Pipeline & Gas Journal - for the original article go HERE.
Democrats in the House are about to pass a new pipeline safety bill which is unlikely to attract any Republican support. The Pipeline Safety Act (H.R. 5120), passed by two House committees in November with no GOP votes in favor, also clashes with the bi-partisan bill passed last summer by the Senate Commerce, Science and Transportation Committee.
The House Democratic bill was praised by the Environmental Defense Fund (EDF), an environmental group, which has typically been at loggerheads with the Interstate Natural Gas Association of America (INGAA) with regard to how safety and environmental factors should affect pipeline permitting. The INGAA supported a rival bill proposed by Republicans in the House Transportation and Infrastructure Committee. That bill attracted support from one Democrat.
A few days before the Transportation and Commerce Committees voted to approve H.R. 5120 on November 19 and 20, a number of natural gas industry trade groups, including the INGAA and American Petroleum Institute, sent a letter to members of those committees expressing concern about the lack of bipartisan support for H.R. 5120. The letter stated: “Pipeline safety legislation historically has been enacted on a bipartisan basis, and bipartisanship will ultimately be essential to achieve the bicameral support needed in this Congress to reauthorize PHMSA.” The PHMSA is the Pipeline and Hazardous Materials Safety Administration. Its legislative authorization ceased at the end of September 2019 but the agency can continue to do its business nonetheless although new legislation is eventually needed, and sooner rather than later.
The INGAA letter ticked off a number of actions the industry would support in a new pipeline safety bill, including: enhancing PHMSA’s workforce, increasing funding for State pipeline safety regulators, reauthorizing emergency responder grant funding, promoting innovative technologies, and updating PHMSA regulations to address the intent of relevant National Transportation Safety Board recommendations.
Prior to the November 19 and 20 votes by both House committees, Democrats in the Energy & Commerce Committee supported a much milder version of H.R. 5120. But they ditched that bill and jumped on the more radical—from industry’s perspective—bill presented by the House Transportation and Infrastructure Committee.
Elizabeth Gore, Senior Vice President, EDF, lauded H.R. 5120 called the Safe, Accountable, Fair and Environmentally Responsible Pipelines Act of 2019. "By putting in place critical new public safety and climate protections, the SAFER Pipelines Act is a win-win for all American families. It's well past time to give PHMSA the tools and direction to contribute to our nation's efforts to prevent the worst impacts of climate change."
One of the provisions of the bill would essentially prohibit the Environmental Protection Agency from completing an ongoing rulemaking announced last September which would change current regulations imposed in 2012 and 2016 obligating pipelines to reduce methane leaks. The creation in those years of Clean Air Act new source performance standards (NSPS) subparts OOOO and OOOOa subjected pipelines to limits on emissions of volatile organic chemicals and methane from controllers and compressor stations. There were subsequent legal challenges in 2016 and 2017 which led to the EPA reconsidering a few provisions of the 2016 final rule, including those having to do with fugitive emissions. Then, last September, in a proposed rule, the Trump EPA essentially proposed cancelling the 2016 final rule which dealt primarily with methane.
At the end of November 2019, a week after the House committees acted, the INGAA submitted comments on the EPA’s September proposed rule. The group said it was particularly concerned about the provisions in the 2016 EPA final rule dealing with “certain repairs” but added: “Although INGAA’s participation in the legal challenge of NSPS OOOOa was limited to this particular technical issue, INGAA does support a broad review of these rules...”
The comments point out that the INGAA board of directors had formally committed to methane reductions in voluntary pledges issued on July 19, 2018. These included core principles such as minimizing emissions from interstate natural gas pipelines, pneumatic controllers and compressor stations. More specifically, members of INGAA said they will install air-driven, low-bleed, or intermittent pneumatic controllers when installing new pneumatic controllers, unless a different device is required for safe operations; minimize emissions during maintenance, repair and replacement of pipelines; replace rod packing on all transmission and storage reciprocating compressors; conduct leak surveys at all member-owned and operated transmission and transmission and storage compressor stations by 2022 and at all natural gas storage wells owned and operated by INGAA member companies by 2025; and transparently report methane emissions.
