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PHMSA Proposes Expanding Regulatory Scope of Gathering Lines

Thousands of miles of in-service natural gas pipeline built before 1970 -- such as the one that ruptured and exploded in San Bruno, CA, in 2010 -- could be subject to pressure testing under new safety regulations proposed by the Department of Transportation's (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA).

Other proposed changes contained in a 549-page notice of proposed rulemaking (NPRM) include adding thousands of miles of gathering lines to PHMSA's purview, requiring pipeline inspections after extreme weather events such as floods, earthquakes and hurricanes, and more frequent inspections of pipelines in rural areas.

"The significant growth in the nation's production, usage and commercialization of natural gas is placing unprecedented demands on the nation's pipeline system," DOT Secretary Anthony Foxx said in a statement Thursday. "This proposal includes a number of commonsense measures that will better ensure the safety of communities living alongside pipeline infrastructure and protect our environment."

PHMSA Administrator Marie Therese Dominguez added that the proposed regulations "address the emerging needs of America's natural gas pipeline system and adapt and expand risk-based safety practices to pipelines located in areas where incidents could have serious consequences."

A 60-day public comment period will begin for the proposed rule when it is published in the Federal Register.

Eight people were killed and several were injured when a 30-inch diameter transmission pipeline owned and operated by Pacific Gas and Electric Co. (PG&E) ruptured and caused an explosion on Sept. 9, 2010 in San Bruno (see Daily GPI, Sept. 15, 2010). A subsequent investigation by the National Transportation Safety Board (NTSB) concluded that "inadequate quality assurance and quality control" at PG&E, coupled with a failed pipeline integrity management program, were to blame for the rupture of Line 132, which was relocated in 1956 (see Daily GPISept. 27, 2011).

PHMSA said its proposed regulations would meet four congressional mandates from the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011, one recommendation by the Government Accountability Office (GAO), and six recommendations from the NTSB, including one that more modern testing be performed on pipelines built before 1970. PHMSA officials told NGI on Monday that approximately 57% of all on-shore gas transmission pipelines were constructed before 1970.

Under the proposed rule, the agency would create new subdivisions for Type A gathering lines. A new designation called "Type A, Area 1" would apply to currently regulated Type A gathering lines, while "Type A, Area 2" gathering lines would include gathering lines with at least an 8-inch diameter that are also located in Class 1 locations. The NPRM said the new rule would require "Type A, Area 2" gathering lines to "develop procedures, training, notifications, and carry out emergency plans," and satisfies the recommendation made by the GAO.

On Monday, PHMSA officials told NGI that the new "Type A, Area 2" guidelines would affect 68,749 miles of gathering lines. An additional 275,337 miles of gathering lines would be subject to additional reporting requirements, for a total of 344,086 miles subject to new regulations or reporting requirements.

The agency estimated that, over a 15-year period, the total cost to implement the rule changes would be approximately $597 million ($39.8 million/year) using a 7% discount rate, or $711 million ($47.4 million/year) using a 3% discount rate. Additional costs to states were estimated to not exceed $1.5 million/year.

PHMSA added that it would address several issues in separate rulemakings in the future, including modifying the definition of a high consequence area (HCA), which the agency currently defines as an area or locale where an inadvertent release from pipeline "could have the most significant adverse consequences." Other issues for future rulemaking include enacting tougher remote control valve and leak detection rules for pipeline segments in HCAs; valve spacing and the need for remotely or automatically controlled valves; underground gas storage, and quality management systems.

In a statement Thursday, Interstate Natural Gas Association of America (INGAA) CEO Don Santa said his organization was committed to eliminating pipeline incidents altogether, with or without federal regulation, through its own plan, called Integrity Management Continuous Improvement (IMCI).

"We are encouraged that the long-awaited proposal has been released, and we intend to submit comments to PHMSA by its deadline," Santa said. "Our initial analysis will focus on whether PHMSA's proposal is consistent with the voluntary pipeline safety program INGAA's members undertook in 2012."

Santa added that the IMCI "included several provisions that we anticipate will be addressed in this new [PHMSA] rule, including expanding the federal pipeline integrity management program and ensuring that all pipelines are fit for service."

Dave McCurdy, CEO of the American Gas Association, said his organization would also analyze the changes proposed by PHMSA.

"We have worked closely with PHMSA over the past five years as the agency has developed this proposed rule and we are pleased that it is finally out," McCurdy said Thursday. "We appreciate PHMSA's efforts and look forward to continuing to work with them to help ensure that the final rule is technically-based, reasonable and cost-effective."

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