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AGO Opinion 97037

Does Federal Law Regulating Interstate Natural Gas and Gasoline Pipelines Preempt State Electrical Inspection Requirements of Pipeline Company Property Located in the State of Nebraska?
Opinion 97037

DATE: July 2, 1997

SUBJECT: Does Federal Law Regulating Interstate Natural Gas and Gasoline Pipelines Preempt State Electrical Inspection Requirements of Pipeline Company Property Located in the State of Nebraska?

REQUESTED BY: Terry Carlson, Executive Director

Nebraska State Electrical Board

WRITTEN BY: Don Stenberg, Attorney General

Timothy J. Texel, Assistant Attorney General




You have requested the opinion of this office regarding

whether federal preemption applies and prevents inspections of

natural gas and/or gasoline pipeline property by Nebraska

electrical inspectors to ensure compliance with Nebraska's State

Electrical Act, Neb. Rev. Stat. §§ 81-2101 to 81-2145 (1994 and

Cum. Supp. 1995), when the natural gas and/or gasoline pipeline

companies' pipelines, property, buildings, and electrical equipment

are located in Nebraska. In the opinion request, you explained

that the Board's concern stems from a situation where one of the

Board's electrical inspectors stopped electrical work being

performed on a pipeline company's compressor station project

located in Nebraska. The electrical contractor had not obtained a

wiring permit for temporary electrical service for construction

activities, as required by Neb. Rev. Stat. § 81-2124 (1994). The

electrical contractor has since applied for inspection, but the

situation may arise again.




After the inspector stopped the work, the Board received a

letter from the pipeline company's legal counsel, who asserted that

the company is not required to comply with Nebraska's State

Electrical Act because federal law controlling interstate pipelines

preempts State Electrical Acts. We believe that federal law

controlling interstate pipelines does in fact preempt state

electrical inspection requirements regarding interstate natural gas

or gasoline company pipelines, property, buildings, and electrical

equipment, provided that the property is part of the interstate gas

pipeline facility.




49 U.S.C., Chapter 601 sets out federal safety standards for

gas pipelines. 49 U.S.C. § 60104(c) (1994) states, "A State

authority may not adopt or continue in force safety standards for

interstate pipeline facilities or interstate pipeline

transportation." Prior to 1994 there were two Acts controlling the

area of interstate pipeline safety - the Natural Gas Pipeline

Safety Act of 1968 (NGPSA) and the Hazardous Liquid Pipeline Safety

Act of 1979 (HLPSA). The NGPSA and the HLPSA were combined and

recodified without substantial change at 49 U.S.C. §§ 60101 to

60125 in 1994. See P.L. 103-272, 108 Stat. 1371 (July 5, 1994).

The two similar provisions from each Act pertaining to preemption

were consolidated into what is now 49 U.S.C. § 60104(c). Compare

49 U.S.C. § 60104(c) with 49 U.S.C. § 1672(a)(1) (NGPSA) and 49

U.S.C. § 2002(d) (HLPSA).




For purposes of Chapter 601, the term "gas pipeline facility"

is defined to include "a pipeline, a right of way, a facility, a

building, or equipment used in transporting gas or treating gas

during its transportation." 49 U.S.C. § 60101(3) (1996). It is

our understanding that compressor stations are placed along the

length of extended pipelines to repressurize the line, ensuring the

continual flow of gas through the pipeline. They consist of a

small building with pumping equipment, part of or directly adjacent

to the pipeline itself. It would appear that compressor stations

fall directly under the definition of "gas pipeline facilities."




Nebraska's electrical standards and inspections are general in

nature. None of the statutes in the State Electrical Act are

directed specifically toward regulation of interstate pipeline

facilities. Despite this, Nebraska's electrical safety standards

can directly affect gas pipeline facilities, as demonstrated in

your opinion request. We point out that the language in § 60104(c)

prohibits states from adopting or continuing safety standards

intended to apply to interstate pipeline facilities. It does not

explicitly address generally applicable state safety requirements,

such as electrical standards. However, we believe the language in

§ 60104(c) likewise proscribes enforcement of general state safety

standards which directly impact on those facilities.




We believe the regulations promulgated by the Department of

Transportation support the conclusion that state electrical laws

cannot be enforced against interstate gas pipeline facilities. The

pertinent regulation on this issue states:




(e) Electrical facilities. Electrical equipment

and wiring installed in compressor stations must conform

to the National Electrical Code, ANSI/NFPA 70, so far as

that code is applicable.




49 C.F.R. § 192.163(e) (1996).




The above regulation sets out a specific minimum federal

safety standard controlling electrical equipment used in pipeline

compressor stations. It appears to regulate the field of

electrical standards for interstate gas pipeline compressor

stations. Although this is not a federal statute, it is well

established that properly promulgated and adopted federal

regulations published in the Code of Federal Regulations carry the

force and effect of law. National Medical Enterprises v. Bowen,

851 F.2d 291, 293 (9th Cir. 1988); Moody v. United States, 774 F.2d

150, 156 (6th Cir. 1985); Frisby v. United States Dept. of Housing

and Urban Development, 755 F.2d 1052, 1055 (3rd Cir. 1985);

Bahramizadeh v. United States I.N.S., 717 F.2d 1170, 1173 (7th Cir.

