PHMSA Proposes $3.7 million fine for Enbridge Spill in Michigan in 2010

The July 10, 2012, preliminary report from the National Transportation Safety Board (NTSB) on the major oil leak from an Enbridge pipeline in Michigan in July 2010 faults the company’s operational and training procedures in numerous instances.

But those findings are to some extent diluted by criticism of unclear federal pipeline safety rules, and the Pipeline and Hazardous Materials Safety Administration (PHMSA) failure to enforce them.

The NTSB report, which will be issued in final form publicly sometime in the future, with additions and deletions from the preliminary report, came about one week after the PHMSA issued a Notice of Probable Violation with the largest proposed civil penalty in its history — $3.7 million — as a result of a spill of over 840,000 gallons of crude oil into hundreds of acres of Michigan wetlands, fouling a creek and a river.

“This investigation identified a complete breakdown of safety at Enbridge. Their employees performed like Keystone Kops and failed to recognize their pipeline had ruptured and continued to pump crude into the environment,” said NTSB Chairman Deborah A.P. Hersman. “Despite multiple alarms and a loss of pressure in the pipeline, for more than 17 hours and through three shifts they failed to follow their own shutdown procedures.”

The NTSB preliminary report appears to be a bit hazy on one issue: whether Enbridge violated federal hazardous liquid integrity management rules with regard to fixing pipeline defects and doing risk assessments with regard to what is called Line 6B. But the company clearly seems to have fallen short of compliance with regard to federal rules in the areas of operation and management procedures, reporting and operator qualification requirements. Perhaps the biggest problem with the Enbridge control room was that they were apparently asleep at the wheel. The rupture occurred during the last stages of a planned shutdown and was not discovered or addressed for over 17 hours. During the time lapse, Enbridge twice pumped additional oil (81 percent of the total release) into Line 6B during two startups.

The NTSB’s key finding was that the Line 6B segment ruptured under normal operating pressure due to corrosion fatigue. But the report goes on to say that federal law “does not provide clear requirements regarding when to repair and when to remediate pipeline defects and inadequately defines the requirements for assessing the effect on pipeline integrity when either crack defects or cracks and corrosion are simultaneously present in the pipeline.”

The report then faults PHMSA for failing “to pursue findings from previous inspections and did not require Enbridge Incorporated (Enbridge) to excavate pipe segments with injurious crack defects.”

Enbridge clearly made numerous mistakes before and after the accident. The NTSB said Enbridge’s integrity management program was inadequate because it did not consider the following: a sufficient margin of safety, appropriate wall thickness, tool tolerances, use of a continuous reassessment approach to incorporate lessons learned, the effects of corrosion on crack depth sizing, and accelerated crack growth rates due to corrosion fatigue on corroded pipe with a failed coating.

But again, underlining the inadequacy of federal law, as it does in a number of instances, the NTSB cites the absence of a “uniform and systematic approach in evaluating data for various types of in-line inspection tools” which is “necessary to determine the effect of the interaction of various threats to a pipeline.” That raises the question as to whether the PHMSA rules on risk assessment within IM programs are adequate to prevent the kinds of accidents that happened in Michigan.

The NTSB also cited a list of control room inadequacies, including a lack of training of personnel leaving them unable to correctly identify the cause of the Material Balance System (MBS) alarms. “Enbridge’s control center staff placed a greater emphasis on the MBS analyst’s flawed interpretation of the leak detection system’s alarms than it did on reliable indications of a leak, such as zero pressure, despite known limitations of the leak detection system. Enbridge control center staff misinterpreted the absence of external notifications as evidence that Line 6B had not ruptured.”

The NTSB preliminary report recommendations to PHMSA would seem to give Enbridge some leverage for arguing that some of its missteps, particularly related to addressing the crack which led to the leak, were understandable given the lack of clarity in federal law. The recommendations include urging the PHMSA to revise current law “to clearly state:” (1) when an engineering assessment of crack defects, including environmentally assisted cracks, must be performed; (2) the acceptable methods for performing these engineering assessments, including the assessment of cracks coinciding with corrosion with a safety factor that considers the uncertainties associated with sizing of crack defects; (3) criteria for determining when a probable crack defect in a pipeline segment must be excavated and time limits for completing those excavations; (4) pressure restriction limits for crack defects that are not excavated by the required date; and (5) acceptable methods for determining crack growth for any cracks allowed to remain in the pipe, including growth caused by fatigue, corrosion fatigue, or stress corrosion cracking as applicable.

Devon Condemns EPA Air Standards For Gas Industry

A Devon Energy executive lambasted the Environmental Protection Agency at Senate hearings in June for basing new gas industry air emissions rules related to fracking on faulty research. At the hearings before the Senate Environment and Public Works Committee, Darren Smith, environmental manager, Devon Energy Corporation, argued the EPA had based the rules on “a drastic overestimate of methane emissions from hydraulically fractured natural gas wells.”

The New Source Performance Standards would ostensibly reduce emissions of methane, among other volatile organic chemicals. When it issued the final rules, the EPA ditched the provisions in the proposed rules which would have applied them to natural gas transmission and storage sectors — at least for the moment.

James Inhofe (R-OK), the top Republican on the committee, also assailed the EPA. “They are working to stop hydraulic fracturing through 13 federal agencies and have attempted to implement their agenda to crucify American energy producers,” Inhofe said. He has been frustrated by a lack of EPA response to his request for documents related to “imminent and substantial endangerment order” the agency issued out of its Dallas office in 2010.The EPA had asserted that methane and possibly benzene from fracked gas wells in Parker County, TX, had contaminated drinking water in two wells. The Texas Railroad Commission subsequently determined the contamination was not the result of fracking done by Range Resources.

OSHA Issues Worker Alert In Fracking Operations

The Occupational Safety and Health Administration (OSHA) issued an “alert” telling engineering service companies who frack wells to take “appropriate steps” to protect workers from silica exposure. The National Institute of Occupational Safety and Health (NIOSH) worked in cooperation with oil and gas industry partners to sample the air at 11 sites in five states where hydraulic fracturing operations were taking place.

NIOSH identified seven primary sources of silica dust exposure during fracturing operations and found that workers downwind of sand mover and blender operations, especially during hot loading, had the highest silica exposures. The alert says engineering controls and work practices provide the best protection for workers and must be implemented first, before respiratory protection is used.

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