DOT proposes extending low-pressure oil pipeline rules

Nick Snow
Washington Correspondent

WASHINGTON,DC,Sept. 1 -- The US Department of Transportation proposes to stiffen safety requirements, including cleaning and continuous monitoring, for more than 1,200 miles of crude oil and product pipelines.

If adopted, the regulations would place another 684 miles of domestic onshore oil pipelines, primarily operated by major firms, under federal regulation. Comments will be accepted for 60 days following the Aug. 31 announcement.

The department's Pipeline and Hazardous Materials Safety Administration (PHMSA) was already preparing the proposed rules when leaks were discovered late last winter in BP Exploration (Alaska) Inc.'s crude oil gathering lines at Prudhoe Bay oil field in Alaska.

PHMSA issued orders to the company to more closely monitor and maintain the low-pressure system on Mar. 2, which it amended on July 20 with additional requirements, and on Aug. 10. Meanwhile, the company found and identified leaks elsewhere in its Prudhoe Bay system and announced that it would have to cut off up to 200,000 b/d of shipments while repairs were made.

Three congressional committees have scheduled hearings on the leaks and subsequent system shutdowns in the coming weeks, starting with the House Energy and Commerce Committee on Sept. 5 and continuing with the Senate Energy and Natural Resources Committee on Sept. 12 and the House Transportation and Infrastructure Committee on Sept. 13.

Acting Transportation Sec. Martha Cino said the proposed regulations would require operators of low-pressure pipelines at Prudhoe Bay and other unusually sensitive areas to meet requirements similar to the ones PHMSA applies to high-pressure pipelines.

"This rule will help restore confidence in America's pipelines," she said, adding that it would have prevented maintenance lapses that led to BP's partial system shutdown in Alaska.

Existing regulations
PHMSA already regulates gathering lines in populated areas and in rural areas of Gulf of Mexico inlets. It also regulates low-stress lines in populated areas or which cross commercially navigable waterways, as well as any line carrying hazardous liquids.

The agency decided that additional onshore low-stress pipelines in rural areas, which were exempted when the original regulations were formulated in 2000, needed to be included after leaks were reported.

It received a set of proposals from the American Petroleum Institute and the Association of Oil Pipelines in July. Their recommendations included leak detection measures appropriate to each pipeline, employee training for abnormal operating events, well-marked routes, more programs to reduce the chance of excavation damage, and prompt reporting of incidents.

Other proposals recommended establishing a 5-mile buffer zone from public drinking water sources and a 1-mile buffer from an environmentally sensitive area from low-pressure oil pipelines. PHMSA rejected the idea, proposing a 1/4-mile buffer instead after its data showed the largest onshore spill from an oil pipeline traveled no farther than 2 acres.

The proposed new regulations would cover oil pipelines between 6-5/8 and 8-5/8 in. in diameter operating above 20% of specified minimum yield strength (SMYS) in areas designated "unusually sensitive." The proposals noted that a pressure of 125 psig approximates 20% SMYS for steel pipe of unknown stress level, based on minimum weight pipe 8 in. in nominal diameter with 24,000 psi yield strength.

DOT and PHMSA are seeking comments within 60 days on whether the proposed pressures and buffer zone are adequate.

Primary threats
The proposals also focus on corrosion and third-party excavation damage as the primary threats to rural oil pipeline integrity. Operators would have to continuously monitor systems, but DOT and PHMSA are seeking comments on a proposal to require low-pressure line operators to submit the annual reports and accident reports PHMSA makes other oil pipeline operators prepare.

The proposed regulations would cost an estimated $5 million initially, $2 million/year from the second through seventh years and $1 million/year after the seventh year, DOT said in its proposed rulemaking notice.

It said that PHMSA determined that smaller independent producers would not be affected following consultations with the Independent Petroleum Association of America and the US Small Business Administration.

The Pipeline Safety Trust immediately called DOT's proposals inadequate because they would apply to only 17% of the currently unregulated low-pressure oil pipelines nationwide.

Carl Weimer, executive director of the Bellingham, Wash.-based nonprofit organization, said PHMSA pushed the proposals out "presumably to avoid uncomfortable, ongoing questions by Congress and the media."

He called them "so technically deficient [with] such narrow pipeline coverage that uncomfortable questions to PHMSA need to continue." He said, "Contrary to a statement in the proposal, the rule will not improve public confidence in pipeline safety since the agency has continued to exempt the vast majority of these types of problem pipelines."

Shipments rise
Meanwhile, BP Exploration Alaska reported on Aug. 29 that shipments through its Prudhoe Bay gathering system were back above 200,000 b/d following completion of repairs to its Gathering Center 2 compressor. It also said it has found no additional integrity problems after completing ultrasonic inspections of approximately 2,500 ft of pipe in the eastern operating area and 5,300 ft of pipe in the western operating area.

While more than 15,000 ft of insulation has been stripped from eastern-area oil transit lines, BP Exploration Alaska said it temporary stopped removing insulation from the western-area lines because it contains asbestos. The line will continue to operate while it evaluates possible worker exposure problems, it said.

The company has completed orders for 16 miles of replacement pipeline, which it expects to receive from US mills during 2006's fourth quarter. BP's West Coast refining and marketing system remains adequately supplied for the short term, and no disruptions of crude oil or fuel supplies are expected.

Contact Nick Snow at nsnow@cox.net.

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