1983). At least one court reviewed the regulations promulgated by

the Secretary of Transportation under authority of the former 49

U.S.C. § 1672(a), which was part of the NGPSA and corresponded to

the current language at 49 U.S.C. § 60104(c). The court stated

that although the regulations were not laws enacted by Congress,

they have the force and effect of law. See Baker v. Central &

South West Corp., 334 F.Supp. 752, 754 n. 3 (N. D. Okla. 1971). 49

C.F.R., Part 192, Chapter 1, of which 49 C.F.R. § 192.163(e) is a

part, is entitled "Transportation of Natural and Other Gas by

Pipeline: Minimum Federal Safety Standards." Congress explicitly

authorized the Secretary of Transportation to establish minimum

safety standards for pipeline facilities. The applicable statute

states: "The Secretary of Transportation shall prescribe minimum

safety standards for pipeline transportation and for pipeline

facilities." 49 U.S.C. § 60102(a)(1) (1996). Courts reviewing

state government attempts to regulate interstate pipelines have

acknowledged that the Secretary of the Department of Transportation

is responsible for regulation of interstate pipeline safety under

the former NGPSA and the HLPSA. See Williams Pipe Line Co. v.

Mounds View, Minnesota, 651 F.Supp. 551, 554 (D. Minn. 1987).




Article VI, Clause 2 of the United States Constitution

contains what is referred to as the Supremacy Clause. This is the

section from which the power of federal preemption is derived. It

states:




This Constitution, and the Laws of the United States

which shall be made in Pursuance thereof; and all

Treaties made, or which shall be made, under the

Authority of the United States, shall be the supreme Law

of the Land; and the Judges in every State shall be bound

thereby, any Thing in the Constitution or Laws of any

State to the Contrary notwithstanding.




U.S. Const., art. VI, cl. 2.




Under the Supremacy Clause, if Congress evidences an intent to

occupy a certain field, state laws regulating that same topic are

preempted. Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 248 (1984).

See also Louisiana Public Service Comm'n v. FCC, 474 U.S. 355, 371

(1986). If state electrical codes applied to interstate compressor

stations, there would be no need for the federal minimum safety

standards established in the previously cited statutes and

regulations, particularly the electrical standard set out in 49

C.F.R. § 192.163(e).




Federal preemption of state law is not generally favored. The

U.S. Supreme Court has stated that "federal regulation of a field

of commerce should not be deemed preemptive of state regulatory

power in the absence of persuasive reasons - either that the nature

of the regulated subject matter permits no other conclusion, or

that the Congress has unmistakably so ordained." Florida Lime and

Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142 (1963). An

examination of the federal statutes and regulations controlling

interstate pipelines demonstrates that Congress intended to

completely occupy the field of safety standards applicable to

interstate pipeline compressor stations.




The Courts reviewing state government attempts to regulate the

construction and safety of interstate pipelines have uniformly held

that such state statutes or regulations are preempted. Whether the

safety regulations are specific to pipelines or generally

applicable and only incidentally affect pipelines does not appear

to matter. Preemption applies because Congress intended to

completely control the area. The court in the Williams Pipe Line

case cited to the preemption clause in the HLPSA, which was

essentially identical to the language currently contained in 49

U.S.C. § 60104(c). The court, emphasizing the language prohibiting

states from adopting or continuing in force any safety standards

applicable to interstate pipeline facilities, stated, "The statute

thus clearly expresses Congressional intent to preempt state

efforts to establish safety standards for hazardous liquid

pipelines." Williams Pipe Line at 566. The language in the HLPSA

and NGPSA now codified at 49 U.S.C. § 60104(c) is cited by the

courts as the language controlling this topic.




Courts reviewing the preemption clause in the NGPSA, which was

virtually identical to that in the HLPSA and the current §

60104(c), have similarly found state attempts to regulate safety

aspects of natural gas pipelines are preempted. In ANR Pipeline

Co. v. Iowa State Commerce Comm'n, 828 F.2d 465 (8th Cir. 1987),

the Eighth Circuit reviewed Iowa statutes and regulations

pertaining to interstate pipelines. The regulation involved

enabled the Iowa Commerce Commission to conduct inspections, issue

permits, and hold hearings regarding interstate and intrastate

pipelines. The Commission had adopted the U.S. Department of

Transportation's regulations controlling construction and safety

standards as their own. The pipeline company claimed the NGPSA

preempted the state regulations. The Eighth Circuit Court of

Appeals held that state regulatory authority concerning the safety

of interstate pipelines was preempted. The fact that Iowa adopted

the federal standards was found to be irrelevant. The court cited

to the language at § 1672(a)(1) in the NGPSA which, as with the

similar provision in the current § 60104(c), expressly provides

that no state agency may adopt any standards applicable to

interstate transmission facilities. Id. at 468. Citing to the

NGPSA's legislative history, the court found it was clear that

"Congress intended to preclude states from regulating in any manner

whatsoever with respect to the safety of interstate transmission

facilities." Id. at 470.




