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Gas Pipeline Safety Under Heightened State and Federal Scrutiny - - PowerPoint PPT Presentation

Nov 24, 2022 320 likes •882 views

Presenting a live 90-minute webinar with interactive Q&A Gas Pipeline Safety Under Heightened State and Federal Scrutiny Navigating the New Regulatory Landscape and Preparing for Increased Testing and Penalties THURS DAY, MARCH 15, 2012

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Gas Pipeline Safety Under Heightened State and Federal Scrutiny

Navigating the New Regulatory Landscape and Preparing for Increased Testing and Penalties

Today’s faculty features:

1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific

The audio portion of the conference may be accessed via the telephone or by using your computer's

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have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

THURS DAY, MARCH 15, 2012

Presenting a live 90-minute webinar with interactive Q&A

Darren J. Hunt er, Counsel, Dewey & LeBoeuf, Chicago Ahren S . Tryon, Associat e, Dewey & LeBoeuf, Washingt on, D.C. Vidhya Prabhakaran, Associat e, Davis Wright Tremaine, S an Francisco

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Dewey & LeBoeuf LLP dl.com

Natural Gas Pipeline Safety Under Heightened State and Federal Scrutiny

Stafford Webinars and Publications

March 15, 2012 Darren J. Hunter 312.794.8018 dhunter@dl.com Ahren S. Tryon 202.346.8059 atryon@dl.com

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Dewey & LeBoeuf LLP | 6

I-A OVERVIEW OF STRUCTURE: STATE AND FEDERAL GAS PIPELINE SAFETY

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Dewey & LeBoeuf LLP | 7

Over a Million Miles of Pipeline in the US

  • Interstate Gas Transmission
  • Intrastate Gas Transmission and Distribution
  • Interstate Liquids (crude oil, petroleum products and hazardous liquids)
  • Intrastate liquids, including gathering lines
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Dewey & LeBoeuf LLP | 8

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Dewey & LeBoeuf LLP | 9

Federal Regulatory Authority

  • U.S. DOT regulates pipeline

safety and sets national safety standards

  • U.S. DOT administers pipeline

safety through the Office of Pipeline Safety (OPS)

  • OPS operates within the Pipeline

and Hazardous Materials Safety Administration (PHMSA)

  • OPS Offices

–

Washington, D.C.

–

Atlanta

–

Kansas City

–

Houston

–

Denver

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Dewey & LeBoeuf LLP | 10

State Regulatory Authority

  • States: Can assume regulatory authority over intrastate pipelines

and sometimes act as interstate inspection agents.

  • State standards must be at least as stringent as Federal standards,

but may be more stringent.

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Dewey & LeBoeuf LLP | 11

Other Federal Agencies with Pipeline Safety Oversight

  • FERC (siting, abandonment)
  • Transportation Security

Administration (security, terrorist threats)

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Dewey & LeBoeuf LLP | 12

I-B FEDERAL PIPELINE SAFETY ACTS & REGULATIONS

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Dewey & LeBoeuf LLP | 13

Acts & Regulations

  • A. Background: Prior Pipeline Safety Acts
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Dewey & LeBoeuf LLP | 14

Federal Statutes

  • Natural Gas Pipeline Safety Act of

1968

  • Pipeline Safety Improvement Act of

2002

– Integrity Management Programs

for Transmission

  • Pipeline Inspection, Protection,

Enforcement, and Safety Act of 2006 (PIPES Act)

– Integrity Management Programs

for Distribution

  • Pipeline Safety, Regulatory

Certainty and Job Creation Act of 2011

  • 49 USC §§ 60101 et seq.
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Dewey & LeBoeuf LLP | 15

Acts & Regulations

  • B. Key Regulations Implementing Pipeline

Safety Acts

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Dewey & LeBoeuf LLP | 16

Part 190: Pipeline Safety Programs and Rulemaking Procedures

  • Enforcement mechanisms

– NOPVs and Warnings – Compliance Orders and Notices of Amendment – Corrective Action Orders – Safety Orders

  • Hearings

– Former combined prosecutorial and adjudicatory functions

  • Civil penalties

– The old maximum: $100,000 per violation daily, max of $1,000,000 per

violation

Federal Regulations

continued >

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Dewey & LeBoeuf LLP | 17

Part 191: Transportation of Natural and Other Gas To Pipelines; Reporting

  • Procedures for reporting by natural gas pipelines
  • Incident Reports
  • Safety-Related Conditions Reports
  • Annual Reports

