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PHMSA Pauses Stricter Natural Gas Storage Rules for Clarification

Responding to requests from the oil and natural gas industry, the Trump administration has served notice that it will delay some of the Obama administration's stepped up safety rules for underground natural gas storage.

The rules were forged last year in the aftermath of the massive storage well leak at Aliso Canyon, California's largest gas storage facility. The move is a pause -- not a rejection -- of the tougher standards, according to industry sources.

Environmental groups reacted with alarm, but industry representatives said the federal agency was trying to correct and clarify some the proposed changes.

"The entire rule on natural gas storage is in place and moving forward," said a Washington, DC-based spokesperson for the Interstate Natural Gas Association of America (INGAA). "It continues to be in place and will be in place” when the final rule is issued, as scheduled in January.

The Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) has intended to issue a final rule by Jan. 18. The interim rule inadvertently indicated all of the new storage requirements had to be in place within a year's time, which apparently was not the agency’s intent. Industry asked for and PHMSA agreed to provide revisions and clarification.

“They're holding back the section that they made a mistake on,” the INGAA spokesperson told NGI.

The spokesperson said there is no basis for the contention that the Trump administration was not going to enforce natural gas storage safety.

"It is ridiculous to say that; for years, the industry has been trying to get federal gas storage regulations, and we have been completely involved in the development of these regulations."

According to the notice regarding the delay, PHMSA said it “plans on using the final rule to address the comments and the petition for reconsideration and revise the requirements in the interim rule.” It would not enforce any new rules for one year, which would be after Jan. 18, 2019 at the earliest.

At issue is the Obama administration's interim final rule that would convert voluntary requirements under the American Petroleum Institute (API) recommended practices to being mandatory provisions. Industry subsequently asked the Trump administration to reconsider these provisions in the final rule.

Initially asking for reconsideration were the American Gas Association, API, American Public Gas Association and the INGAA, which later withdrew from the petition.

PHMSA's notice said it "reserves the right to exercise its other authorities, if necessary, to address any emergencies that present an imminent hazard or specific conditions that are or would be hazardous to life, property, or the environment."

California Oil and Gas Supervisor Ken Harris said the state's ongoing efforts to strengthen its rules for gas storage would not be affected by the PHMSA action. "PHMSA's regulation sets a regulatory floor for state regulation of intrastate underground storage facilities," Harris said.

The state Division of Oil, Gas and Geothermal Resources proposed gas storage regulations are stricter and more comprehensive than the minimum standards in the PHMSA regulations, Harris said.

"California continues to enforce the strict monitoring, inspection, and testing regimen for all natural gas storage facilities instituted following the Aliso Canyon leak.”

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