On September 25, 2013, the Pipeline and Hazardous Materials Safety Administration (“PHMSA”) released a final rule increasing the civil penalty maximums for pipeline safety violations. The rule increased the maximum penalties from $100,000 to $200,000 per day for each violation, and from $1,000,000 to a $2,000,000 maximum for a related series of violations.
PHMSA stated the rule is intended to comply with mandates in the Pipeline, Safety, Regulatory Certainty, and Job Creations Act of 2011 (“2011 Act”). According to the rule, the new maximum penalties will only apply to violations that occur after January 3, 2012, the date the 2011 Act was enacted. PHMSA also deleted civil penalty provisions for violations that involve offshore gathering lines.
In addition to the increase in maximum penalties, PHMSA also finalized various other enforcement and hearing regulations to adhere to the 2011 Act. Those revisions included (1) reducing the amount of time to respond to a request for information from 45 days to 30 days, with the option for an extension; (2) adding a new section that imposes a separation of functions between investigation and prosecutorial personnel, and those personnel involved in decision making; and (3) prohibiting ex parte communications in enforcement cases.
The final rule takes effect on October 25, 2013. A copy of the final rule is available here.