Those voluntary commitments obviously did not move House Democrats. H.R. 5120 goes beyond the Obama-era 2016 “methane release from pipelines regulation” by imposing a host of new federal requirements in the area of leak detection and elsewhere. Another provision would require comprehensive pipeline mapping for the first time. Automatic shutoff or remote-controlled valves would be required on existing, new and replaced pipelines. The maximum civil penalties that could be imposed by the PHMSA would be increased from $200,000 to $2 million per violation. It would be easier for the PHMSA to assess criminal penalties for operators who act recklessly. Operators would have to immediately repair major gas leaks.
Democrats in the House believe those far-reaching actions are necessary. “There are nearly 3 million miles of pipelines transporting hazardous liquid and natural gas just feet below countless communities across the U.S., yet federal efforts to ensure these pipelines are safe, reliable and environmentally-sound are woefully outdated,” Transportation Chair Peter DeFazio (D-OR) said, “Last year alone, there were 636 pipeline incidents that left eight people dead and injured another 90, including the horrific incident that killed one person, sent 21 others to the hospital, and damaged 131 structures in Merrimack Valley, Massachusetts. Moreover, it’s estimated that this industry is responsible for one-third of our country’s emissions of methane, a greenhouse gas that is 84 times more potent than carbon dioxide in the first few decades of its release and a major contributor to climate change.”
But those provisions go too far for the pipeline industry, and for Republicans in the House, and most likely, for GOPers in the Senate, where Republicans are in control. After the Transportation Committee vote on November 20, ranking member Sam Graves (R-MO), said, “The most disappointing fact about today’s partisan markup is that if Republicans had been offered the chance to work on these bills with our colleagues in the majority, we could have produced legislation that every member of the committee supported.” The GOP bill, which one Democrat supported, is called the Pipeline Safety Improvement Act of 2019. It includes a number of industry “asks” including prohibiting three overt actions that jeopardize safety: unauthorized turning of a valve; puncturing of a pipe, pump, or valve; and causing a defect to a pipe, pump, or valve. It also creates a safety-enhancing testing program for innovative technologies and operational practices.
Don Santa, President and Chief Executive Officer of the INGAA, said, “The Pipeline Safety Improvement Act of 2019 includes a number of provisions that enjoy wide support…and along with elements of the SAFER Pipeline Act of 2019 reflects the bipartisan approach that has characterized each renewal of this important law. We urge the committees to work together to reconcile these proposals into a legislative package that can be signed into law.”
The House Democratic bill is considerably different from the bill passed by the Senate Commerce Committee on July 31. That bill is milder than even the bill the House Energy and Commerce Committee passed, and then jettisoned on November 19 in favor of the tougher H.R. 5120. The Senate bill is the Protecting Our Infrastructure of Pipelines Enhancing Safety (PIPES) Act of 2019 (S. 2299).
Author Bio:
Mr. Barlas is a freelance writer in Washington, D.C. who covers issues inside the Beltway.
Showing posts with label INGAA. Show all posts
Showing posts with label INGAA. Show all posts
FERC Pressed to Change Pipeline Approval Policies
Pipeline & Gas Journal - September 2018 for the original article go HERE.
Interstate pipeline companies are fending off efforts by environmental groups to pressure the Federal Energy Regulatory Commission (FERC) to make significant changes to its 1999 pipeline certificate policy. Groups such as the Chesapeake Bay Foundation, Delaware Riverkeepers, some members of Congress and others want the FERC to make it hard to establish economic need for a project and if that initial barrier is crossed, if it is crossed, look at an expanded menu of landowner and environmental concerns, both of which could lead to either slowing down approval for or even cancelation of a project where substantial demand exists.
Author bio:
Interstate pipeline companies are fending off efforts by environmental groups to pressure the Federal Energy Regulatory Commission (FERC) to make significant changes to its 1999 pipeline certificate policy. Groups such as the Chesapeake Bay Foundation, Delaware Riverkeepers, some members of Congress and others want the FERC to make it hard to establish economic need for a project and if that initial barrier is crossed, if it is crossed, look at an expanded menu of landowner and environmental concerns, both of which could lead to either slowing down approval for or even cancelation of a project where substantial demand exists.
The Notice of Inquiry published in April cites four particular areas for reconsideration: “(1) The reliance on precedent agreements to demonstrate need for a proposed project; (2) the potential exercise of eminent domain and landowner interests; (3) the Commission's evaluation of alternatives and environmental effects under NEPA and the NGA; and (4) the efficiency and effectiveness of the Commission's certificate processes.”