The Eighth Circuit again addressed federal preemption of state

statutes regulating interstate pipelines in Kinley Corp. v. Iowa

Utilities Board, 999 F.2d 354 (8th Cir. 1993). In this case, Iowa

had enacted statutes controlling safety requirements for interstate

hazardous liquid pipelines. The statutes exempted natural gas

pipelines, due to the previous decision in the ANR Pipeline case.

The Iowa Utilities Board (formerly the Iowa State Commerce

Commission) asserted jurisdiction over a pipeline extending from

Council Bluffs, Iowa, to Offutt Air Force Base in Bellevue,

Nebraska. The Board inspected the pipeline and required the

company to file for a pipeline permit. The company filed for the

permit, which was denied. The pipeline company challenged the

statutes, claiming they were preempted by the HLPSA. The court

found the language in 49 U.S.C. 2002(d) (now recodified without

substantial change at 49 U.S.C. 60104(c)) expressly preempted state

safety regulations concerning interstate hazardous liquid

pipelines. Kinley Corp. at 358. The court went on to hold that

the ANR Pipeline decision was controlling.




In Natural Gas Pipeline Co. v. Railroad Comm'n of Texas, 679

F.2d 51 (5th Cir. 1982), the Texas State Railroad Commission

adopted a rule requiring certain procedures and safeguards be used

by natural gas pipeline companies to warn the public in the event

of an accidental release of product. Citing to the language in the

former NGPSA at 49 U.S.C. § 1672(a)(1), the court found the

Commission's rule was prohibited by the Supremacy Clause of the

United States Constitution and held the rule was preempted.




In Northern Border Pipeline Co. v. Jackson County, 512 F.Supp.

1261 (D.Minn. 1981), a county enacted an ordinance requiring a

pipeline company to bury its pipelines at a minimum depth of six

feet. The court pointed out that the NGPSA provided the Department

of Transportation with the authority to adopt safety standards for

pipelines, which the Department did. The Department of

Transportation set the minimum cover for pipelines at three feet.

The county's condition was therefore more stringent than the

federal standard. The court stated that "the provisions and

legislative history of the Natural Gas Pipeline Safety Act indicate

quite clearly that federal legislation has preempted the entire

field of gas pipeline safety." Id. at 1264. As with the other

decisions, the court cited to and emphasized the importance of the

language in the NGPSA at § 1672(a)(1). The court also stated that

Congress intended the federal standards to provide for uniformity

of regulations for companies with pipelines traversing a number of

states. The county's ordinance was held to be preempted by the

NGPSA, and the court permanently enjoined its enforcement.




Similarly, an ordinance regulating the construction,

installation, and operation of gas or liquid petroleum pipelines

through a Louisiana parish was held to be preempted by the NGPSA.

United Gas Pipeline Co. v. Terrebonne Parish Police Jury, 319

F.Supp. 1138 (E.D. La. 1970), aff'd per curiam 445 F.2d. 301 (5th

Cir. 1971). The ordinance established requirements for

specifications, reports, permits, insurance, fees, and penalties

for non-compliance concerning interstate pipelines. Among other

provisions, the ordinance mandated that the pipeline company give

written notification of pipeline inspections to the police jury.

The district court, citing to § 1672(a) of the NGPSA, found that

Congress specifically prohibited the states from regulating

construction and installation of interstate pipelines, even if the

ordinances were identical to federal codes. Id. at 1141.




The pipeline involved in your example transports natural gas

or gasoline across state lines. It is our understanding from your

opinion request and our conversations with your office, that the

Board's concerns are limited to state inspections of these

interstate pipeline facilities. We point out that different

standards may apply when intrastate pipelines are involved. See 49

U.S.C. §§ 60104(c) and 60105; United Steelworkers, Local 12431 v.

Skinner, 768 F.Supp. 30 (D.R.I. 1991). We also note that state

agencies may be allowed to conduct inspections of interstate

pipeline facilities for compliance with federal standards, but only

when acting as the federal government's agent. See 49 U.S.C. §§

60106 and 60107(a)(2). However, all enforcement actions are

retained at the federal level.




Based on the federal statutes, regulations, and case law cited

above, it is our opinion that 49 U.S.C. §§ 60101 to 60125, and in

particular § 60104(c), demonstrates Congress' intent to completely

control the regulation of the safety of interstate gas and

hazardous liquid pipelines and preempts state electrical inspection

requirements which would otherwise apply to those pipeline

facilities located in Nebraska.




Sincerely,




DON STENBERG

Attorney General




Timothy J. Texel

Assistant Attorney General