White House readies its own leak notification rule, panel told

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Sept. 24 -- The Obama administration not only supports a US House bill that would require operators of a leaking oil or gas pipeline to notify authorities within 1 hr, but also is preparing to propose the requirement as a regulation, the top federal pipeline regulator told a US House subcommittee on Sept. 23.

Cynthia L. Quarterman, who leads the US Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), said the requirement in HR 6008, which US Rep. Mark H. Schauer introduced on July 30 after an Enbridge Inc. crude oil pipeline began to leak in his district, would be consistent with current rules which require prompt notification.

“As a complement to the legislation which was offered, the administration is working on a regulatory proposal which we hope to have out in the next few days,” Quarterman told the House Energy and Commerce Committee’s Energy and Environment Subcommittee. “One question we will ask is whether we need a particular standard which companies will have to meet across the board.”

Testifying before the subcommittee, Schauer said he introduced the bill, which has 13 cosponsors, chiefly to clarify congressional intent that immediate notification of a spill notification to the National Response Center is 1 hr, instead of 1-2 hr as he said PHMSA determined in 2002.

“My bill will also increase the current fines if a spill is not reported ‘immediately’ to the National Response Center [NRC],” he continued. “Additionally, my bill seeks to increase transparency by directing [DOT] to create a searchable, public database of all reportable hazardous liquids incidents.”

False alarm potential
But an Enbridge executive and oil and gas pipeline trade association leaders warned that Schauer’s proposed 1-hr reporting requirement could create false alarms. Stephen J. Wuori, Enbridge’s executive vice-president of liquids pipelines, said it potentially could create inaccurate volume estimates. “Our experience is that it takes 2 hr to develop this accurately,” he told the subcommittee.

“When pipeline control system alarms indicate changes in pressure, flow rate, and other operation parameters, controllers quickly institute established procedures to investigate the alarm and if necessary, shut in the pipeline system,” said Andrew J. Black, president of the Association of Oil Pipelines (AOPL). “In many cases, a pipeline operator finds an alarm is not, in fact, a pipeline release but is due to other changes in operations.”

With good reason, regulations now let pipeline operators verify that a release actually has occurred before notifying the NRC and produce a volume estimate which never can be adjusted, he explained. “It is not a perfect system since it relies on human interpretation of response to information but it does ensure that notifications are thoughtful and as accurate as possible,” Black said. AOPL would accept a 1-hr requirement if it was from the time a leak is discovered, “not from the time it should have been known which is emerging as an issue,” he added.

Donald F. Santa, president of the Interstate Natural Gas Pipeline Association of America, said interstate gas pipeline operators appreciate HR 6008’s intent of having the NRC notified of a leak or rupture as soon as possible. “The law should be flexible, however, in giving a pipeline enough time to determine whether an alarm is accurate, and if so, where the release is occurring,” he continued, adding that INGAA supports a 2-hr requirement. “Providing inaccurate or incomplete information to first responders is a potentially counterproductive outcome.”

Gas utilities also need enough time to verify that a leak and its volumes, according to Lori S. Traweek, senior vice-president and chief operating officer at the American Gas Association. Requiring premature notification of authorities potentially could squander first responders’ resources on false alarms, she told the subcommittee.

Heavier fines
Schauer’s bill, if it became law, would increase the maximum fine for each pipeline safety violation to $250,000 from $100,000 (including one-call notification and related requirements), and for a related series of violations to $2.5 million from $1 million. It also would impose a civil penalty on anyone who obstructs a pipeline inspection or investigation. Quarterman said legislation that DOT has sent to Congress would make similar changes as well as provide for the hiring of another 40 inspectors.

DOT also proposed removing the exemption for gas and hazardous liquid gathering lines which operate upstream from transmission systems. “While gathering lines were once considered to be low-risk due to being remotely located near production areas, the ever-increasing growth of business and residential areas means that communities where people live and work are now located closer to gathering lines than ever before,” she said. “Should Congress remove the statutory exemptions, [DOT] would then be able to review the corresponding exemptions in the regulations and remove them as necessary.”

The proposal also would authorize data collection on transportation-related oil flow lines, she said. “These pipelines transport product from a production facility to another pipeline and [DOT] needs additional data to determine the need for regulation of these pipelines, which are often located in environmentally sensitive areas,” Quarterman said.

Christopher A. Hart, vice-chairman of the National Transportation and Safety Board (NTSB), said additional federal regulations apparently are necessary. NTSB is investigating three other oil and gas pipeline accidents in addition to the Enbridge pipeline leak in Michigan, including the Sept. 9 rupture of a 30-in. Pacific Gas & Electric Co. line in San Bruno, Calif., which killed 4 people and leveled many surrounding homes. In Cleburn, Tex., this past summer, 1 person was killed and 6 others were hospitalized when a contractor struck a 36-in. gas pipeline, while a second Enbridge crude oil pipeline in Illinois ruptured in September, he said. No one was killed in either Enbridge incident.

Hart said NTSB’s investigations are focusing on supervisory control and data acquisition operations, pipeline controller performance, operator notification and spill response, emergency and oil spill responses, inspection and maintenance history, oversight activities and actions, and aging pipelines. “NTSB has noted that the many of the major pipeline accident investigations it has conducted in recent years have involved pipeline systems that exceed 30 years or more of age,” he said. The board is uncertain whether this is a definite trend, but plans to pursue the issue with PHMSA, he added.

High-consequence areas
Pipeline operators have to prepare integrity management plans (IMPs) covering portions of their systems that run through what are called “high-consequence areas”—specifically, urban or other areas with heavy population density, commercially navigable waters, and unusually sensitive areas such as water supplies and ecological reserves. “The industry and the regulator are doing exactly what Congress mandated: concentrating on systems in high consequence areas,” Santa said. “It is a cause for concern that the San Bruno accident occurred in an HCA covered by the IMP program.”

When the subcommittee’s chairman, US Rep. Edward J. Markey (D-Mass.), asked Quarterman if pipeline leaks outside HCAs potentially could have impacts, the PHMSA administrator said that they “unquestionably do” and added that the agency’s new regulatory initiatives would include asking whether the definition of an HCA is adequate or if it should be modified.

She said in addition to proposing removing exemptions for some unregulated pipelines, PHMSA also plans to propose identifying additional areas along pipelines that should be included in the HCA category or receive extra protection, establishing minimum requirements for point-to-leak detection systems, requiring installation of flow restricting devices in certain areas, and revising valve spacing requirements on new construction or existing pipelines.

PHMSA’s proposals also will include strengthening criteria for repairs and establishing repair requirements and timeframes for pipeline segments located outside HCAs which are assessed as part of an operator’s IMP, and adopting standards and procedures for improving the methods of preventing, detecting, assessing and remediating stress corrosion cracking, according to Quarterman.

Trade association officials seemed mildly irritated that none of the legislative and regulatory proposals recognized that most pipeline leaks result from outside contractors’ excavations for other projects. Black said that the last time AOPL checked, 41 states had exemptions to the federal one-call requirement for outside contractors to check first with utilities and pipelines. “We encourage Congress to direct DOT to continue on the road of getting them to eliminate those exemptions,” he said.

Some subcommittee members were visibly annoyed when witnesses said they could not provide details about accidents because investigations were still under way. “No one wants to know the answers to these questions more than we do,” said Enbridge’s Wuori. “It’s why we are working hard, and the NTSB is working hard, to complete investigations of what happened.”

Contact Nick Snow at nicks@pennwell.com.

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