Pipeline and anti-pipeline forces are on opposite sides of all those issues. The Interstate Natural Gas Association of America (INGAA) thinks the 1999 policy remains sound but perhaps certain elements could use “a freshening up.” The INGAA adds, “Wholesale changes are unnecessary and likely would be counterproductive.”
On the other hand, the Delaware Riverkeeper Network, which has worked to oppose nearly two dozen FERC pipeline projects “has identified significant and fundamental failures in FERC’s review and approval of pipelines.”
The FERC has this year made a number of pro-pipeline decisions that may indicate which way the wind is blowing at the commission. For example, in granting a certificate to DTE Midstream’s 14-mile Birdsboro pipeline in Berks County, PA in March 2018 the FERC said it would clamp down on allowing “out-of-time intervenors,” that is commenters who want to have their say after a comment deadline has passed. The FERC had previously said out-of-time comments could submitted for “good cause” but in Birdsboro the “good cause” caveat was eliminated, drawing dissenting comments from Commissioners Glick and LaFleur.
In its May 18, 2018 Order denying rehearing of a certificate of public convenience and necessity issued to Dominion Transmission, Inc., the FERC, according to the Riverkeepers, “announced a sudden and unprompted departure from FERC’s practice of evaluating the environmental impact of downstream greenhouse gas emissions from natural gas infrastructure projects and announced a new policy of not evaluating upstream or downstream greenhouse gas emissions in the vast majority of cases.”
Dominion has been in the cross-hairs of many environmental groups because of its Atlantic Coast Pipeline (ACP) which runs through West Virginia, Virginia and into North Carolina. A federal appeals court has sided with the Sierra Club and others about potential damage to stream crossings in very small sections of the 600-mile pipeline. The same court has also cited problems with compliance with Nationwide Permit 12, issued by the Army Corps of Engineers, by the Mountain Valley Pipeline (built by EQT Midstream Partners) which also runs through Virginia along the same general route as the ACP.
Sens. Tim Kaine and Mark Warner, both Democrats from Virginia, argue the two projects should have had their economic and environmental reviews done concurrently, and they should have been co-located along the same right of way, easing the use of eminent domain by pipelines. This support for “regional analysis” of new pipeline applications is a popular demand. The New Jersey Department of Environmental Protection seems to go even further arguing for co-location of the majority of a new pipeline and compressors in an existing right-of-way.
But it was by no means the only popular change supported by landowner and environmental groups who are pressing for greater weight being given to greenhouse gas emissions, both upstream and downstream.
Although the INGAA, Dominion and other interstate pipeline companies are standing firm behind a “no significant change” position, they do open the door narrowly to small changes in the 1999 pipeline certificate policy. That includes more critical analysis of precedent agreements with affiliates. Boardwalk Partners says, “The Commission should place greater focus on ensuring that precedent agreements are the product of true arm’s-length negotiations. For projects that are supported largely by precedent agreements entered into by affiliates of the pipeline, the Commission should ensure that the agreements are the product of genuine competition rather than an attempt to bolster the bottom line of the pipeline and affiliate’s common parent.” Boardwalk is a wholly owned subsidiary of Loews, Inc. whose interstate natural gas subsidiary companies include Texas Gas Transmission, LLC; Gulf South Pipeline Company, LP; Gulf Crossing Pipeline Company LLC; and Boardwalk Storage Company, LLC.
Boardwalk’s position appears to put it at odds with the INGAA which argues, “The Commission should not distinguish between precedent agreements with affiliates and non-affiliates when considering the need for a proposed project because both appropriately represent market need.”
It terms of showing demand for a project, the INGAA urges the FERC to consider the economic and national security benefits stemming from exports of natural gas via cross-border pipelines and as liquified natural gas (LNG) that are facilitated by natural gas pipeline infrastructure. That may have some particular resonance given the European Union’s commitment in late July to buy more U.S. LNG as the price of forestalling President Trump’s threat to impose import duties on European autos.
In terms of the “freshening up” the INGAA would support, that would include expanding FERC communication with landowners. It also advocates for allowing pipelines, following the issuance of a certificate, to conduct limited-scope work outside of approved work areas to accommodate landowners’ requests for non-pipeline related work. That work would be paid for by the pipelines, according to INGAA’s Cathy Landry.
Author bio:
Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.
In Turnaround, FERC Proposes to Allow Surcharges to Fund Modernization
Pipeline & Gas Journal - February 2015 - for the original online version of this article go HERE.
