September 2011, Vol. 66 No. 9

Washington Watch

NLRB Pushing Pro-Union Agenda; EPA Proposal Affects Pipeline Compressors

The National Labor Relations Board (NLRB) has picked up the pro-union cudgel from Democrats in Congress. In the last session of Congress, Democrats had tried and failed to pass the Employee Free Choice Act (EFCA) which would have expanded union organizing rights.

Now the NLRB, composed of three Democrats and one Republican, has filed a pro-union lawsuit against Boeing and proposed a major rule change which would accomplish some of what the EFCA sought to do.

House Republicans are likely to pass legislation changing the NLRB statute to prevent unions from contesting a company’s moving of production facilities from one state to another. This is the issue in the Boeing case, where the NLRB is pursuing a complaint from the International Association of Machinists and Aerospace Workers accusing Boeing of illegally retaliating against the unions for a series of strikes at Boeing plants in Washington state. That retaliation, according to the unions, took the form of Boeing’s decision to build a secondary 787 Dreamliner aircraft plant in North Charleston, SC, instead of the Seattle area as a form of punishment. The company has denied that, saying it picked mostly nonunion South Carolina for the 3,800-worker factory based on several economic factors, including strike-related costs.

The House Education and Labor Committee passed a bill in late July (Protecting Jobs from Government Interference Act /H.R. 2587). The legislation amends the National Labor Relations Act to prohibit the NLRB from ordering any employer to relocate, shut down or transfer employment under any circumstance.

The Boeing lawsuit was followed by NLRB publication of a suite of proposed rules on June 22 seeking about a dozen modifications to procedures governing union representation elections, effectively compressing the time frame between a union’s filing of a representation petition and a representation election. At public hearings on July 19, Maurice Baskin, a Washington attorney who represents the Associated Builders & Contractors, told the four commissioners that the proposed rules “had no purpose other than to promote union organizing.” He argued the NLRB had shown no credible need for the changes, particularly given the fact that unions won 81 percent of elections in the construction industry in the recent past. He was particularly critical of the change in time period to seven days during which a company must put together a legal brief — called a statement of position form — for a hearing in front of a regional NLRB director after a union has filed its intention to unionize a workplace.

INGAA prefers House Pipeline Safety bill
The House pipeline safety bill introduced in July is similar in many ways to the Senate bill which the Commerce Committee passed in May. But there are differences with the House bill, called the Pipeline Infrastructure and Community Protection Act of 2011, being the preferred option in the view of the Interstate Natural Gas Association of America. There has been no floor vote on the bills in either house.

At hearings in a House Energy & Commerce subcommittee in July, Daniel B. Martin, senior vice president of pipeline safety for the El Paso Pipeline Group, who was testifying for INGAA, singled out the sections in both bills on changes to the transmission integrity management program (TIMP). Established in 2003, the TIMP requires interstate pipelines to test segments running through “high consequence areas” (HCAs) and repair any potential problems.

Both the House and Senate bills open the door to HCA expansions. The House bill, which INGAA prefers, requires the Secretary of Transportation to make recommendations to Congress within one year of the bill’s passage on whether to expand the program and, if so, to what degree. The section specifically enumerates factors upon which the Secretary should base the recommendations. These factors include the need to remain focused on reducing risks in populated areas rather than simply an unfocused increase in the number of pipeline miles covered under the program. “INGAA believes that it is important for Congress to provide the Secretary with this guidance that the priority of integrity management should remain risk-reduction,” Martin said.

The House bill also requires the DOT to undertake a rulemaking to eliminate class location regulations within two years. Those regulations, from 1970, require a margin of safety for segments in populated area. The requirements are essentially redundant given the TIMP.

Carl Weimer, executive director, The Pipeline Safety Trust, told the subcommittee that class location rules should not be eliminated unless and until the industry has demonstrated to the satisfaction of the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) that integrity management principles are in place and at least as protective. He got support from Randall S. Knepper, director, Safety Division, New Hampshire Public Utilities Commission who was testifying on behalf of the National Association of Pipeline Safety Representatives.

In another “class-location” related issue, the House bill contains no provisions on maximum allowable operating pressure (MAOP). MAOP was an issue in the San Bruno explosion. The Senate bill does contain a provision which would require all distribution and transmission pipelines to conduct a verification of records for all class 3 and 4 locations and in class 1 and 2 HCAs to insure MAOPs there which accurately reflect the pipeline’s physical and operational characteristics. If those records are not available, the companies would have to submit the location of those pipeline segments to PHMSA. Also, companies would have to report having exceeded any MAOPs within five days of that happening.

The other “hot” issue in the House bill is the provision requiring operators to notify the National Response Center (NRC) of an incident within one hour of discovering the incident. Knepper and Charles Dippo, vice president, engineering services and system integrity for the South Jersey Gas Company, opposed the one-hour dictate. Knepper argued information collected within an hour or less of discovery may not be factual and is likely to result in confusion and misrepresentation while also causing state pipeline safety agencies to spend time and resources chasing after a large number of what could be minor events. Dippo said the one hour maximum time limit will require operators to report minor events to the NRC before there is time to assess if an event meets the federal reporting threshold.

EPA air emission proposal would affect pipeline compressors
The Environmental Protection Agency (EPA) published four related air emission standards which will affect all sectors in the oil and gas industry. Interstate pipelines will be most affected by two of the proposed rules. One sets New Source Performance (NSP) Standards for Volatile Organic Chemicals (VOCs). Centrifugal compressors would have to be equipped with dry seal rod-packing systems and reciprocating compressors would have to be replaced every 26,000 hours of operation.

The NSP standards for VOCs would also regulate “fracking” for the first time. VOC emissions would be minimized through the use of “green completions,” also called “reduced emissions completions.” In a green completion, special equipment separates gas and liquid hydrocarbons from the flowback that comes from the well as it is being prepared for production. The gas and hydrocarbons can then be treated and sold. EPA estimates that use of this equipment for the three- to 10-day flowback period reduces VOC emissions from completions and recompletions of hydraulically fractured wells by 95 percent.

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