Operation and Maintenance

In the wake of Hurricane Irma, PHMSA issued a press release regarding hurricane preparedness and response.  As operators implemented hurricane preparedness plans to minimize the impact of the storm, PHMSA noted several significant allowances for pipeline systems impacted by the hurricane including the following:

  1. Temporarily suspending enforcement for noncompliance with pipeline operator qualification or pre-employment and random drug testing requirements associated with the use of pipeline personnel for response and recovery activities.  The enforcement stay is limited to Florida, Georgia, North Carolina, South Carolina, and Puerto Rico.  It does not relieve operators of their responsibility to use trained, non-impaired workers to perform operations and maintenance tasks.
  2.  Acknowledging that some operators may need to extend the hours of service for pipeline controllers.
  3.  Reminding operators that the Agency is prepared to respond to requests for emergency special permits to assist in disaster relief efforts conducted in response to Hurricane Irma, whether to waive requirements or permit the use of innovative technologies not yet accommodated under the hazardous materials or pipeline safety regulations.
  4.  Delay and rescheduling of planned inspections for interstate operators affected by the storm;

In addition, PHMSA issued 2 emergency waivers of the hazardous materials regulations with respect to persons conducting operations under the direction of the EPA Regions 2 or 4 or the United States Coast Guard (USCG) 7th District within Hurricane Irma emergency and disaster areas of Florida, Puerto Rico, South Carolina, the United States Virgin Islands, and certain counties in Georgia.  The waivers are intended to support EPA and USCG actions to prepare for, respond to, and recover from threats to public health, welfare, and the environment caused by the actual or potential oil and hazardous materials incidents resulting from Hurricane Irma.  In addition, EPA approved emergency fuel waivers under the Clean Air Act for 38 states and Washington, DC due to continued impacts caused by Hurricane Harvey to Gulf Coast refineries and large scale evacuations in response to Hurricane Irma.  Specifically, EPA waived requirements for reformulated gasoline through September 26 and low volatility gasoline through September 15, 2017.

Similar to the precautions operators have taken in advance of other catastrophic events, precautions should be taken before initiating restart of refineries, terminals, offshore and inland pipelines, and other manufacturing facilities.  In its response to Irma, PHMSA highlighted prior advisories it has issued in response to hurricanes, flooding, and other emergency situations.  These advisories include recommendations for (among other things) bringing assets back online, including review for structural damage and aerial inspections to check for leaks.  Operators are required to report incidents and accidents to PHMSA that meet reporting thresholds, and the Agency encourages close communication on other damage caused by hurricanes.  Careful damage assessment and restart of assets is critical.

As the waters begin to recede from our nation’s energy capital following Hurricane Harvey’s unprecedented rainfall in the state of Texas, the full impacts of Hurricane Harvey are beginning to become more apparent.  Beyond the incredible toll on the residents of the state, the daily damage estimates continue to rise.  Significantly, nearly one-third of the U.S. refining capacity in the U.S. has been affected.  The nation’s two largest refineries have closed, and many others are shut down or operating on a limited basis.  One chemical plant suffered from several explosions, while another reported a release from a pipeline, and at least one of the country’s largest liquid transmission pipelines is shut down.  While the full extent of damage to the energy industry is not yet known, the importance of good planning, preparedness and response is central to minimizing damage.  These efforts, by both emergency responders and the private sector, can substantially limit the amount of damage to both the public and the environment.

Continue Reading Impacts of Hurricane Harvey: Underscoring the Importance of Planning, Preparedness & Response

The EPA and the Army Corps of Engineers (Corps) announced a series of public teleconferences for stakeholder input on recommendations to revise the definition of “Waters of the United States” under the Clean Water Act.  This definition is critical to the determination of whether wetlands or water discharge permits are required for construction projects or operations across all industries.  In total, there will be ten teleconferences beginning on September 19, 2017, nine of which will be tailored to a specific industry sector and one of which will be open to the public at large (see summary below).  The session specific to the energy, chemical and oil and gas industries is scheduled for October 24, 2017.  The teleconferences will run throughout the fall on Tuesdays from 1 to 3 pm eastern.  Continue Reading Stakeholder Meetings Scheduled for Revised Waters of the U.S. Rule

The Government Accountability Office (GAO) issued a report on August 4, 2017, titled “Pipeline Safety – Additional Actions Could Improve Federal Use of Data on Pipeline Materials and Corrosion.”  The 55 page Report, prepared in response to a Congressional mandate in the 2016 Pipeline Safety Act reauthorization, summarizes pipeline materials, training and corrosion prevention technologies for gas and liquid pipeline facilities and analyzes PHMSA use of corrosion and material data to inform its inspection priorities. The Report recommends that PHMSA review, document and validate the way in which it identifies the highest risk pipelines for inspection, but makes no significant new findings, and the recommendations are largely consistent with initiatives that PHMSA already has begun.