In a departure from past policy, the Federal Energy Regulatory Commission (FERC) is considering allowing interstate pipelines to recoup the costs of complying with federal environmental and safety regulations.
FERC would allow pipelines to insert simplified mechanisms, such as trackers or surcharges, into contracts with shippers. FERC allowed trackers in an isolated case involving Columbia Gas Transmission when it issued a final order in January 2013. Prior to that, the Commission stated that recovering those costs in a tracking mechanism was contrary to the requirement to design rates based on estimated units of service.
Joan Dreskin, the general counsel for the Interstate Natural Gas Association of America (INGAA), called the proposal a "very positive" development. She said that once it becomes final, it won't open a floodgate of requests for a number of reasons, for example, because some pipelines face more competitive marketplaces than others.
Also, the timing of new environmental and safety requirements may not parallel one another, raising a question about the best timing to negotiate a "tracker" into a contract with a shipper. And those contracts, as was the case with Columbia, will require pipelines to make extensive shipper rate concessions, and provide consumer protections.
It appears FERC's tentative decision to change policy and allow trackers stems in good part from passage of the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011. That law requires transmission companies to undertake new maintenance initiatives. Even prior to passage of that law, the federal Pipeline and Hazardous Materials Administration (PHMSA) had issued a first-step regulatory proposal, never finalized, which could lead to broadened integrity management requirements, including expanded high-consequence areas. Moreover, the Environmental Protection Agency is considering a regulatory proceeding meant to decrease methane emissions from compressors.
Giving certain and potential new federal requirements, the Commission says it is proposing the proposed Policy Statement "in an effort to ensure that existing Commission ratemaking policies do not unnecessarily inhibit interstate natural gas pipelines’ ability to expedite needed or required upgrades and improvements."
The FERC order approving the contested Columbia settlement (the state of Maryland was among the most vociferous opponents) came in January 2013. The Columbia system stands out because both its pipelines and compressors are, for the most part, of pre-1970 vintage, before pipeline safety rules went into effect.
The majority of its system cannot accommodate inline inspection and cleaning tools. Fifty-five percent of its more than 300 compressor units were installed before 1970. FERC approved a capital cost recovery mechanism (CCRM) allowing Columbia to raise up to $300 million annually for a modernization program. The $300 million is being collected via a rate base multiplier of 14%.
In 2013 and 2014, Columbia spent $626 million to place 73 modernization projects in service including 82,692 horsepower at eight compressor stations and retired 92 miles of bare steel and wrought-iron pipeline.
All Columbia shippers supported the tracker, which was cushioned by substantial rebates, including an annual $35 million rate reduction (retroactive to Jan. 1, 2012), and an additional base rate reduction of $25 million each year beginning Jan. 1, 2014, both reductions to end on the effective date of Columbia’s next section 4 general rate case, or a subsequent NGA section 5 rate adjustment.
Columbia also agreed to initial refunds to firm shippers of $50 million in two equal installments, a rate moratorium through Jan. 31, 2018 and an NGA section 4 general rate filing obligation no later than Feb. 1, 2019. Only the Maryland Public Service Commission (MPSC) opposed it, arguing the tracker would shift the burden of investment costs from Columbia to its customers, and its approval could start down a slippery slope toward such mechanisms replacing rate cases as the primary method for recovering major investment costs.
But Regina Davis, spokeswoman for the MPSC, said those objections would not be voiced today. That is because the Maryland General Assembly enacted the Strategic Infrastructure Development and Enhancement (STRIDE) legislation in 2013 which authorizes tracker-based infrastructure investment rate proceedings.
That STRIDE statute and the policy underlying it were recently applied in a number of Maryland PSC cases. "Therefore, the Maryland PSC precedent relied upon in opposing the Columbia Gas would no longer be argued in the way that it was if a case similar to the Columbia case came up today," she explained.
In a departure from past policy, the Federal Energy Regulatory Commission (FERC) is considering allowing interstate pipelines to recoup the costs of complying with federal environmental and safety regulations.
FERC would allow pipelines to insert simplified mechanisms, such as trackers or surcharges, into contracts with shippers. FERC allowed trackers in an isolated case involving Columbia Gas Transmission when it issued a final order in January 2013. Prior to that, the Commission stated that recovering those costs in a tracking mechanism was contrary to the requirement to design rates based on estimated units of service.
