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Pennsylvania Bill Would Give State Oversight of NatGas Gathering Lines

A bill has been introduced in the Pennsylvania Senate that would give state regulators more oversight of rural natural gas pipelines and associated facilities that are not already regulated by the federal government.

Introduced last week by Republican state Sen. Lisa Baker, SB 1044 would mainly apply to the tens of thousands of miles of rural gathering lines and facilities that line Pennsylvania's countryside. The bill would give the Pennsylvania Public Utility Commission (PUC) administrative authority to supervise and regulate rural pipeline operators. It would also give the agency the ability to impose civil penalties for violations and collect annual fees from operators to recover the state's regulatory costs.

Under the bill, the PUC could adopt or modify regulations established under federal pipeline safety laws. The legislation has bipartisan support and was referred to the state Senate's Consumer Protection and Professional Licensure committee last week.

The legislation would give the PUC supervision over pipelines not already regulated by the Federal Energy Regulatory Commission, mainly gathering lines. More specifically, the PUC could investigate reports of hazardous infrastructure, safety complaints and for compliance with state and federal laws. The legislation would also require pipeline marking; incident reporting; minimum construction standards; better record keeping; leakage surveys and damage prevention programs. 

It would assess annual fees for companies based on how many miles of pipelines they operate in the state. Operators would have to report to the PUC their total gathering pipeline miles each year by March 31.

The legislation is the latest effort in the state to either tax pipelines or force more regulatory compliance. Pennsylvania hosts about 20,000 miles of unregulated natural gas gathering pipelines, about 30% of which have been laid to serve rising shale production. Most of those are not covered by federal pipeline safety laws, but in recent years the U.S. Pipelines and Hazardous Materials Safety Administration has considered more oversight for the systems (see Daily GPIJan. 29, 2013)

State lawmakers have in the past  introduced legislation to impose an impact fee on natural gas gathering and transmission pipelines, similar to one already in place for production (see Shale Daily, Dec. 18, 2014). While the state charges a fee for unconventional wells drilled in the state, legislators have tried unsuccessfully to establish a similar structure for pipelines that would be calculated based on their linear foot acreage and right-of-way width. Funds from such a fee would be deposited in an impact fund.

Baker's bill, however, would allocate fines from violations to the state's general fund.  Industry representatives are said to be watching the legislation closely. The Gas Processors Association said last week in a note to members that it would be "involved in all aspects of this bill through its members and Pennsylvania lobbyist."

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