The Report notes initially that pipelines carrying hazardous liquids or gas have the lowest incident rate of other transportation modes.  For oil and gas pipelines from 2010 to 2015, GAO’s assessment of PHMSA incident data attaches the highest single cause as corrosion (22%), followed by “equipment failure” (21%), “natural or outside force” (16%) and “excavation damage” (14%).  PHMSA tracks causal data somewhat differently, however, grouping “equipment failure” and “material/weld failures” together in a single category, which is reported by operators to be the largest cause of significant incidents in the past 5 years.  By comparison, the GAO Report links corrosion (22%) with “material, pipe or weld failure” (12%), although it is a very different failure mechanism from corrosion, to be the estimated cause of nearly one-third of all oil and gas significant incidents.

Continue Reading GAO Report Critical of PHMSA Inspection Priorities

Oil and gas discoveries in various shale plays around the U.S. over the past decade have led to an increased rise in the number of transfers and acquisitions of pipeline assets, including pipelines serving processing plants, producers, storage facilities, and those associated with power plants and other industrial users.  Changes in global and domestic energy markets have continued that trend.  Prudent operators routinely request and review documentation as part of their due diligence in making acquisitions, but it is becoming increasingly important that certain records be located during due diligence or factored into the transaction if such records are lacking and must be recreated.  Decision makers involved in pipeline acquisitions should involve pipeline safety managers or counsel early on in the process to allow sufficient time to include pipeline safety records review as part of the transaction; to do otherwise can be a costly mistake that carries significant liability risk.

Continue Reading Due Diligence: Critical Component of Pipeline Acquisitions

On December 19, 2016, PHMSA issued an interim final rule (IFR) to establish for the first time  minimum federal safety standards for underground natural gas storage facilities.  The rule was issued in response to the 2015 Aliso Canyon storage leak that lasted almost four months,  and a subsequent Congressional mandate to issue federal standards for underground storage.  Among other things, the IFR incorporated by reference (thereby making them mandatory) two American Petroleum Institute (API) Recommended Practices (RPs) regarding underground natural gas storage in salt caverns and reservoirs: (1) API RP 1170, “Design and Operation of Solution-mined Salt Caverns Used for Natural Gas Storage,” (July 2015); and (2) API RP 1171, “Functional Integrity of Natural Gas Storage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs,” (Sept. 2015).  API finalized both of those RPs in response to the Aliso Canyon incident.

Continue Reading PHMSA to Reassess Underground Natural Gas Storage Rule

The Gas Pipeline Advisory Committee (GPAC) will meet [Notice of advisory committee meeting] in Washington, D.C. early next month to convene the second public meeting regarding PHMSA’s proposed gas rules, often referred to as the gas mega rule.  The meetings will be focused on key proposed revisions to 49 C.F.R. Part 192 natural gas rules, including expanded integrity assessment requirements, revised integrity assessment and repair criteria, records, material documentation, corrosion control, and the integrity verification process (IVP) for segments that are currently grandfathered under the rules.  The meetings are scheduled for Tuesday and Wednesday, June 6-7, 2017, from 8:30 a.m. to 5:00 p.m.

Continue Reading Technical Advisory Committee Meeting Scheduled on Gas Mega Rule

President Trump has issued 30 Executive Orders and 28 Executive Memoranda since taking office on January 20, 2017, despite his failure to pass any major laws.  That is more Executive Orders than any President has issued in the first 100 days since World War II.  Nearly one fourth of these executive actions have affected the pipeline industry, either directly or indirectly, as noted below:

Continue Reading The First 100 Days: Executive Directives Impacting the Oil & Gas Pipeline Industry

Industry trade groups anticipate construction delays and cancelations, higher costs, and consumer impacts if the Trump administration’s January 24, 2017 Executive Memorandum, requiring that all new and repaired pipe be made in the U.S., is implemented. In comments filed to the Department of Commence by oil and natural gas industry trade associations, INGAA, AGA, GPA, API, and AOPL, the associations point out numerous challenges presented by the directive and various exclusions and exceptions that would need to be carved out. At the same time, the trade groups committed to engaging with the executive branch, regulators, and steel manufacturers to promote job growth and affordable energy in the U.S. Continue Reading Industry Responds to U.S. Made Pipe Directive

In an April 18, 2017 letter, EPA Administrator Scott Pruitt stated that the Agency will reconsider final rules governing new sources of methane emissions from the oil and gas industry. This decision was prompted by issues raised in petitions for reconsideration filed by a number of groups—including API and the Texas Oil and Gas Association—concerning EPA’s final rule amending the oil and natural gas sector New Source Performance Standards (NSPS) (the Final Rule), which was published on June 3, 2016 and became effective August 2, 2016. Under Clean Air Act Section 307(d)(7)(B), the Agency must convene a proceeding if a petition for reconsideration raises issues that are of central relevance to the rule and arose after the public comment period closed or were impracticable to raise during the public comment period. Continue Reading EPA Reconsiders and Stays Compliance with Oil and Gas Methane Rule