Federal Regulations

continued >

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Dewey & LeBoeuf LLP | 18

Federal Regulations

Part 192: Minimum Federal Safety Standards (Natural Gas)

  • Subpart A: General Provisions

Keys: Scope, class locations (1 through 4), company procedures

  • Subpart B: Materials

Keys: Strength of steel and plastic pipes, marking of materials

  • Subpart C: Pipe Design

Keys: Design formula for pipe (i.e., thickness of pipeline wall)

  • Subpart D: Design of Pipeline Components

Keys: Design of fittings, valves, vaults, compressor stations, etc.

  • Subpart E: Welding of Steel in Pipelines

Keys: Welding procedures, inspection and testing

continued >

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Dewey & LeBoeuf LLP | 19

  • Subpart F: Joining of Materials Other Than by Welding

Keys: Design of mechanical fittings to withstand force

  • Subpart G: General Construction Requirements For Transmission Lines

and Mains Keys: Standards, materials, inspection, etc.

  • Subpart H: Customer Meters, Service Regulators, and Service Lines

Keys: Meter installations, service installations, valves, connections to mains, etc.

  • Subpart I: Requirements for Corrosion Control

Keys: External corrosion control (i.e., protective coating, cathodic protection), internal corrosion control, atmospheric corrosion control

  • Subpart J: Test Requirements

Keys: Pressure testing to establish MAOP, mains, service lines, plastic

Federal Regulations

continued >

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Dewey & LeBoeuf LLP | 20

  • Subpart K: Uprating

Keys: Pressure testing to increase MAOP

  • Subpart L: Operations

Keys: Procedural manual for operations, maintenance and emergencies, surveillance, damage prevention program, emergency plans, investigation of failures, odorization, purging, etc.

  • Subpart M: Maintenance

Keys: Leak surveys, repairs, inspections, abandonment, etc.

  • Subpart N: Qualification of Pipeline Personnel

Keys: OQ, pipeline personnel must be qualified to perform specific tasks, recordkeeping

Federal Regulations

continued >

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Dewey & LeBoeuf LLP | 21

  • Subpart O: Gas Transmission Pipeline Integrity Management

Keys: Identify high consequence areas, develop and follow program that addresses risks in each pipeline segment, consensus standard ANSI B31.8S, baseline assessments, identify threats, continuing evaluation, address anomalous conditions, reporting, etc.

  • Subpart P: Gas Distribution Pipeline Integrity Management

Keys: Identify risk factors, tank risks, leak management, address risks, reporting, etc.

Federal Regulations

continued >

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Dewey & LeBoeuf LLP | 22

Federal Regulations

Where is the regulatory focus now?

  • Integrity Management
  • Maximum Allowable Operating Pressure – Records
  • Control Room Management
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E nsuring Ga s Pipe line Sa fe ty

T he State ’ s Re spo nse to the San Bruno and Ranc ho Co rdo va trag e die s

23

Vidhya Pra b ha ka ra n 415.276.6568 vidhya pra b ha ka ra n@ dwt.c o m

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Ba c kg ro und o n T he T ra g e die s

24

  • Ra nc ho Co rdo va – De c 24, 2008
  • Sa n Bruno – Se p 9, 2010
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I mme dia te Afte rma th o f Ra nc ho Co rdo va E xplo sio n

  • 1 de a d, 2 se rio usly injure d, 3 o the rs injure d
  • Spa rk fo r the e xplo sio n wa s a lig hte r
  • 1 ho use c o mple te ly de stro ye d, 2 a dja c e nt

ho use s with se ve re da ma g e , a nd o the r ho use s with mino r da ma g e

  • NT

SB a nd CPSD imme dia te ly inve stig a te d the g a s e xplo sio n a nd fire

25

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Co nse q ue nc e s fo r PG&E

  • L

a unc he d OI I

  • f PG&E
  • n No v 19, 2010 to

de te rmine if vio la tio ns o c c urre d a nd le vy a fine , fo llo wing CPSD a nd NT SB inve stig a tio n re po rts

  • $38 millio n fine
  • Pre vio us fine o f $26 millio n wa s re je c te d
  • Pa yme nt o f the c o sts o f the inve stig a tio n b y

