On January 14, 2026, the Pipeline and Hazardous Materials Safety Administration (PHMSA) published a final regulation allowing natural gas transmission operators to use integrity management (IM) principles as an alternative to traditional pressure reductions or costly pipeline replacements when managing population growth around their pipelines. PHMSA’s Class Location Change final rule is the culmination of more than twenty years of data collection, technological advances, and education by the pipeline industry. The agency’s work to finalize this rule spanned administrations and required consistent engagement with a variety of stakeholders, including Congress, the public, and advocacy groups. PHMSA also carefully weighed public comments and relied on recommendations of the multi-stakeholder governing body, the Gas Pipeline Advisory Committee (GPAC), in crafting this final rule.
Ultimately, the final rule expands integrity management requirements, which is a superior risk management tool for segments of pipe requiring the highest level of care, and acknowledges the technological advancements in in-line inspection (ILI tools). The rule projects $461 million in savings through avoided pipe replacement costs and special permit processing that could be passed through to consumers and could reduce methane emissions by approximately 287,000 metric tons over 15 years.
What is class location?
The term “class location” refers to a mandatory federal classification system established in the 1950s that dictates safety requirements based on population density near a pipeline. The system counts buildings intended for human occupancy within a defined area and assigns one of four classifications: Class 1 locations have the lowest population density, while Class 4 locations have the most densely populated areas. These classifications determine how pipelines must be designed, operated, and tested.
Class location changes when an area’s population grows and develops over time. A pipeline built decades ago to Class 1 standards may find itself surrounded by new buildings. Many pipeline operators plan ahead for these changes and construct pipelines to a higher class location than required at the time of building. Historically, class location changes triggered requirements for pipeline operators to reduce operating pressure, purge gas and retest the pipeline at higher pressures, or replace pipes to meet stricter standards associated with higher class locations.
The first rules around class location date back to the 1950s; at the time, the regulations reflected the technological limitations of the era. However, since then technology has advanced materially: pipeline inspections have been improved with the development of in-line inspection (ILI) tools and integrity management (IM) practices. ILI technologies can detect and size anomalies with precision and comprehensive IM programs systematically identify, assess, and remediate threats before they become an incident. A traditional approach to class location changes would treat all pipeline segments the same, often requiring operators to take pipelines out of service, purge natural gas (methane), and replace serviceable pipe, all of which disrupt the delivery of natural gas to consumers, potentially increasing rates.
What does the final rule do?
The final rule announced earlier this month allows eligible pipeline segments to follow an integrity management alternative for confirming maximum allowable operating pressure (MAOP) when pipeline segments change from Class 1 or Class 2 to Class 3 due to increased population density. Rather than requiring pressure reductions, hydrostatic testing, or pipeline replacement, operators can maintain existing operating pressures by meeting comprehensive integrity management and operational requirements.
To qualify, pipelines must meet strict eligibility standards, including complete material records and pressure tests demonstrating adequate strength. The rule requires baseline integrity assessments within 24 months using in-line inspection tools that detect metal loss, mechanical damage, and cracking. These assessments must be validated to industry standards and repeated at least every seven years. Operators must immediately repair serious conditions and address less severe issues within one year.
The rule also mandates enhanced operational measures: monthly right-of-way patrols, quarterly leak surveys, close-interval cathodic protection surveys every seven years, annual class location studies, and installation of test stations and line-of-sight markers.
Benefits and Implications
Safety. Over the past 15 years, there has been only one stress corrosion cracking-related incident in high consequence areas despite thousands of miles operating under integrity management requirements. By extending these proven practices to class location changes, the rule brings more pipeline mileage under systematic assessment and monitoring programs.
Environment. Industry analysis during the 2024 GPAC proceedings found that implementing the integrity management alternative could reduce methane emissions by approximately 287,000 metric tons over 15 years. This represents 28 times the methane savings PHMSA estimated for its proposed Leak Detection and Repair rule’s impact on the transmission sector.
Economic Impact. PHMSA’s cost-benefit analysis projects annual savings of approximately $461 million through avoided pipe replacement costs and special permit processing. These savings allow operators to redeploy resources toward initiatives that demonstrably enhance safety and reduce emissions. The rule also provides regulatory certainty that the special permit process could not fully deliver.
Looking Forward
During GPAC deliberations, committee members identified additional areas for improvement, including potential updates to clustering methodologies for class location determinations. In the final rule, PHMSA indicated openness to continuing these discussions.
The class location final rule demonstrates that data-driven regulatory modernization can advance safety while delivering environmental and economic benefits. For an industry committed to both safety and environmental stewardship, this rule sets a foundation for continued progress in the years ahead.
