Groups list concerns with proposed PHMSA hazardous liquids rules

Jan. 25, 2016
The US Pipeline and Hazardous Materials Safety Administration (PHMSA) proposed hazardous liquids pipeline management requirements are a laudable step in some ways, but could create problems and needless duplication in others, according to four national oil and gas associations in three separate filings.

The US Pipeline and Hazardous Materials Safety Administration (PHMSA) proposed hazardous liquids pipeline management requirements are a laudable step in some ways, but could create problems and needless duplication in others, according to four national oil and gas associations in three separate filings.

"While we welcome regulatory certainty promised by a new proposed rulemaking on hazardous liquids from [PHMSA], and the proposal makes some necessary updates to regulations, we are concerned that some of its provisions may ultimately hamper successful safety practices detailed in existing and currently released API documents," American Petroleum Institute Midstream Group Director Robin Rorick said.

Comments submitted jointly by API and the Association of Oil Pipelines highlight aspects of the proposal that limit companies' ability to use their expertise to manage pipeline operations appropriately, Rorick told reporters in a Jan. 8 teleconference.

"Operations vary significantly from pipeline to pipeline, so regulations need to allow for necessary engineering judgment and analysis," Rorick said. "Several of the proposals do not allow this ability and take a one-size-fits-all approach that isn't appropriate."

PHMSA also suggested in its notice of possible rulemaking that it might try to regulate more hazardous liquids gathering lines, the Independent Petroleum Association of America noted in its filing. "It's starting out as usual with a proposal asking for more reporting," IPAA Vice-Pres of Regulatory Affairs Susan Ginsberg told OGJ on Jan. 8. "We don't believe PHMSA should regulate gathering lines."

A desire to regulate gathering lines and challenges PHMSA faces in meeting its existing enforcement responsibilities does not justify disregarding jurisdictional boundaries imposed by Congress and encroaching upon states oil and gas production regulatory responsibilities, IPAA said in its comments.

Costs underestimated

PHMSA also estimated that the proposed rule would cost $22 million, the Gas Processors Association noted in its comments. "The actual cost exceeds that figure, and it's important to note that the unaccounted-for costs will be put on midstream operators, and ultimately the end user," GPA Vice-Pres. of Government Affairs Matthew Hite said. "Moreover, no data or justification has been provided to demonstrate how or why the proposed changes are reasonable or necessary."

Hite said the proposed rule's requirement for all lines to be able to use pigs also would create problems some are not capable of handling these interior inspection devices. "Requiring that the lines be retrofitted is also unrealistic since a majority of the lines do not have minimum flow characteristics to propel the devices through the line," he said. IPAA also questioned PHMSA's rationale for mandating in-line inspection tools to monitor pipelines.

Pipeline operators go to great lengths to manage resources effectively by focusing on pipe that may be next to environmentally sensitive or more populated areas, Rorick said. Proposals requiring them to expend resources conducting unnecessary inspections on low-risk piping do not allow companies flexibility to use resources on protecting more sensitive locations, he observed.

"PHMSA also proposes inspections of pipelines 'within 72 hr after the cessation of an extreme weather event,'" Rorick said. "Putting a specific time requirement to complete a survey can actually decrease safety by placing a regulatory requirement for company personnel to access a facility when the dangers from a hurricane or earthquake may be present."

The US Department of Transportation agency's proposals also are duplicative, Rorick said. "Arbitrary timelines-of 72 hr or 48 hr or 100 hr-don't allow on the ground decision making about when it is safe to reenter area or facilities," he said. "Requirements for operator action after weather events are already covered by existing statutes."

Developing best practices

API has coordinated with pipeline operators and trade associations like AOPL to advocate for the rule's completion since Congress asked PHMSA to draft it in October 2010, Rorick said. The industry also has developed a series of consensus documents that challenge companies to implement best practices and push them to achieve the industry-wide goal of zero incidents, he noted.

"We are finalizing another new safety measure in the first quarter of this year-Recommended Practice 1176-which will strengthen the industry's current capability to predict and prevent crack-related pipeline failures by enhancing the gathering, integration, and analysis of data," Rorick said.

Two other RPs with API released in December provide operators with an enhanced framework to continually improve emergency planning and response processes, and to help develop, implement, and manage a sustainable program to minimize the size and extent of leaks with new technologies and enhanced internal and external coordination, he added.

IPAA said in its comments that it believes producers' experience in the Barnett shale the last 10 years shows safety advantages of newly constructed, well-engineered gathering lines where there have been no real issues. "We urge PHMSA to limits its attention to pipelines already under its jurisdiction that likely pose higher risks due, for example, to higher operating pressures or a history of failure," it said. "Gathering lines have the reverse safety profile."

GPA also addressed PHMSA's effort with regard to risks in high-consequence areas. "We feel that the current definition of an HCA adequately encompasses 99.9% of sensitive areas which pipelines transverse," Hite said. "This assessment expansion is proposed to cover gathering lines, on which PHMSA has not yet even collected data to determine whether or not there is a problem."

About the Author

Nick Snow

NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.