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Pennsylvania Considers Regulating Gathering Lines

A bill moving through the Pennsylvania General Assembly would give state regulators more oversight over intrastate pipelines, but the sponsor of the legislation wants to expand it to include gathering lines in remote areas that aren't currently regulated.

The Senate Consumer Protection and Professional Licensure Committee unanimously passed Senate Bill 325 on Feb. 14, paving the way for the Pennsylvania Public Utility Commission to begin regulating intrastate gathering lines that are not public utilities. State Sen. Lisa Baker (R-Dallas) introduced the bill, which would give the PUC the authority to conduct safety inspections and investigations, respond to complaints, assess fines or penalties and address service quality issues. The bill also creates a fee structure for pipeline operators to pay for the cost of increased inspections and enforcement.

The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) has jurisdiction over all pipeline facilities but hands over inspection and enforcement duties to individual states. Currently, Pennsylvania only oversees pipelines regulated as public utilities, making it one of only two gas-producing states that don't regulate gathering lines.

SB 325 would allow the PUC to oversee gathering lines without requiring them to become public utilities, something that worried industry for its potential to increase costs and worried landowners for its potential to increase eminent domain cases.

The bill does not cover interstate pipelines.

Several recent explosions on pipelines around the country have drawn attention to the safety of aging transportation infrastructure, but in Pennsylvania the issue is compounded because expanding Marcellus Shale production will likely cause a boom in pipeline construction (see Daily GPI, Feb. 15).

The existing intrastate pipeline network in Pennsylvania, built to support conventional gas drilling, isn't designed for the high pressures and volumes of shale development.

SB 325 would only allow the PUC to adopt regulations that mirror federal standards, meaning that it wouldn't cover "Class 1" gathering lines in very rural areas. However, because the Marcellus Shale fairway in Pennsylvania runs through large rural areas in the center of the state, many of the future gathering lines associated with development would be Class 1 pipelines. Baker's staff told NGI's Shale Daily that the senator intended for her legislation to include those pipelines and could amend the legislation.

SB 325 grew out of two en banc hearings the PUC held in April and June 2010 to try and get its hands around whether and how it should regulate Marcellus Shale development. During those hearings, industry representatives, including the Marcellus Shale Coalition, supported the PUC becoming a "state agent" for PHMSA, even if it meant additional fees, but opposed regulating gathering lines over and above the existing federal standards.

Some states, including Colorado and Texas, have imposed additional requirements on gathering and production lines beyond those in federal pipeline safety regulations.

Others at those hearings raised issues not addressed by SB 325. The environmental group Earthjustice wanted the PUC to regulate the location of gathering lines, while the Wyoming County Landowners wanted to odorize gas to make it easier to detect leaks, to make incident reports public and to standardize safety training for pipeline personnel.

The bill also does not expand the Pennsylvania One Call system, a hotline where people can find out the location of buried lines before excavation projects. The natural gas industry wanted more pipelines included in the system because nearly 35% of all major pipeline accidents come from people digging blindly, according to PHMSA.

Baker said she is developing an amendment to her bill that would keep gas compressor stations from being located near schools, hospitals and critical infrastructure.

The Pennsylvania House is currently considering a similar bill to SB 325 called HB 344.

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