CPSD

26

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Co mmissio n F inding s

  • 2006 re pa ir wa s impro pe r
  • F

a ile d to pre ssure te st re pa ire d pipe

  • L

a te r de te rmina tio n o f impro pe r pipe did no t re sult in re vie w o f pre vio us insta lla tio ns

  • No drug a nd a lc o ho l te sts a fte r the fa c t to its

e mplo ye e s tha t re spo nde d

  • Re spo nse to o utdo o r g a s le a k wa s

unre a so na b ly de la ye d a nd no t e ffe c tive

27

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I mme dia te Afte rma th o f Sa n Bruno E xplo sio n

  • 8 de a d, 58 injure d
  • De struc tio n o f 38 ho me s, da ma g e to 70 o the rs
  • CPSD a nd NT

SB inve stig a te d the e xplo sio n

  • Re duc tio n in o pe ra ting pre ssure o f the pipe line

28

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I nitia l I nve stig a tio ns

  • NT

SB

– Ja n 3 Sa fe ty Re c o mme nda tio ns to CPUC – He a ring s Ma rc h 1-3 – Mo re la te r

  • I

nde pe nde nt Re vie w Pa ne l

– Cha rte re d o n Se pt 23 – E

mpa ne le d o n Oc t 14

– I

ssue s re po rt June 9

29

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NT SB/ I RP F inding s

  • PG&E

’ s Pipe line I nte g rity Ma na g e me nt Pro g ra m ha d nume ro us sho rtc o ming s

  • PG&E

’ s E me rg e nc y Re spo nse Ne e ds I mpro ve me nt

  • Po o r c o mpa ny sa fe ty c ulture
  • L

a c k o f re so urc e s fo r CPUC re g ula tio n o f sa fe ty

  • L

a c k o f e mpha sis o n sa fe ty pro g ra ms in ra te ma king

  • Po o r c ulture a t the re g ula to r

30

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NT SB/ I RP Re c o mme nda tio ns

  • Ma ny te c hnic a l a nd spe c ific
  • Spe c ific re c o mme nda tio ns fo r PG&E
  • Othe rs tha t flo w into CPUC Rule ma king to

impro ve pipe line sa fe ty

31

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NT SB/ I RP Re c o mme nda tio ns fo r PG&E

  • Pro vide re c o rds fo r pipe line syste m c o mpo ne nts

to de te rmine a ppro pria te o pe ra ting pre ssure

  • (Re )T

e st se g me nts whe re re c o rds c a nno t b e pro duc e d

  • F

ull a udit o f PG&E ’ s o pe ra tio ns (b o th inte rna l a nd CPUC)

32

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NT SB/ I RP Re c o mme nda tio ns fo r CPUC

  • Ac q uire ne c e ssa ry re so urc e s, tra ining a nd skills

to a c hie ve a ppro pria te o ve rsig ht

  • I

nc re a se d sta ffing (CPUC do ub le d g a s sa fe ty sta ff)

  • Re struc turing o f CPSD
  • I

nte rna l a udit o f CPSD

  • Allo w sta ff to issue c ita tio ns (a nd fine s!) in the

fie ld

33

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SLIDE 34

Sub se q ue nt Pro c e e ding s

  • I

. 11-02-016 – inve stig a tio n to de te rmine pe na ltie s a sso c ia te d with sa fe ty-re la te d re c o rd ke e ping

  • I

. 11-11-009 – pe na ltie s a sso c ia te d with

  • pe ra tio ns in hig h-de nsity po pula tio n lo c a tio ns
  • I

. 12-01-007 – pe na ltie s a sso c ia te d with Sa n Bruno e xplo sio n

  • R. 11-02-019 – ne w rule s fo r re g ula ting na tura l

g a s pipe line s

34

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I nve stig a tio n No . 11-02-016

  • Did PG&E

vio la te the la w in its sa fe ty-re la te d re c o rdke e ping ?

  • No t just Sa n Bruno , b ut g e ne ra lly
  • Ba se d o n sta te me nts re g a rding a de q ua c y o f

PG&E re c o rds b y NT SB a s pa rt o f its inve stig a tio n

  • Ong o ing

35

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SLIDE 36

I nve stig a tio n No . 11-11-009

  • Did PG&E

vio la te the la w in its o pe ra tio ns o f its na tura l g a s pipe line syste m in o r ne a r lo c a tio ns

  • f hig he r po pula tio n de nsity?
  • Re pla c ing pipe line se g me nts with stro ng e r pipe

ma te ria l

  • Re duc ing ma ximum a llo wa b le o pe ra ting

pre ssure

36

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SLIDE 37

I nve stig a tio n No . 12-01-007

  • Did PG&E

vio la te the la w, a nd did tho se vio la tio ns re sult in the Sa n Bruno e xplo sio n?

