Surging US production has led to strong demand for the construction of crude oil pipelines. The industry and its government regulators are working hard to make certain the systems are properly designed, constructed, operated, and maintained. Both recognize that public support for these projects is essential. Neither believes it will be won by trying to conduct business as usual.
The Association of Oil Pipe Lines (AOPL) estimates 10,000 miles have been added to the US petroleum liquids pipeline network in the last 4 years. "That's significant," AOPL Pres. Andrew J. Black said. "But we're still increasing crude supplies in regions that don't have pipeline capacity to take it away. There's good potential to match often lower-priced domestic crude supplies with refineries that need them. But that potential has yet to be realized."
Carl Weimer, executive director of the Pipeline Safety Trust in Bellingham, Wash., meanwhile, said, "It seems new pipelines are being proposed or announced every day lately. The rapid increase has raised concerns about construction practices, but there's also an uptick in the number of incidents. It's causing many of us to scratch our heads and wonder what it will take to reach the zero incidents level we all want."
Weimer told OGJ that his group is trying to track landowners' concerns, particularly in communities that have spread onto previously rural pipeline routes. "In the past, pipelines were out of sight and out of mind and people didn't think about them much," Weimer said. "But if oil spills into a creek, they start to ask questions. There's kind of perfect storm of attention on pipelines, and some of it is actually about climate change. That's what's happened with the Keystone XL project, and some of it is carrying over to other proposed pipelines."
As of July 1, AOPL figures showed 15 new US projects totaling 2,378,500 bbl of capacity in service, and 17 others totaling 3,285,000 bbl under construction. Another 15 with 2,195,000 bbl total capacity had firm commitments or announced consideration, while 20 more totaling 3,035,000 bbl of capacity had partial capacity commitments.
Already extensive
The US system is extensive already. Operators delivered 14.1 billion bbl of crude and products over 185,599 miles of interstate pipeline in 2012, according to figures jointly released in January by the American Petroleum Institute and AOPL. The system included 57,051 miles of crude oil lines, 64,024 miles of product lines, and 59,853 miles of natural gas liquid lines.
"We have more domestic production than ever. We need to find ways to move it," said API Pipeline Director Peter T. Lidiak. "The pipelines haven't been there, so railroads, barges, and even some trucking has picked up some of the capacity."
Lidiak told OGJ, "We need to get the crude to where it has to go in the safest way possible. You can argue what way is best, but they all have strong safety records. It isn't good to play off one method against another. Our goal at API is to drive the overall accident rate down. That's where our emphasis is directed."
The US oil and gas pipeline industry has grown dramatically since 2007. Its federal safety regulator, the US Pipeline & Hazardous Materials Safety Administration (PHMSA), responded by increasing the number of pipeline construction inspections performed each year. Those inspections uncovered issues that could adversely affect pipelines' long and short-term integrity if they were not resolved.
"Through new construction inspections performed during the 2008-10 pipeline construction seasons, PHMSA inspectors discovered issues requiring immediate operator remediation prior to the pipeline being placed in service or requiring pressure reduction to assure pipeline integrity," PHMSA notes on its web site's pipeline construction page. The issues included poor quality control and procedures for welding, coating, fittings, hot bends, and pipe; as well as inadequate operator inspection and general construction practices.
Findings led to conference
The US Department of Transportation agency met with operators constructing pipelines to discuss issues its inspectors found. It also tried to reach out to all pipeline industry members with an April 2009 workshop hosted in collaboration with its state pipeline safety partners, the US Federal Energy Regulatory Commission, and Canada's National Energy Board. The objective of the workshop, which concentrated on transmission pipelines, was to inform the public, alert the industry, review lessons learned from inspections, and improve new pipeline construction practices before the 2009 construction season got under way.
That same year, PHMSA challenged industry leaders to come up with a plan or practice to resolve these issues. It asked industry trade groups to encourage their members to have quality action plans in place for each new pipeline construction project. PHMSA said it has received responses from all the trade associations concerning their efforts to resolve new pipeline construction issues and enforce and maintain best practices, including technical work groups that have developed improved practices to resolve these quality issues.
Standards and practices historically have been important across the US oil and gas industry from exploration and production to refining and marketing. API has used committees and subcommittees of industry experts since 1924 to develop recommended operating procedures and equipment specifications. Federal, state, and local governments have adopted many of these as regulations.
A list of new pipeline publications on the standards page at API's web site includes the 21st edition of Standard 104, "Welding of Pipelines and Related Facilities" (September 2013) and four Recommended Practices: RP 1160, "Managing System Integrity for Hazardous Liquid Pipelines," Second Edition, September 2013; RP 1161, "Pipeline Operator Qualification (OQ)," Third Edition, January 2014; RP 1169, "Basic Inspection Requirements-New Pipeline Construction," First Edition, July 2013; and RP 1172, "Construction Parallel to Existing Underground Transmission Pipelines," First Edition, April 2014.
