Ruling on Pipeline Safety: Potential New PHMSA Rule Still Under Development

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In December 2017, officials with the Pipeline and Hazardous Materials Safety Administration (PHMSA) met with two of their external advisory committees to continue work on a complex rulemaking proposed almost two years ago, in April 2016. The meetings focused on expanding federal control over natural gas pipelines; a proposal formally referenced as “Pipeline Safety: Safety of Gas Transmission and Gathering Pipelines.” Approximately 140 people attended the December meetings, including 13 of 15 Advisory Committee members.

According to the U.S. Department of Transportation (DOT) the United States has 11,000 miles of on-shore gathering pipelines and 297,814 miles of transmission pipelines. PHMSA is concerned that changes to this immense infrastructure present new public safety risks from changes in supply and demand, pipeline operations, such as reverse flow, and the fact that America’s mobile population has moved closer to once-isolated pipelines and related infrastructure.

Because of these concerns, federal officials moved to establish new oversight regulations. PHMSA’s initial proposal was a 136-page document, a proposal so extensive that the American Gas Association (AGA) referred to it as “the most significant revision to the regulation of gas transmission and gathering pipelines since 1970.”

Other industry groups echoed AGA’s concerns. In fact, AGA’s 295 pages of comments was really a team effort, with sections authored, reviewed and endorsed by a wide range of industry experts and trade associations.

The PHMSA rule builds on safety concepts linked to integrity management (IM) practices — the deliberate approach to evaluating and then responding to maintenance, repair and safety issues. The rule would expand IM applications. It would, for example, set explicit requirements for risk modeling rather than allow the use of general industry standards. There are non-IM changes, too, covering a wide range of issues, from repair criteria, verifying maximum allowable operating pressure (MAOP) and verifying pipeline material.

The proposal would repeal the use of API RP 80, one of a number of changes proposed for on-shore gathering lines, which would no longer be exempt from reporting requirements.

Finally, there are new proposals for inspections, new MAOP reporting, seismicity considerations and standards for assessing the physical condition of in-service pipelines using in-line inspection, internal corrosion direct assessment and stress corrosion cracking direct assessment.

PHMSA writes that “the overall goal of this proposed rule is to increase the level of safety associated with the transportation of gas by proposing requirements to address the causes of recent incidents with significant consequences, clarify and enhance some existing requirements, and address certain statutory mandates of the Act and NTSB recommendations.”

Two DOT/Pipeline advisory committees have been working on the proposal: the Technical Pipeline Safety Standards Committee, also known as the Gas Pipeline Advisory Committee (GPAC) and the Technical Hazardous Liquid Pipeline Safety Standards Committee, also known as the Liquid Pipeline Advisory Committee (LPAC). These are not casual, ad hoc committees. They are statutorily mandated advisory committees, each with 15 members with membership evenly divided among Federal and State governments, the regulated industry, and the public. The committees “advise PHMSA on the technical feasibility, reasonableness, cost-effectiveness, and practicability of each proposed pipeline safety standard.”

The December Advisory Committee meetings continued a process of back-and-forth discussion and review of PHMSA’s proposals. December’s agenda focused on three critical topics: Material documentation, Integrity Verification Process and Strengthened Assessment Requirements. There was progress on two of those topics (the first and third), providing insight on how this rulemaking is evolving.

The advisory committees have met four times. Between meetings, PHMSA staff take the most recent Advisory Committee comments and recommendations back to the office, so to speak. They make revisions based on comments and discussion. Then, at the next meeting, these revisions are presented and participants work for approval or consensus. Those topics are closed, and new ones are taken up.

Darius Kirkwood is with PHMSA’s public affairs team. He was asked about a timeline to conclude this methodical process. Kirkwood said that each topic does not require the same level of scrutiny, that issues overlap and that completing work on one topic frequently benefits other, related topics. This staff-committee work could end soon — a teleconference is tentatively scheduled for March, with two additional in-person meetings, likely in the spring. The unfinished topic at the December meeting — Integrity Verification Process — will likely be the main agenda item for the March teleconference meeting.