  • Re sult o f CPSD re po rt a lle g ing spe c ific vio la tio ns
  • f la w
  • No t just e ve nts spe c ific to Sa n Bruno , b ut a lso

pa st o pe ra tio ns a nd pra c tic e s

  • De te rmina tio n o f fine
  • PG&E

e xpe c ting a t le a st $200 millio n in fine s

37

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SLIDE 38

Rule ma king No . 11-02-019

  • Pro spe c tive rule ma king to ma ke c ha ng e s a s

ne e de d

  • Cha ng e s b a se d o n da ta re q ue sts se nt to a ll

utilitie s

  • Ra te ma king dire c tive s fo r future c a pita l

e xpe nditure s a nd sa fe ty-justifie d e xpe nditure s

38

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SLIDE 39

Co nse q ue nc e s to PG&E

  • Split g a s a nd e le c tric o pe ra tio ns
  • Re pla c e d se nio r ma na g e me nt, inc luding CE

O

  • $3 millio n fine fo r fa ilure to c o mply with CPUC
  • rde r to sub mit pipe line re c o rds b y Ma rc h 15
  • $16 millio n fine fo r fa ilure to c o nduc t pipe line

le a k surve ys

  • $1 b illio n in g a s syste m upg ra de s a nd sa fe ty

te sts no t re c o ve re d in c usto me r b ills

39

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SLIDE 40

Co nse q ue nc e s Mo re Ge ne ra lly

  • He ig hte ne d fo c us o n sa fe ty (we e kly sa fe ty

re po rts a t Co mmissio n me e ting s)

  • F
  • c us o n issue s with de g ra ding unde rg ro unde d

fa c ilitie s

  • I

nc re a se d spe nding o n infra struc ture ?

40

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Dewey & LeBoeuf LLP | 41

Acts & Regulations

  • III. PIPELINE SAFETY

ACT OF 2011

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Dewey & LeBoeuf LLP | 42

Pipeline Safety Act of 2011

  • Section 2. Civil Penalties

– Penalties doubled – Anti-obstruction provisions

  • Section 3. Pipeline Damage Prevention

– State programs must be broadly inclusive to get grants

  • Section 4. Automatic and Remote-Controlled Shut-Off Valves.

– New transmission construction or entire line replacements – “Economically, technically, and operationally feasible””

continued >

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Dewey & LeBoeuf LLP | 43

Pipeline Safety Act of 2011

  • Section 5. Integrity Management

– Should PHMSA expand the Integrity Management program

beyond High Consequence Areas?

  • Section 6. Public Education and Awareness

– Accurate mapping = better emergency response

  • Section 9. Accident and Incident Notification

– PHMSA to mandate incident notification within 1 hour of

discovery

– Fixes a longstanding regulatory issue regarding “earliest

practicable moment”

continued >

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Dewey & LeBoeuf LLP | 44

Pipeline Safety Act of 2011

  • Section 13. Cost Recovery for Design Reviews

– You pay PHMSA for design reviews, but only for the most

massive projects

  • Section 20. Administrative Enforcement Process.

– Separation of functions

  • Section 21. Gas and Hazardous Liquid Gathering Lines

– No immediate change to regulations. Review, study, report

  • Section 22. Excess Flow Valves

– For distribution lines other than service lines to single family

residences, must consider the need for EFVs

continued >

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Dewey & LeBoeuf LLP | 45

Pipeline Safety Act of 2011

  • Section 23. Maximum Allowable Operating Pressure

– The guts of the Act and the response to San Bruno – Within 6 months of the Act operators to verify records for

interstate and intrastate transmission in class 3 and class 4 locations and class 1 and class 2 HCAs, using elements considered appropriate by PHMSA ♦ Virtually impossible timeframe for PHMSA to issue a rulemaking

