PHMSA Response Letter
Mr. Thomas Correll
Director-Pipeline Safety and Risk
Northern Natural Gas Company
1111 South 103rd Street
Omaha, NE 68124
Dear Mr. Correll:
In a letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA) received March 21, 2011, you requested written clarification regarding the applicability of the distribution integrity management program (DIMP) regulation to farm taps operated by Northern Natural Gas (NNG). You stated that it is NNG¿s belief that its farm tap facilities are transmission facilities since: (1) they meet the criteria for, and are properly classified as, transmission facilities; (2) the facilities have been addressed and characterized for many years as transmission facilities during PHMSA audits; and (3) the configuration is very similar to a town border station (meter station) or a direct sales lateral, both of which would be considered a transmission facility under PHMSA rules. Secondly, based on Frequently Asked Question (FAQ) B.1.2, you infer that the intent of the DIMP rule is to address natural gas pipeline systems in areas with greater population density, as is characteristic of most distribution system areas. Finally, you indicate that you are seeking clarification of this issue to avoid a potential duplicative layer of integrity management regulatory oversight.
49 C.F.R. § 192.1003 of the pipeline safety regulations clearly states that any gas distribution pipeline covered under Part 192 must have an IM program that meets the requirements of the DIMP regulation. In DIMP FAQ C.3.7, PHMSA informed operators of distribution, gathering, and transmission lines whose system includes ¿farm taps¿ meeting the definition of a distribution line that they must have a DIMP covering these facilities. A distribution line is a ¿pipeline other than a gathering or transmission line.¿1 A transmission line is ¿a pipeline, other than a gathering line, that: (1) transports gas from a gathering line or storage facility to a distribution center, storage facility, or large volume customer that is not down-stream from a distribution center; (2) operates at a hoop stress of 20 percent or more of SMYS; or (3) transports gas within a storage field.¿2
Therefore, NNG¿s farm taps are transmission lines if: (1) they serve large volume customers; or (2) they operate at hoop stress of 20 percent or more of SMYS; or (3) they transport gas within a storage field. Farm taps which do not meet these criteria are distribution pipelines and must comply with DIMP.
PHMSA has recognized farm taps as distribution lines for several years as addressed in the following rulemakings:
(1) In the ¿Customer-Owned Service Lines¿ Final Rule, PHMSA defined a ¿farm tap¿ as ¿industry jargon for a pipeline that branches from a transmission or gathering line to deliver gas to a farmer or other landowner.¿3
Although many commenters argued against the inclusion of farm taps in this rule, PHMSA determined in the Final Rule that an operator who primarily operates gathering or transmission lines is also operating a distribution line when it delivers gas directly to customers through farm taps or industrial taps. The pertinent section of the preamble is quoted below:
To begin with, while we recognize that Congress was primarily concerned about residential customers, the mandate is not so limited. Congress applied the mandate to "operators of natural gas distribution pipelines." But these operators are not just local distribution companies as the commenters suggested. Some operators primarily engaged in the gathering or transmission of gas also operate distribution pipelines. They do so when they deliver gas directly to customers through farm taps and industrial taps. In fact, because portions of these delivery lines qualify as service lines, gathering and transmission operators report them as distribution pipelines under 49 CFR 191.13. Moreover, farm and industrial tap customers are not immune from harm by potential hazards that could occur on their piping. And surely not all farm and industrial tap customers know enough about gas piping safety to make even a single maintenance notice unnecessary.4
(2) In the ¿Excess Flow Valve-Performance Standards¿ Final Rule, a few commenters objected to what they thought was the proposed requirement to install EFVs immediately downstream of the service-to-main connection when the line served more than one residence (branch service). In the Final Rule, PHMSA determined that the references to ¿main¿ or ¿transmission line¿ included farm taps.
In the NPRM, RSPA intended that all new and replaced service lines, whether from a main or transmission line, where the source of gas supply consistently operates above 10 psig, be required to have an EFV installed. The reference to "main'' and "transmission'' lines was intended to cover farm taps, as farm taps are also subject to the type of incident that could benefit from an EFV. The final rule deletes the reference to "main'' and "transmission'' and sets performance standards for EFVs installed on single-residence gas service lines. By referring to "service'' line, RSPA intends for the standards to apply if an EFV is installed on a farm tap.5
In referencing FAQ B.1.2, you suggest that farm taps were not intended to be included in the DIMP rule. The purpose of FAQ B.1.2 was to explain to stakeholders the reason why the concept of ¿high consequence areas¿ used in transmission integrity management was not applied to distribution integrity management. The FAQ stated that since transmission pipelines are often in rural areas, the use of high consequence areas (HCAs) allows operators to focus safety improvement efforts on areas where consequences could be more significant. Since distribution pipelines are largely in proximity to populated areas, the use of HCAs was not necessary and instead operators were required to consider their entire pipeline under DIMP. This distinction does not exclude distribution lines in less populated areas from DIMP.
Your final concern stated that you sought to avoid potentially duplicative layers of regulatory oversight. States will implement the DIMP rule in accordance with their particular certification under 49 U.S.C. 60105 for intrastate facilities or agreement under section 60106 for interstate facilities. As defined in 49 U.S.C. 60101, an ¿intrastate gas pipeline facility¿ means a gas pipeline facility and transportation of gas within a State not subject to the jurisdiction of Federal Energy Regulatory Commission (FERC) under the Natural Gas Act (15 U.S.C. 717 et seq.). Since the typical ¿farm tap¿ is not subject to a FERC filing, these facilities are intrastate and regulated by the State. In your specific situation, the South Dakota Public Utilities Commission (SDPUC) has a 60105 agreement and has regulatory authority to inspect intrastate pipeline facilities within South Dakota.
You have not provided us with the specifics of NNG¿s farm taps, but please note that unless NNG¿s farm taps meet the definition of a transmission line and are incorporated in NNG¿s IMP plan, NNG must comply with requirements of 49 CFR Part 192 Subpart P ¿ Gas Distribution Pipeline Integrity Management (DIMP).
I hope that this information is helpful to you. If I can be of further assistance, please contact me at 202-366-4595.
Jeffrey D. Wiese
Associate Administrator for Pipeline Safety