When Does Pipeline Damage Count? New Cost Rules Clarify
Published Date: 4/24/2026
Proposed Rule
Summary
PHMSA is updating the rules about when pipeline companies must report damage from gas, liquid, or carbon dioxide leaks. The new definition of property damage will help decide if an incident needs to be reported right away, focusing on clear cost thresholds. Pipeline operators should get ready to follow these changes and send their feedback by June 23, 2026, with no big new costs expected.
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Analyzed Economic Effects
6 provisions identified: 6 benefits, 0 costs, 0 mixed.
Exclude indirect repair costs
If you operate a pipeline, PHMSA proposes that certain indirect costs would not count toward the property damage reporting threshold. Specifically, the rule excludes the cost to acquire permits and the cost to remove and replace non-operator infrastructure that was not damaged by the release; for gas pipelines it also excludes the cost of gas lost, and for hazardous liquid and carbon dioxide pipelines it excludes the cost of lost product.
New $149,700 reporting threshold
PHMSA proposes to set the property damage reporting threshold at $149,700 for gas, hazardous liquid, and carbon dioxide pipelines and to publish annual inflation adjustments. For calendar-year inflation observed in 2026 onwards, updates will be posted on PHMSA's website and apply each July 1, using the Consumer Price Index for accident/NRC reporting and the Producer Price Index for construction notifications.
Small annual compliance savings
PHMSA estimates about five incidents per year (out of an average of over 370 incidents annually) would no longer meet the reporting requirements, producing estimated industry cost savings of $5,235 per year and eliminating five responses and 60 hours from the hazardous liquid accident information collection (OMB Control No. 2137-0047). PHMSA also says these savings may reduce costs passed on to the public.
Align NRC immediate-notice rules
PHMSA proposes to revise Sec. 195.52(a)(3) so immediate National Response Center (NRC) notification for hazardous liquid and carbon dioxide pipelines is triggered when estimated property damage meets the criteria in Sec. 195.50(e). This aligns immediate-notice criteria with the accident reporting standard.
Indirect impacts still recorded
Under the proposal, pipeline operators would still record indirect impacts (like temporary pavement removal or permit acquisition) as consequences on incident and accident report forms, but those indirect costs would not count toward whether an event is reportable under the property damage threshold.
PHMSA: no safety/environment harm found
PHMSA preliminarily found the proposed changes would not have adverse safety or environmental effects because the average release of incidents that would be exempted is less than four gallons. PHMSA also states that other accident criteria—fire or explosion, a release of five gallons or more (or five barrels/210 gallons for certain contained releases), and injury resulting in death or hospitalization—remain reportable regardless of the property damage definition.
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