April 2016, Vol. 243, No. 4


House Democrats Seek to Toughen Senate Pipeline Safety Bill

Key Republicans and Democrats in the House were determined to pass a pipeline safety bill this year, although it may have some differences with the bill just passed by the Senate. That bill is called the Securing America’s Future Energy: Protecting Infrastructure of Pipelines and Enhancing Safety (SAFE PIPES) Act (S. 2276) and was passed by the Senate on March 3. The House pipeline subcommittee held hearings on potential legislation on Feb. 25 and the Energy & Commerce Committee followed with its own hearings a week later.

The Senate bill includes one new mandate for the Pipeline and Hazardous Materials Safety Administration (PHMSA) concerning underground gas storage facilities, but was otherwise an unambitious bill which essentially tells PHMSA to complete numerous unfinished rulemakings the agency was charged with in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011. The Interstate Natural Gas Association of America (INGAA) generally supports the Senate bill but hopes for a few further tweaks if and when the bill goes to a House-Senate conference committee.

The House may exceed the gas storage provision in the Senate bill, based on comments made at hearings in the House Transportation and Infrastructure Committee on Feb. 25. Democrats cited some weaknesses in the Senate bill, including its underground storage provision. Rep. Brad Sherman (D-CA), who lives near the site of the October 2015 Alison underground gas release near Los Angeles, has introduced a bill called the Underground Gas Storage Safety Act (H.R. 4578). It would require PHMSA to prescribe strong minimum safety standards for underground gas storage facilities within 180 days of passage.

Those standards would have to echo recommendations PHMSA made in Advisory Bulletin ADB–2016–02, issued on Feb. 2, except to the extent the Secretary clearly establishes evidence that it is not in the public interest. Until that final rule was actually published, storage operators would have to comply with two API Recommended Practices, 1170 and 1171.

Rep. Steve Knight (R-CA) has introduced H.R. 4429, the Natural Gas Leak Prevention Act (H.R. 4429). It would reiterate the provision in the Senate bill which gives PHMSA two years to finalize a regulation making API 1170/1171 federally enforceable, instead of voluntary industry standards.

Cheryl Campbell, senior vice president, Gas, XCEL Energy, testified at the House hearing on behalf of the American Gas Association, and said AGA supports adoption of the API standards as federal minimum standards and the ability of states to add more standards they may deem necessary for their area. Asked whether AGA supports the Knight bill, she said, “I believe so.”

Don Santa, CEO and president of INGAA, said much the same thing.

It appears that House Democrats will push to enhance the Senate bill, not just with regard to its provisions on underground gas storage. Rep. Peter DeFazio (D-OR), top Democrat on the Transportation and Infrastructure Committee, criticized the Senate bill for barring PHMSA from conducting any new rulemakings until those required by the 2011 act are completed. That could take years. The only exception would be if the Secretary of Transportation certified to Congress of “a significant need to move forward.”

“The Senate went down the wrong path,” DeFazio said. “We shouldn’t be tying their hands.” He also advocated including an amendment which would give PHMSA emergency order authority, which many other federal regulatory agencies have. This allows the agency to address industry-wide situations, such as concerns about underground gas storage facilities. PHMSA only has authority to issue corrective action orders, which concern single incidents.

In fact, a “discussion draft” premiered at hearings in the House Energy & Commerce Committee on March 1, does go beyond the Senate bill, but it gives citizens, not PHMSA, new power to fight perceived pipeline problems. At those hearings, Santa said INGAA would oppose a House bill if that provision remains, once an actual bill is introduced. The provision in the discussion draft would allow a private party to seek injunctive relief against PHMSA based on its alleged failure to perform “any nondiscretionary duty” under the federal pipeline safety law.

“For example, this provision would be another arrow in the quiver of those opposing new pipeline construction, as they could seek injunctive relief in connection with PHMSA’s review of the design of a proposed new natural gas pipeline,” Santa explains. “In addition, the provision could be used to seek injunctive relief, compelling PHMSA to update existing rules or pursue other actions based on the allegation that the agency’s inaction was a failure to perform a nondiscretionary duty under the pipeline safety law. If allowed, this situation could rapidly deteriorate into a regime of ‘regulation by litigation.’”

Natural gas transportation issues took a back seat to underground storage and liquid pipeline issues at the earlier Transportation committee hearings. Marie Therese Dominguez , PHMSA administrator, was repeatedly asked about the remaining unfinished mandates from the 2011 Act of which the agency has completed 26 of 42. One significant issue is a proposed rule on gas transmission safety. It has long been stuck at the White House Office of Management and Budget which is reviewing the proposal. Dominguez said she hopes to publish that proposed rule shortly.

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