Can Federal Regulators Keep Up with Growing Oil Pipeline Industry?
With a North American energy boom expected to continue in the years to come, more farmers and other landowners will see pipelines cross their fields.
Battles over where those pipelines are to be sited will continue. The three-year fight over the Keystone XL pipeline is the current example for the “not in my back yard” efforts.
History has shown, however, that once a path is set, there is often little landowners can do to stop construction. That moves the battle from site location to post-construction safety and a less-probed question: Can federal regulators keep up with the growing pipeline industry?
The recent oil pipeline break in Tioga, N.D., has heightened safety concerns. (See the first story in this Pipeline Perplexity series.)
Federal agencies that oversee pipeline safety include the Pipeline and Hazardous Materials Safety Administration, or PHMSA, and the Federal Energy Regulatory Commission, or FERC. Both have faced public heat because of recent pipeline breaks.
“As for the massive number of lines planned and under construction — yes, an enormous number of landowners will be affected by the building boom,” said Rebecca Craven, program director for the Pipeline Safety Trust based in Bellingham, Wash. That trust, which advocates for pipeline safety, was created by a court-ordered endowment from the proceeds of fines and settlements levied after the June 1999 gasoline pipe explosion which killed three Bellingham youths.
As more people become potentially affected by the pipeline boom, state and local governments need to educate themselves about pipeline issues and exercise their authority to help their constituents, Craven said. There will likely be more call for public forums for landowner participation, with citizens pushing for proof that public roads, utilities and right-of-ways are properly protected and repaired.
States need to work to require approved spill response plans and control pipeline siting, and ensure that the operators have sufficient bonding to protect the financial interests of those local governments, she said.
More than 5,800 “significant” U.S. pipeline accidents have been reported since 1993, according to PHMSA. Many of those occurred in rural areas. Significant accidents are those resulting in fatalities or injuries, property damage exceeding $50,000, liquid releases resulting in unintentional fire or explosion and highly volatile liquid releases of five barrels or more or other liquid releases of 50 barrels or more.
There has been an average of 281 significant incidents per year in the past 20 years, according to PHMSA.
A total of 374 fatalities, $6.7 billion in property damage and about 2.3 million barrels of “hazardous liquids” have occurred since 1993.
PHMSA numbers show that of the 184,643 miles of steel pipelines carrying hazardous liquids including crude oil, 93,726 miles of line were inspected and repairs were made to 26,280 miles in 2012.
When it comes to natural gas lines, there’s concern that companies are not fixing or replacing leaky lines nationwide, according to a report compiled this summer for Sen. Edward Markey, D-Mass., here. That report took into account all gas transmission lines, including service lines used to distribute gases to commercial and residential end-users.
Gas companies replaced just 3% of their cast iron and bare steel distribution mains in 2012 — pipes that connect transmission lines to service lines.
Of the estimated 319,000 miles of natural gas pipelines in the U.S., PHMSA numbers show that 59,000 miles were inspected and nearly 40,000 miles repaired in 2012. Those were increases of about 9,000 miles in inspections and 6,000 miles in repairs compared to 2011.
Federal regulations treat liquid and natural gas pipelines differently, and the processes vary for landowners addressing pipeline issues.
PHMSA is the primary federal agency in charge of pipeline safety oversight, including conducting inspections. PHMSA and FERC both have safety jurisdiction.
FERC is charged with reviewing construction and operation applications of natural gas pipelines.
“The FERC restoration and upland erosion control rules don’t apply to liquid pipelines, since (liquid pipeline builders) don’t have to get FERC certificates to begin construction,” Craven said. “So the legal framework for the two sets of landowners are different.”
In the case of gas pipelines, landowners can file complaints with FERC as well as attempt to work with a pipeline company or file lawsuits to address issues.
Landowners along liquid pipelines are “completely dependent” on getting a court to enforce the terms of easements, Craven said.
Even state laws differ when it comes to governing the restoration of farmland after pipeline construction, she said.
PHMSA began to examine existing pipeline safety regulations after a 2010 oil spill of more than 1 million gallons into the Kalamazoo River in Michigan, here.
A July 2010 National Transportation Safety Board report concluded the main cause of the Michigan rupture was “corrosion fatigue cracks that grew and coalesced from crack and corrosion defects.” The report found “weak regulation” and “ineffective oversight of pipeline integrity management programs,” by PHMSA as contributing to the accident.
Congress passed legislation last year to begin to address shortfalls in federal oversight. But most new rules typically become law only during the “four-year cycle of reauthorizing federal programs,” Craven said.
The most recent reauthorization came in January 2012 soon after the liquid pipeline failure in Michigan and a natural gas pipeline explosion in San Bruno, Calif. That bill called for studies and reports on issues from those two incidents, rather than mandating specific changes, Craven said. Any improvements are yet to come.
Congress ordered studies on a number of pipeline issues in recent years. Those included leak detection technology and valves, depth of cover at river crossings and validation of maximum allowable operating pressure. There also was a call for a comprehensive review of the regulations governing hazardous liquid lines to see if those rules are sufficient to regulate pipeline facilities that transport diluted bitumen and other liquids.
PHMSA issued advanced notices of proposed rulemakings on Oct. 18, 2010, for pipelines transporting liquids, and Aug. 25, 2011, for gas.
“Unfortunately, the next step in the rulemaking process — a notice of proposed rulemaking — has never been issued, although PHMSA has frequently indicated that the new rules are a high priority,” Craven said.
Many issues that have been raised are similar to recommendations from the National Transportation Safety Board, which also investigates pipeline incidents. PHMSA is required by law to respond to NTSB recommendations.
“There are a large number where the PHMSA response is ‘under development,'” Craven said.
“It is imperative that progress be made on these identified weaknesses in the pipeline safety regulatory scheme in the near future.”
Jeannie Shiffer, PHMSA’s director for governmental, international and public affairs, said safety is a priority and the agency continues to make progress in implementing a pipeline leak detection rule.
During the past decade, PHMSA has invested $69 million in research and development, she said. This is on a number of safety fronts including leak detection systems, testing for ‘unpiggable’ pipelines and developing stronger materials to construct new pipelines. A ‘pig’ is a device run through pipelines to look for corrosion and other issues.
“When leaks do occur, PHMSA has acted aggressively to hold companies accountable,” Shiffer said.
In the past year, PHMSA has hosted safety workshops and webinars on leak detection systems, and continues research and development on ways to improve leak detection, Shiffer said.
Through the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011, the agency is working on regulatory updates.
“PHMSA will use recommendations from Congress, information received through our leak detection study, as well as industry experiences to determine how best to move forward with new leak detection requirements,” she said.
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