Stronger federal oversight of gas storage essential, US House panel told

Problems stopping a leak at Southern California Gas Co.’s Aliso Canyon storage facility near Los Angeles show stronger federal oversight is needed, two US House Democrats from the state told a US House Transportation and Infrastructure subcommittee.

Problems stopping a leak at Southern California Gas Co.’s Aliso Canyon storage facility near Los Angeles show stronger federal oversight is needed, two US House Democrats from the state told a US House Transportation and Infrastructure subcommittee.

“The pipes there are eligible for Social Security. That’s how old they are,” said Rep. Brad Sherman, whose district includes the field and a nearby subdivision where residents had to be evacuated while the Sempra Energy subsidiary tried to seal a well that leaked from Oct. 23 to Feb. 19.

Sherman introduced a bill, HR 4578, on Feb. 12 that would establish minimum federal safety standards for underground gas storage installations that would be administered by the US Pipeline & Hazardous Material Safety Administration. The measure has 19 cosponsors.

“We need tough national standards,” Sherman told the House committee’s Railroads, Pipelines, and Hazardous Materials Subcommittee on Feb. 25. “So far, PHMSA has issued a request for the industry to please, pretty-please, follow the American Petroleum Institute’s standards. We should make those standards federal law.”

Jackie Speier, whose northern California district includes San Bruno where a PG&E intrastate gas pipeline explosion killed 8 people in September 2010, said PHMSA’s not having implemented portions of the 2011 pipeline safety reauthorization law makes no sense. “Let those responsible for these tragedies be held responsible for actions, or lack of actions, she urged. “We need PHMSA to be a firm regulator, and not a lap-dog for the industry.”

Some subcommittee members recommended that PHMSA be given authority to issue emergency orders. “I too am frustrated by the lack of progress in implementing the 2011 law,” said Elizabeth E. Esty (D-Conn.) “I want to add my voice in making sure that PHMSA has emergency order authority to address safety problems.”

Stops at well bore

PHMSA Administrator Marie Therese Dominguez, who was one of five witnesses testifying at the hearing, said there very clearly is a role for the federal government in regulating gas storage facilities. The US Department of Transportation agency would work closely with states in setting minimum standards that some states could go beyond, she told the subcommittee. “Currently, our authority stops at the well bore,” Dominguez said. “We don’t go downhole at all.”

She noted that PHMSA issued a Feb. 5 advisory bulletin that called on gas storage facility operators to conduct reviews and implement API Recommended Practices 1170 and 1171 and Interstate Oil & Gas Compact Commission standards for design, construction, and operation of gas storage caverns.

Asked by Subcommittee Ranking Minority Member Michael E. Capuano (D-Mass.) how PHMSA could turn the two API RPs into federal requirements, Dominguez said it would require a rulemaking process over several months. Capuano said having authority to issue emergency orders would be preferable in some cases.

“The first step is to educate everyone,” Dominguez said. “I would never take codification off the table. We have seen in other transportation modes, particularly aviation, that voluntary actions are particularly effective in obtaining data and identifying needs.”

But a second witness said PHMSA asked in a 2011 Advance Notice of Possible Rulemaking whether it should create gas storage standards and safety requirements for such facilities. Interstate Natural Gas Association of America Pres. Donald F. Santa said INGAA responded in the affirmative, and worked over the past 4 years with API, the American Gas Association, and state regulators to develop the two RPs which API issued in July.

He said INGAA would like to see Congress require the creation of such regulations by a specific date. “We also support the appropriate delegation of oversight authority to state entities for intrastate storage facilities, similar to the existing delegation of authority for intrastate pipeline regulation,” Santa said.

“Finally, INGAA recommends that Congress give PHMSA the authority to collect user fees from storage operators to fund federal and state oversight of storage facilities,” he said.

PHMSA authority’s limits

A third witness said PHMSA has authority to order an individual pipeline operator to immediately make changes if it finds a problem that can’t be remedied through existing rules. “But under the current rules, PHMSA has no authority to issue such emergency orders industry-wide if the situation has the potential to cause significant harm from more than a single operator,” Pipeline Safety Trust Executive Director Carl Weimer said.

The San Bruno incident highlighted this problem since during its investigation, it became clear that potentially a significant portion of the nation’s gas pipelines had not implemented necessary safety procedures, Weimer said in written testimony. “Currently, all PHMSA can do in such situations is issue nonbinding ‘advisories,’ hope the industry pays attention, and then go through a multiyear rulemaking process to correct the problem,” he noted.

“Other transportation [agencies], such as the Federal Railroad Administration, have authority to quickly issue emergency orders to correct deadly situations as evidenced by Title 49 USC Subsection 201014—Emergency Authority,” he said. “We ask that you put into this reauthorization bill a similar provision for PHMSA so it has the ability to rapidly address critical industry-wide safety issues.”

The hearing came a day after IOGCC announced in Oklahoma City that state oil and gas regulatory agencies have joined it and the Groundwater Protection Council to form a gas storage working group to recognize aging infrastructure concerns, identify technological advancements, and determine regulatory challenges. The group will include technical advisory experts from academia, industry, nonprofit organizations and federal agencies, it said.

IOGCC said on Feb. 24 that while DOT and PHMSA have jurisdiction over interstate gas transmission and storage, “the responsibility for enforcing the safety of storage facilities rests with state oil and gas agencies.” IOGCC added, “From a technical standpoint, a uniform federal regulation is not sound because of the geology, geography, and potential risks that vary from state to state.”

Dominguez seemed to agree when she announced at the hearing the next day that PHMSA would host a public workshop to get suggestions on new underground gas storage regulatory enhancements. “The agency will work with states that currently have regulations in place and we will work with our state partners who have, or want to develop, regulations that exceed the minimum federal regulations,” she said.

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