A check with some of the Advisory Committee members indicates that many substantive issues still need to be settled. However, there is also the sense that all sides are working openly and diligently and that a final document will indeed reflect a consensus agreement, with real compromise among all parties.

Cheryl Campbell is senior vice president of gas engineering and operations for Xcel Energy, based in Denver. She has been on the GPAC since April, 2014.

“We are getting somewhere, and we are getting somewhere that will be effective,” Campbell said about the December meeting. She described a productive and open consensus-based process.

Campbell added there is no dispute about safety as the final goal. Industry, though, has pushed back on what it calls PHMSA’s prescriptive approach, treating all operators alike, largely asking people, according to Campbell, to procedurally just “check the box” to somewhat rotely document safe operations. She said that PHMSA’s work with the Advisory Committees has led to revisions that, for her, “suggest we are
getting to consensus about changing the rules that will hold operators to higher standards but doing so in a cost-effective manner so we’re not putting a huge burden on our customers.”

As an example, Campbell cited likely changes to material verification requirements. She said the proposed rule required that incomplete records pertaining to system expansion or revision demanded operators to “pull a coupon,” i.e., cut out a piece of pipe and send it for testing. That’s rather drastic, Campbell explained, possibly resulting in shutdowns and service interruptions. PHMSA and committee members have compromised on verification. Again, not to deny or withhold safety data, but to find acceptable allowances that reach the same end point more easily and with less cost.

PHMSA proposed repealing the use of API RP 80, meaning that on-shore gathering lines would no longer be exempt from reporting requirements. That’s still on the table, Campbell said, adding that the complexity of that document is one concern, both for industry and regulators. She expects that gathering lines will be on the agenda at the upcoming meeting in March.

Another open agenda item is PHMSA’s proposal to establish “moderate consequence areas (MCA),” something that would require the kind of anticipatory safety planning and analysis now required for “high consequence areas.”

Regarding the MCA concept, there hasn’t been industry support for how PHMSA would implement it. “I would like to find a better way to handle this (MCAs),” Campbell said. “The biggest reason, honestly, is because every time you define another thing like that operators have to keep track of it, do a lot of extra record keeping, reevaluate it and it creates a lot of extra work that doesn’t necessarily make it safer.”

Stephen Allen is director of the Pipeline Safety Division at the Indiana Utility Regulatory Commission, in Indianapolis. He was appointed to the GPAC in November 2016. He, too, described progress with the pipeline rule. He characterized the work as “in a groove,” with very focused back-and-forth discussions on economics, feasibility and whether the ideas at hand make sense.

Allen is confident a final rule will respect and include industry’s concerns and ideas. He sees evidence of that, again, in the way the process has worked so far. When PHMSA staff present their revisions, Allen said that Committee members have been supportive of the new language.

Regulatory reform and streamlining are topics with a much higher profile in 2018 than 2016. President Donald Trump established a “Regulatory Cap for Fiscal Year 2017.” The president directed that “whenever an executive department or agency promulgates a new regulation, it shall identify at least two existing regulations to be repealed.”

Campbell and Allen were asked about changes they may have noticed regarding approaches to new regulations. Campbell said that gas industry representatives have made many offers regarding rules to help with the 2:1 offset. Allen thinks that regulators are still seeking clarity themselves about how to calculate the 2:1; it might reflect an aggregate, department-wide number, but not necessarily a total within each department or agency, i.e., at a final tally, DOT will meet the 2:1 goal but ratios within DOE’s divisions may be higher or lower.

Christina Sames is vice president of operations and engineering for the American Gas Association. She is the principal author of AGA’s 295-page set of comments. On regulatory reform, Sames said AGA wants to see “actions to modify existing or proposed regulations to allow alternate actions that have the same benefit but are less burdensome.”

Considering optimism on progress, when might this proposed rule be finalized? PHMSA’s Kirkwood wouldn’t guess at a date. Campbell and Allen, though, thought PHMSA’s redrafting might conclude this summer, with a final rule published late in 2018, effective in mid-2019.

Tom Ewing is a freelance writer specializing in energy, environmental and related regulatory issues.

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