October 2016, Vol. 243, No. 10

Government

Government

PHMSA Cautions Industry on Abandoned Pipelines

Interstate and intrastate gas and hazardous liquids pipelines received a two-pronged warning from PHMSA. The agency, following up on dictates in the Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016, told operators to pay attention to regulatory requirements based on the status of the pipeline’s operations, and secondly, to pay attention to obligations when abandoning pipelines.

The advisory bulletin published in August by PHMSA cited several recent pipeline accidents. For example, on May 31, 2015 a 24-inch natural gas “auxiliary” pipeline crossing the Arkansas River in North Little Rock, AR failed due to vortex-induced vibration after high water levels eroded the ground cover and exposed the pipeline to the river’s flow. The pipeline, considered an emergency backup pipeline crossing the river, had not been fully operated since 1972.

In its Protecting Act of 2016, Congress required PHMSA to issue an advisory bulletin to owners and operators of gas or hazardous liquid pipeline facilities and federal and state pipeline safety personnel regarding procedures required to change the status of a pipeline facility from active to abandoned.

PHMSA regulations do not recognize an “idle” status for hazardous liquid or gas pipelines. The regulations consider pipelines to be either active and fully subject to all relevant parts of the safety regulations or abandoned. The process and requirements for pipeline abandonment include purging all combustibles and sealing any facilities left in place. The last owner or operator of abandoned offshore facilities and abandoned onshore facilities which cross over, under, or through commercially navigable waterways, must file a report with PHMSA. PHMSA regulations define the term “abandoned” to mean permanently removed from service.

PHMSA is aware that some owners and operators may properly purge a pipeline of combustibles with the expectation to later use that pipeline in hazardous materials transportation. A purged pipeline presents different risks, and therefore different regulatory treatment may be appropriate. Degradation of such a pipeline can occur, but is not likely to result in significant safety impacts to people, property, or the environment. PHMSA will accept deferral of certain activities for purged but active pipelines. These deferred activities might include actions impractical on most purged pipelines, such as inline inspection.

PHMSA is considering proposing procedures in a future rulemaking that would address methods owners or operators could use to notify regulators of purged but active pipelines. In the interim, owners or operators planning to defer certain activities for purged pipelines should coordinate the deferral in advance with state or federal regulators. All deferred activities must be completed prior to, or as part of, any later return-to-service.

Construction of Constitution Pipeline Now in Lap of Federal Court

New York State’s rejection of the construction of the 124-mile Constitution Pipeline now is the subject of a number of legal challenges with the pipeline filing two lawsuits, one before the U.S. Court of Appeals for the Second Circuit the second with the federal district court. Constitution Pipeline Company LLC is a joint project headed by lead partner Williams Companies Inc. It would connect New York and New England markets with gas supplies from the Marcellus Shale.

Environmental groups have filed a counter suit in the Court of Appeals arguing the Federal Energy Regulatory Commission approved Constitution without regard to New York State’s environmental concerns.

In the lawsuit filed in July by Constitution, and joined by a number of manufacturing and energy trade groups, the company made the argument that New York State was unilaterally vetoing a project approved by FERC. The supporting brief from the industry groups admits that New York State can play a “limited role” in pipeline approvals, but in this case had overstepped the boundaries of that authority, which lies “principally” in the hands of FERC.

Ryan Morris, the lawyer at Sidley Austin which represents the trade groups supporting Constitution, says, “If the court rules along the lines of our brief, it could be precedent setting.”

In April the New York State  Department of Environmental Conservation (DEC) denied Constitution’s Clean Water Act Section 401 Water Quality Certification arguing it failed to meet the state’s water quality standards. Williams’ spokesman Chris Stockton maintains New York made a political decision. The state was pressured by a number of grassroots opponents to Constitution, such as Stop the Pipeline (STP). Anne Marie Garti, founder of STP, says local pressure played a very important role in New York’s decision.

Environmental groups have made several moves to tamp down Marcellus production and pipeline building. Williams took it as an affront to Constitution when an official of the Environmental Defense Fund (EDF) quoted a recent study on Marcellus in testimony before the Senate Energy and Natural Resources Committee in June. The committee held hearings on the status of pipeline infrastructure. At those hearings, N. Jonathan Peress , Air Policy Director for Natural Gas, EDF, quoted RBN Energy LLC President Rusty Braziel who recently suggested, based on a survey the company completed, that currently planned takeaway capacity from the Marcellus is on the way to an “overbuild.” Peress did not mention the Constitution pipeline specifically.

However, Williams took the Peress testimony as criticism of its project and submitted a statement to the committee which stated: “Constitution Pipeline worked closely with NYSDEC staff for more than three years to ensure that water quality measures are met before, during and after construction. As a result of that dialogue, Constitution Pipeline voluntarily agreed to the agency’s requests to incorporate re-routes, adopt trenchless construction methodologies, commit to site-specific trout stream restoration and agreed to fund approximately $18 million for wetland mitigation and banking and approximately $8.6 million for the restoration and preservation of migratory bird habitats.”

Canadian Panel Reviewing TransCanada’s Energy East Resigns

TransCanada Corp.’s Energy East pipeline hit another snag as panel members reviewing the project for Canada’s energy regulator stepped down on Sept. 9, threatening more delay. The National Energy Board adjourned its project hearings after all three panelists recused themselves to “preserve the integrity” of the regulator and of the project’s review, the board said. Environmental groups had submitted letters  asking for panelists to step aside over the risk of bias, after reports revealed two of the members had held meetings in Quebec in advance of the official proceedings, including with former Quebec Premier Jean Charest, who was then a consultant for TransCanada.

The halting of the review is the latest challenge for the C$15.7 billion ($12 billion) project that has already been delayed by local and environmental opposition in Quebec and by route changes made by TransCanada to appease concerns.

“We accept the NEB’s decision,” Tim Duboyce, a TransCanada spokesman, said in an e-mailed statement to Bloomberg. “We look forward to the sessions resuming and a respectful and constructive dialogue with Canadians about Energy East.”

Just how big a delay the move will cause for the Energy East hearings is unclear.