PHMSA comes under fire for missing PIPES deadlines

Nick Snow
Washington Editor

WASHINGTON, DC, Mar. 14 -- The federal agency which regulates oil and gas pipelines came under fire from a US House subcommittee on Mar. 12 for not meeting deadlines set in the Pipeline Inspection, Protection, Enforcement, and Safety (PIPES) Act of 2006.

House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.) and Energy and Air Quality Subcommittee Chairman Rick Boucher (D-Va.) separately noted that PIPES required the US Department of Transportation's Pipeline and Hazardous Materials Safety Administration to publish distribution integrity management plans, low-stress pipeline regulations and technical assistance grant information by the end of 2007.

PHMSA Administrator Carl T. Johnson, who was sworn in on Jan. 9, said publication of that information was delayed because the agency was distracted by its investigation of oil leaks on Alaska's North Slope, emerging questions about alternative fuels transmission, and PHMSA's cooperative enforcement efforts with states.

"As to the vigor of PHMSA enforcement, we initiated 259 pipeline enforcement actions in 2007, the second highest number since 2002. Seven of these involved corrective action orders issued in response to incidents causing fatalities or serious injury, hazardous liquid spills that damaged the environment, or other conditions posing serious threats to public safety or the environment," he continued.

A record settlement
PHMSA also imposed nearly $4.3 million in fines last year, 39% more than in 2006 and the second highest amount since 2002, Johnson said. With the US Department of Justice, the agency also reached the largest judicial settlement ever brought under federal pipeline safety laws last year, a judicial consent decree with El Paso Pipeline Co. that include a $15.5 million civil penalty and $86 million of injunctive relief, he said.

"We're going to start the clock," Boucher told him after he said that the integrity management plan would be published before June, initial low-stress pipeline regulations would emerge before September, and the agency had just completed technical assistance application guidelines.

Other subcommittee members suggested PHMSA's inability to meet PIPES deadlines made repeal of a 7-year pipeline reinspection requirement questionable. "Frankly, the statutory deadlines were very generous when they were set. It's very disappointing that after years of working on this, we still aren't doing the job," said Rep. Jay Inslee (D-Wash.).

But the subcommittee's ranking minority member, Fred Upton (R-Mich.), noted that the Government Accountability Office has said that a risk-based approach would help focus attention and resources where they are needed. "We can't inspect all the lines all the time, but we can ensure that the public is protected. For the sake of increasing pipeline safety, I agree that we should seek a legislative fix that would implement the risk-based assessments," he said.

"I'm undecided about this. If we're going to get away from a rigid 7-year schedule, I'd like to know what's going to take its place," Boucher said.

Still being considered
Stacey L. Gerard, PHMSA's assistant administrator and chief safety officer, said the US Department of Transportation agency still is considering letting qualified pipelines use a risk-based approach, which would focus on areas with the highest potential for problems instead of a specific time interval.

"We would require notification by an operator that it intended to use a different inspection interval. We would then look at the pipeline's integrity records, operating experience, construction, and design including the type of metal used, and other aspects of its history," she said.

Inslee remained skeptical. "While a risk-based approach may seem scientifically sound, we've seen it fail," he said, adding that BP Alaska, the operator of the North Slope crude gathering system, believed it knew what was going on inside the lines before they began to leak due to internal corrosion.

"We would not have characterized the risk-based assessment BP had in place as adequate. The decision to move to a risk-based approach would not be at the operator's discretion," Gerard replied. She said that PHMSA would like to use a rulemaking process to establish inspection interval alternatives.

2010-12 overlap
Witnesses from the natural gas industry said such an option is needed. Williams Gas Pipeline Co. President Phillip D. Wright, who testified on behalf of the Interstate Natural Gas Association of America, said that an overlap of baseline inspections and reassessments from 2010 through 2012 would result in a volume of inspections which would be daunting, given the limited number of contractors and equipment. "In addition, this stepped-up level of inspection activity would be difficult to accommodate without affecting gas system deliverability. This last point is critical," he said.

Inspections are only one tool in an integrity management program in which pipeline operators identify and mitigate operating risks, Wright continued. "It is vital that an effective program utilize a risk-based approach to focus attention and resources, and that this program include strategies to address all risks," he said.

Testifying on the American Gas Association's behalf, Paul Preketes, senior vice president of energy delivery for Consumers Energy Co. in Jackson, Mich., said gas utilities support adoption technically-based reassessment standards similar to the American Society of Mechanical Engineers' B31.8s consensus standard.

"Industry, regulators and technical consultants have worked to develop and implement new technologies that can assess transmission pipelines in situations where internal inspection devices or pressure testing are not feasible. External corrosion direct assessment and other indirect assessment methods have been very beneficial to gas utilities that operate transmission pipelines," he said.

Contact Nick Snow at nicks@pennwell.com.

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