– Within 18 months of the Act, identify and submit documentation

related to segments for which the records are insufficient to confirm the established MAOP

continued >

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Dewey & LeBoeuf LLP | 46

Pipeline Safety Act of 2011

  • Section 23. Maximum Allowable Operating Pressure

– Now must report MAOP exceedances beyond pressure-limiting

device capacity within 5 days of occurrence

– If a pipeline has insufficient MAOP records, PHMSA must:

♦ Require reconfirmation of MAOP as expeditiously as economically feasible; and ♦ Determine what actions are appropriate until a MAOP is confirmed, considering potential consequence to public safety and the environment, impacts on pipeline system reliability and deliverability, etc.

continued >

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Dewey & LeBoeuf LLP | 47

Pipeline Safety Act of 2011

  • Section 23. Maximum Allowable Operating Pressure

– PHMSA must issue regulations within 18 months for tests to

confirm the material strength of previously untested gas transmission lines in HCAs that operate at a pressure > 30 %

  • SMYS. Must consider safety testing methodologies like pressure

testing and ILIs

– PHMSA to consult with FERC and states to establish

timeframes for the testing, so as to account for potential consequences to public safety and the environment and minimize costs and service disruptions

continued >

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Dewey & LeBoeuf LLP | 48

Pipeline Safety Act of 2011

A plethora of studies and reports:

  • A study on excavation damage.
  • A study on transmission pipeline operator response capabilities in HCAs.
  • A study on expanding IMP requirements outside of HCAs.
  • A report to Congress on using Risk Based Assessment Intervals for IMP.
  • Surveys and reports on cast iron pipe management and replacement .
  • A report to Congress on liquid pipeline leak detection systems.
  • A study and report to Congress on the transportation of diluted bitumen.
  • Allows DOT to study transportation of nonpetroleum hazardous liquids (i.e.

chemicals).

  • A report to Congress on existing gathering line regulations.
  • A report evaluating NTSB’s recommendation on excess flow valves.
  • A report to Congress on minority, women, and disadvantaged business participation

in the pipeline industry.

  • A study and report to Congress on pipeline construction permitting issues.
  • A study and report to Congress on depth of cover for liquid pipeline navigable water

crossings.

  • A report to Congress on PHMSA staffing.

continued >

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Dewey & LeBoeuf LLP | 49

Acts & Regulations

PHMSA Rulemaking Initiatives

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Dewey & LeBoeuf LLP | 50

PHMSA Rulemaking Initiatives

  • Anticipating legislation, PHMSA issued an Advance Notice of

Proposed Rulemaking last August.

  • Certain issues in the ANPRM overlap with the new Act (e.g.,

gathering lines, EFVs, HCA expansion, etc.)

  • Focus on 14 topics in two broad categories:

– (1) Strengthening Integrity Management Program – (2) Strengthening Non-IM Regulations that Affect Pipeline

Integrity

continued >

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Dewey & LeBoeuf LLP | 51

PHMSA Rulemaking Initiatives

  • (1) Integrity Management Regulation Possibilities:
  • Modify High Consequence Area definition?
  • Tighten existing Part 192 IM requirements?
  • Modify repair criteria?
  • Revise requirements for collecting, validating, and

integrating pipeline data?

continued >

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Dewey & LeBoeuf LLP | 52

PHMSA Rulemaking Initiatives

  • Make IM requirements for risk models more prescriptive?
  • Strengthen requirements for applying “knowledge gained”

through the IM program?

  • Strengthen requirements for assessment methods?
  • E.g., specify techniques to allowed to identify

manufacturing and construction defects, stress corrosion cracking, etc.?

continued >

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Dewey & LeBoeuf LLP | 53

PHMSA Rulemaking Initiatives

  • (2) Considerations to strengthen or expand non-IM regulations to

improve pipeline integrity:

  • Valve spacing and remotely- or automatically-controlled

valves.

  • Corrosion control.
  • Pipe with longitudinal weld seams with systemic integrity

issues.

  • Establishing requirements applicable to underground gas

storage.

continued >

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Dewey & LeBoeuf LLP | 54

PHMSA Rulemaking Initiatives

  • Management of Change.
  • Quality Management Systems (QMS).
  • Exemptions applicable to facilities installed prior to the

regulations.

  • Gathering lines (i.e., expanded regulation of large diameter,

high pressure Marcellus Shale lines).

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Dewey & LeBoeuf LLP | 55

  • IV. POTENTIAL FUTURE

DEVELOPMENTS