In addition to RPs 1161 and 1172, API's Pipeline Standards Committee expects to publish a second edition of RP 1168, "Pipeline Control Room Management", and a first edition of RP 1173, "Pipeline Safety Management Systems (SMS)" later this year. A leak detection RP combining several RPs also is in the works, AOPL's Black told OGJ.
Lidiak said that several industry practices already addressed issues PHMSA found in its 2008-10 pipeline construction inspections. "People adhere to them to a large degree," he said. "API has had a pipeline specification for years covering what manufacturers need to do to ensure quality control, welding standards, and supply chain management such as one recent document for valve bodies and valve casts.
Fresh potential problems
"As the market has become more international, supply chain management has grown more difficult than when it was largely domestic," the API official said. "We believe this supply chain document will help operators improve their safety programs."
He said he also has heard talk within the pipeline industry about developing better construction management programs. "In the last 2-3 years, we've tried to lay out what construction inspectors need to know, and we expect to run the first tests on that next fall. So we've had several standards and practices for a long time, and several which are recent."
API also has developed a pipeline inspector certification program to establish an industry-wide credential for pipeline inspection professionals. It will test an applicant's knowledge of in relevant codes and standards necessary to perform inspection activities during construction of new onshore pipelines. Qualified individuals will need to be knowledgeable about general pipeline construction inspections, an inspector's responsibilities, personnel and general pipeline safety, and environmental and pollution controls. Certification will be for a 3-year term.
PHMSA's pipeline construction responsibility is to assure that the line will operate safely once it goes into service. Requirements related to crude and product pipeline design and construction are in Chapter 49, Part 195 of the Code of Federal Regulations (CFR). They address such issues as the required strength of pipe for certain applications and the design of components that will be attached to the pipeline. Requirements specifically addressing construction issues include how welding must be performed, limitations on pipe bending, installing pipe in the ditch, and the required depth of burial.
PHMSA said its inspectors review operator-prepared construction procedures to verify that they conform to these regulations. Inspectors then observe construction activities in the field to assure that they are conducted in accordance with the procedures.
Black confirmed that PHMSA checks design specifications, watches pipeline construction, and monitors testing before a new line starts to operate. "I'm hearing that its inspectors are increasingly involved in new construction oversight," he said. Projects require other permits and approvals for land disruptions from states, the Army Corps of Engineers, and other federal agencies. "State and federal processes must work together to give consumers what they need, which is access to supplies," Black said.
Capital-intensive projects
Pipelines can cost several million dollars per mile to construct, he continued. "These are capital-intensive projects," he noted. "Operators need long-term agreements with shippers-either producers or refiners-to get financing. They also need the assurance that FERC pipeline rate policies are predictable and stable for a fair rate of return."
Weimer identified a specific uncertainty: "PHMSA has been doing a rulemaking that started 3 years ago that sort of fell into a black hole," he told OGJ. "Someone putting a new pipeline doesn't know what kind of regulations will be required 3 years from now. We and the industry are both concerned about this."
API also began to review pipeline safety management systems at the National Transportation Safety Board's request, and quickly increased the frequency of integrity management checkups. PHMSA now requires flyovers 26 times/year to inspect a pipeline's right-of-way, Black said. "The industry is working on technology to gain information about leaks beyond what the human eye can see," he told OGJ. "BP just got approval to use drone flights for fly-overs in Alaska."
Corrosion is still the main problem for older pipelines, while problems with seams apparently have improved. Black said API pipeline committees began to look more closely at cracking after it was found to be the main cause of 5,000 bbl of Canadian heavy crude leaking when ExxonMobil's Pegasus pipeline ruptured near Mayflower, Ark., on Mar. 29, 2013.
Pipeline industry groups also have sought safety management systems information from other government sources, including the US Bureau of Safety and Environmental Enforcement which now requires them for offshore oil and gas producers after the 2010 Macondo deepwater well blowout and crude oil spill.
The significant jump in domestic oil and gas pipeline construction the past few years has led PHMSA to devote more of its inspectors' time to construction inspections. Its inspectors spent nearly 10 times as many days on construction inspections in 2008 (2,221 total days, including 1,492 away from the office, or AFO) as they did in 2005 (277 total days, including 186 AFO). The number of inspection days has decreased from this peak, but was still nearly six times the 2005 value in 2013 (1,519 total days, including 1,095 AFO).
API's Lidiak said he's also spending a lot of time on the road these days. "Part of working some of these issues is to go where the action is," he told OGJ. "As much as it might disappoint my wife and family, I think that's where I need to be."