October 2013, Vol. 240 No. 10


Pipeline Construction Among Most Affected By OSHA Proposal On Crystalline Silica

Oil and gas operations are near the top of the list of sectors which will be affected if the Occupational Safety and Health Administration’s (OSHA) proposed workplace standard on crystalline silica becomes final.

The agency lists 13 sectors which have the biggest exposure to crystalline silica, which is a primary cause of silicosis, a fatal lung disease, and also lung cancer. Of the 13 sectors, rock and sandblasting associated with building pipelines and digging wells has the fourth-highest number of workers exposed to crystalline silica above the permissible exposure (PEL) limit of 100 micrograms.

The proposed rule would replace that 40-year old PEL with one set at 50 micrograms and an action level of 25 micrograms. The action level is the standard’s trigger for increased industrial hygiene monitoring and initiation of worker medical surveillance.

Bill Hillman, CEO of NUCA, says his group was reviewing “the whole enchilada – all 757 pages” but was not ready to make comments on it.

Groups such as the National Association of Manufacturers (NAM) say no new standard is needed because there was a 93% reduction in silicosis mortality from 1968 to 2002, according to the Centers for Disease Control and Prevention. Given the costs of compliance that all companies face, Amanda Wood, Director, Labor and Employment Policy, NAM, says OSHA ought to focus on companies violating the current standard.

The costs for all companies subject to the new standard, even those with admirably low exposure limits, might be substantial, given the exposure monitoring, medical monitoring and training costs. OSHA estimates those to be $630 million (total, for all sectors) on an annual, recurring basis. Wood says the industry estimate is $5 billion. That difference may be because the OSHA says the provisions of the proposed rule “are similar to industry consensus standards that many responsible employers have been using for years, and the technology to better protect workers is already widely available.”

Wood and many others are studying the proposed rule in order to come up with more specific objections. The AFL-CIO has been pushing hard for a new standard for years. OSHA has considered one for more than a decade, but never moved forward, in part because of industry opposition and because of a deregulatory bent among Republicans and some Democrats.

PHMSA Considers Elimination Of Class Location Rules On Pipeline Safety

Should the federal government ditch the long-standing class location system which allows pipelines to operate at reduced levels of stress based on population near the pipelines? That is one of the issues before the Pipeline and Hazardous Materials Safety Administration (PHMSA) which issued a proposed rule in August. PHMSA didn’t take a position on the question. But it was asking it because a provision in the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 requires the Secretary of Transportation to evaluate and issue a report on whether IMP requirements should be expanded beyond high consequence areas (HCAs) and whether such expansion would mitigate the need for class location requirements.

Class locations were an early method of differentiating risk along gas pipelines. The class location concept pre-dates federal regulation of pipelines. These designations were previously included in the ASME International standard, “Gas Transmission and Distribution Pipeline Systems,” (ASME B31.8) from which the initial pipeline safety regulations were derived.

PHMSA published an extensive list of possible new pipeline safety regulations in August 2011. Those included strengthening and adding more prescriptive language to integrity management (IM) requirements and revising the definition of HCAs. At that time, PHMSA acknowledged that it was raising “several important and complex public safety issues, many of which, if implemented, could impose significant cost on the pipeline industry.”

PHMSA has not taken any new regulatory steps on pipeline safety since that August 2011 “advanced notice of proposed rulemaking.” But this latest proposed rule could be considered an outgrowth since any elimination of the class location safety system might pave the way for needed changes to the definition of HCAs. The Interstate Natural Gas Association of American (INGAA) has opposed any regulatory redefining of HCAs, and has said it had voluntarily extended integrity management–i.e. pigging–well beyond HCAs, to 65% of the 300,000 miles of interstate pipe by the end of 2012. There are 18,000 miles of pipeline in HCAs.

FERC Considers Allowing Transmission Of “Non-Public Operational” Information
Pipelines want a couple of fairly minor changes around the edges of a Federal Energy Regulatory Commission (FERC) proposal to allow the exchange of “non-public operational” information between pipelines and electric generators. The expanded flow of information would help prevent power outages during cold and hot weather events and give electric utilities advance notice of potential supply interruptions on the pipeline’s end.

This is FERC’s latest action stemming from its consideration of numerous aspects of gas-electric interdependence and coordination begun formally in February 2012. There have been meetings and technical conferences since then, and at least one FERC regulatory change directed at the Northeast.

This proposed rule would provide explicit authority to interstate natural gas pipelines and energy utilities in interstate commerce to share non-public, operational information with each other for the purpose of promoting reliable service or operational planning on either the public utility’s or pipeline’s system. However, recipients of that non-public, operational information would be subject to a “no-conduit rule” which would prohibit subsequent disclosure of that information to an affiliate or third party.

INGAA is generally fine with the proposed rule, but suggests a couple of tweaks. For example, Joan Dreskin, the general counsel, has asked the agency to waive the proposed no-conduit rule during critical and imminent or ongoing emergency situations in order to ensure reliability, subject to a record of the exchange as soon as practicable after the fact.

“For example, during a critical and imminent or ongoing emergency, transmission operators should be able to speak to a local distribution company (LDC), a marketer who can provide supply and a specific generator in order to remedy an emergency situation that threatens reliability,” she explains.

Speaking for the LDCs, Andrew K. Soto, senior managing counsel at American Gas Association, says the proposed no-conduit rule may be interpreted too broadly as to prohibit the very kinds of communications now permitted under FERC Standards of Conduct.

“This rule should not be interpreted to prevent a public utility or interstate pipeline from disclosing non-public, operational information to a third-party LDC, especially where such information would promote reliable service or operational planning with regard to gas-fired generators located on the LDC’s system,” he says.

The kinds of information FERC has in mind includes: 1) real-time and anticipated system conditions that have or are anticipated to impact natural gas transportation by changing near-term gas flows; 2) actual and anticipated electric service interruptions to gas compressor locations; 3) verification that there is sufficient pipeline operational capability available at a specific delivery point to change the quantity of natural gas delivered to the generator as identified by the electric transmission operator; and 4) actual and projected gas transportation restrictions to electric generators.

Dreskin says INGAA wants further clarification about what FERC means by “operational planning information,” particularly as it relates to longer-term operational planning such as future changes in operations and/or facilities.

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