While US President Donald J. Trump's executive orders dealing with proposed crude-oil pipelines clearly were favorable, they also will require companies in the oil and gas industry to make new contacts with departments and agencies that were not required previously, an American Petroleum Institute official suggested.
The most obvious case is the provision in Trump's Jan. 24 pipeline construction memorandum requiring use of materials and equipment produced in the US, API Midstream Director Robin Rorick noted on Feb. 13.
Oil and gas companies and their trade associations will need to identify and begin working with US Department of Commerce agencies for the first time as a result, Rorick said during a pipeline safety discussion before the National Association of Regulatory Utility Commissioners' Gas Committee at NARUC's 2017 Winter Meeting.
API also is concerned about possible delays the president's Jan. 30 executive order on reducing regulation and controlling regulatory costs may create for emerging federal pipeline safety regulations, Rorick noted. "We may see problems with some of their aspects, but API wants rules in place that are effective and efficient."
The possible new challenges come as API and its members prepare for the Trump administration to appoint new directors at the Pipeline & Hazardous Materials Safety Administration (PHMSA) and other federal agencies as well as commissioners to fill vacancies at a seriously depleted Federal Energy Regulatory Commission, Rorick added.
He noted that more public education is needed about underground gas storage and other issues since PHMSA issued an interim final rule toward yearend 2016 in response to a leak at Southern California Gas Co.'s Aliso Canyon storage facility near Los Angeles a year earlier (OGJ Online, Dec. 14, 2016). PHMSA included two API recommended practices (RP) in the IFR, but concerns have emerged about whether its IFR allows enough time for implementation, Rorick said.
RPs turn prescriptive
API's RPs that PHMSA included in its underground storage IFR effectively became prescriptive, reducing facility operators' flexibility, according to a second panelist, American Gas Association Operations Vice-Pres. Christina Sames. Pipelines, like roads, were built in the US over many decades with different materials over a variety of terrain, she noted. Their only difference is that most pipelines are buried, she added.
Sames said AGA and its local distribution companies are concerned that a new federal gas transmission rule is so comprehensive that it could cost consumers significant money. "They promote a box-checking mentality instead of a thoughtful conversation about how to reduce risks," she said.
AGA also would like to start placing heavier regulations on pipelines with greater concerns and then move onto others, Sames said. "We support this rulemaking's going forward. We just don't want it to be so costly and inefficient."
Continued involvement with state regulators will be essential, a PHMSA official told the group. "We are getting the new administration up to speed on our new rulemakings," said Alan K. Mayberry, the US Department of Transportation agency's associate administrator for pipeline safety.
PHMSA issued its gas storage IFR this past December because there was so much public interest in an area it had not regulated following the Aliso Canyon leak, Mayberry told the state regulators. "It's incumbent on us all as regulators to make sure we're asking the right questions, particularly about how rules are being implemented," he said.
A fourth panelist-New Hampshire Public Utilities Commission Chair Randy K. Knepper, who also chairs NARUC's Pipeline Safety Staff Subcommittee-said PHMSA may need to start working on gas storage issues with state oil and gas commissions, many of which have not dealt with the problem before. "In a balance between risk and prescriptive approaches, many states believe a little more of the prescriptive is necessary to get rid of some ambiguities," he stated.
NARUC's gas committee is considering its own pipeline permitting resolution, Knepper said. "We recognize pipelines need to be built. If we can do anything to make the public feel this will be done safely, we'll do it."