February 2017 Vol. 72 No. 2
Washington Watch
Corps Ignores Pleas To Restrict Pipeline Construction Permits
The Army Corps of Engineers turned back efforts by environmental groups to limit availability of nationwide permits (NWPs) that pipelines use when they want to build facilities that cross streams and tributaries but cause insubstantial environmental damage. The Corps issued its revisions to 50 NWPs in early January, including changes to NWP 12, which is used by gas and oil pipeline companies. The activities eligible for NWPs, which allow companies to commence construction faster than if they had to apply for an individual permit, cover discharges of dredged or fill material that cause only minimal adverse environmental effects. NWP 12 covers utility projects that would have up to a half-acre of “loss of waters of the US.”
Key issues were whether to adjust the half-acre limit, whether NWPs should be available for one large pipeline project that crosses many water bodies, and how fast a Corps district office must respond to a preconstruction notice (PCN) which a pipeline company must submit in order to obtain an NWP. A PCN is required when the project meets one of seven factors. NWP 12, like other NWPs, lists numerous “general conditions” which must be adhered to before a project qualifies for NWP.
Environmental groups had pressed the Corps to allow NWP 12 to expire without reissuance. The Corps ignored that request. The Interstate Natural Gas Association of America (INGAA) said the elimination of NWP 12 would be contrary to congressional intent, and increase costs for pipeline construction dramatically. One study cited by the INGAA concluded that, on average, it takes an extra 475 days to obtain an individual permit versus an NWP. That same study concluded that the average cost to prepare an NWP application is $28,915 versus an individual permit application which, on average, costs over $271,596 excluding the cost of mitigation, design changes, costs of carrying capital and more.
The fallback position of the Sierra Club and its allies was to ask the Corps to change the wording of NWP 12 so that a pipeline company could not use it for large projects such as TransCanada’s Gulf Coast Pipeline – the southern half of the Keystone XL pipeline – which crossed 2,227 waters over many miles. “This marked the first time the Corps had approved a major project in this way using NWP 12,” said numerous environmental groups under the Sierra Club’s leadership.
The environmental groups alleged that since using NWP 12 to permit the Gulf Coast Pipeline in 2012, the Corps has verified several other major pipelines in the same way. For example, four Corps district offices verified the 600-mile Flanagan South crude oil pipeline through 1,950 waterways in four states under NWP 12. The Corps verified the 1,168-mile Dakota Access Pipeline through North Dakota, South Dakota, Iowa and Illinois using NWP 12. Pipeline projects like these should undergo an individual Section 404 permit review under the Clean Water Act,” the groups wrote.
The Corps turned a deaf ear to that request, too. In allowing the use of NWP 12 for major projects, the Corps explicated its interpretation of the meaning of “separate and distant crossing of waters of the United States.” The utility line activities authorized by NWP 12 are similar in nature because they involve linear pipes, cables or wires to transport physical substances or electromagnetic energy from a point of origin to a terminal point.
The Corps also stood fast on the current half-acre threshold. INGAA had supported its continued application arguing it and the PCN requirements are “appropriate, well- supported by the record, and fully ensure that activities authorized by those NWPs will result in no more than minimal individual and cumulative adverse effects.
Timeframe, wording at issue
The compliance start date for the new federal safety requirement on underground gas storage facilities doesn’t go into effect for one year, but the arrival of the Trump administration in Washington could result in an extension of that deadline. That is what groups such as the INGAA and the American Petroleum Institute (API) hope for. While they support, for the most part, the incorporation of industry voluntary standards into the federal pipeline safety laws, they argue that the 12-month implementation deadline is too short.
The industry hopes the Pipeline and Hazardous Materials Safety Administration (PHMSA) will realize the problem and change it on its own, without political pressure having to be put on the Trump administration. If not, there could be industry-sponsored litigation. The PHMSA interim final rule (IFR) issued in December has wiggle room built in allowing the agency to make changes based on public comments, which were due on Feb.17.
Don Santa, president and CEO of the INGAA, said, “INGAA strongly supports PHMSA regulation of natural gas storage based on consensus standards. We are quite concerned, however, that the 12-month implementation period outlined in the interim final rule is unrealistic. Extensive effort will be required to implement a structured and documented integrity management program across the roughly 400 underground gas storage facilities in the United States.”
The standards will directly apply to approximately 197 interstate facilities and 203 intrastate facilities. INGAA’s board in February 2016 supported voluntary adoption of these consensus standards.
While the timetable for implementation is the big concern for industry groups, some players such as the American Gas Association (AGA) want additional changes. Christina Sames, vice president of operations and engineering for the AGA, said the association, which fully supports incorporating by reference the American Petroleum Institute’s Recommended Practices 1170 and 1171 into federal law, also wants a change in the timetable as well as reversal of the IFR’s language that makes all non-mandatory provisions in the Recommended Practices mandatory.
Maybe not surprisingly, environmentalists think the IFR stops short of needed protections in the wake of the Aliso Canyon gas storage field leak, which prompted Congress to enact the new safety requirements PHMSA is implementing. “The new standards offer scant or no detail on many safety precautions, creating immediate challenges for the state and federal regulators enforcing these new policies,” argued Adam Peltz, attorney, Climate and Energy Program, Environmental Defense Fund. “To bridge this gap, PHMSA will need to both beef up the rule and rely on state expertise to ensure all gas storage wells are held to uniformly high standards.”
Nor does Peltz consider the one-year implementation deadline onerous. “Since the PHMSA rule is essentially the industry’s own consensus standards, one would think compliance would be relatively straightforward,” he explained. “If PHMSA had adopted a more rigorous rule, we might be sympathetic to calls to extend the deadline, but at this juncture we are not persuaded that the industry needs longer than a year.”
PHMSA issued the IFR in December which takes effect on January 18, 2017. But interstate and intrastate pipeline facilities do not have to comply with its requirements until Jan. 18, 2018. Given what are likely to be changes in the attitudes of federal regulatory agencies under the Trump administration, it is entirely possible that PHMSA will rethink the implementation deadline, which may also come under pressure from congressional Republicans.
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