October 2011, Vol. 66 No. 10

Washington Watch

NTSB Recommendations On San Bruno Put Pressure On Congress, Administration; Keystone XL Decision Coming

The pipeline safety recommendations issued by the National Transportation Safety Board (NTSB) on Aug. 30 puts significant pressure on both Congress and the Obama administration to respond to the problems discovered as part of the NTSB investigation of the PG&E San Bruno explosion in December 2010.

Eight persons were killed and many others injured as a result of that accident. The NTSB recommendations go way beyond the legislation Congress has begun to pass through committees and in the advanced notice of proposed rulemaking (ANPR) the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued on Aug. 24.

The House Transportation and Infrastructure Committee passed a pipeline safety reform bill on Sept. 8 a few days after returning to Washington from the summer recess. Called the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011(H.R. 2845), the bill came a week after the NTSB released its final conclusions on San Bruno. The explosion was caused by escape of gas from a fracture in a defective piece of pipe installed in 1956. PG&E’s integrity management program, which the NTSB called “deficient and ineffective,” should have caught the defect, but did not.

The NTSB was also sharply critical of the PHMSA which released an ANPR on Aug. 24 which sets the stage for possible regulatory changes to the transmission integrity management program (TIMP) authorized by Congress in 2002 and put in place by PHMSA in 2003. The TIMP requires interstate pipelines to test segments running through “high consequence areas” (HCAs) and repair any potential problems.

The NTSB recommendations focus on PHMSA supervision of the TIMP but also push enhancements of many other pipeline safety rules, such as exemption from hydrostatic testing for pipelines built prior to 1970. The defective PG&E segment which ruptured in San Bruno was exempt from hydrostatic testing, which would have probably found the defect. The NTSB recommended that the Department of Transportation provide considerably more oversight to PHMSA supervision of the TIMP in addition to directives to PHMSA itself in the areas of control room operation, supervisory control and data acquisition (SCADA) systems, installation of shutoff valves, provision of pipeline data to local emergency responders, expanded inline testing, drug and alcohol programs and on other topics. The board also asked for elimination of the pre-1970 pipeline exemption from hydrostatic testing.

INGAA CEO Don Santa says his association’s Pipeline Safety Task Force’s Integrity Management Continuous Improvement (IMCI) team is implementing action plans that address NTSB’s recommendations.

The bill passed by the House committee on Sept. 8, a second House bill in the Energy & Commerce Committee and a third bill passed in May by the Senate Commerce Committee respond to only a handful of the NTSB recommendations. The House Transportation Committee bill is very similar to the Energy & Commerce bill, which is called the Pipeline Infrastructure and Community Protection Act of 2011. INGAA prefers the House E&C bill to the Senate bill, called the Pipeline Transportation Safety Improvement Act of 2011(S. 275).

In its San Bruno report, the NTSB criticized the PHMSA for inadequate TIMP inspection protocols and for not incorporating the use of effective and meaningful metrics as part of its guidance for effective performance-based pipeline safety management programs. Neither the House nor Senate bills require upgrading PHMSA standards or inspection of transmission company implementation of the TIMP. The bills do charge PHMSA with making recommendations whether to expand the TIMP to areas not now considered HCAs.

The House and Senate bills do cover some of the ground in the NTSB recommendations but stop short of requiring most of what NTSB recommends, such as automatic shutoff valves. The bills, for example, require shut off valves if they are “economically, technically and operationally feasible” and then only for new pipelines. The NTSB wants automatic shutoff valves or remote control valves in high consequence areas and in class 3 and 4 locations.

A House staffer explains that widespread use of remote control valves “which run in the hundreds of thousands of dollars – in every transmission line in every HCA would place an impossible burden on industry and consumers alike.”

The House and Senate bills have no provisions related to SCADA, for example. The House Energy & Commerce bill does end the grandfathering of pre-1970 pipelines from maximum allowable operating pressure requirements. “Closing this loophole will help prevent accidents like San Bruno in the future,” says the House staffer. She adds, “Also, as part of expanding integrity management programs into transmission lines located outside high consequence areas, we are starting the process of requiring inline inspection of many more miles of gas transmission lines.”

The NTSB investigation also determined that a sewer line installation in 2008 near the rupture did not damage the defective pipe. Nonetheless, the House Transportation bill requires PHMSA to conduct a study of third-party excavation damage, a provision missing from the Senate bill. Both bills eliminate current exemptions for local government civil works arms from state “one-call” notification systems.

National Interest Determination On Keystone XL Upcoming
The U.S. State Department held hearings in Montana, Nebraska, Kansas and Texas in late September as the last step before deciding whether to approve the Keystone XL pipeline. That is the controversial 1,661-mile tar sands pipeline TransCanada wants to build in stages from Hardisty in Alberta to Houston and Port Arthur, TX, in the Gulf region. Environmentalists have opposed it because of concerns about the way tar sands are produced, their contribution to greenhouse gas emissions and potential groundwater contamination in the Ogallalla aquifer in Nebraska.

But the State Department’s final environmental impact statement (EIS) issued on Aug. 26 said the proposed route would have “limited environmental impacts” and was better than any of the 14 alternative routes the department looked at.

When she announced the environmental approval, Kerri-Ann Jones of State’s Bureau of Oceans and International Environmental and Scientific Affairs, noted TransCanada has agreed to take a number of steps to lessen environmental damage along the pipeline’s route. More importantly, she pointed out that before State would make a “national interest determination,” which is the final regulatory approval step, State will “look at other topics, including economic impacts, energy security questions and foreign policy concerns.”

Given Keystone XL’s assumed contribution to U.S. jobs and energy independence, its final approval by the Obama administration seems a foregone conclusion. However, Jones was unable to comment on whether any state had the authority to stop the pipeline within its border. “I mean, the states – that’s in the states’ court to decide about that. And their future actions, I really can’t comment on that,” she said.

Debate in Nebraska has been particularly intense, in part because of the presence there of the Ogallalla aquifer and Nebraska Sand Hills. Sen. Mike Johanns (R-NE) says he was tremendously disappointed that running the pipeline through the Sand Hills continues to be the State Department’s preferred route. “The State Department is now one step away from giving the green light to a project that could have grave consequences for our state,” he adds. “I strongly urge the State Department officials who visit next month to take a long, hard look at where TransCanada intends to place this pipeline.”

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