American Oil and Gas Reporter - January 2016 - 25

WASHINGTONWATCH
Pipeline Safety Regs
Threaten To Encroach On
Production Lines
Some high-profile oil pipeline spills have cast a more intense
spotlight on pipeline safety. For both natural gas transmission lines
and oil/hazardous liquids lines, the Department of Transportation's
Pipeline Hazardous Materials and Safety Administration (PHMSA) has been working on new safety regulations for the past five
years. These regulatory efforts are combining with renewed congressional oversight and efforts to provide greater resources to
the agency. While increasing safety is of importance to communities and the oil and gas industry, PHMSA is casting a wide net,
seeking compliance from operators of gathering lines.
PHMSA published a notice of proposed rule making for hazardous liquid lines in the Oct. 13 Federal Register. The NOPR
is a long-delayed follow-up to an advance notice of proposed rule
making, on which comments were submitted in early 2011.
The October NOPR incorporates legislative changes and safety recommendations from the National Transportation Safety Board
and the Government Accounting Office. Of particular interest is
PHMSA's proposal to extend reporting requirements to all hazardous liquid gravity and gathering lines to provide data on whether
existing federal and state regulations are adequate. At present,
gravity lines are exempt from PHMSA regulations.
In the NOPR, PHMSA acknowledges that "many gravity lines
are short and (are located) within tank farms or other pipeline facilities; however, some gravity lines are longer and are capable
of building up large amounts of pressure."
Relying on its statutory authority to gather data for all gravity lines, PHMSA proposes that the operators of all gravity lines
submit annual, safety-related condition and incident reports. PHMSA estimates that, at most, five hazardous liquid pipeline operators will be affected by this regulation of gravity lines.
PHMSA also proposes to extend reporting requirements to hazardous liquid gathering lines, whether onshore, offshore, regulated,
or unregulated. Some gathering lines are not subject to federal regulation: "crude oil gathering lines with a nominal diameter of not more
than six inches, (are) operated at low pressure, and (are) located in
a rural area that is not unusually sensitive to environmental damage."
However, PHMSA is relying on a congressionally mandated
review of whether currently unregulated gathering lines should
be made subject to the same regulations as other pipelines.
The NOPR supports its proposed regulatory expansion with numbers. The agency points out, "PHMSA regulates fewer than 4,000
miles of the 30,000-40,000 miles of onshore hazardous liquid gathering lines in the United States. That means as much as 90 percent
of the onshore gathering line mileage is not subject to any minimum
federal pipeline safety standards."
However, those statistics warrant further review. The potential for
damage is influenced by diameter, pressure, age, and location of the
gathering line. While that may require PHMSA to obtain data on various gathering lines, the NOPR would require "that the operators of
all gathering lines . . . comply with requirements for submitting annual, safety-related condition and incident reports." It is not clear that
this ongoing reporting is cost effective, or even necessary.
Other aspects of the NOPR would require:
* Inspections of pipelines in areas affected by extreme

"While increasing safety is of importance,
PHMSA is casting a wide net."

weather and natural disasters;
* Periodic in-line integrity assessments of pipelines located
outside high consequence areas (HCAs) (This is a significant
change from PHMSA's prior focus on pipelines in HCAs,
which include specific locales and areas where a release could
have the most significant adverse consequences.); and
* Leak detection systems on hazardous liquid pipelines in all
locations.
Such sweeping proposed changes will be followed sometime
this year by a NOPR for gas transmission lines. The release of
that NOPR has been pushed back on numerous occasions.
It is expected PHMSA will continue its efforts to regulate gathering lines. While gathering falls under PHMSA jurisdiction, PHMSA historically has left this area of gas transportation to state regulators.
Production lines are nonjurisdictional by statute. However, it
will be critical to ensure that any proposed changes do not encroach on production lines by changing definitions for production and gathering facilities.
PHMSA's responsibilities will increase dramatically if PHMSA
achieves even part of its proposal. Congress has weighed in with
its concerns over recent pipeline spills and perceptions that PHMSA is not carrying out its duties. PHMSA's new administrator, Marie
Therese Dominguez, appears to have inspired new confidence.
Legislation in the U.S. Senate, S 2276, would provide a significant increase in funding to PHMSA. The bill was approved
by the Commerce, Science & Transportation Committee, although
it faces an uncertain future in the full Senate and House.
Increased resources for PHMSA are necessary to ensure hazardous liquids and natural gas pipeline safety. But the costs to operators of providing more data and performing inspections, as well
as the costs to PHMSA, must be balanced against any incremental
benefits projected.
❒

SUSAN GINSBERG is vice
president of crude oil and natural gas regulatory affairs for
the Independent Petroleum
Association of America. She
covers legislation and regulation, focusing on the CFTC
and FERC. Her experience in
natural gas regulatory affairs
spans 25 years.
JANUARY 2016 25

American Oil and Gas Reporter - January 2016

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