There is both broad agreement among federal regulators and industry trade groups on their commitment to improve natural gas pipeline safety, and a sharp divergence on whether the Notice of Proposed Rule Making (NPRM) introduced in March and known as the Natural Gas Mega Rule, represents the correct approach.

Recently, both the American Petroleum Institute (API) and the Interstate Natural Gas Association of America (INGAA) have voiced displeasure with aspects of the proposal from the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA). Among the complaints:

  • That the federal agency significantly underestimates the cost of compliance and overestimates the proposal’s benefits;
  • That insufficient data exist to support a broadening of requirements on operators of gas gathering lines; and
  • That replacing industry standard API Recommended Practice 80 (RP 80) with a more expansive program will extend the agency’s jurisdiction but not provide additional safety benefits.

Robin Rorick, API’s group director of midstream and industry operations. (Source: Hart Energy) “API firmly believes that the proposed changes taken together are arbitrary and capricious and contrary to the law,” Robin Rorick, API’s group director of midstream and industry operations, told journalists during a conference call.

In a statement, INGAA said that the NPRM “does not recognize the proposal’s implications for compliance with other applicable federal requirements, including those of the Environmental Protection Agency [EPA] and the Federal Energy Regulatory Commission [FERC].”

Complying with the proposed rule to conduct hydrostatic pressure testing and implement certain repairs would result in increased methane emissions, which conflicts with the EPA’s new rule restricting methane emissions from certain oil and gas facilities, INGAA said.

“Removing lines from service to perform hydrostatic testing would raise issues under FERC’s regulations and policies,” the group added.

Expansion

Rather than an overhaul, the NPRM adds to existing safety rules. There are several significant differences in what PHMSA proposes:

  • The removal of the grandfather clause that previously exempted pipelines built prior to 1970 from PHMSA oversight. These lines would now require the verification of maximum allowable operating pressure (MAOP), and additional testing requirements.
  • The following additional Integrity Management Program (IMP) requirements are proposed for currently regulated areas:
    • Revision of High Consequence Area repair criteria to include cracking defects, non-immediate corrosion metal loss anomalies, and other repair criteria;
    • Defined requirements for data collection, integration and validation for pipeline data models;
    • Additional requirements for existing IMP elements such as: risk models application of lessons learned, management of change;
    • Additional requirements for the criteria associated with the choice of direct assessment methodology;
    • Internal corrosion and quality monitoring requirements;
    • The addition of Moderate Consequence Areas (MCAs) to IMP requirements; and
    • Changes to the definition of “gathering line,” annual reporting requirements for all onshore gathering lines, including unregulated lines, and the repeal of RP80.

Mary Campos, pipeline services leader for GE Oil & Gas. (Source: Hart Energy) “These proposed changes, like removal of the grandfather clause and the repeal of RP 80 have the potential to significantly impact the industry.” Mary Campos, pipeline services leader for GE Oil & Gas, told Hart Energy.

The NPRM cites incidents outside HCAs (areas of high population density, sources of drinking water or sensitive ecological regions), noting that the rules need to conform to present and future population shifts.

Density of buildings “can be a meaningful metric for prioritizing implementation of safety and risk management protocols for areas where an accident would have the greatest likelihood of putting human life in danger, but it is not necessarily an accurate reflection of whether an incident will have a significant impact on people,” the proposal said. Other incidents that PHMSA cited in the executive summary to its NPRM are:

  • The August 2000 rupture of a gas transmission pipeline adjacent to the Pecos River near Carlsbad, N.M, which killed 12 people camping in the area and damaged two nearby steel suspension bridges;
  • The rupture of a 30-inch gas transmission pipeline in December 2007 that killed one motorist and injured another near Delhi, La.; and
  • The rupture of a 20-inch line in December 2012 that destroyed three houses and damaged others in Sissonville, W.Va., costing $8.5 million and shutting down I-77 for 19 hours.

In addition to the Natural Gas Mega Rule NPRM, Congress passed the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 following the National Transportation Safety Board’s root cause analysis of the explosion of a PG&E pipeline in San Bruno, Calif., near San Francisco in August 2011.

Joseph Markman can be reached at jmarkman@hartenergy.com and @JHMarkman.