Pipelines 'Troubled' by Change in Senate's Pipe Safety Bill

By 98-0, the Senate last week voted out what one lawmaker dubbed the "strongest and most comprehensive" pipeline-safety bill ever passed in Congress, with provisions calling for stepped-up inspections for natural gas and hazardous liquid lines and stiffer penalties against safety violators.

The bill (S. 235) essentially mirrors the legislation that was passed by the Senate last year, with one "significant" change --- it would require gas and hazardous liquid pipelines to undergo safety inspections every five years. But, as with any Capitol Hill legislation, it would allow waivers under certain circumstances. Still, pipeline representatives in Washington D.C. weren't happy with the change.

The Senate approved the bill after reaching a "compromise" on an key amendment, offered by Sen. Jon Corzine (D-NJ), which sought to replace the "periodic" inspections called for in the original bill with mandatory pipeline inspections every five years. As a result of the last-minute compromise worked out Thursday, pipes would be exempt from the five-year review under certain conditions, such as if the technology isn't available to perform a safety inspection, or if an inspection would significantly interfere with a pipeline's ability to deliver gas or liquids

The inclusion of this "compromise" amendment in the legislation represents a big defeat for interstate natural gas pipelines because it sets a specific timetable for inspections to be completed.

The change is "deeply troubling" for interstate gas pipelines, said a Washington pipeline lobbyist. The compromise on the amendment was "very poorly drafted," and thus left pipelines unsure of what to make of it. "But based on what we think its intent is...we would have some problems" with it, he said.

"We don't see the justification for a five-year inspection interval," the pipeline lobbyist said, adding it would require an "enormous amount of resources" from pipes during a time when they're running flat out to meet increased gas demand. He believes 10-15 years ought to be the "most logical standard" for an inspection interval.

He further criticized a provision in the compromise amendment that makes it the responsibility of the Department of Transportation's Inspector General (IG) to issue waivers to pipelines. The IG "would be under a lot of political pressure not to waive that standard."

The legislation, which was co-sponsored by Sens. John McCain (R-AZ) and Patty Murray (D-WA) and a number of other senators, "does not go far enough to ensure the safety and integrity of natural gas pipelines" in New Jersey or elsewhere in the nation, said Corzine, as he offered the controversial amendment, along with three others.

Corzine also sought to add provisions calling for stricter community right-to-know laws with respect to pipelines, certification of pipeline personnel and steeper liability penalties for pipeline-safety violators, but these were defeated.

Sen. Robert Torricelli (D-NJ) backed his colleague, even though he voted for the McCain-Murray bill last year. That bill was and is a "good first step" in strengthening pipeline-safety regulations, but "we're going to insist" that these amendments be included, he said.

In pressing for the stiffer amendments, both Torricelli and Corzine reminded lawmakers of the March 1994 explosion on Texas Eastern Transmission that turned "peaceful, suburban" Edison, NJ, into a "war zone." Other senators, in pushing for a stricter pipe-safety law, recounted the details of the deadly explosions on El Paso Natural Gas last summer near Carlsbad, NM, and on Olympic Pipe Line in Bellingham, WA, nearly two years ago.

McCain and Murray re-introduced their legislation last month after it was derailed in the House of Representatives during waning days of the 106th Congress, failing to garner the necessary two-thirds vote. Key House lawmakers, Reps. John Dingell (D-MI and James L. Oberstar (D-MN), spearheaded the defeat, claiming that the Senate bill was too soft on pipeline-safety violators.

Prior to reaching the compromise, McCain said he "could not support them [amendments] at this time," but he agreed to "examine any recommendations [and] proposals" during conference on the Senate and House bills. Murray called Corzine's amendments "excellent provisions," and said they should be included in the final pipeline-safety bill "regardless of what happens here today."

Sen. Sam Brownback (R-KS) and others urged the Senate to pass a "clean bill," minus any amendments. "This issue is too important to be cluttered by hasty changes," he said.

The Senate-approved bill also includes a couple of other amendments that have nothing to do with pipeline safety. One calls for a federal study to be conducted into the gas price spikes and shortages that have occurred this winter, while another would require a study of the gas pipeline capacity situation in New England.

Sen. Dianne Feinstein (D-CA) used the debate on pipeline safety to announce new legislation that would direct the Federal Energy Regulatory Commission to impose cost-based rates on wholesale power transactions when it finds that energy suppliers are charging "unjust and unreasonable" rates.

The bill would be an alternative to the legislation she proposed last month, which seeks to give the Energy Secretary the authority to impose either a regional price cap or cost-based rates when wholesale power rates are found to be "unjust and unreasonable."

Feinstein believes her two bills are necessary to provide "short-term price stability" until the California power market can "straighten itself out" by getting new generation facilities sited, permitted and built.

Sen. Larry Craig (R-ID) said he favored Feinstein's alternative measure, noting that eight western governors had written President Bush to urge the federal government not to go in the direction of a regional price cap.

Feinstein said she had planned to offer her proposal as an amendment to the McCain-Murray pipeline safety bill, but agreed to introduce it as a stand-alone measure after Sens. Frank Murkowski (R-AK) and Jeff Bingaman (D-NM) promised to schedule a hearing on the bill before the Senate Energy and Natural Resources Committee by the end of the month.

Sen. Barbara Boxer (D-CA) offered up an amendment --- which received bipartisan support --- calling for the National Academy of Sciences to conduct a 60-day study of the high gas prices and supply shortages that the nation has experienced this winter. It directs the Academy to review a "range of solutions," such as establishing a reserve for natural gas. The Senate also adopted an amendment, sponsored by Sen. Jack Reed (D-RI), to study the capacity of natural gas pipelines serving the New England region.

Murray expressed concern about President Bush's energy policy proposal that calls for streamlining the pipeline certification process. She urged him "not to do this at the expense of safety or the environment," adding that he would be replacing an "energy crisis with a safety crisis."

Murkowski, however, said he believes the Senate's pipeline-safety bill and the president's national energy policy will "complement" each other.

In addition to requiring inspections of interstate pipes every five years, the Senate bill will increase the maximum civil penalties for a single safety violation and for a series of safety violations, give states an increased role in inspecting and overseeing pipelines, require pipeline operators to carry out continuing public education programs, augment pipeline reporting requirements to states and local authorities, provide for investments in new inspection technology and offer protection for whistle-blowers.

The issue of pipeline safety now moves to the House, which is expected to draft its own bill rather than act on the Senate measure. But the House "probably won't act on this for months," predicted a pipeline source.

The House currently has two pipe-safety bills pending, one from Oberstar and another from Rep. Rich Larsen (D-WA). Larsen introduced legislation last week that contains a number of provisions similar to those found in the Senate measure. It calls for the establishment of minimum standards for training and evaluating of pipeline personnel, strengthening public right-to-know laws with respect to pipeline operations and inspection results, greater state oversight over pipelines, and whistle-blower protection.

"...[T]his is not the end of the discussion on pipeline safety. It's just the beginning," Sen. Murray declared last Thursday.

Susan Parker

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