Shuster To Support Transmission Company-sought Change To Integrity Program; EPA Delays Emissions Reporting

April 2011 Vol. 238 No. 4

Pipeline safety hearings were the rage in early March. The National Transportation Safety Board (NTSB) held hearings March 1-3 on last year’s PG&E explosion in San Bruno, CA. Then on March 7 the House subcommittee on railroads, pipelines and hazardous materials held a hearing in King of Prussia, PA focusing on the explosion of a 12-inch diameter main in Allentown, PA owned by UGI Utilities, Inc.

Five people died in that accident. Eight people died in San Bruno. A preliminary NTSB report hypothesized that the cause may have been a weld on a 30-inch transmission pipeline which blew apart.

In an interview, Rep. Bill Shuster (R-PA), chairman of the House pipeline subcommittee, who scheduled the Pennsylvania hearing, says it is unclear what caused the accidents in California and Pennsylvania. Shuster adds that he plans to introduce a pipeline safety bill this fall, and fight any Obama administration attempt to include pipeline safety changes in a highway bill, which could move through Congress sooner.

Congress has temporarily extended highway programs with short-term bills, the latest in March, which were necessary to prevent federal highway programs from stopping dead in their tracks. The latest extension lasts until Sept. 30 by which time Congress will consider a major highway bill. The administration is pushing to include pipeline provisions in that highway bill. Shuster says he opposes that strategy. House and Senate efforts to pass stand-alone pipeline safety bills went nowhere in 2010.

Shuster plans to propose changing the gas transmission integrity management program so that pipelines re-inspect segments in high consequence areas (HCAs) based on the risk of the pipeline. Currently, pipelines are re-inspected based on a specified timeline. INGAA has been pressing for five years for a risk-based re-inspection program without any luck in Congress. But Shuster appears ready to pick up that gauntlet.

Shuster says that based on what he heard in the Allentown hearing it might be a good idea if the Pipeline and Hazardous Materials Safety Administration (PHMSA) or the state Public Utility Commissions set up a certification program for private pipeline inspectors used by companies such as UGI Utilities. “That is not something I want to do for sure, but I want to take a look at it.”

By waiting until fall, Shuster may have recommendations from the NTSB included in a final San Bruno report. One surprising revelation coming from the NTSB hearings was that the San Bruno fire chief had no idea a 30-inch PG&E transmission pipeline ran through his jurisdiction. Federal laws, amended as recently as 2006, require pipeline owners to educate local communities about the location of pipes. There was some concern even before the San Bruno accident that the PHMSA rules on “public education” needed improvement. Those rules essentially site the American Petroleum Institute’s (API) recommended practice (RP) 1162 as the standard for these public awareness programs.

EPA Delays Emissions Reporting; Congress May Prohibit EPA Imposition Of GHG Controls   
Seemingly bowing to Republican congressional pressure, the EPA put off the March 31 deadline for companies to report greenhouse gas (GHG) emissions. Transmission pipelines were to have reported emissions of carbon dioxide, methane and other GHGs from compression stations by that deadline if those emissions exceeded 25,000 metric tons in 2010. The EPA had not set a new reporting deadline as of this writing.

The agency said it was extending the deadline “following conversations with industry and others, and in the interest of providing high-quality data to the public this year.” The agency added: “This extension will allow EPA to further test the system that facilities will use to submit data and give industry the opportunity to test the tool, provide feedback, and have sufficient time to become familiar with the tool prior to reporting.”    

Emboldened by that reporting delay, and by their November election gains, the GOP is moving forward with legislation prohibiting the EPA from actually regulating (as opposed to simply reporting) GHG emissions. The Energy Tax Prevention Act (H.R. 910) introduced in March by House and Senate Republicans, with some Democratic support, would do that.

The EPA’s initial GHG regulation took effect in January 2011 when it issued a final rule requiring “major sources” of air toxics to apply for a permit when their emissions crossed the threshold of 25 metric tons on Jan. 1 because of the addition of GHG emissions, which were previously not computed in a program called “prevention of significant deterioration (PSD).” This could apply to gas transmission pipelines based on GHG emissions from compressions stations and vents.

Lisa Jackson, administrator of the EPA, has said the agency would begin the job of writing regulations for GHG emissions from electric utilities and refineries toward the end of 2011. There is no indication the EPA is yet considering to restrict GHG emissions from compression stations or other pipeline station equipment, based on those emissions alone. But H.R. 910 would prohibit that in any case.

Lisa Beal, vice president, environment and construction policy at INGAA, explains, “With regards to the Upton Bill, INGAA has always opposed using the CAA (Clean Air Act) to regulate GHGs. We are still evaluating the specifics of the bill but we support the intent and believe that Congress is the appropriate body to decide if, how and when GHGs should be regulated.”

Federal Coordinator Comments On Open Season Negotiations
Alaska Natural Gas Transportation Projects Federal Coordinator Larry Persily said a “temporary delay” rather than a failed open season is likely the meaning behind Denali’s
statement on March 7 that it is continuing commercial negotiations with potential natural
gas pipeline shippers.

Although the pipeline venture had hoped to announce successful results of its open season bidding for pipeline capacity, the immense cost, complexity and risk of the undertaking are making it harder for Denali – and the other pipeline venture, the Alaska Pipeline Project sponsored by TransCanada and ExxonMobil – to meet their self-imposed timelines to conclude

“Continuing negotiations are part of the process and do not equate to a failed open season. Rather, I hope they are a temporary delay, though certainly a frustrating delay to Alaskans who have been waiting years for a North Slope gas pipeline, and to the project developers that have spent more than $500 million in the past decade in an effort to pull together a commercially viable pipeline project.

“The fact that negotiations continue between the two project development teams and potential
shippers means there is still the opportunity to put together a deal that would bring jobs, natural
gas and public revenues to Alaska for decades. The fact that negotiations continue is another
opportunity for the state to engage the North Slope producers, which will underwrite financing
for the gas line, in discussions of possible fiscal terms for the largest private-sector energy
project in North American history.

“The state’s fiscal terms would make a difference to the economics of the project, just as the loan guarantees and expedited timeline for the environmental impact statement in federal law will make a difference,” Persily said.

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