Environmental Alert: Compressed Natural Gas Ignites Regulations (part 1 of 3)

With the explosion of natural gas exploration and production in the United States, several companies are moving forward with making Compressed Natural Gas ("CNG") more available to motorists nationwide.  As a result, most states and localities have adopted as law a variety of codes and standards to regulate the construction and installation of CNG fuel dispensers.  This alert, the first of three in this series, provides a brief introduction concerning broad regulations related to CNG dispensers.  The next two alerts will focus specifically on Texas regulations because Texas is the only state to have promulgated its own set of regulations related to CNG. Two organizations—the National Fire Protection Association (“NFPA”) and the International Code Council (“ICC”)—promulgate competing sets of standardized safety codes for various regulated industries and activities, including building, fire prevention, mechanical installation, and so on.  Governments look to and adopt certain codes or standards as regulations in their jurisdictions.

Perhaps the most well-known standards related specifically to CNG fueling can be found in NFPA 52, Vehicular Gaseous Fuel Systems Code.[1] Chapter 8 of NFPA 52 applies to “CNG Compression, Gas Processing, Storage, and Dispensing Systems” and Chapter 4 specifies the requirements for CNG equipment. Throughout NFPA 52, and specifically in Chapter 2, the standards incorporate the requirements of other publications, including those disseminated by the American Society for Mechanical Engineers ("ASME") and the American Standards Institute ("ANSI"). Chapter 2 of NFPA 52 also incorporates the requirements of certain federal regulations related to CNG, which are discussed in more detail below.[2] Many states statutorily require CNG fuel dispensing equipment and operations to comply with NFPA 52.

The ICC, which was created in the late 1990s by the merger of several regional code standardizing organizations, publishes competing codes and standards that many states have adopted either in the alternative to or in addition to NFPA codes and standards. Notably, the ICC standards often reference and/or incorporate NFPA publications. The International Fire Code (“IFC”),[3] International Fuel Gas Code (“IFGS”), and International Mechanical Code (“IMC”) all include standards for CNG fuel dispensing systems. States and/or local jurisdictions have adopted various editions of these codes, with most adopting the IFC and some also adopting editions of the IFGS and IMC.[4]

Specifically with regard to CNG, the IFC incorporates compliance with NFPA 52 as part of its provisions.[5] While the IFC’s provisions are often more general than those of NFPA 52, in some instances the IFC specifies standards that are either not covered by NFPA 52[6] or are slightly more specific.[7]

As CNG becomes a more common fuel source in our homes, vehicles and businesses, governmental regulatory requirements will continue to evolve and develop. Persons involved with CNG storage and distribution should retain experienced professionals to provide current information and advice with regard to specific state, county and municipal regulations.