API, INGAA call on PHMSA to reconsider some recent actions

The US Pipeline & Hazardous Materials Safety Administration should reconsider several rules and procedures it adopted late in the Obama administration, officials from the American Petroleum Institute and Interstate Natural Gas Association of America told a subcommittee of the US House Transportation and Infrastructure Committee in separate written testimony on Apr. 26.

The US Pipeline & Hazardous Materials Safety Administration should reconsider several rules and procedures it adopted late in the Obama administration, officials from the American Petroleum Institute and Interstate Natural Gas Association of America told a subcommittee of the US House Transportation and Infrastructure Committee in separate written testimony on Apr. 26.

PHMSA historically has pursued performance-based, instead of prescriptive, regulatory solutions such as its 2004 integrity management regulations that let pipeline operators use tools that were most suitable for their assets, API Midstream and Industry Operations Director Robin Rorick said during a Railroads, Pipelines, and Hazardous Materials Subcommittee hearing.

This follows direction from the White House’s Office of Management and Budget to give preference to performance-based standards, Rorick noted.

“We are concerned, however, that recent regulatory action by PHMSA takes a much more simplistic and narrow-minded assessment that solely considers one factor—such as the type of steel used in the pipeline—to determine which in-line inspection tool is used,” Rorick said.

API and its members strongly encourage PHMSA to modify pending rulemakings and return to its traditional performance-based scheme, Rorick said. This would assure that the latest advances in new technologies and understanding of pipeline anomalies are used fully to improve pipeline safety, he said.

“We all want PHMSA to be an effective regulator, and that includes the ability to promulgate important regulations on a timely basis. It also includes the ability to rescind legacy regulations that more recent rules have rendered redundant,” said INGAA Pres. Donald F. Santa in his written testimony.

Stakeholder dialogue matters

Timely rulemakings are essential if pipeline owners and operators are to make improvements and improve safety promptly with certainty, Santa said. “Some of the greatest improvements in pipeline safety have occurred when industry, other stakeholders, and government have worked together. These include collaborative efforts around technology research and development, damage prevention, safety management systems, and cyber and physical security,” Santa said.

PHMSA’s pending Natural Gas Transmission and Gathering Rule is a good example of why an appreciation of the capabilities and limitations of pipeline infrastructure and the technologies and practices used to manage pipeline integrity is so important to achieving effective and technically workable pipeline safety rules, he said.

“New rules should leverage stakeholder knowledge and expertise to facilitate the deployment of new technologies that may be more effective, more efficient, and less disruptive than the legacy technologies that may be endorsed by existing regulations,” said Santa, who was a Federal Energy Regulatory Commission member during 1993-97.

“Unfortunately, PHMSA’s recent approach to fulfilling its rulemaking responsibilities has resulted in less, rather than more, constructive dialogue in developing pipeline safety rules,” he added. “PHMSA has foregone robust dialogue with all stakeholders prior to publishing a proposed rule for public comment. Foregoing this dialogue on the front end of the process has resulted in both delay in the rulemaking process and problematic technical content in PHMSA’s proposals.”

INGAA recognizes that developing proposed rules, receiving comments, and producing a final rule can be a multiyear exercise, Santa said. “Still, the PHMSA process has become unusually protracted,” especially when it comes to implementing mandates in the 2011 Pipeline Safety, Regulatory Certainty, and Job Creation Act, he asserted.

Three rulemaking flaws

Santa noted that a proposed rule was not published until more than 4 years after the law’s enactment “and we likely will see the six-year anniversary of enactment before a final rule is issued.” Santa said the delay was a cumulative result of three flaws in the rulemaking process: failure to embrace consensus building as an early step in developing the rulemaking proposal; the agency’s choice to address too much in a single rulemaking; and the “pre-filing” process OMB used which compounded the consequences of these choices.

“The natural gas transmission and gathering rule is a gigantic proposed rule that was created by assembling what could be 16 separate rules into one rulemaking,” Santa said. “Advancing this proposal to a final rule has been especially daunting due to the complexities of dealing with multiple proposals addressing disparate topics.”

Broken into components, many of these individual initiatives could have been—and still could be—implemented in a comparatively short time, and thus complete many of the 2011 pipeline safety law’s unfulfilled congressional mandates, Santa said. “We suggest that PHMSA avoid these catch-all mega rules in the future,” he said.

Rorick said API believes that PHMSA’s proposed gas transmission and gathering rule does not reflect the risk management approach that Congress directed in the 2011 pipeline safety law because it sets forth prescriptive repair criteria requirements following pipeline inspections.

“According to the [Notice of Possible Rule Making], if an operator discovers an anomaly in [its] pipeline, the operator is not allowed to holistically assess the conditions of the pipeline and operate based on available data,” he explained. “The operator is instead forced to repair all discovered anomalies despite the level of risk posed to the pipeline and potential disruption to the public.

“As such, the proposal is not based on risk, but is instead based on a misguided principle that more is better without grounding that determination in potential pipeline safety improvements and benefits to the public and the environment,” Rorick said.

Contact Nick Snow at nicks@pennwell.com.

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