PHMSA recently proposed to significantly expand the information collected from operators through the National Pipeline Mapping System (NPMS). In the Agency’s notice and request for comment, PHMSA proposes to collect extensive information regarding pipeline attributes and extends reporting requirements to newly abandoned pipelines, regulated breakout tanks, and offshore gas gathering lines. The deadline for commenting is September 29, 2014.
In a report issued on July 25, 2014, EPA’s Office of Inspector General (OIG) issued a series of recommendations for EPA to increase its efforts to reduce methane emissions from natural gas distribution pipelines, including partnering with PHMSA to develop a joint strategy. According to the report, pipeline leaks accounted for more than 10 percent of total methane emissions from natural gas systems, equating to a loss of more than $192 million of gas in 2011. EPA does not directly regulate methane, and the report was undertaken to review EPA’s progress in implementing the Obama administration’s 2013 Climate Action Plan, which calls for EPA to develop a comprehensive interagency methane strategy. (See prior pipelinelaw alert here).
The OIG recognized that EPA currently maintains a voluntary program (Natural Gas STAR) to address methane leaks across the gas industry, but concluded that its efforts have produced limited results from local distribution companies because of financial and policy disincentives. These include the fact that operators have little financial interest in repairing leaks that do not pose safety hazards, because costs of fugitive emissions are passed on to customers. As a result of these findings, the OIG report recommends that EPA: (1) partner with PHMSA to address methane leaks from a combined environmental and safety standpoint, (2) develop a strategy to address the financial and policy barriers that hinder reductions from the distribution sector, (3) establish performance goals, (4) track distribution sector emissions and use that data to help determine if future regulation is appropriate, and (5) assess whether data from ongoing studies should be used to update distribution sector emission factors.
With regard to PHMSA coordination, the report urges EPA to consult closely with PHMSA as it develops any future regulations, noting that “the lack of coordinated action between the EPA and PHMSA hinders an effective partnership where PHMSA’s technology and regulations could be used to produce additional environmental benefits.” The report also recommends that EPA work with state utility commissions to develop and expand policies that encourage mitigation of leaks, especially from aging cast-iron and unprotected pipes.
EPA was provided an advance draft of the OIG report and has confirmed its willingness to work more closely with PHMSA and to determine by the second quarter of FY 2016 whether potential new regulations beyond voluntary efforts are appropriate. The status of the implementation of several other recommendations of the OIG report remains unresolved, with resolution efforts in progress. Despite EPA’s commitment to work with PHMSA, the agencies have not yet conferred on this issue. Because both PHMSA and EPA have regulatory jurisdiction over different aspects of natural gas pipelines, it will likely take some time for the agencies to develop a proposed path forward and it is unclear at this time whether that will include additional regulation.
In response to recent crude oil train derailments in the U.S. and Canada, PHMSA has proposed two rulemakings intended to prevent and mitigate the consequences of crude by rail incidents. In consultation with the Federal Railroad Administration, on August 1, 2014, PHMSA issued a notice of proposed rulemaking that addresses three primary topics: (1) operational controls for certain “high hazard flammable trains,” (2) improved classification and testing program for mined gases and liquids, and (3) enhanced tank car standards. In conjunction with the rail safety proposed rule, PHMSA also issued an advanced notice of proposed rulemaking regarding oil spill response plans requirements for high hazard flammable trains.
The Senate Intelligence Committee recently approved the “Cybersecurity Information Sharing Act”, which would facilitate the sharing of information about cybersecurity threats or countermeasures by among private entities and with the federal government. If information is shared in accordance with certain requirements (such as the use of technical controls to protect shared information), the bill provides broad protections for entities sharing information for cybersecurity purposes, including immunity against any legal action related to the monitoring, sharing, or receipt of information done in accordance with the Act.
PHMSA and the National Association of Pipeline Safety Representatives (NAPSR) announced a public workshop to be held on August 5, 2014, to discuss challenges associated with detecting and characterizing crack-like defects in oil and gas pipelines (e.g., environmentally assisted cracks and cracks associated with corrosion). Presenters include the NTSB, the National Energy Board of Canada, PHMSA and certain pipeline operators. Discussion will include: (1) an update on developments in crack detection technology; (2) case studies using these technologies; (3) data collected to support engineering assessments; and (4) criteria for determining excavation of a probable crack defect, the associated timeframe, and models for determining crack growth rates. The workshop will be held in Chicago, but will also be webcast. Additional information, including the agenda, is available here.
