The Department of Transportation has announced changes to penalties for energy firms breaching federal laws, aiming for fairness and transparency.

The Pipeline and Hazardous Materials Safety Administration (PHMSA) is revising enforcement approaches, aligning with broader efforts to reduce restrictions on energy producers under the Trump administration, as the Washington Examiner reports.

The PHMSA, responsible for overseeing the safe transport of oil, natural gas, and other hazardous liquids, revealed significant reforms to previous penalty processes. These changes are part of an overhaul targeting energy company violations of federal guidelines.

PHMSA reforms on the way

The reform efforts seek to modify policies implemented during the Biden administration concerning penalty assessments against energy companies. Notably, one energy operator involved in a pending case is projected to enjoy savings of approximately $250,000 due to these initiatives.

Overall, operators find themselves paying about 6.5% less in penalties on average, thanks to the new policies. The PHMSA's revised calculation method for fines now dates violations from when they occurred, as opposed to when a case concludes. This prevents retrospective fee increases.

As a key component of these reforms, PHMSA will carry the burden of proof in cases under review. This marks a move toward more equitable assessments compared to the previous approach, which many perceived as less fair.

Ensuring due process, transparency

New guidelines also mandate that PHMSA disclose relevant records and materials, including any evidence that could prove a company's innocence. The directive assures fairness during investigations.

Additionally, a recent memorandum requires PHMSA to share penalty calculation steps. This measure enhances transparency and is intended to encourage negotiated resolutions, streamlining conflict resolution processes.

These reforms are part of a broader push by the Trump administration to ease constraints under the Biden-era policies that many in the energy sector had criticized. Efforts to ease aspects of oil and gas regulation have been ongoing.

Political debate ensues

However, the reauthorization of PHMSA remains a contentious issue in Congress. There is considerable division on how far federal oversight of oil and gas pipeline safety should extend.

Sen. Ted Cruz of Texas has expressed concerns that the agency, under Biden, shifted its focus excessively towards climate change rather than pipeline safety. Cruz emphasized that pipelines represent the safest method for transporting vast quantities of oil and gas.

Cruz noted, “The unaccountable Biden PHMSA attempted to remake the pipeline safety agency into a climate change agency.” His critique forms part of the broader legislative debate regarding the future of pipeline safety laws.

Balancing safety with energy growth

Administrators maintain that the PHMSA's primary mandate is to oversee the secure transit of oil, natural gas, and hazardous substances. This includes major projects such as the Keystone pipeline, which has been under scrutiny and debate.

Acting PHMSA Administrator Ben Kochman highlighted the significance of these reforms. He stated, "These long overdue reforms will refocus our enforcement program, so the law is applied fairly, transparently, and in a way that respects the core legal principle of due process.”

As the debate on reauthorization unfolds, the Trump administration continues to advocate for policy modifications that facilitate U.S. energy sector growth, emphasizing cost savings and regulatory efficiency as potential benefits.