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.
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.
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.
As the U.S. House of Representatives considers reauthorization of the Pipeline Safety Act (PSA), a House Transportation & Infrastructure Subcommittee requested input from the Department of Transportation (DOT) Office of Inspector General (OIG) on ways to enhance the enforcement of criminal pipeline safety laws under the PSA. In a letter dated March 8, 2016, DOT Inspector General (IG) Scovel provided two recommendations: (1) that the mental state required for prosecutions under the Pipeline Safety Act be reduced from “knowingly and willfully” to “recklessly;” and (2) that the law provide for greater whistleblower incentives, such as the one recently enacted by the Fixing America’s Surface Transportation Act (FAST Act).
The ongoing leak of methane from Southern California Natural Gas Company’s Aliso Canyon/Porter Ranch underground storage field near Los Angeles has drawn national attention to underground natural gas storage, triggering regulatory and legislative efforts to regulate these facilities at federal and state levels. On the regulatory front, President Obama recently committed to direct PHMSA to promulgate new storage regulations. Just this week, PHMSA announced a new Advisory Bulletin on managing the integrity of underground natural gas storage facilities.
Congress passed a $1.1 trillion spending bill (H.R. 2029) that contains a provision to end the United States’ ban on crude oil exports and earmarks for funding the federal pipeline safety program. The measure passed in the House (316-113) and the Senate (64-33) on Friday, December 18, and was signed by President Obama later that day.
Further Regulation of Underground Natural Gas Storage is under consideration by several state and federal agencies. Gas storage helps moderate supply and demand. As a result, natural gas and related gas products have been stored underground for many years, either in depleted oil or gas field formations, aquifers or salt caverns. Above ground aspects of this storage are regulated by a variety of federal and state agencies, but to date there has not been significant regulation of underground storage facility siting, construction or operation. Several states have been considering new regulations over underground gas storage (e.g., Texas and Kansas), and a recent leak from SoCal’s Aliso Canyon gas storage facility near Los Angeles has drawn national attention to the issue generally.
A bipartisan group of Senators who serve on the Senate Committee on Commerce, Science and Transportation introduced a Pipeline Safety Act reauthorization bill in November, the Securing America’s Future Energy: Protecting Infrastructure of Pipelines and Enhancing Safety (SAFE PIPES) Act, Senate Bill 2276. That bill was approved by the Committee on December 9, 2015 with five amendments. Key provisions of the bill as amended include: (1) regulation of underground natural gas storage facilities; (2) temporary allowances for certified states who are not interstate agents to participate in inspection and oversight of interstate pipelines; (3) PHMSA/State post-inspection briefings, issuance of a final report or enforcement within 30 days of inspection, and (4) regulation of “small scale liquefied natural gas facilities.” The bill would reauthorize the Pipeline Safety Act, and PHMSA, through 2019 and significantly increase authorized funds for pipeline safety programs and grants.
As the September 30th deadline for the Pipeline Safety Act reauthorization draws near, the Senate Committee on Commerce, Science, and Transportation convened a pipeline safety field hearing in Billings, Montana and recently scheduled a second hearing for September 29th in Washington, DC. Newly confirmed PHMSA Administrator Marie Therese Dominguez’s comments at the field hearing provide insight into current developments and priorities of the federal agency that is tasked with pipeline safety. In particular, Administrator Dominguez committed to issuing two outstanding rulemaking proposals in the near term, signaled that the Agency is increasing its focus on inspection and enforcement, committed to “vigorously” promote pipeline safety management systems, and conduct its own organizational self-assessment.