Following this meeting, PHMSA and NAPSR will hold a two day Research and Development forum in Chicago on August 6 and 7 to develop a national pipeline research agenda. The forum will target current gaps in technology and priorities for future research. Working groups are slated to discuss the following issues: damage prevention, leak detection/fugitive methane emissions, anomaly detection characterization, improving risk models and technology to address legacy material challenges (e.g., cast iron and seam weld issues). More information is available here.
Despite veto threats from the Obama Administration, H.R. 3301, the “North American Energy Infrastructure Act”, passed in the U.S. House of Representatives by a vote of 238 to 173 on June 24, 2014. The purpose of the bill (subject of a prior post) is to eliminate the Presidential permitting process for cross-border pipelines and electric transmission facilities. For oil pipelines and electric transmission lines, the bill would only require a “certificate of crossing” for the construction, connection, operation or maintenance of the cross-border segment of a proposed project. The certificate would be issued by the State Department (for oil pipelines) or by the Department of Energy (for electric transmission lines). These Departments would be required to issue certificates of crossing within 120 days of completion of review of the proposed “cross-border segment” under the National Environmental Policy Act (NEPA), unless they find that the project is not in the national public interest. For natural gas pipeline projects, a certificate of crossing would not be required, as the bill leaves in place the current authorization process of the Natural Gas Act, under which FERC approves siting, construction or operation of natural gas pipeline facilities, and the import or export of natural gas. The bill would, however, eliminate the Presidential Permit requirement for natural gas pipeline projects.
PHMSA announced its second workshop on Pipeline Safety Management Systems (PSMS) scheduled for July 2, 2014. Notice, 79 Fed. Reg. 34393 (June 16, 2014). The purpose of this workshop is to discuss the emerging national consensus standard regarding PSMS, draft American Petroleum Institute (API) Recommended Practice 1173, and to identify how concepts discussed at the prior workshop are addressed in this standard. The standard was prompted by an NTSB recommendation to API as a result of the Board’s investigation of the Marshall, Michigan incident. As explained by PHMSA, a PSMS is intended to be a formal framework for operators to measure and improve pipeline safety performance over time and to ensure that senior management is actively fostering a safety culture. Registration information is available here.
As part of a 2014 industry initiative, the Association of Oil Pipelines and the American Petroleum Institute prepared its first “Annual Liquid Pipeline Safety Performance Report” (the Report). Despite several high profile pipeline incidents in the past few years and increased PHMSA enforcement activity, these statistics reflect that PHMSA pipeline safety regulations and industry efforts over the past ten years have been successful in improving pipeline safety.
- The number of releases from liquid pipelines decreased 62% over the last ten years (based on three year averages).
- While the volume of barrels of crude or petroleum product transported has increased, the amount released over the last ten years decreased by 47% (based on three year averages).
- Releases caused by corrosion decreased by 79%, third party damage by 78% and those caused by material defects, seam and weld failures decreased by 31% (based on three year averages).
In response to recent oil spills by rail and pipeline as well as a report by DOT’s Office of Inspector General criticizing PHMSA oversight of state pipeline safety programs, states are becoming increasingly active in oil spill response and oil transportation safety. Under the Oil Pollution Act of 1990 (OPA), state spill response regulations may exceed federal requirements. 33 U.S.C. 2718 (stating that OPA does not preempt a State’s imposition of additional liability or requirements regarding oil releases within the State or any removal activities associated with a release). Some states, including California, Washington, Oregon, and Alaska, already impose additional spill response requirements.
In a decision that may affect how impacts of related pipeline construction projects are analyzed, the D.C. Circuit Court of Appeals recently remanded an environmental assessment (EA) prepared by FERC under the National Environmental Policy Act (NEPA). Delaware Riverkeeper Network et al. v. FERC, D.C. Cir. No 13-101 (June 6, 2014). The Court held that the Commission violated NEPA by improperly considering the project’s environmental impacts in isolation from three inter-related projects undertaken or proposed by the same operator on the same pipeline within a short period of time. The Court remanded the case to FERC for further consideration of the cumulative environmental impacts of the four related natural gas pipeline construction projects.