Recently proposed legislation in the U.S. House of Representatives would require FERC to revise its review process for proposed natural gas pipeline expansion projects to include additional analysis of cumulative impacts in a single region or State and extended environmental monitoring. While this bill is unlikely to gain traction in the Republican-controlled House, it is indicative of an ongoing debate about the need for and environmental impacts of new pipeline construction, and the role of both federal and state regulators in reviewing and approving such projects—a debate that has attracted national attention in the wake of the Obama administration’s rejection of the Keystone XL project in late 2015.
In response to the Aliso Canyon leak from an underground natural gas storage well that lasted nearly four months, federal agencies with oversight of over such facilities announced workshops to gather information and solicit input on forthcoming minimum safety regulations. There are an estimated 400 interstate and intrastate underground natural gas storage facilities that operate with more than 4 trillion cubic feet of natural gas capacity. Some interstate pipeline operators rely on underground storage to facilitate load balancing and system supply on their transmission lines, while a large portion of this capacity is leased to other industry participants. In addition to serving customers, intrastate pipeline companies use storage capacity and inventories for similar purposes. Underground natural gas storage provides for flexibility in supply to accommodate daily and seasonal demand fluctuations.
A recent PHMSA Advisory Bulletin warns the pipeline industry about Corrosion Under Insulation (CUI), which is frequently used on pipe transporting heavy crude oil. Such products are often heated for more efficient transport, thus the pipe is wrapped with foam insulation over the coating, and then further covered with a tape wrap over the insulation. The crude oil release from a Plains All American pipeline near Santa Barbara in May of 2015 used such thermal insulation, and the government’s investigation following that release prompted this Advisory from PHMSA.
Congress has approved amendments to the Pipeline Safety Act (PSA), reauthorizing PHMSA’s pipeline safety program through 2019. The bill is expected to reach the President’s desk soon to be signed into law. S. 2276 was approved in the House of Representatives by voice vote in the first week of June, representing a compromise between two House committees on several topics. The Senate took up the bill and approved it by unanimous vote on June 13, 2016.
In an effort to advance White House climate change targets, EPA recently finalized methane rules for new, heavily modified or reconstructed oil and natural gas facilities. The Clean Air Act New Source Performance Standards (NSPS) new rules, among other things, will require monitoring to detect and repair methane and volatile organic compound (VOC) leaks at new oil and gas wells, production, gathering and boosting stations, gas processing plants, and gas pipeline compressor stations. In addition, the Agency moved toward regulation of existing onshore facilities by issuing a draft information collection request for information on how equipment and emissions controls are, and can be, configured and the associated costs, natural gas venting in conjunction with maintenance activities, equipment malfunctions and flashing emissions from storage tanks.
PHMSA announced that it will extend the comment period on its proposed gas rule by only 30 days, with comments due on or before July 7, 2016. Due to the scope and complexity of the proposal, numerous parties requested a 60 day extension of the comment period. In granting the 30 day extension, PHMSA noted that the proposal was made available to the public 3 weeks before its publication. That said, the Agency has still not posted information necessary to fully respond to the proposed rules in the rulemaking docket, such as the Agency’s class location report which is still under internal review within the Department of Transportation.
In addition to granting an extension for comments, the Agency committed to holding public webinars and briefings on the rule at two upcoming advisory committee meetings. The Spring 2016 Technical Advisory Committee meetings have not yet been officially scheduled, but they are anticipated to occur in May or June. Advance notice of the meeting date and additional specifics will be published in the Federal Register 15 days prior to the meeting.
The proposed rule would significantly expand regulations regarding transmission and gathering pipelines under 49 C.F.R. Parts 191 and 192. These proposals include: reporting requirements for all gathering pipelines regardless of whether they are regulated, routine testing and repair requirements outside of high consequence areas, material documentation and MAOP verification requirements, among others.
The extension of the comment will be formalized in a forthcoming Federal Register notice.
During a busy time for the federal Pipeline and Hazardous Materials Safety Administration (PHMSA or the Agency), and while Congress considers reauthorization legislation, there have been several significant personnel changes at the Agency. In early April, Department of Transportation (DOT) Secretary Foxx appointed Teresa Gonsalves as new chief counsel for PHMSA, who comes from the Office of Personnel Management and U.S. Postal Service. In addition, longtime PHMSA Associate Administrator Jeff Wiese departed last week after more than 17 years with the Agency that included oversight of major initiatives such as integrity management and public awareness programs. PHMSA Administrator Marie Therese Dominguez, new to the Agency herself as of last August, is expected to name an Interim Associate Administrator for Pipeline Safety, while the Agency searches for a permanent replacement. PHMSA Deputy Associate Administrators, Alan Mayberry and Linda Daugherty, are expected to share that role in the interim. Other changes include a new Director of Training at the Agency’s Training and Qualifications Center and establishment of an Accident Investigations Division (expected to start up later this year).
Several legislative developments of significance to the pipeline and energy transportation industries are in progress, with the introduction of a bipartisan pipeline safety reauthorization bill in the House, the passage of a bipartisan energy bill in the Senate, and the passage of a bill in the Senate that provides for the use of drones to monitor pipelines and other energy infrastructure.
PHMSA’s expansive Natural Gas Notice of Proposed Rulemaking will be published in the Federal Register tomorrow, April 8, 2016. The Agency released a pre-publication version of its proposed rulemaking several weeks ago, but note that the Federal Register pre-publication version of what will be officially published tomorrow contains slight non-substantive differences from the Agency’s prior released version (e.g., capitalizations, movement of certain proposed revisions among subsections, etc.). The proposal significantly expands numerous requirements for gas transmission and gathering pipelines. Publication in the Federal Register triggers the start of the comment period, with comments due on or before June 7, 2016, unless an extension is granted. Due to the complexity and volume of the proposed changes, several industry trade groups already have requests pending for a 60 day extension of the comment deadline.
The legacy of Keystone XL lives on, as fallout from that politically influenced debate has created a stigma for many new pipeline construction projects. The Sierra Club and other opposition groups openly admitted that their challenge to the Keystone XL pipeline was really a stalking horse to bring more attention to climate change generally. While that opposition was not intended as a more specific objection to pipelines, regional and local citizen groups are now opposing almost any form of new pipeline construction, on a more confrontational basis, using Keystone XL climate change type arguments even where they are not relevant.