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?
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
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
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.
Timothy J. Texel
Assistant Attorney General