PHMSA defeated in court thanks to GPA Midstream precedent

The Interstate Natural Gas Association of America won in court over the U.S. Pipeline and Hazardous Materials Administration because the agency failed to perform an adequate cost-benefit analysis of proposed rules affecting gas-related pipeline safety. The ruling by the 10th Circuit Court of Appeals in Washington, D.C., relied in part on the precedent established in GPA Midstream's victory against against PHMSA. GPA's 2023 case was the first time any organization had successfully challenged PHMSA's cost-benefit analysis.

According to US statute, PHMSA is to conduct and publish two cost-benefit analyses when attempting to implement a new safety standard, the first when it proposes the rule, and another when it is finalized. Before finalizing a rule, the agency must consider recommendations from an advisory committee, comments from the public, and other factors, including costs and benefits.

In this case, INGAA argued that the agency's analysis of costs and benefits of five standards was inadequate. Judges of the 10th Circuit agreed and threw out four out of five PHMSA rules at issue because they "failed to adequately explain why the benefits of the final standards outweigh the cost." In some situations, the court found that PHMSA's cost-benefit analysis included contradictory information, and in others that the agency had performed no cost-benefit analysis at all.

PHMSA published an advance notice of proposed rules in 2011 relating to changes in gas transmission pipelines. In 2016, there was a cost benefit analysis and then a final impact analysis in 2022. The court, however, found that in some cases the analysis was inadequate and in others non-existent.

GPA Midstream will monitor PHMSA's likely effort to continue pursuing these proposed standards through an additional rulemaking process. The association will continue working with PHMSA on updates to safety regulations, including integrity management and leak detection.