August 2019, Vol. 246, No. 8


New Democratic Pipeline Safety Bill Elicits Industry Opposition

House Democrats debuted the first comprehensive pipeline safety reform bill introduced in this Congress, and it contains a number of provisions opposed by both the intrastate and interstate gas transportation industries. 

When the Democratic-controlled House Energy & Commerce Committee’s energy subcommittee passed the Safer Pipelines Act of 2019 (H.R. 3432) on June 26 by a voice vote, full committee Chairman Rep. Frank Pallone (D-N.J.) admitted the bill was unlikely to win enough Republican support, despite changes made in the legislation to respond to some GOP and industry objections. The bill would make a number of changes both in terms of safety practices required and the application of criminal statutes. 

One week earlier at subcommittee hearings, Rep. Fred Upton (R-Mich.), the top Republican on the energy subcommittee, said that without significant changes the bill has no chance of getting GOP support in the House, meaning it could not pass the Senate.

One week later, Democrats dropped two provisions from the draft bill but kept a number of others which were subject to Republican and industry objections.

Direct assessment (DA) is no longer eliminated as a method for evaluating pipeline integrity. Christina Sames, vice president, Operations & Engineering for the American Gas Association, explained at the initial hearings, “AGA is not aware of any pipeline incident due to corrosion after the pipeline was inspected by DA. This indicates that DA is a viable and effective way to find pipeline defects caused by corrosion. AGA recognizes that DA is not effective to identify other threats.” 

Instead, the legislation requires Pipeline and Hazardous Materials Safety Administration (PHMSA) to issue a rule to assess technologies such as internal inspection devices, robots and hydrostatic testing. It also requires the prioritization of their use over direct assessment on transmission lines, if that will provide a greater level of safety. In addition, the bill dropped a provision to require hydrostatic testing to reconfirm maximum allowable working pressure (MAOP) for all pipelines built prior to 1970. 

However, the bill as passed by the subcommittee, increases PHMSA’s civil penalty authority, removes the limit on total penalties in current law, and strengthens the criminal penalty standard by changing the standard to the easier-to-prove “knowingly or recklessly” from “knowingly and willfully.”

C.J. Osman, director of operations, Safety and Integrity, Interstate Natural Gas Association of America (INGAA), said, “Expanding criminal liability to include ‘recklessness’ would remove the need to prove intentional wrong-doing and risks criminalizing good-faith, reasonable decisions that pipeline operators make when they identify, assess and manage pipeline risk priorities.”

The Democrats’ bill does not, at the moment, include a provision proposed by PHMSA and sought by the industry to create a pilot program in which gas companies could test new technologies as a first step toward more broad approval by the agency, a process which now takes a very long time. 

The Department of Transportation (DOT) is PHMSA’s parent agency. But there is no pilot program in the bill passed by the subcommittee.

Also discussed at that hearing was a second bill that focuses more narrowly on distribution lines. The Leonel Rondon Pipeline Safety Act, which was introduced in the House and Senate in April, directs the DOT to promulgate regulations to strengthen requirements for distribution integrity management plans, including prohibiting companies from assigning a risk rating of “zero” for low-probability events. 

The bill also directs the DOT secretary to issue regulations to strengthen emergency response plans and gas distribution operators’ procedural manuals for operations, maintenance and emergencies. 

The Safer Pipelines Act of 2019 would come on the heels of similar laws passed by Congress in 2011 and 2016, which included dictates to PHMSA, some of which are still awaiting action. P&GJ

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