December 2013, Vol. 240 No. 12


Cost Of Regulation Lessens With Coordination Among Agencies

Mike Purpura, Director of Business Development, Midwestern Contractors, Elburn, IL

The value of governmental regulation cannot be denied. In addition to numerous safety and environmental benefits, it provides a benchmark for maintaining safety and stability during the completion of field work – be it new infrastructure integration or maintenance and repair.

There are circumstances, however, in which uncoordinated or conflicting regulatory requirements can delay a much needed project and dramatically affect the costs of performing the work.

An example of how regulatory inconsistencies or conflicting requirements can impact field work can be found in a recent Midwest Contractors (MWC) project, performed on behalf of one of its largest clients. During the early planning, MWC’s Northern Illinois-based customer asked it to assist in planning and executing the elimination of an anomaly on one of its 16-inch refined products pipelines. Normally, this would not be a large project and MWC would anticipate taking only a few days in the field to expose the pipe, analyze the anomaly and make the necessary repairs to rectify the problem.

In the case of this pipeline, however, MWC was challenged by its location, which runs through a section of marshland overseen by the Illinois Department of Natural Resources. This was further complicated by its being about one-quarter of a mile from the nearest county road. Before beginning work, we needed to overcome a number of hurdles and resolve several regulatory issues. The first obstacle involved obtaining the myriad of permits required; the second was the attention required to resolve all pending ROW issues.
The project fell within the native habitat of the Blanding turtle.
As a general contractor MWC’s role is to ensure that the work is carried out safely and in accordance with both plans and permits. Increasingly, MWC is being asked by townships, counties, municipalities, soil and water conservation districts, state departments of natural resources, and a host of federal agencies to apply construction methods that minimize the impact of our processes on flora, fauna, soil and water. To compound these pressures, the “wish lists” and compliance guidelines of these agencies do not always coincide, but rather place a contractor, such as MWC, in a situation of compromising the directives of one regulatory agency at the expense of another.

In the case of this refined products pipeline project, we began by investing 18 months of time in meetings with various oversight agencies. These compliance and permitting hurdles were in addition to discovery work performed by our own right-of-way agent, an independent environmental consultant and our client’s internal project engineer. All parties were focused on understanding fully the regulations set forth and planning a construction strategy that would meet or exceed the expectations of the parties involved in the oversight.

We all know fully well that these hidden costs are part of the process of doing business in today’s regulatory environment. That said, in this specific circumstance we estimated the cost, prior to the commencement of any sight activity, to be $30,000. MWC discovered soon afterward that our estimate for this phase of the project was miniscule compared to what was ultimately spent before any earth was disturbed.

Part of the challenge MWC faced was seasonal. During 2012, a drought cycle existed in the Midwest that presented ideal conditions to perform this work in the summer and fall. The pipe section with the anomaly, although situated in marshland, was accessible due to the drought, which caused the marshland to be damp but hold little standing water. The ROW was firm, requiring no mats. Conditions would have been ideal for performing the cursory maintenance work at that time.
The location of the pipeline anomaly.
Unfortunately, by the time MWC and its client completed the permitting process with the multitude of agencies and governmental bodies that had regulatory authority over the marshland it was April of 2013, which coincided with the mating season of the Blanding’s turtle. As a result, work on the project was further delayed.

The spring of 2013 was one of the wettest springs on record, and by the time MWC was allowed to begin work there was 41 inches of water and 4 feet of muck-soils encasing the pipe. Ironically, not only did the regulatory delays substantially increase the complexity and cost of this project, but also exposed numerous species of reptiles and birds to mating and reproductive disturbances. Certain species of reptiles and birds are dependent on certain water levels for successful reproduction. The regulatory delays compromised, rather than protected the ideal environmental conditions for these species.

Simultaneously for MWC’s customer, the delays meant having to use one-quarter of a mile of crane mats and construction of two decks to accommodate water treatment tanks and heavy equipment. In addition, the size of the bladder dam and its length was increased to accommodate the elevated water levels. In the end, MWC was required to use 400 feet of 8-foot bladder dam to achieve the tolerances required during the repair process.

The permits, among other things, required that MWC treat all water pumped out of the marsh by pumping it through flocculation logs containing an anionic polymer. Then the water flowed through a treatment tank prior to entering a settling tank with a jute matrix suspended from it. This removed the organic material and sediments.

Once the pipe was exposed, the trench shored and dewatered, the repair was completed using a straightforward, welded sleeve. After nondestructive testing (NDT), blasting and coating, the pipe was ready for backfill. This process only took a few days. The real work was setting up, water treatment, bladder dam inflation, laying of mats, then reversing ourselves to remove all material and restore the marsh to its prior state. This relatively common repair job, which could have been performed both safely and in an environmentally sound manner for under $90,000 within a few days, ended up costing in excess of $500,000 and requiring well over one-and-a-half years of preparation and planning time.

The lesson learned is that better coordination needs to exist among permitting agencies. This travesty could have been easily avoided had the regulatory bodies exercised a willingness to listen and work more closely with the pipeline company and its contractor (MWC).

The hard facts of this case are the drought of 2012 was an environmental gift. Had all parties concerned coordinated their efforts and focused on the prevailing opportunities that the drought provided, and exercised a sense of urgency, this project would have been accomplished with greater efficiency. Ironically, the species needing specific conditions to reproduce would not have been affected either.

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