June 2018, Vol. 245, No. 6


House Considers Pipeline Cybersecurity Bill

Concerns in Congress about the inability of the Transportation Security Administration (TSA) to monitor gas pipeline hacking vulnerabilities are the stimulus behind a bipartisan bill that would give the Department of Energy new non-regulatory powers to plug the gaps in TSA oversight.

A House Energy & Commerce subcommittee passed the Pipeline and LNG Facility Cybersecurity Preparedness Act (H.R. 5175) in late April by a voice vote. It is apparently a non-controversial measure that should have no trouble clearing the House and Senate and being signed by President Trump.

Energy Secretary Rick Perry asked Congress to expand his cybersecurity authority and has created a new cybersecurity office. The DOE traditionally has done little with pipelines on that topic, but the bill, sponsored by Energy Subcommittee Chairman Fred Upton (R-Mich.), would require the Department of Energy to coordinate the “security, resiliency, and survivability of natural gas pipelines, hazardous liquid pipelines, and liquefied natural gas facilities and to coordinate response and recovery by federal agencies, states, and the energy sector, to physical incidents and cyber incidents impacting the energy sector.”

Cathy Landry, the spokeswoman for the Interstate Natural Gas Association of America (INGAA), said her group was still reviewing the bill.

Upton told P&GJ, “This bipartisan legislation is meant to strengthen the Department of Energy’s role to coordinate cyber-response, collaborate, and build capacity within states and the energy sector. It is not a regulatory program and we’re not authorizing DOE to develop mandatory minimum standards. It is about conducting research, communicating threats, and coordinating the response across government.”

The cybersecurity preparedness of gas pipelines is supposed to be assessed by the TSA, which in March published updated guidelines on the topic.

Corps Review

Pipeline trade associations are pressing the Army Corps of Engineers to clarify new, proposed guidelines so that pipeline projects are not unnecessarily delayed because of state and federal bureaucratic review.

The Corps issued a draft Engineer Circular (EC) that makes some changes in how the Corps would review requests for “alterations” in civil works projects. Alterations are granted when pipelines, road and electric lines need to cross a civil works project authorized under the Rivers and Harbors Act (RHA) of 1899. Alterations are granted under Section 408 of that law if they “will not be injurious to the public interest and will not impair the usefulness of such work.”

The Corps took a first crack at defining “alteration” rules on July 31, 2014. The Corps has been working to refine that policy ever since. Any new, final guidance will be good for two years, and then will either be revised, rescinded or converted to an Engineer Regulation, which does not expire.

The American Gas Association (AGA) and INGAA must obtain Clean Water Act (CWA) Section 404 permits and RHA Section 408 authorizations when natural gas pipeline projects cross Corps public works projects such as levees, dams, bridges and dredged channels. According to the comments the two groups submitted to the Corps, “As a result of non-prescriptive Corps guidance documents confusing implementation in the various Corps districts, this process can often be lengthy and costly and has frequently led to miscommunication and unnecessary delays in permitting.”

One of the shortcomings of this draft EC is that it does not establish a categorical permission for a number of potential alterations that are similar in nature and have similar effects. Section 404 of the CWA, for example, has nationwide permits, including Nationwide Permit (NWP) 12 for pipelines, greatly simplifying the process for a company that wants to cross a river, stream or wetland with a pipeline. INGAA and AGA want a similar nationwide “alteration.”

That is important because some Corps districts have established such categorical permission categories but have excluded pipelines. That is true of the Sacramento Corps district, for example. The two pipeline groups noted the Sacramento categorical alteration excludes “requests for new, long-distance pipelines crossing multiple [Corps] navigation and flood risk reduction projects or crossing a single project in multiple locations.”

Congress Eyes Change

Republicans and Democrats in Congress want FERC to make significant changes in its 1999 pipeline certification policy, which is now under formal review.

The backdrop for the review is a concern at FERC and elsewhere that there might not be adequate, new pipeline construction, particularly in the Midwest and Northeast, given the retirement of coal- and nuclear-fired generators. Full Energy & Commerce Committee

Chairman Rep. Greg Walden (R-Ore.) pointed out at hearings in the energy subcommittee on April 17 that on two occasions last winter New England power suppliers had to import LNG from Russia to keep generators running. Walden added he hopes the FERC review will result in “more efficient, timely decisions.”

But subcommittee and committee members had a number of complaints about how FERC has reviewed some pipeline applications, and the concerns crossed party lines. Rep. Leonard Lance (R-N.J.) cited the FERC approval of the PennEast pipeline last January, a decision that saw one commissioner dissent and two offer concurring opinions with two different sets of reservations. The new 116-mile natural gas pipeline runs from Luzerne County, Penn., to Mercer County, N.J.

PennEast takes shale gas from Pennsylvania through New Jersey, including through Lance’s district. Lance asked the commissioners whether any new certificate policy would “assure robust analysis of economic need especially where precedent agrees are signed with affiliates of owner, such as in the case of Penn East.” Only 155,000 dth/d of the 990,000 dth/d of firm capacity has been taken by non-affiliates of the five owners.
In his concurring decision approving PennEast Commissioner Neal Chatterjee said, “I do have concerns about the order’s impact on landowners. For this project, there are incomplete surveys due to lack of access to landowner property.”

Commissioner Cheryl LaFleur also cited unease about a significant number of environmental surveys that are incomplete due to lack of access. At the April 17 hearings at the House subcommittee, she said she hopes the pipeline certificate policy review “tees up how we do our environmental work on the traditional parts of the pipeline and downstream impacts such as climate change.”

Republican Rep. Morgan Griffith (Va.) was equally unhappy with FERC’s approval of two Virginia pipelines, which in areas run very close to one another, resulting in “two separate communities across Virginia are being disrupted.”

The two pipelines he referred to are the Mountain Valley Pipeline and Atlantic Coast Pipeline. Griffith and Sen. Tim Kaine (D-Va.) introduced separate bills. which aim to do the same thing: give communities more say in whether and where pipelines are sited. Griffith’s bill is called the Pipeline Fairness and Transparency Act (H.R. 2893). Griffith said he doesn’t know whether his bill will come up for a vote soon.

Rep. Frank Pallone (D-N.J.), the top Democrat on the full committee, worried about the public footing the bill “for unnecessary pipelines and homeowners in the path having little recourse to stop pipeline companies from seizing their land through eminent domain.” P&GJ


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