Industry Speaks Out On PHMSA’s Penalty Proposals, Other Actions

November 2012, Vol. 67, No. 11

The AOPL and the American Petroleum Institute (API) also raised questions about PHMSA's plan to shorten to 30 days from the current 45 days the maximum time a company has to respond to information requests from the PHMSA after an inspection is conducted. "The notice of proposed rulemaking offers no explanation for shortening the response period deadline from 45 to 30 days, and given that the Associate Administrator can specify a period by which a response must be submitted, there is no apparent reason to shorten the deadline," the two groups say in their comments. "Indeed, AOPL and API propose that, in addition to retaining the 45-day response deadline, a minimum 15-day response period should be provided."

Many of the new administrative proceedings requirements could be considered technical in nature, although some may have a bearing on the outcome of individual penalty cases. These new requirements include such things as issuing new regulations defining who qualifies as a "presiding officer" of hearings conducted for the issuance of corrective action orders (CAOs), safety orders, compliance orders, and civil penalties to be convened before a presiding official. The Act requires that PHMSA issue regulations both defining the term ``presiding official'' and requiring the presiding official to be an attorney on the staff of the Deputy Chief Counsel who is not engaged in investigative or prosecutorial functions.

Other prospective changes may be viewed as a touch more substantive, such as time frames for PHMSA to conduct hearings after a penalty order is delivered to the company, to whom a notice of probable violation is delivered, etc.

Feds open door to regulatory oil & gas reform

A number of federal regulatory agencies with authority to impose safety rules on oil and gas companies have begun an inquiry into whether they ought to consider shifting their regulations to a more "performance-based" methodology. Typically, regulations imposed by the Environmental Protection Agency, Pipeline and Hazardous Materials Safety Administration, Occupational Safety and Health Administration and Department of Interior are prescriptive, mandating the actions companies must take to protect their workers and the environment. Performance-based regulations specify a result, and give companies leeway in terms of how they achieve those.