July 2015, Vol. 242, No. 7


Government: Obama Nominates New PHMSA Administrator

With Congress riled about PHMSA’s slow implementation of the last pipeline safety law, the Obama administration has nominated a new administrator for the Pipeline and Hazardous Materials Safety Administration who lacks pipeline and hazardous materials experience. Nor has she ever been a regulator.

Marie Therese Dominguez began in the Clinton White House and worked her way through administrative positions in the
Federal Aviation Administration, U.S. Postal Service and the Army, where she spent the last two years as deputy assistant secretary of the Army for Civil Works.

If one compares her professional background and its relevance to the PHMSA job with the background of Colette Honorable, the recently appointed FERC chairman, and the suitability of
Honorable’s background, the difference is night and day. Honorable was supremely qualified.

The only positive with Dominguez is that she knows her way around Washington bureaucracy, and ostensibly has a sharper political antennae than Timothy Butters, the former assistant chief of pperations for a northern Virginia fire department and current
PHMSA deputy administrator.

Effort to End Crude Oil Export Ban

Sen. Lisa Murkowski’s bill (S. 1312) to end the U.S. ban on crude oil exports looks to be running into substantial opposition from the Obama administration and Democrats on Capitol Hill. Her Energy Supply and Distribution Act does have one Democratic co-sponsor, Sen. Heidi Heitkamp (ND), but is otherwise a solidly GOP bill.

Energy Secretary Ernst Moniz appeared to forecast administration opposition when he told an energy conference in Houston in April: “In a situation where we still import 7 million barrels of crude oil per day, I don’t think an overly compelling argument has been made on the basis of pragmatic economics.”

says Carlos Pascual, senior vice president at IHS, an international consulting firm, said, “The United States now has the fastest growing oil economy in the world.”

He previously served as the Coordinator for International Energy Affairs and Special Envoy on Energy at the State
Department. Since 2008, U.S. crude oil output has increased by 81% – 4.1 million bpd principally of light tight oil.

“This increase is the fastest in U.S. history and exceeds the combined production gains from the rest of the world,” adds Pascual. “The conditions that justified the crude oil export ban in 1973 no longer apply.”

GOP Trying to Get Permit Reforms Past Democrats

House Republicans have restarted efforts to pass legislation making it more difficult for federal environmental agencies to drag their feet reviewing new pipeline applications.A key House committee reviewed a new draft bill, partially devoted to pipelines, which is a pale alternative to another bill which passed the House in January.That would be the Natural Gas Pipeline Permitting Reform Act (H.R. 161) which passed Jan. 21 by a vote of 253-169.

But H.R. 161, sponsored by Rep. Mike Pompeo (R-KS) cannot pass the Senate because of opposition. So the new draft bill is an attempt to craft pipeline permitting reform which Democrats can agree to.

The Pompeo bill would give an agency such as the Corps of Engineers or the Fish and Wildlife Service an extra 30 days beyond the current 90-day limit, which starts once FERC has finalized an environmental impact statement, in which to approve or disapprove a pipeline application. If it failed to act, FERC could approve the project.

The draft pipeline section unveiled at hearings in May before the House Energy & Commerce Committee’s subcommittee on energy and power is weaker than what is in the Pompeo bill from a pipeline advocacy standpoint.It does set the 90-day deadline, now an administrative requirement, as a federal statute. But it substitutes “issue resolution meetings” instead of hard deadlines, which the Pompeo bill imposed. If a federal agency doesn’t meet the 90/30 day deadlines, it
must notify Congress and “describe in that notification an implementation plan to ensure completion.”

Sen. Shelly Moore Capito (R-WV) has already introduced an actual bill encompassing the House draft language (S. 1210). The Capito bill is called the Oil and Gas Production and Distribution Reform Act of 2015.But this new, draft pipeline approval language, weak as it is, is still unacceptable to Democrats. Both Frank Pallone, Jr. (NJ) and Bobby Rush (IL), the top two Democrats on the full committee and energy and power subcommittee, oppose the draft. Rush called it “a solution in search of a problem.”

The new version may pass the House as part of whatever larger energy bill it is included in. But it will run into trouble
in the Senate if House GOPers don’t meet at least some of the Democratic objections, if that is possible.
Complicating the draft’s future, too, was opposition from Ann F. Miles, Director, Office of Energy Projects, FERC.She said,”I am concerned that codifying the commission’s practices too rigidly might have the unintended
consequence of limiting the commission’s ability to respond to the circumstances of specific cases, to changes in the natural gas industry, and to the nation’s energy needs.”

Don Santa, President and CEO of the Interstate Natural Gas Association of American, said the current FERC pipeline approval process “remains a good, albeit complex, process.” He added, however, “There have been some trends in the wrong direction. What was once orderly and predictable is now increasingly protracted and contentious.”

He said the bill would “modestly” improve the permitting process. But he argued Congress should do more by creating “real consequences for agencies that fail to meet reasonable deadlines.” That appeared to be a reference to the Pompeo bill or something similar.

OSHA Issues New Underground Construction Standard

The Occupational Safety and Health Administration (OSHA) issued a new rule in May which, for the first time, sets regulatory standards for employers whose employees work in confined spaces in a construction setting. The rule applies to utility work, for example, in places such as storm drains, water mains, and precast concrete and other pre-formed
manhole units.

It apparently does not apply to pipeline excavation work. The OSHA has had a confined spaces rule since 1993, but it only applies to general industry. Construction companies have said over the past decades that they are following that rule.However, the United Steelworkers filed a lawsuit in 1992 demanding the agency establish separate rules for confined spaces in construction, and after issuing a proposed rule in 2007, the agency has finally complied.

The final rule for construction sectors isn’t terribly different than the one for general industry. The main difference is that the new rule requires communication and coordination among controlling contractors and subcontractors, and between host employers and controlling contractors. The idea behind the new communications mandates is to prevent the
actions of one employer from exposing another’s employees to hazards in a permit space.

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