The North American pipeline industry is regulated by two different federal regulators: the Pipeline and Hazardous Materials Safety Administration (PHMSA) in the United States and the Canadian Energy Regulator (CER) in Canada. Alongside these federal regulators, numerous state and provincial regulators. Each regulator takes a different approach to achieving a common regulatory objective of safeguarding people and the environment.

Regulators develop regulations that fall along a spectrum from outcome-based to prescriptive regulatory approaches. Outcome-based regulations set overarching goals and performance objectives, leaving companies the flexibility to determine how to achieve these results. This is typically achieved by taking a Management System approach, where companies are required to develop and implement a Management System (e.g. one that is aligned with API 1173: Pipeline Safety Management Systems), which requires companies to continually improve how they identify and manage risk. This approach fosters innovation, allowing companies to tailor safety and environmental strategies to specific operational contexts.

In contrast, prescriptive regulations provide specific, detailed requirements that dictate how certain tasks should be conducted, often resulting in a checklist-based approach to compliance. These regulations typically outline precise technical requirements, creating a standardized method for achieving compliance across the industry. While prescriptive standards can simplify compliance by removing ambiguity, they limit flexibility, requiring companies to adhere strictly to predetermined methods rather than exploring innovative solutions.

Both regulatory models offer distinct advantages and limitations. Outcome-based regulations provide flexibility and encourage continuous improvement, but they may require greater resources and expertise to implement effectively. Prescriptive regulations offer clear, actionable steps that can facilitate enforcement and consistency but may restrict adaptability in addressing unique or evolving risks.

Recognizing these strengths and limitations, many regulators are moving towards a hybrid approach, combining both outcome-based and prescriptive requirements to provide clear guidelines while allowing flexibility. This blended approach aims to maintain high safety and environmental standards while supporting innovation and operational efficiency within the pipeline industry.

This presentation will explore the advantages and disadvantages of both regulatory approaches from a company and regulator perspective. The presentation will include an overview the evolution of regulations across North America, outline the current state in various jurisdictions and a prediction, based on evidence, of where the regulations will be going in the future. Understanding the changing regulatory landscape will enable companies to prepare for and proactively position their businesses to adapt to future changes to regulatory requirements.