PHMSA’s Attention To Pipeline Safety Becomes An Issue

Pipeline safety is back on the congressional agenda: in part because of a recent Department of Transportation Inspector General’s report and in part because of PHMSA’S failure to finish rulemakings mandated by the 2011 pipeline safety bill.

The PHMSA’s foot-dragging has irritated the industry and major pipeline safety advocacy group equally.

The unhappiness surfaced at a May 20 hearing in the House Transportation and Infrastructure Committee. The lightening rod was the PHMSA’s failure to finalize rules that are required by the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011. Rulemakings on remote and automatic shutoff valves, on changes to both the hazardous liquid and gas transmission integrity programs, regulations on records/testing for pre‐1970 pipe as well as a report on excavation damage to pipelines are among the delayed items.

What was interesting was that Rep. Jeff Denham (R-CA), chairman of the Subcommittee on Railroads, Pipelines and Hazardous Materials, seemed to back the agency’s “go slow” approach. “It also means doing the due diligence to ensure rules do not go beyond congressional intent, thereby creating uncertainty for the regulated community, which ultimately does not enhance safety,” he said. Denham appeared to be more concerned that any PHMSA final rules could tie the pipeline industry in regulatory knots while providing little extra in the way of safety.

But Don Santa, president and CEO of the Interstate Natural Gas Association of America (INGAA), disabused Denham’s approval of PHMSA’s slow pace. He said, “The practical consequence of this delay, however, is to erode the confidence of some pipeline companies that proceeding with the dedication of resources needed to implement pipeline safety commitments will be consistent with the final rules adopted by PHMSA. This hesitancy is rooted in the perceived risk that the rules ultimately might compel repeating certain steps in the pipeline safety action plan.”

Carl Weimer, executive director the Pipeline Safety Trust, also voiced some frustration. He said part of the reason the PHMSA is behind schedule is that its officials say they lack the resources to meet the congressional timetables. Sometimes the White House has impeded progress. There is plenty of blame to go around, he noted. That said, Weimer gave the industry much credit for reducing pipeline accidents.

PHMSA also took it on the chin in the audit by Jeffrey B. Guzzetti, assistant inspector general at the Department of Transportation. Completed in May, it was done at the behest of the National Transportation Safety Board, as part of its recommendations based on its investigation of the San Bruno, CA, pipeline explosion in 2010 where eight people died.

The IG audit looked at PHMSA guidelines for states that in most instances have the authority for inspecting natural gas and liquid pipelines. Those inspections are made based on federal law. Eight-five percent of the 2.5 million miles of gas and liquid pipelines are under state inspection jurisdiction. The audit found that PHMSA’s guidelines, policies and procedures for state pipeline safety programs – such as inspector staffing, training, scheduling and inspection forms – lack elements to ensure state inspections cover all Federal requirements and pipeline operators maintain safety standards. For example, the PHMSA’s guidelines include an outdated staffing formula that does not account for the effects of new inspection types on state inspector needs and lack minimum qualifications for state inspectors to lead standard pipeline operator inspections.

Nominated FERC commissioners still awaiting senate approval

The Federal Energy Regulatory Commission (FERC) is still without a “real” chairman since Republicans in the Senate have balked at the nomination of Norman Bay, currently the director of the office of enforcement at FERC. President Obama has nominated Bay to be chairman, essentially replacing Cheryl LaFleur, who has been acting chairman for seven months, and has been re-nominated for another term by the White House.

But Sen. Lisa Murkowski (R-AK), top Republican on the Senate Energy and Natural Resources Committee, was one of nine GOP members voting against Bay’s nomination on June 18. Thirteen Democrats voted for Bay. Murkowski feels Bay is too inexperienced in the broad range of FERC regulatory policy to become chairman. She wants the White House to remove LaFleur’s “acting” designation and make her full chairman for a period while Bay learns the ropes. Robert Dillon, Murkowski’s press secretary, says the White House has declined to provide that assurance.

But Republican opposition to Bay won’t necessarily stop the Senate from approving his nomination. Senate Majority Leader Harry Reid (D-NV) plans to bring up the Bay nomination for a Senate vote in July. Bay needs 51 votes to become a commissioner. It is likely he would get those votes. At that point, the White House can designate him as chairman or not.

LaFleur, whose term as commissioner ends in January, is expected to win easy approval by the Senate when her re-nomination comes up for a vote.

New bills would speed pipeline permitting on Federal, Indian lands

In terms of substantive initiatives related to pipeline construction, there is more action in Congress than at FERC, and much of it has to do with the Interior Department and permitting on federal and Indian lands. That explains the introduction of two bills which received their first hearing at a House Natural Resources Committee hearing in late June. The more important of the two bills (H.R. 1587) would authorize the Secretary of the Interior and the Secretary of Agriculture to issue permits for rights-of-way, temporary easements, or other necessary authorizations to facilitate natural gas, oil, and petroleum product pipelines and related facilities on eligible federal lands. The second (H.R. 4293) would speed up permits for gathering lines on federal and Indian lands.

Don Santa, president and CEO of INGAA, testified at that hearing, focusing on H.R. 1587. The bill would correct a problem where the National Park Service is not able to approve permits for pipeline rights of way proposed to run though its jurisdiction. Congress has to pass legislation on a pipeline-by-pipeline basis approving those permits.
The most recent example of congressional action was the Denali National Park Improvement Act, approved after four years of consideration. The President signed it in September 2013.

But the Obama administration opposes the bill. Michael D. Nedd, assistant director, Minerals and Realty Management, Bureau of Land Management, said its provisions are “redundant or conflict with existing Mineral Leasing Act (MLA) authority regarding granting pipeline rights-of-way through federal lands

The second bill (H.R. 4293) gets at the issue of the massive flaring of natural gas due to lack of sufficient gathering lines, which take years to approve, according to Rep. Doug Lamborn (R-CO), He stated one-third of the gas produced in North Dakota is flared daily resulting in the loss of $1.3 million. Amy Mall, senior policy analyst, Land & Wildlife Program, Natural Resources Defense Council, conceded that a gathering line proposed to be adjacent to an existing disturbed area like a road “may seem like an innocuous location, and therefore an environmental review might not be warranted.” But she nonetheless opposes the bill because it would not take into consideration new or cumulative impacts of additional large-scale industrial development in an area. Gathering lines in areas defined as rural—with 10 or fewer homes within a quarter-mile of the pipeline in any mile-long stretch of pipe – are not regulated by the PHMSA.

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