Interpretation Response #PI-17-0003

Below is the interpretation response detail and a list of regulations sections applicable to this response.

Interpretation Response Details

Response Publish Date: 03/11/2019

Company Name: Dow Chemical Company

Individual Name: Ms. Jennifer Ashcraft

Location State: TX Country: US

View the Interpretation Document

Response text:

Ms. Jennifer Ashcraft
Sr. Regulatory Compliance Specialist
The Dow Chemical Company
2301 N. Brazosport Blvd., B-101
Freeport, Texas 77541-3257

Dear Ms. Ashcraft:

In a January 24, 2017, letter to the Pipeline and Hazardous Materials Safety Administration (PHMSA), you requested an interpretation of 49 Code of Federal Regulations (CFR) Part 195. Specifically, you requested an interpretation as to PHMSA's regulatory requirements at your Salt Dome Operations (SDO) facility in Freeport, Texas.

You stated that the primary purpose for the SDO facility is to provide storage capacity (manage inventory) and supply brine for facilities in Dow's Texas Operations. In addition, you stated the facility is subject to and complies with the Railroad Commission (RRC) of Texas Oil & Gas Division requirements as well as OHSA's Process Safety Management (PSM) regulations. You asked if the in-plant the piping system within the SDO facility meets the in-plant piping exemption in § 195.1(b)(8).

PHMSA requested additional information specific to the SDO facility first on February 13, 2017, and several times thereafter. On July 5, 2018, you provided PHMSA with additional information via email. In your response, you stated the SDO is an integrated storage facility comprised of underground storage caverns, piping, valves and miscellaneous process equipment used for the storage and transfer of various hydrocarbons to and from both Dow manufacturing units and third parties. You stated the facility stores the following products: naphtha, pygas, methane, ethane, LPG/propane, ethylene, and propylene. From the information you provided, it appears one or more of these products, such as methane, may be stored in gas form.

You stated products and materials enter the SDO facility through Dow's Gulf Coast Pipeline Operations (GCPL), Dow's Site Pipeline Operations (SPO) and other third party, PHMSA-regulated pipelines. All pipelines entering the SDO are equipped with PHMSA-regulated over pressure protection (OPP) devices that protect the SDO in-plant piping from experiencing an over-pressuring event from outside (mainline) pressure.

Further, you stated that the SDO facility does not refine or manufacture products. You stated the facility is only a storage facility associated with Dow Texas Operations' manufacturing and chemical plants. You opined that where you believe PHMSA's regulations on pipelines entering the SDO end, piping and equipment used to transport materials throughout the storage facility and to the underground storage caverns are regulated by EPA's Risk Management Program (RMP) and OHSA's Process Safety Management (PSM) regulations. Similarly, where you believe RRC's regulations end for cavern surface piping, you opined EPA's RMP and OSHA's PSM regulations apply to piping and equipment. In addition, you provided maps, tables, and product descriptions of the SDO facility.

The Pipeline Safety Act, 49 USC § 60102(a), specifies that "pipeline transportation" includes "the movement of hazardous liquid by pipeline" and "storage of hazardous liquid incidental to the movement of hazardous liquid by pipeline," but not the movement of hazardous liquids through “onshore production, refining, or manufacturing facilities." PHMSA has adopted minimum safety standards for hazardous liquid pipelines in 49 CFR Part 195. Section 195.1(b)(8) states that these pipeline safety standards do not apply to the "[t]ransportation of hazardous liquid or carbon dioxide through onshore production (including flow lines), refining, or manufacturing facilities or storage or in-plant piping systems associated with such facilities." The exception in § 195.1(b)(8) does not apply to any facilities that are used directly in the transportation of hazardous liquids by pipeline (see 49 C.F.R. § 195.1(a)).

Based on the information you provided, it appears the in-plant piping system transporting hazardous liquid within your SDO facility is jurisdictional to PHMSA. You stated the SDO facility "is an integrated storage facility comprised of underground storage caverns, piping, valves and miscellaneous process equipment used for the storage and transfer of various hydrocarbons to and from both Dow manufacturing units and third parties." You further stated products enter the SDO facility by pipeline and exit the facility by pipeline. Importantly, you stated no production, refining or manufacturing activities are performed at the SDO facility, and characterized the SDO as a storage facility. In summary, the information submitted with your request indicates the SDO facility receives hazardous liquids in transportation by pipeline, stores hazardous liquids incidental to their movement by pipeline, and transports hazardous liquids from the facility by pipeline. The facility is, therefore, engaged in pipeline transportation subject to the Pipeline Safety Act and 49 C.F.R. Part 195 unless an exception applies. In addition, the facility may be subject to 49 CFR Part 194 and require an oil spill response plan to be submitted to PHMSA for review and approval.

As explained above, both the Pipeline Safety Act and Part 195 except the movement of hazardous liquids through production, refining, manufacturing facilities or storage or in-plant piping associated with such facilities. Since the SDO is not a production, refining or manufacturing facility and does not meet any other exception listed in § 195.1(b), the in-plant piping within the facility is not excepted from PHMSA's jurisdiction.

¹Dow Letter, (July 5, 2018) at 1.

²Id. at 2-3.

³Id. at 2, 7.

Further, you noted that the SDO facility "has equipment and systems in place to process materials stored to prepare for use in Texas Operations facilities." Processing involved in transportation that is not otherwise "production, refining or manufacturing," is not exempt from the Pipeline Safety Act under 49 USC § 60101(a)(22)(B). PHMSA, however, has not currently adopted regulations addressing the safety standards of processing equipment.

Finally, you stated that hazardous liquids are stored in underground storage caverns on the SDO facility site. PHMSA does not currently have specific regulations for underground hazardous liquid storage facilities, but does have regulations governing underground natural gas storage facilities in Part 192, specifically in § 192.12. Because PHMSA does not have specific regulations at this time for underground hazardous liquid storage facilities, the application of Part 195 would stop at the wellhead site valves for underground caverns storing hazardous liquids. The specific valve at the wellhead site can be wellhead, casing head, choke assembly, or line valve, based on your operations and maintenance manual. To the extent any portion of your SDO facility meets the definition of a natural gas storage facility under § 192.1, it is subject to PHMSA's regulations in Part 192.

This interpretation is based upon the information you have provided to support this request. If PHMSA discovers that any of the information provided by Dow Chemical Company is not accurate or that relevant circumstances change, PHMSA may amend this interpretation to be consistent with the pipeline safety regulations.

If we can be of further assistance, please contact Tewabe Asebe at 202-366-5523.

John A. Gale
Director, Office of Standards
and Rulemaking

Regulation Sections