H.R. 2845: Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011

H.R. 2845

Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011

Date
December 13, 2011 (112th Congress, 1st Session)

Staff Contact
Communications

Floor Situation

On Monday, December 12, 2011, the House is scheduled to consider H.R. 2845 under a suspension of the rules, requiring a two-thirds majority vote for passage.  The resolution was introduced by Rep. Bill Shuster (R-PA) on September 7, 2011 and referred to the Committees on Transportation and Infrastructure. 

Bill Summary

H.R. 2845 would reauthorize the federal pipeline safety programs administered by the Pipeline and Hazardous Materials Safety Administration (PHMSA) of the U.S. Department of Transportation (USDOT) for fiscal years 2012 through 2015.  

The Pipeline and Hazardous Materials Safety Administration (PHMSA) oversees the safety of pipelines that transport gas or hazardous liquids and provides grants to states for programs to ensure pipeline safety.  For those activities, H.R. 2845 would authorize gross appropriations of $505 million over the 2012-2016 period.  

The bill would increase the maximum amount of civil penalties the U.S. can seek from pipeline owners or operators who violate pipeline safety rules and regulations.  H.R. 2845 would require states to eliminate most exemptions to their ‘Call Before You Dig’ programs in order to receive federal grant funding.  

The bill would allow the Secretary to issue a rulemaking requiring the installation of automatic and remote-controlled shutoff valves on newly constructed transmission pipelines but would not require operators to retrofit existing pipelines.

Additionally, the bill would require the Secretary to study expanding pipeline integrity management requirements and leak detection systems but would give Congress the final approval of whether the requirements should be expanded or the leak detection systems should be installed.  

H.R. 2845 would require USDOT and pipeline operators to provide information to first responders on the location of pipelines in their jurisdiction.  The bill would also require USDOT to review regulations regarding accident reporting requirements for pipeline operators.

The bill would authorize funding to be appropriated for several pipeline safety programs.  Specifically, the bill would authorize $107 million a year to be appropriated for safety inspections.  The bill would also authorize grants to states funded from pipeline safety fees collected from pipeline operators.  Further, it would authorize approximately $13 million a year to be appropriated out of the General Fund for emergency response grants and damage prevention programs.

Background

According to H. Rept. 112-297 from the House Committee on Transportation and Infrastructure, H.R. 2845 would provide for enhanced safety in pipeline transportation and provide for enhanced reliability in the transportation of the Nation's energy products by pipeline.  The bill would also ensure regulatory certainty which would help create a positive environment for job development.

The Nation's pipelines are a transportation system that enables the safe movement of extraordinary quantities of energy products to industry and consumers, literally fueling our economy and way of life.  Pipelines are the arteries of the Nation's energy infrastructure, as well as the safest and least costly ways to transport energy products.

PHMSA is the federal safety authority for the Nation's 2.3 million miles of natural gas, petroleum and other hazardous liquid pipelines. PHMSA's pipeline safety programs ensure the safe design, construction, testing, operation, maintenance, and emergency response of U.S. hazardous liquid and natural gas pipeline facilities.

The federal pipeline safety programs were last authorized under the Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006 (Public Law 109-468), a four-year authorization for fiscal years 2007 through 2010. The federal pipeline safety programs expired on September 30, 2010.

Cost

According to Congressional Budget Office (CBO) estimates, about $434 million of the $505 million in appropriations authorized by H.R. 2845 would be offset by fees paid by pipeline operators over the 2012-2016 period.  In addition, subject to provisions in appropriation acts, CBO estimates that the bill would authorize PHMSA to collect and spend about $10 million over the 2012-2016 period to recover its costs of conducting safety reviews at a pipeline project in the state of Alaska.  CBO estimates that implementing H.R. 2845 would have a net cost of $45 million over the 2012-2016 period, assuming appropriation of the specified and estimated amounts.

Pay-as-you-go procedures apply because enacting the legislation could affect revenues.  H.R. 2845 would increase certain civil penalties for violating pipeline safety regulations.  Civil penalties are recorded in the budget as revenues and deposited in the general fund of the Treasury.  However, CBO estimates that any increase in civil penalties would be small and would have no significant effect on the federal budget over the next 10 years. Enacting the bill would not affect direct spending. 

H.R. 2845 contains intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) because it would impose new requirements on both public and private operators of natural gas pipelines.  The bill would impose additional private-sector mandates on operators of hazardous liquid pipelines.  Because of the relatively small number of public entities affected, CBO estimates that the aggregate cost of intergovernmental mandates in the bill would fall below the annual threshold established in UMRA ($71 million in 2011, adjusted annually for inflation).  Because many of the mandates on private entities would depend on future regulations, CBO cannot determine whether the aggregate cost of the private-sector mandates would exceed the annual threshold established in UMRA ($142 million in 2011, adjusted annually for inflation).

Additional information on the CBO estimate can be found here.