Marcellus Business Central
On March 17, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) proposed new regulations to update critical safety requirements for natural gas pipelines. The prior legislation, the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, expired at the end of FY 2015 but called for PHMSA to evaluate the need for additional damage prevention and inspection regulations.
The 549-page, pre-publication edition of the proposed regulations for gas transmission and gathering lines took over four years to make and includes four congressional mandates, one recommendation from GAO, and six recommendations from the National Transportation Safety Board (NTSB).
PHMSA’s new proposals include a climate action plan to reduce methane emissions and inspections for previously exempt gas pipelines built before 1970, such as the PG&E pipeline that exploded and started fires in San Bruno, CA in 2010, killing eight people and leveling 35 houses, and the pipeline explosion in 2011 in Allentown, Pa., which killed five people including a 4-month-old child. Both explosions were caused by leaks from old cast-iron natural gas distribution pipelines. NTSB’s investigation of the PG&E natural gas pipeline failure concluded that hydrostatic testing of grandfathered pipelines would have likely have prevented the explosion.
The proposed regulations would also broaden the scope of safety coverage by adding new assessment and repair criteria for gas transmission pipelines, including pipelines that pass through areas of medium population density where a failure could pose a serious risk to residents.
The significant growth in the nation’s production, usage and commercialization of natural gas is placing unprecedented demands on the nation’s pipeline system,” said U.S. Transportation Secretary Anthony Foxx.
“This proposal includes a number of commonsense measures that will better ensure the safety of communities living alongside pipeline infrastructure and protect our environment.”
The U.S. DOT stated it expects the proposed changes to result in fewer incidents, which could lead to a reduction in greenhouse gases, with average annual reductions of 900-1,500 metric tons of carbon dioxide and 4,600-8,100 metric tons of methane.
The new regulations will affect the 16 new “greenfield” transmission pipelines planned for the region over the next three years.
“The new regs should have little impact on the construction schedule and total cost of the 16 proposed greenfield projects,” said Dave Messersmith, Penn State extension educator, whose expertise includes natural gas pipeline siting and regulations.
“One of the most costly aspects of the new regulations may be hydrostatic testing of pipelines built prior to 1970, because there are many of these previously exempt pipelines in operation in the Commonwealth, and it will be a significant undertaking to hydrostatically test all of them.”
In addition to interstate pipeline operators being able to invoke the “right of condemnation” or “eminent domain” on private land through which the pipelines run, state owned lands are also not exempt from hosting a natural gas transmission line; however, they are avoided in favor of alternative routes if feasible. The cost of rerouting pipelines is about $5 million per mile, but it can vary significantly, depending on the diameter of the pipeline.
The Babst Calland Pipeline and HazMat Safety team at the law firm’s new Washington, D.C. office, which is led by energy attorneys James Curry and Keith Coyle, reviewed the proposed regulations and issued a three-page white paper outlining several areas that pipeline operators may wish to investigate further.
For example, Curry and Coyle suggested operators assess the scope of materials verification. While the new provision appears to apply only to pipelines in certain locations, cross references to the materials verification rule in several other proposals from PHMSA apply to all transmission lines. The team’s report stated the new regulations would create new materials verification requirements for certain onshore gas transmission lines, modify maximum allowable operating pressure (MAOP) requirements for all gas pipelines and impose strict requirements for verifying the MAOP of certain pipelines.
The proposed regulations would also impact gathering lines.
“While the new proposal for determining whether a pipeline qualifies as a gathering line appears to draw on many of the concepts in the existing regulations, two important changes are notable,” Curry and Coyle state in the report.
“First, the gathering function would begin at a point closer to the wellhead in many cases, thereby narrowing the extent of exempt production operations. Second, new restrictions would be imposed on the use of the incidental gathering designation, potentially expanding the universe of transmission lines in the midstream sector.”
R. Brock Pronko, Regional Business Analyst
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