August 2011, Vol. 238 No. 8

Government

House GOP Seek To Force State Department Action On Keystone XL; EPA Gives Ground On GHGs; 4G Wireless May Threaten GPS

A House committee voted out a bill 33-13 on June 15 which would force the State Department to decide on the Keystone XL pipeline, an expansion of an existing TransCanada pipeline which would bring oil from Alberta and North Dakota to U.S. refineries.

The North American-Made Energy Security Act (H.R. 1938) was approved by the House Energy and Commerce Committee with strong Republican and modest Democratic support. The bill says President Obama must issue a final order approving or disapproving the project not later than 30 days after the issuance of the final environmental impact statement but no later than Nov. 1, 2011.

Advocates and critics sparred one day after the bill passed the House committee in a hearing June 16 called to discuss needed changes to pipeline safety laws. Rep. Henry Waxman (D-CA), the top Democrat on the full Energy and Commerce Committee, complained about passage of H.R. 1938 the previous day. He said recent pipeline incidents resulting in loss of life, the latest in Pennsylvania in February, are the “canaries in the coal mine.” He added that oil companies are rapidly and dramatically expanding the quantity of crude they are moving through U.S. pipelines. He cited concerns raised about the environmental impact of diluted bitumen, which is what the Keystone XL would carry, and said those risks need to be evaluated before the pipeline is approved.

Anthony Swift, policy analyst for the Natural Resources Defense Council, gave subcommittee members a long, technical dissertation about the environmental dangers and increasing quantities of diluted bitumen, one variety of tar sands, flowing through U.S. pipelines. He said TransCanada’s existing Keystone pipeline, one of the first pipelines dedicated to moving diluted bitumen from Canada to the U.S., has had 12 leaks in its first year in operation.

He used that statistic to assail the State Department’s latest environmental review of the project, which determined, according to Swift, the Keystone XL pipeline will have a leak due to pipeline corrosion once every 3,400 years and a leak due to flooding and washout once every 87,600 years. He argued the State Department is incompetent to assess safety risks, and that the Pipeline and Hazardous Materials Safety Administration (PHMSA), which has no role in the XL environmental assessment, should take the lead.

Rep. Lee Terry (R-NE), responded to Waxman saying the State Department has been studying the Keystone XL expansion for three years and “has been sitting on a foot and a half stack of environmental impact studies.” He accused the State Department of “irresponsible foot dragging.”

Cynthia L. Quarterman, Administrator at PHMSA, laid out for committee members new fees she wants to charge pipeline companies. This would include reimbursement from project applicants for design review, consulting, and field oversight that the agency performs for new pipeline construction projects exceeding 100 miles in length.

Chris Helms, CEO of NiSource Gas Transmission & Storage, and chairman of the INGAA board’s task force on pipeline safety, didn’t object to that new fee, which is already part of the Senate bill. But Helms wants relatively minor changes to the Senate language. Addressing the current fee structure, he argued that user fees paid by transmission pipelines to PHMSA are three times larger than they should be, given the programs PHMSA funds. His point was that distribution pipelines should be paying higher fees because the majority of PHMSA grants and budget go toward insuring the safety of intrastate pipelines.

EPA Gives Ground on Greenhouse Gas Monitoring
The Environmental Protection Agency bowed to complaints from the natural gas and petroleum pipeline industries and softened some of the monitoring requirements for greenhouse gas emissions (GHG) which went into effect on March 31. The EPA stepped back from elements of what is called the Subpart W requirements for the industry the agency issued in late 2010.

In that final rule the agency restricted pipeline companies from using best available monitoring methods (BAMM) to determine leaks of fugitive and vented emissions from various compressor equipment and pipeline pumping equipment. BAMM allows companies to estimate emissions, and is less costly than the prescriptive monitoring requirements which were included in the Subpart W final rule.

INGAA and the API filed lawsuits in early 2011 asking for broader use of BAMM, and the agency has now, via a proposed rule issued June 28, given them new leeway retroactive to March 31. Lisa Beal, vice president, Environment and Construction Policy at INGAA, says she is satisfied EPA loosened requirements related to 2011 reporting but remains frustrated the agency continues to implement the Subpart W rule in such a piecemeal fashion. “Our biggest issues remain the lack of a clear process for obtaining BAMM in the post-2012 time period,” she adds.

In its proposed rule of June 27, 2011 the EPA essentially allowed pipelines to use BAMM without obtaining EPA prior approval until Dec. 31, 2011. With regard to use of BAMM beyond 2011, in the original final rule the EPA said BAMM could be used beyond Dec. 31, 2011 only if companies could prove extreme and unique circumstances. In the June 27 proposed rule the agency removed the reference to extreme circumstances.

Companies wanting to use BAMM in 2012 must provide a notice of intent to submit a request for BAMM beyond 2011 to EPA by Dec. 31, 2011. Facilities that submit a BAMM request by March 30, 2012 that have also submitted a notice of intent by Dec. 31, 2011 would automatically be granted BAMM through June 30, 2012. Facilities which submit such a notice of intent but do not follow up with a BAMM request by March 30, 2012 would not be allowed to use BAMM after Dec. 31, 2011. The agency did not discuss any options for using BAMM beyond Dec. 31, 2012.

New Proposed 4G Satellite Service Raises Questions about GPS Interference
A critical report from a Federal Communications Commission advisory committee on June 30 was the latest hitch in the plans of a company called LightSquared to offer new 4G wireless service to broadband users. LightSquared would share some of the broadband spectrum used by global positioning system (GPS) service providers, which has caused users of GPS services, such as pipeline and underground construction companies, to worry about interference with their mapping efforts. Earlier this year, the FCC gave LightSquared conditional approval to use the 10 Mhz spectrum it owns if the interference problem could be solved.

The report from the Global Positioning System Industry Council asserted that LightSquared planned operations in the 10Mhz spectrum could negatively affect 500 million GPS receivers used by public safety agencies, construction companies and others. That report followed by one week approval by the House Appropriations Committee of an amendment which would allow FCC approval in fiscal 2012 only if interference issues are settled. FCC Chairman Julius Genachowski has supported the LightSquared application because it will create jobs and provide new broadband service in rural areas especially via use of spectrum that is underused.

On the heels of the advisory committee report, LightSquared submitted to the FCC proposed changes to its operational plan which would allow it to get up and running now while the interference issue is settled, hopefully by 2015, the date the company originally expected to have full service in full swing. This short-term solution involves using an alternative block of spectrum located further away from GPS frequencies and reducing its base station power by more than 50%. LightSquared has argued that the interference problems are the result of “the GPS device manufacturer’s decision over the last eight years to design products that depend on using spectrum assigned to other FCC licensees.”