 Part 195 applies to transfer piping on facility grounds

if the piping is necessary to control the operating pressure of off-

grounds lines covered by Part 195, or if the on-grounds piping

serves a breakout storage tank.

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RSPA is concerned that the impending imposition of the Part 195

regime on a multitude of short hazardous liquid transfer lines

throughout the U.S. and Puerto Rico may create difficulties for both

industry and government that are not counterbalanced by a reduction in

risk. A significant difficulty for many operators of transfer lines is

that the lines may be designed and operated according to standards and

specifications that differ from Part 195 requirements. Some time and

expense would be necessary for operating personnel to become familiar

with Part 195 and the companion drug and alcohol rules in 49 CFR Part

199.

Another difficulty for industry is the separate federal regulatory

regimes over transfer piping. Part 195 generally does not displace OSHA

regulations over on-grounds transfer piping. So most plants and

terminals would have to comply with OSHA's Process Safety Management

regulations for some transfers and Part 195 for others.8 For

transfers between vessels and marine transportation-related facilities,

the Coast Guard safety regulations would apply as well. Application of

Part 195 to these marine terminal transfer lines duplicates agency

efforts within DOT and creates uncertainty in the industry as to which

DOT regulations apply to particular facilities. The upshot of these

separate regulatory regimes of RSPA, OSHA, and the Coast Guard is that

differing safety rules and enforcement policies could confuse operating

personnel and increase administrative costs through separate operating

plans and recordkeeping.

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\8\ However, where Part 195 applies to facility transfer piping,

OSHA regulations may be preempted, because OSHA is precluded from

enforcing its regulations against employee working conditions over

which another federal agency prescribes or enforces safety

regulations. (29 U.S.C. Sec. 653(b)(1)).

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Carrying out adequate government inspections presents a further

difficulty. The task of finding and educating the many new operators

coming under Part 195 because of low-stress pipelines is

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likely to be a major, protracted effort that could swamp current

inspection resources.

At the same time, the risk to the public from short low-stress

transfer lines off plant or terminal grounds is generally low. A low

operating stress is itself a safety factor against several accident

causes. And the short length means the potential spill volume would be

limited should an accident occur. Also, typically there is limited

public exposure in the industrial areas where low-stress transfer lines

are located. The risk of marine transfer lines is reduced even more by

the U.S. Coast Guard regulations and inspection force.

Therefore, we are considering amending Part 195 to except short,

low-stress transfer lines that traverse areas outside plant and

terminal grounds. We are also considering excepting low-stress transfer

lines of any length that are regulated by the U.S. Coast Guard. We

intend to publish a notice of proposed rulemaking (NPRM) in the Federal

Register to seek public comment on these proposals.

Meanwhile, effective May 14, 1996, I am staying enforcement of Part

195 against two categories of low-stress pipelines: (1) low-stress

pipelines regulated by the U.S Coast Guard; and (2) low-stress

pipelines that are less than 1 mile in length (measured outside plant

or terminal grounds), except if the pipeline crosses offshore or any

waterway currently used for commercial navigation. This stay will

remain in effect until modified through another Federal Register

document or until Part 195 is amended as a result of the NPRM,

whichever happens first. RSPA will continue to enforce Part 195 over

short lines that cross offshore or commercially navigable waterways but

do not come under U.S. Coast Guard regulations because of the need to

reduce the threat of environmental damage.

Authority: (49 U.S.C. Sec. 60102 et seq.; 49 CFR 1.53)

Issued in Washington, DC on May 7, 1996.

Richard B. Felder,

Associate Administrator for Pipeline Safety.

[FR Doc. 96-11886 Filed 5-13-96; 8:45 am]

BILLING CODE 4910-60-P