Natural gas distributors in Texas will soon have to develop programs that assess the risks of failures on their pipeline systems and prioritize equipment replacements under a rule adopted last week by the Railroad Commission of Texas (RRC).

The requirement affects companies such as Atmos Energy, CenterPoint Energy, Texas Gas Service and City Public Service of San Antonio.

"The risk analysis for distribution pipelines will include pipe location, including proximity to buildings or large populations; composition and nature of the piping system, including pipe age, materials, operating pressures and leak history; corrosion history; environmental factors that affect gas migration, such as extreme weather conditions, soil conditions and extensive growth of tree roots around pipelines; and any other conditions known to operators that have a potential to cause a gas leak or allow gas to migrate to an area where it could result in a hazard," the RRC said.

The rule also requires that all joints on steel and plastic pipe below ground must be welded or designed and installed to resist "pullout." If steel service lines are determined to be the greatest risk in a distribution system, an operator must implement a replacement schedule for these lines. According to the rule, a segment with an annualized steel service line leak rate of:

All replacement programs will require a minimum annual replacement of 5% of pipelines or facilities posing the greatest risks identified unless an exception is approved by the RRC.

"Texas' rule is more stringent than the federal government's recently enacted Gas Distribution Integrity Management rule (49 CFR Subpart P) because it mandates the replacement of pipelines or facilities that pose the greatest potential threats for failure," the RRC said.

"This latest rule is part of the commission's ongoing effort to set the bar high on Texas' pipeline safety standards and expand upon [the] commission's pipeline safety rules implemented in recent years, including the pipeline integrity rule and risk-based leak survey rule," said Commissioner David Porter.

The rule takes effect March 14. Operators must submit to the RRC pipeline safety division their written procedures for implementing the new Distribution Facilities Replacement rule requirements by Aug. 1.

According to the RRC, Texas was one of the first states in the nation to require a pipeline integrity management program, which became effective April 30, 2001 -- before the issuance of the federal pipeline integrity rule, which was effective Dec. 15, 2003. The Texas integrity management regulations required that gas companies must have had surveyed half of their systems by Dec. 17, 2007. Surveys of the remainder of their systems have to be completed by Dec. 17, 2012.

"The federal program requires integrity testing only in high-consequence areas (i.e., densely populated areas) whereas Texas' pipeline safety rules require the entire regulated line to undergo integrity assessment, which is above and beyond federal rules," the RRC said.

At the time the federal rule was adopted by the Department of Transportation Office of Pipeline Safety, the pipeline trade association Interstate Natural Gas Association of America said the rule would be difficult to implement and could exacerbate natural gas shortages as it was implemented (see Daily GPI, June 9, 2003).

In January 2009 the RRC adopted rules, which took effect the following month, that require gas distribution pipeline operators to submit online to the RRC reports of all leak repairs on their pipeline systems every six months beginning in July 2009.

Last summer Atmos agreed to replace 100,000 steel natural gas service lines in North Texas over the next two years to reduce the risk of explosions. The company said at the time it planned to replace at least an additional 350,000 lines (see Daily GPI, Aug. 25, 2010). The RRC previously faulted Atmos and a contractor for three explosions that had occurred in McKinney, TX (see Daily GPI, Aug. 7, 2008).

Last year the Texas gas industry experienced a couple of pipeline rupture incidents, but these did not involve distribution lines and were the result of pipeline strikes during excavation (see Daily GPI, July 6, 2010). Last year's rupture and explosion on a Pacific Gas & Electric pipeline in San Bruno, CA, has focused the attention of regulators in that state on pipeline safety (see Daily GPI, Feb. 24).

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