November 2015, Vol. 242, No. 11


Government: Senate Hears Criticism of Upcoming Gas Transmission Proposal

INGAA CEO Don Santa showed increasing frustration with PHMSA’s continued failure to move forward with important pipeline safety regulations.

At Senate hearings Sept. 29, he said gas transmission pipelines are hesitant to make extensive safety investments now since those investments could be proved inadequate or wrong-headed once PHMSA finally publishes an upcoming safety rule containing numerous changes dictated by the 2011 Pipeline Safety, Regulatory Certainty, and Job Creation Act.

The final rule isn’t expected for two years, although a proposed rule is apparently imminent. The key components of that proposed rule, according to Santa, will be a presumed expansion of the 2004-vintage integrity management program beyond high-consequence areas and new testing requirements on pipelines built before 1970.

A broad proposed rule on those and other issues has apparently been approved by the White House Office of Management and Budget. However, it is a proposed rule, and any changes to pipeline safety programs won’t go into effect for a few years, at minimum.

“The practical consequence of this delay, however, is to erode the confidence of some pipeline companies that their voluntary safety commitments will be consistent with the final rules adopted by PHMSA,” Santa said.

If the proposed rule on liquid pipeline safety published by PHMSA on Oct. 1 is any guideline, the proposed gas transmission rule is likely to impose much tougher federal safety requirements than are currently in force.

Congress could complicate this timing issue further. The House and Senate are considering changes to the 2011 law and pipeline safety laws more broadly. So, theoretically, PHMSA could propose safety changes in response to the 2011 edicts, transmission companies could move integrity programs in that direction before a final rule is proposed, and then Congress could make further changes, necessitating a new PHMSA rulemaking.

The House and Senate have begun to work on a pipeline law reauthorization, albeit slowly. Sen. Debbie Fischer’s (R-MI) Surface Transportation and Merchant Marine Infrastructure, Safety and Security Subcommittee held the latest hearing Sept. 29.

At the hearing, Christopher Hunt, chairman of the National Safety Transportation Board, said, “There is clearly significant room for improvement” in PHMSA’s rules regulating natural gas pipelines.

Hunt mentioned a study the NTSB published this year called Integrity Management of Gas Transmission Pipelines in High Consequence Areas. It found that although PHMSA’s gas IM requirements have kept the rate of corrosion failures and material failures of pipe or welds low, no evidence exists to show that the overall occurrence of gas transmission pipeline incidents in HCA pipelines has declined.

Susan A. Fleming, director of Physical Infrastructure Issues at the Government Accountability Office (GAO), reiterated criticism the office first made in 2013 that the PHMSA transmission integrity program requirements are “not fully consistent with risk-management practices, which are the basis for PHMSA’s integrity management program.”

PMSA Proposes Liquid Pipeline Safety Changes

Striking a blow for equal treatment, PHMSA proposed a new rule for liquid pipelines on Oct. 1 just as it was planning to get out the parallel gas transmission rule. The proposal would require liquid pipelines to ramp up their safety programs in several areas, including leak detection and repair of pipeline anomalies. API released a somewhat ambiguous statement in response to the proposed rule.

“Safety is our top priority,” said Robin Rorick, API Midstream Group director. “We are always looking for new ways to enhance an already safe industry. “We need a practical pipeline safety rule for hazardous liquids that will complement industry’s strong safety standards. We look forward to working with PHMSA when it comes to protecting the public.”

In February 2011, after PHMSA issued an advance notice of proposed rulemaking, the API and the Association of Oil Pipe Lines sent a comment that said in part:

“However, to the extent there is any need to modify PHMSA’s regulations; we submit there is no support for wholesale changes. API and AOPL also believe that many of the topics being considered in the ANPRM do not warrant the issuance of a formal rulemaking.”

The proposed rule seems to anticipate some fairly significant changes. It would modify the integrity management criteria, both by expanding the list of conditions that require immediate remediation and consolidating the timeframes for remediating all other conditions, and apply those same criteria to pipelines that are not subject to the IM requirements, with an adjusted schedule for performing non-immediate repairs.

There would be a new requirement for use of inline inspection tools applied to any pipeline that could affect a high-consequence area; that pipeline would have to be capable of accommodating these devices within 20 years, unless its basic construction won’t permit that accommodation.
The proposed rule would improve the quality and frequency of tests used to assess the condition of pipelines and establish stricter repair guidelines for high-risk pipelines. The proposed regulations would modify repair and replacement criteria under PHMSA’s risk-based management framework by expanding the list of conditions that require immediate repair, establishing shorter repair timelines for critical repairs, and tightening the standards for pressure tests.

Industry Unhappy with Proposed Rule on Notification, Operators

One proposed rule PHMSA issued last summer has already produced a cascade of industry criticism. Also stemming from the 2011 pipeline safety act, it extends current operator qualification (OQ) standards to construction workers on pipeline projects and establishes a specific time limit for telephonic or electronic reporting of pipeline accidents and incidents.

The proposal mandates reporting “not later than one hour following the time of such confirmed discovery.” A pipeline would have to revise or confirm that initial notification within 48 hours of confirmed discovery of the accident or incident.

In comments submitted to PHMSA, INGAA asked the agency to limit incident reporting to “confirmed discoveries” as stated in the congressional language in the 2011 act. In the proposed rule the agency appeared to expand the congressional criterion by defining confirmed discovery as one in which “there is sufficient information to determine that a reportable event may have occurred even if an evaluation has not been completed.”

Eric J. Amundsen, vice president of Technical Services, Energy Transfer Partners, argued by adding the word “may” the definition contradicts its intent.

“Understanding of plain English usage would not hold that discovery has been confirmed if it is believed that an event may have occurred,” he said.

INGAA also contested the definition of a “reportable incident” and said not all of them can be reported in one hour. It suggested PHMSA distinguish between a significant and non-significant event, the latter being one based only on account of property damage estimates in which there is no fatality or injury resulting in hospitalization.

INGAA supported PHMSA’s inclusion of construction and emergency response tasks in the OQ requirements but countered the agency’s estimate of what the expansion would cost industry. PHMSA said the cost of the entire rule would be $3.1 million. The costs involved to comply with changes proposed to OQ for new construction alone could easily exceed $322 million, INGAA said.

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