Interpretation Response #PI-11-0016 ([Atmos Energy] [Charles R. Yarbrough, II])
Below is the interpretation response detail and a list of regulations sections applicable to this response.
Interpretation Response Details
Response Publish Date:
Company Name: Atmos Energy
Individual Name: Charles R. Yarbrough, II
Location State: TX Country: US
View the Interpretation Document
Response text:
Mr. Charles Yarbrough
Vice President
Rate and Regulatory Affairs
Atmos Energy
5420 LBJ Freeway, Suite 1557
Dallas, TX 75240
Dear Mr. Yarbrough:
In your letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA) dated April 29, 2011, you stated that PHMSA has inaccurately classified "farm taps" as distribution pipelines. Specifically, you contend that these lines are essentially part of the transmission or gathering pipelines to which they are attached, are not distribution pipelines, and therefore, are not subject to distribution integrity management program (DIMP) requirements. PHMSA disagrees with this analysis.
In DIMP FAQ C.3.7, PHMSA informed operators of distribution, gathering, and transmission lines whose system includes "farm taps" that they must have a DIMP covering these facilities. In past rulemakings, PHMSA has 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."1
PHMSA has recognized farm taps as distribution lines for several years. Historically, PHMSA and its predecessor agencies have held that farm taps are service lines; a subset of distribution pipelines. Farm taps were first referenced in the pipeline safety regulations in 1971 when the Department of Transportation proposed to broaden the definition of a service line. The proposed rulemaking document stated, in part:
"[T]his definition does not appear to cover all types of lines that are generally considered to be service lines. The present definition does not indicate that the regulations covering service lines apply to a distribution line on which there is no meter (i.e., where gas is sold at a flat rate), or to a distribution line which is downstream of the meter (such as where the meter is installed at the curb or at some distance from the customer's building). Similar problems also arise with a pipeline such as a "farm tap" which may be unmetered or may be metered at the point of tie-in with a very long line downstream of the meter".[i]t is apparent that all of these pipeline are just as involved in the distribution of gas under the Natural gas Pipeline Safety Act, and just as potentially dangerous to the public, as lines that are metered in the individual's basement. Accordingly, it is proposed to amend the definition of "service line" to clarify the status of service lines in master distribution systems and unmetered service lines and to assure that service lines downstream of an outside meter are covered by the minimum Federal standards.2
A final rule was published subsequent to this proposal establishing the definition of a service line as the following:
"Service Line" means a distribution line that transports gas to a customer meter set assembly from a common source of supply to (1) a customer meter or the connection to a customer piping, whichever is farther downstream, or (2) the connection to a customer piping if there is no customer meter. A customer meter is the meter that measures the transfer of gas from an operator to a customer. 3
This final rule did not alter the position that farm taps were still to be classified as service lines.4
PHMSA's predecessor agency, the Research and Special Programs Administration (RSPA), also addressed farm taps as part of an interpretation issued on September 10, 1980, in which the filer asked if the gas in a service line used to deliver gas directly from a transmission line to a restaurant needs to be odorized.5 PHMSA responded that "[s]ince service lines are distribution lines, they are subject to the odorization requirements of §192.625(a). The exception from odorization provided by §192.625(b) for some transmission lines does not affect the requirement to odorize gas in distribution lines connected to an un-odorized transmission line."6 This interpretation again makes clear that PHMSA considers farm taps to be distribution service lines.
In 1995, RSPA again addressed this issue in a final rule concerning customer-owned service lines. Many commenters opposed the inclusion of farm taps in the customer-owned service line rule. In the final rule, RSPA reasserted its position that farm taps are distribution lines. The pertinent section of the preamble to the final rule states:
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. 7
PHMSA further supported its position that farm taps are service lines and thus distribution lines in the "Excess Flow Valve (EFV)-Performance Standards" Final Rule. In that particular rule, PHMSA determined that the references to 'main' or 'transmission line' included farm taps. The preamble stated the following:
In the Notice of Proposed Rulemaking (NPRM) RSPA [Research and Special Programs Administration, a predecessor to PHMSA] 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. 8
Finally, PHMSA's understanding of farm taps is similar to that of industry. This was made clear when industry developed API RP-80, Guidelines for the Definition of Onshore Gas Gathering Lines, and recommended PHMSA adopt this recommended practice as a functional definition of gathering pipelines. The definition from the API Recommended Practice states that a gathering line is-
(a) ".any pipeline or part of a connected series of pipelines used to
(1) transport gas from the furthermost downstream point in a production operation to the furthermost downstream of the following endpoints, which physically may have intermediate deliveries (to other production operations, pipeline facilities, farm taps, or residential/commercial/industrial end users) that are not necessarily part of the gathering line. (emphasis added).
