In the wake of high-profile explosions on interstate natural gas pipelines, Congress is expected to take up comprehensive pipeline safety legislation in the coming months, said a top official with the Interstate Natural Gas Association of America (INGAA) Monday.
On the Senate side, there "may be a mark-up [by the Senate Commerce, Science and Transportation Committee] before Easter. Certainly that's their goal at this point. I think this is the kind of bill that would be quickly approved by the full Senate if it made it through the committee," said Martin Edwards, INGAA's vice president of legislative affairs.
In early February Sens. John D. Rockefeller (D-WV), chairman of the Senate Commerce Committee; and Frank R. Lautenberg (D-NJ), chairman of a Commerce subcommittee, offered legislation that would hike fines for violations of pipeline regulations to $2.5 million from $1 million; add civil penalties for obstructing investigations; and require the federal government to hire 39 new inspection and enforcement personnel through a phased-in approach over the next four years. This measure is expected to have the best chance of clearing the Senate (see Daily GPI, Feb. 16).
On the House side, the House Transportation and Infrastructure Committee has a "goal of at least trying to get a [pipeline safety] reauthorization bill introduced before Memorial Day," Edwards told reporters at INGAA's headquarters in Washington, DC. The House Energy and Commerce Committee, which would also have jurisdiction over a pipe safety bill, would likely follow the same schedule, Edwards said.
"We as an industry recognize that while we have a good safety record, it isn't perfect...Continuous improvement in safety processes is just going to be a fact of life. When it comes to pipeline safety, you're never really done with it," he noted.
"I would expect it [the bill] to be pretty comprehensive" in nature, and would lay out a number of "aspirational [aggressive] goals to be met in a number of areas," Edwards said. He noted that he expects Congress to delegate a lot of the details to the Pipeline and Hazardous Materials Safety Administration (PHMSA) to carry out.
Despite criticisms that the natural gas pipeline infrastructure is vintage -- more than 50 years old -- Edwards said he doesn't expected a congressional bill to address the age of the pipelines. "I don't think age is an issue. Age assumes that pipelines are built with a certain planned life and they're not...Properly maintained pipelines can last for [a] hundred years."
Asked to explain the rash of pipeline explosions, he said they could be attributed to factors other than age -- corrosion, lightning, land movement or being struck by backhoes or other pieces of equipment. There are a total of 23 factors that could contribute to explosions, according to Terry Boss, INGAA's senior vice president of safety and environment.
INGAA officials declined to speculate on the cause of the explosion on the Pacific Gas and Electric pipeline, which killed eight people, injured 52 people and destroyed 37 homes (see Daily GPI, Sept. 13, 2010). "We can speculate, but it's probably not a good idea," said Edwards, noting that not all the contributing factors were known at this point.
"All very valid questions," he told a reporter who pressed him on the causes. "The only problem is we still don't have the full picture yet." Boss likened the investigation to a "jigsaw," adding, "We don't have all the pieces."
Each of the recent pipeline accidents "has its own history," Edwards said. "For example, the accident in Pennsylvania occurred on a distribution system, which has been around a long time and was probably under a a lot of stress due to the very cold weather in the Northeast." He was referring to the blast on UGI Corp.'s natural gas pipeline in Allentown, PA, which killed five people (see Daily GPI, Feb. 11).
Edwards said INGAA will press Congress to include user fees for local distribution companies (LDC) in the pipeline safety bill. PHMSA currently collects a user fee from interstate gas pipelines, but not LDCs. "There has been a glaring loophole in the user fee statute for 26 years now," he noted, adding that the statute was written in the mid-1980s when PHMSA had very few gas distribution-related activities.
In 2009 natural gas pipelines paid nearly $60 million in user fees to PHMSA, of which the largest chunk -- $38.3 million -- went to LDCs, while only $20 million went to the actual payers of user fees -- interstate gas pipelines."The largest user of PHMSA dollars -- natural gas distribution -- pays absolutely no user fees. [We] hope that Congress revisits this user fee issue."
Edwards said the PHMSA budget for fiscal year 2012 proposed two new fees on gas pipelines -- one on design reviews for new construction, and another on special permits for design or operational changes that are outside existing regulations. The Lautenberg bill has set a "mild threshold" of $3.4 billion for a proposed pipeline to be subject to the proposed fees.
"We would support something along the lines of what's in the Lautenberg bill, not the thresholds that are in the administration's budget," he said.
At the end of 2010 PHMSA issued an advanced notice of proposed rulemaking on their integrity management program for hazardous liquid pipelines. INGAA is "anticipating that on the natural gas transmission side there will be a similar [proposal] made in the coming months," Edwards said.
On a broader scale, he said INGAA was "not crazy" about any kind of mandate, including a clean energy standard (CES). "[We] feel like the market is working very well for natural gas in terms of incentivizing power generation...Any kind of mandate from Congress would bite into [the market] share for natural gas."
In his State of the Union address, President Obama mentioned that natural gas should be included in a CES. "We were happy about that," but INGAA still thinks a CES would present problems, Edwards said.
"I think there'll be a huge debate as to whether natural gas will be included in CES," he noted. And Edwards thinks there will be a big debate over whether there will be a CES in the first place.
If Congress fails to agree on a budget resolution by Friday (March 4) and the federal government is shut down, he said he expects the PHMSA inspection activities to continue. "I would view a lot of these activities as essential." Moreover, PHMSA is not funded by the federal government; its funding comes from pipeline user fees and the Oil Spill Liability Trust Fund.
And if there is a shutdown, "it's going to be pretty short," he told reporters.
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