Rulemaking Process and Cost Benefit Analysis John A. Gale Director - - PowerPoint PPT Presentation

Rulemaking Process and Cost Benefit Analysis

John A. Gale Director Office of Standards & Rulemaking

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Goals

• Regulatory Process

– Improve your knowledge of the regulatory process – Improve your knowledge of how you can be involved in the process

• Cost Benefit Analysis

– Better understanding of how “Cost Benefit Analysis” affects rulemaking development – in particular rulemakings affecting pipeline safety

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Steps 1-5

• Step 1 – Initiating event – THE PROBLEM”
• Steps 2 & 3 – Development of the Notice of

Proposed Rulemaking

– Development of cost benefit analysis (Regulatory Impact Analysis” – Small Business Impact – Information Collection

• Step 4 – OMB Review – Significant rule
• Step 5 – Publication of NPRM in the

Federal Register

– Public comment period

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www.regulations.gov

• Please comment!!!

– Positive or negative comments. – Additional data – https://www.federalregister.gov/agencies

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Steps 6-9 (Plus one more)

• Extra Step – Pipeline Advisory

Committees

– GPAC/LPAC

• Steps 6-7 – summarize comments,

develop final rule, revise proposed regulatory changes based on comments and data

• Step 8 OMB Review
• Step 9 Publish in the Federal Register
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Rule Process

• Non-Significant rules
• PHMSA - Federal Register
• Significant rules
• PHMSA - OST – OMB – Federal Register
• OMB Determines what rules are Significant

– Most PHMSA Pipeline Safety Rulemakings are deemed Significant

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Rule Process

• Significant vs Non-Significant Rulemakings

(EO 12866)

• Have an annual effect on the economy of $100 million
• r more…
• Create a serious inconsistency or with another agency;
• Materially alter the budgetary impact of entitlements,

grants, user fees, or loan programs or the rights and

• bligations of recipients thereof; or
• Raise novel legal or policy issues arising out of legal

mandates, the President’s priorities, or the principles set forth in this Executive order.

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Statute(s) OMB Secretary of DOT Administrator of PHMSA Office of Pipeline Safety

Relational Reference Significant Rulemakings

Rule Process

• Where can I find information on the Status
• f rulemakings?

– PHMSA – www.phmsa.dot.gov – DOT

• DOT Significant Rulemakings (Monthly reports)

– www.dot.gov/regulations/report-on-significant- rulemakings

– OMB

• www.reginfo.gov
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DOT Significant Rulemaking report

Milestone Originally Scheduled Date New Projected Date Actual Date To OST 11/18/2011 05/22/2012 06/13/2012 Returned to Mode 06/28/2012 Resubmitted to OST 07/16/2012 09/17/2012 Returned to Mode/2 10/04/2013 Resubmitted to OST 12/05/2013 Returned to C-1 02/21/2014 Returned to S-1 03/07/2014 To OMB 12/16/2011 04/15/2014 05/01/2014 OMB Clearance 03/19/2012 09/22/2015 09/17/2015 Publication Date 03/30/2012 10/02/2015 10/13/2015 End of Comment Period 05/30/2012 12/02/2015 01/08/2016

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Cost Benefit Analysis

• EO 12866, EO 13563 and OMB guidance A4

– Provides Federal agencies guidance and direction

• n the development of regulatory analysis

– …agencies should propose or adopt a regulation

• nly upon a reasoned determination that is its

benefits justify its costs… – Select those regulatory approaches that maximize net benefits

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Cost Benefit Analysis

• Cost benefit analysis

– 49 USC 60102(b)(5) – Federal Pipeline Safety Statute

• “… the Secretary shall propose or issue a standard

under this chapter only upon a reasoned determination that the benefits of the intended standard justify its costs.”

• Pipeline Advisory Committees
• Mandate vs Discretion
• if appropriate; reasonable; practicable; minimize

costs

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Cost Benefit Analysis

§ Averages over last 20 years for Gas Transmission incidents: § Fatalities – 2 § Injuries – 9 § Property damages - $88.6 million § Excluding excavation damage/Outside or natural force damage incidents: § Fatalities - 1 § Injuries - 6 § Property damages - $52.3 million

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Cost and Benefits

• Number of Gas Transmission miles that

would be affected to Hydro-test a mile of pipeline:

• 45,000 miles
• Estimated cost to implement NPMS

amendments:

• PHMSA – $85 million over three years

– INGAA - $820m covering 180,000 miles of GT – API - $10.8m-$21m per operator

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THOUGHTS

• Rulemaking development is a process
• Improve our “benefit formula”
• Bring additional economic expertise into

the organization

• Public involvement/engagement/

education

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QUESTIONS

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Current Rulemakings in Process

• Hazardous Liquid NPRM
• Gas Transmission NPRM
• Excess Flow Valve NPRM
• Plastic Pipe NPRM
• Operator Qualification and Cost Recovery NPRM
• Rupture Detection and Automatic shutoff Valve

NPRM

• Standards Update
• Excavation Damage Final Rule
• Miscellaneous Final Rule
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