PHMSA's position on farms taps is also discussed in an interpretation letter to Mr. Thomas Correll of Northern Natural Gas, dated April 19, 2010, (PI-11-0008). This letter is available on PHMSA's web site.
It is PHMSA's position that farm taps have been historically considered service lines, a subset of distribution pipelines, and the final rules referenced above clearly support that approach. Farm taps are thus subject to all requirements associated with distribution lines. The pipeline safety regulations clearly state that any gas distribution pipeline covered under Part 192 must have a DIMP program meeting the requirements of subpart P of Part 192.9
With respect to integrity management, it does not matter whether the transmission line to which a farm tap is attached is not in a high consequence area or otherwise not subject to integrity management requirements. Similarly, it does not matter that integrity management requirements are not imposed on gathering pipelines from which a farm tap may originate.
Finally, you suggest in your letter that application of DIMP requirements to farm taps was not specifically discussed in the DIMP rulemaking documents and is therefore in violation of the Administrative Procedures Act. PHMSA disagrees with this position. The DIMP NPRM and Final Rule10 clearly indicate that integrity management requirements apply to all distribution pipelines. In fact, contrary to integrity management requirements for hazardous liquid or gas transmission pipelines, DIMP requirements do not focus on a subset of pipelines in "high consequence areas" but, instead, apply to all distribution pipelines. The DIMP rulemaking documents did not need to include a discussion of the applicability of DIMP to specific defined types of distribution pipelines. DIMP applies to all distribution pipelines. Farm taps have clearly been considered distribution pipelines for many years. The prior rulemakings discussed above provided ample opportunity for the public to object to classification of farm taps as distribution pipelines. As noted, commenters did object to such classification in one proceeding (the customer-owned service lines rulemaking). These comments were analyzed during the rulemaking process.
PHMSA stands by the response to DIMP FAQ C.3.7. All farm taps which meet the criteria for a distribution pipeline must comply with requirements of Part 192 Subpart P " Gas Distribution Pipeline Integrity Management.
Sincerely,
John A. Gale
Director, Office of Standards
and Rulemaking
TAsebe:jmd:64046:02-27-12
cc:PHP-30:Interps:Open:Atmos:04-29-11
1 Customer-Owned Service Lines, 60 Fed. Reg. 41821, 41823 (August 14, 1995).
2 "Minimum Federal Safety Standards for Transportation of Natural and Other gas by Pipeline-Definition of Service Line", 36 Fed. Reg. 9667 (May 27, 1971) (emphasis added).
3 "Definition of Service Line", 38 Fed. Reg. 9083, 9084 (April 10, 1973).
4 The definition remained unchanged until October 15, 2003, when it was modified to recognize the use of multiple meter manifolds and services serving adjacent properties. The new, and current, definition reads: "Service Line" means a distribution line that transports gas to a customer meter set assembly from a common source of supply. to (1) a customer meter or the connection to a customer piping, whichever is farther downstream, or (2) the connection to a customer piping if there is no customer meter. A customer meter is the meter that measures the transfer of gas from an operator to a customer." Nothing in the notices related to these rulemakings specifically addressed "farm taps," and PHMSA's position on that issue was thus unchanged.
5 Letter, Melvin A Judah to F. Scott Smith, Kentucky Energy & Utility Regulatory Commission, attaching interpretation 80-13, September 10, 1980.
6 Id.
7 "Customer-Owned Service Lines", 60 Fed. Reg. 41821, 41823 (August 14, 1995).
8 "Excess Flow Valve-Performance Standards", 61 Fed. Reg. 31449, 31453 (June 20, 1996).
9 49 CFR 192.1003
10"Pipeline Safety: Integrity Management Program for Gas Distribution Pipelines," 74 Fed. Reg. 63906 (December 4, 2009).