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Texas AG Challenging Federal NatGas Storage Facilities Rule

Texas Attorney General (AG) Ken Paxton is seeking to block federal safety standards for underground natural gas storage facilities that took effect in January.

In a petition filed Friday with the U.S. Court of Appeals for the Fifth Circuit, Paxton is seeking review of a final rule established by the U.S. Department of Transportation’s Pipeline Hazardous Materials Safety Administration (PHMSA). Paxton claims the rule usurps the authority of the Railroad Commission of Texas (RRC) as well as that of regulatory bodies in other states.

Paxton argues that PHMSA unlawfully converted American Petroleum Institute (API) non-mandatory recommendations into mandatory requirements for gas storage facilities. He said the rule erodes what has been a traditionally state role over the regulation of intrastate as well as interstate storage facilities. Nationwide, the rule affects 400 underground storage facilities.

The rule was adopted in response to the leak at the Aliso Canyon gas storage facility in California. The interim final rule was published in the Federal Register on Dec. 19 [Docket 2016-0016]. It addresses safety issues related to downhole facilities, including well integrity, wellbore tubing and casing. Release of the rule satisfies a key requirement of the SAFE PIPES Act, which President Obama signed into law last June.

"This IFR addresses aging infrastructure and is the first step in a multiphase process to enhance the safety of underground natural gas storage," PHMSA Administrator Marie Therese Dominguez said at the time. "These minimum federal standards will help to prevent incidents like the one at Aliso Canyon from happening in other communities around the country."

RRC data cited by Paxton show that there are 18 active facilities in Texas that store natural gas in salt caverns, and 13 active facilities that store gas underground in depleted reservoirs.

“Despite state laws and programs that regulate these facilities with respect to conservation, environmental protection and protection of property rights, the PHMSA effectively stripped the states of authority over their own natural gas facilities and completely disregarded traditional state regulatory roles,” Paxton said, adding that the rule is an example of federal government “overreach.”

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