The Transportation Department’s Pipeline and Hazardous Materials Safety Administration (PHMSA) said it will extend the public comment period for proposed rules governing natural gas transmission and gathering lines by another 30 days, but it was half of what the oil and gas industry had requested.
Meanwhile, within the halls of the oil and gas trade associations that had asked for an extension, some areas of concern are beginning to emerge over the regulatory changes contained in PHMSA’s notice of proposed rulemaking (NPRM), a 549-page tome that the agency unveiled on March 17 (see Daily GPI, March 21). The most mentioned is an expansion in the definition of a transmission line that would include gathering lines, including some just eight inches in diameter.
In a statement last Thursday, PHMSA said the public comment period would be extended from June 7 to July 7 [Docket No. PHMSA-2011-0023].
“The proposed regulations address the emerging needs of America’s natural gas pipeline system and include commonsense measures to better ensure the safety of communities living alongside pipeline infrastructure and protect our environment,” PHMSA Administrator Marie Therese Dominguez said in a statement. “We want to be responsive to stakeholders who have requested additional time to review the proposed regulations and, with this extension, we have effectively provided a public comment period of 112 days.
“Once the comment period closes, we will fully consider all comments that were received, as we evaluate options for finalizing the rule.”
In March, trade organizations representing the oil and gas industry asked PHMSA for a 60-day extension (see Daily GPI, March 28). The organizations include the American Gas Association (AGA), the American Petroleum Institute (API), the American Public Gas Association (APGA), the Gas Processors Association (GPA), which is now the GPA Midstream Association (see Daily GPI, April 11), the Interstate Natural Gas Association of America (INGAA), and the Independent Petroleum Association of America (IPAA).
‘More Time Was Needed’
“The extension granted will have to be okay,” AGA spokesman Jake Rubin told NGI on Monday. “We were hoping for more time to analyze a rule that is more than 500 pages long, but this definitely helps. We will not be asking for another extension.”
But API spokewoman Sabrina Fang was more candid. “It has taken PHMSA more than five years to develop the more than 500-page rule in which only 60 days were provided for comment,” she told NGI on Tuesday. “In addition to the sheer volume of the NPRM, API feels that more time was needed to develop sufficient feedback on many provisions of the rule.
Susan Ginsberg, vice president for crude oil and natural gas regulatory affairs for the IPAA, agreed.
“IPAA and the other trade associations firmly believed that [the original] 60 days was too short in which to comment on such a lengthy and far-reaching proposal,” Ginsberg said Monday. “All too often, agencies will grant an extension just a few days prior to the comment deadline, which takes away much of the benefit to the regulated community and other commenters.”
Early Red Flags
One item that has drawn criticism is a new broader definition of a transmission line that will vastly expand the size and variety of pipelines coming under PHMSA’s jurisdiction.
John Erickson, vice president for operations at APGA, said his organization’s operations and safety committee will hold its first conference call to discuss PHMSA’s proposals later this week, and to “identify what sections are initially the ones we’re most concerned with.” But he said three items — new definitions for Moderate Consequence Areas (MCA) and distribution centers, and a revised definition for a transmission line — have caught the APGA’s attention.
“The proposed definition of a transmission line is one that we’re probably unique in looking at and considering that’s something important,” Erickson said Tuesday, adding that of the approximately 1,000 public gas systems nationwide, only 56 have lines that are currently classified as transmission. “It has the definition that anything over 20% of specified minimum yield stress is transmission, but it also has a clause that says any line that transports gas from a storage facility to a distribution center is a transmission line, regardless of its pressure.
“That one will pull in a lot of our members’ lines. It’s been interpreted that if they take gas from an interstate transmission line, the line that takes the gas from the transmission line up to the town is also a transmission line.”
For example, Erickson said a five-mile, two-inch diameter pipeline in Lorimor, IA, which operates at just 150 pounds per square inch (psi), would be classified as a transmission line.
“A lot of the lines that are out there aren’t really what you would think of as transmission,” Erickson said. “More than half of them are eight inches or less in diameter and one-third of them are less than four inches. By DOT’s definition, they’re transmission. But we’re still not sure exactly what it does. It’s still kind of vague, and we’ll probably have to be talking with PHMSA to find out what they think it means.”
Erickson said some of its approximately 730 members would probably have their lines reclassified and would be required to have a distribution — rather than a transmission — integrity management program. The transmission program includes mandatory inspection requirements over and above what’s required for leak surveys. It also requires smart pigging, hydrostatic testing and direct assessment requirements.
“We think it would be a good thing if it resulted in them being treated as distribution, because that’s what they really are,” Erickson said. “A lot of those lines are rural, and under the current rules their potential impact radius is so small that they don’t have any high consequence areas that they pass through, therefore the integrity management rule doesn’t really affect them.
“But that’s why we’re also interested in this new definition for an MCA. If the potential impact circle includes the right-of-way for an interstate, freeway, expressway or other principal four-lane arterial highway, that’s an MCA. Some of our members that have lines that are not near any populated area, but cross a highway, that could affect them. They probably wouldn’t have to perform any additional inspections, but they would have to prepare and write an integrity management plan, which for a system with less than $1 million a year in revenue, spending $100,000 just to write a document, is a complete waste of money.”
Erickson said PHMSA has been receptive to industry in the past to proposed changes, but added that pipelines were “a very political issue,” and it was unclear at this juncture how things would pan out.
“The whole process of them putting out a notice like this, and for us to file written comments to it — I know that’s the way officially it’s supposed to work, but having the opportunities to have some give and take [would have been helpful]. It’s really not clear what their intent is. We’re hoping that there can be a little dialogue to find out what they mean by [the definitions], and perhaps we can help them by providing some alternative language that accomplishes what they want to accomplish.”
Matthew Hite, vice president for government affairs at GPA Midstream, said his organization is “still prioritizing the issues that will impact us,” and was also evaluating the government’s lengthy cost-benefit analysis.
“We’re looking at a lot of the gathering line portions of the NPRM,” Hite said Tuesday. “One of the things that we were led to believe was the rule would be going after large diameter gathering lines. The proposal actually goes all the way down to 8.5-inch diameter gathering lines, which are not something we would define as large gathering lines.”
‘Not Written Very Clearly’
Many of the aforementioned trade organizations were still poring through the NPRM.
INGAA spokeswoman Cathy Landry told NGI “some of our main concerns are: the cost of the proposal (and PHMSA’s cost-benefit analysis); maximum allowable operating pressures [MAOP] and integrity re-verification; and rules surrounding the new MCAs under the Integrity Management Program.”
Ginsberg said the new deadline would give IPAA more time “to make the best use of our resources to push back against PHMSA’s proposed expansion of jurisdiction to gathering.”
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, and six recommendations from the NTSB, including one requiring that more modern testing be performed on pipelines built before 1970. PHMSA officials told NGI that approximately 57% of all onshore gas transmission pipelines were constructed before 1970.
The agency said a notice of the extension will be published in the Federal Register. PHMSA added that it would also hold public webinars and host briefings at two upcoming advisory committee meetings.
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