Possible PHMSA and OSHA Jurisdictional Clarity

On November 4, 2020, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued draft guidance on jurisdictional overlap with the Occupational Safety and Health Administration (OSHA) on "Midstream Processing Facilities". The draft notification document was issued to help clear up where PHMSA's jurisdiction ends and OHSA's begins. Up until this announcement, the term "Midstream Processing Facility" has not been defined in any Pipeline Safety Laws or the PHMSA and/or OSHA regulations.

The principal question for companies in these sectors to ponder was whether these facilities fell under the OHSA, Process Safety Management regulation. Without the above definition the confusion has been mainly predicated on in the CFR 1910.119, "Process safety management of highly hazardous chemicals", applicability requirement:

"1910.119(a)
Application.
1910.119(a)(1)
This section applies to the following:
1910.119(a)(1)(i)
A process which involves a chemical at or above the specified threshold quantities listed in appendix A to this section;
1910.119(a)(1)(ii)
A process which involves a Category 1 flammable gas (as defined in 1910.1200(c)) or a flammable liquid with a flashpoint below 100 °F (37.8 °C) on site in one location, in a quantity of 10,000 pounds (4535.9 kg) or more except for:
1910.119(a)(1)(ii)(A)
Hydrocarbon fuels used solely for workplace consumption as a fuel (e.g., propane used for comfort heating, gasoline for vehicle refueling), if such fuels are not a part of a process containing another highly hazardous chemical covered by this standard;
1910.119(a)(1)(ii)(B)
Flammable liquids with a flashpoint below 100 °F (37.8 °C) stored in atmospheric tanks or transferred which are kept below their normal boiling point without benefit of chilling or refrigeration.
1910.119(a)(2)
This section does not apply to:
1910.119(a)(2)(i)
Retail facilities;
1910.119(a)(2)(ii)
Oil or gas well drilling or servicing operations; or,
1910.119(a)(2)(ii)
Normally unoccupied remote facilities."

The case about applicability mainly boils down to the interpretation of three subclauses above:

• 1910.119(a)(1)(ii)
• 1910.119(a)(2)(ii)
• 1910.119(a)(2)(ii)

A company's interpretation of these subclauses and the OSHA and PHMSA regulations requires them to pick which regulation to follow. From the operator's point of view, this creates a possible regulatory liability based on the company's choice or requires the company to try to satisfy both regulations creating confusion and extra cost.

As an acknowledgement of the problem, the year 2014 saw the formation of a "Working Group" whose purpose for "Midstream Processing Facilities" was to:

• To evaluate equivalency between the PHMSA and OSHA safety requirements.
• Identify how to delineate jurisdictional boundaries and oversight.
• Address the oversight of midstream processing facilities containing pass-through, bypass, and storage configurations, including storage-related piping.

The "Working Group" found that:

• The PHMSA and OSHA regulations provided the same level of protection for "Midstream Processing Facilities".
• The possibility of enforcing both sets of regulations might make "Midstream Processing Facilities" less safe by causing confusion and creating contradictions.

Therefore, they drafted seven frequently asked questions (FAQs) and answers and submitted them to PHMSA. After review, PHSMA has now put out an announcement draft document for comment that contains the FAQs and additional information, such as the definition for "Midstream Processing Facilities":

• https://cms7.phmsa.dot.gov/regulations-fr/rulemaking/2020-24011 Note(1)

The clarifications of and the definition for "Midstream Processing Facilities" in the document are:

"For the purposes of this guidance document, a "midstream processing facility" is a processing facility that receives products being transported by PHMSA-jurisdictional pipelines and reinjects those products for continued transportation by pipeline. In other words, a midstream processing facility is a processing facility with piping or storage that is engaged in the transportation of gas or hazardous liquids by pipeline, and is therefore a pipeline facility subject to PHMSA jurisdiction. The pipeline systems within or associated with midstream processing facilities may be subject to regulation by one or more Federal agencies, depending on the facility's purpose and configuration. PHMSA regulates the safety of transportation related pipeline systems associated with midstream processing facilities in 49 CFR parts 190–199, while OSHA regulates safety within midstream processing facilities using the Process Safety Management (PSM) regulations (29 CFR 1910.119)."

The deadline for comments for the draft was January 4, 2021. As Asset Optimization Consultants, Inc. (AOC) is not an operating company, we do not take sides but try to help our clients comply with all federal, state, and local regulations. We believe this draft clarification from PHMSA will help operating company's make decisions about compliance that will make their facilities safer. If you are not aware of this new development, please go to the link above or see the following source or contact us:

• https://www.vnf.com/pipeline-safety-update-issue-no-161 Note(2)

REFERENCES

1. Pipeline Safety: Midstream Facilities Frequently Asked Questions. (2020, November 4). Retrieved from https://cms7.phmsa.dot.gov/regulations-fr/rulemaking/2020-24011
2. Olenchuk, Van Ness Feldman LLP, S. A., Karaus, Van Ness Feldman LLP, B. S., Cunningham, Van Ness Feldman LLP, J. I., & Bracamonte, Van Ness Feldman LLP, M. (2020, November 13). Pipeline safety update - Issue No. 161. Retrieved from https://www.vnf.com/pipeline-safety-update-issue-no-161

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