December 2016, Vol. 243, No. 12

Government

Government

Interim Gas Storage Regulations Upcoming from PHMSA

Interim regulations from PHMSA on natural gas storage facilities are imminent. They are unlikely to be controversial since the Pipeline and Hazardous Safety Administration says it will be based on two industry voluntary standards: API Recommended Practices 1170 and 1171, both fully supported by pipeline groups.

The regulations were adopted in 2015 in the wake of the leak at SoCalGas’s Aliso Canyon facility. There are 415 underground gas storage facilities in the U.S., half are interstate and half intrastate. However, permanent regulations scheduled to be finalized in the future may be more onerous.

The near-term adoption of the RP1170 and 1171 as federal law was recommended by a federal task force under the Department of Energy which was created by the terms of the Protecting our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2016.

That law gave the PHMSA two years to establish a new standard which would jump off from the task force’s 44 recommendations but may well exceed requirements of RP 1170 and 1171. There will be an interim rule first, a final rule later.

RP 1171 addresses storage in depleted hydrocarbon reservoirs and aquifer reservoirs, which comprise the vast majority of storage fields including Aliso Canyon and all the other California storage fields. RP 1170 addresses storage in salt caverns.

Don Santa, CEO of the Interstate Natural Gas Association of America (INGAA), highlighted aspects of the recommendations – beyond industry adoption of 1170/1171 – that are problematic in addition to calling the recommendations generally premature because they were issued prior to the completion of the root-cause analysis of the Aliso Canyon incident. That is being done by the California Public Utilities Commission (CPUC) through a third-party contractor. The analysis will include detailed work at the leak site.

INGAA is particularly concerned about one recommendation. “We also are concerned by the task force’s recommendation that storage wells with single barriers be transitioned to double barriers,” Santa stated. “As written, this prescriptive recommendation could affect the majority of U.S. gas storage wells, and adversely affect customer service and reliability. Installing double barriers is not the only approach to improve gas storage safety.”

However, the recommendation does not exactly say that single-lined wells should all be converted to double-lined systems. The report says is that underground gas storage wells should be designed so that a single point of failure cannot lead to leakage and uncontrolled flow. Operators with existing wells with single-point-of-failure designs should have a risk management plan to maintain safe well operating pressure that includes a rigorous monitoring program, well integrity evaluation, leakage surveys, mechanical integrity tests, conservative assessment intervals, and in most cases, a plan to phase out these designs.

An operator seeking to continue using a single-barrier well design should prepare and make available for regulatory review during inspections a rigorous and fully documented engineering analysis of the design that considers the potential impacts and consequences of a leak at any point for each well without benefit of a double barrier. So the recommendation does imply that wells with single barrier systems should be able to keep them if certain steps are taken.

Cathy Landry, INGAA spokeswoman, said, “We are concerned with how the terms ‘single barrier’ and ‘double barrier’ will be defined. We disagree with the suggestion that all storage wells injecting/withdrawing through production casing –a possible interpretation of ‘single barrier’ – have a ‘problem’ that needs to be addressed. A significant majority of gas storage wells in the U.S. operate in this manner, and as the interagency report repeatedly points out, incidents are rare.”

The PIPES Act requires a final rule to be published by summer 2018. PHMSA has missed congressional deadlines for rulemakings over the past decade. So some states are stepping in, California among them. The PIPES Act also provides that states can adopt additional or more stringent safety regulations as long as they are compatible with the federal minimum standards.

PHMSA Expands Flow Valves Mandate

PHMSA expanded requirements for local gas distributors regarding installation of excess flow valves (EFVs). The American Gas Association and other local gas suppliers have long supported the widened mandate. AGA in 2011 issued a Commitment to Enhancing Safety, which includes a commitment by member companies to expand installation of EFVs to new and fully replaced branch services, small multi-family facilities, and small commercial facilities where economical, technically and operationally feasible.

Based on an informal survey taken by AGA, this commitment has resulted in EFVs being installed on over 95% of all new and replaced services since June 30, 2013.

The final rule PHMSA issued in October adds four new categories for which EFV installation will be required. These are for new and entirely replaced services. The existing EFV installation requirement for single family residences (SFRs) served by a single service line remains unchanged. New categories of service are:

• Branched service lines to a SFR installed concurrently with the primary SFR service line (a single EFV may be installed to protect both lines)

• Branched service lines to a SFR installed off a previously installed SFR service line that does not contain an EFV

• Multifamily installations, including duplexes, triplexes, fourplexes, and other small multifamily buildings such as apartments, condominiums) with known customer loads at time of service installation, based on installed meter capacity, up to 1,000 standard cubic feet per hour (SCFH) per service

• A single, small commercial customer served by a single service line, with a known customer load at time of service installation, based on installed meter capacity, of up to 1,000 scfh per service.

The final rule requires curb valves, or EFVs, if appropriate, for applications operating above 1,000 SCFH. Curb valves cannot be operated instantaneously like EFVs; they are manual. This was probably the most controversial aspect of the final rule, given that the local distribution industry was solidly behind expansion of the EFV mandate.

With regard to curb valves, distribution companies objected to early wording which would have given first responders automatic access to those valves. Operators said it ought to be up to their discretion as to who gets access to curb valves.

They were concerned about unintended accidents if the valves were mishandled. In the end, PHMSA came to a consensus solution that enables first-responders, if qualified and authorized, to operate valves if needed, yet retains the operators’ right to make decisions regarding the operation of their own systems.

The National Transportation Safety Board (NTSB) recommended installing EFVs on all homes and buildings in 2001 after its investigation of an explosion in Virginia in 1998. PHMSA eventually mandated EFVs on SFRs in 2009 and then began considering widening that requirement, which became somewhat of a necessity when Congress admonished the agency via an amendment to the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011.

That provision required PHMSA to issue regulations, if appropriate, requiring the use of EFVs or equivalent technology for new or entirely replaced gas distribution branch services, multifamily facilities, and small commercial facilities if economically, technically and operationally feasible.