Joan Dreskin, the general counsel for the Interstate Natural Gas Association of America (INGAA), called the proposal a "very positive" development. She said that once it becomes final, it won't open a floodgate of requests for a number of reasons, for example, because some pipelines face more competitive marketplaces than others.
Also, the timing of new environmental and safety requirements may not parallel one another, raising a question about the best timing to negotiate a "tracker" into a contract with a shipper. And those contracts, as was the case with Columbia, will require pipelines to make extensive shipper rate concessions, and provide consumer protections.
It appears FERC's tentative decision to change policy and allow trackers stems in good part from passage of the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011. That law requires transmission companies to undertake new maintenance initiatives. Even prior to passage of that law, the federal Pipeline and Hazardous Materials Administration (PHMSA) had issued a first-step regulatory proposal, never finalized, which could lead to broadened integrity management requirements, including expanded high-consequence areas. Moreover, the Environmental Protection Agency is considering a regulatory proceeding meant to decrease methane emissions from compressors.
Giving certain and potential new federal requirements, the Commission says it is proposing the proposed Policy Statement "in an effort to ensure that existing Commission ratemaking policies do not unnecessarily inhibit interstate natural gas pipelines’ ability to expedite needed or required upgrades and improvements."
The FERC order approving the contested Columbia settlement (the state of Maryland was among the most vociferous opponents) came in January 2013. The Columbia system stands out because both its pipelines and compressors are, for the most part, of pre-1970 vintage, before pipeline safety rules went into effect.
The majority of its system cannot accommodate inline inspection and cleaning tools. Fifty-five percent of its more than 300 compressor units were installed before 1970. FERC approved a capital cost recovery mechanism (CCRM) allowing Columbia to raise up to $300 million annually for a modernization program. The $300 million is being collected via a rate base multiplier of 14%.
In 2013 and 2014, Columbia spent $626 million to place 73 modernization projects in service including 82,692 horsepower at eight compressor stations and retired 92 miles of bare steel and wrought-iron pipeline.
All Columbia shippers supported the tracker, which was cushioned by substantial rebates, including an annual $35 million rate reduction (retroactive to Jan. 1, 2012), and an additional base rate reduction of $25 million each year beginning Jan. 1, 2014, both reductions to end on the effective date of Columbia’s next section 4 general rate case, or a subsequent NGA section 5 rate adjustment.
Columbia also agreed to initial refunds to firm shippers of $50 million in two equal installments, a rate moratorium through Jan. 31, 2018 and an NGA section 4 general rate filing obligation no later than Feb. 1, 2019. Only the Maryland Public Service Commission (MPSC) opposed it, arguing the tracker would shift the burden of investment costs from Columbia to its customers, and its approval could start down a slippery slope toward such mechanisms replacing rate cases as the primary method for recovering major investment costs.
But Regina Davis, spokeswoman for the MPSC, said those objections would not be voiced today. That is because the Maryland General Assembly enacted the Strategic Infrastructure Development and Enhancement (STRIDE) legislation in 2013 which authorizes tracker-based infrastructure investment rate proceedings.
That STRIDE statute and the policy underlying it were recently applied in a number of Maryland PSC cases. "Therefore, the Maryland PSC precedent relied upon in opposing the Columbia Gas would no longer be argued in the way that it was if a case similar to the Columbia case came up today," she explained.
Author bio:
Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.
FERC To Review Recent Rule Requiring Permitting Of Auxiliary Facilities
Pipeline & Gas Journal
March 2014 - for the online version go HERE.
The Federal Energy Regulatory Commission (FERC) will look again at a new rule requiring certificates to be filed for right-of-way auxiliary construction and for landowners to be given a five-day heads-up before construction and maintenance work starts. That rule was published in November and went into effect Feb. 3.
The Interstate Natural Gas Association of America (INGAA) and National Fuel Gas Supply Corp. both asked for a rehearing, and FERC granted that wish on Jan. 29. The rule was issued as the result of a petition submitted in 2012 by INGAA whose requests were essentially squashed by FERC when it issued a final rule in November.
Joan Dreskin, general counsel, INGAA, says, "FERC issued a standard ‘tolling order’ in this case which allows them to act when they wish on the rehearing/clarification."
In part, the debate revolves around the difference between replacement and auxiliary facilities. FERC wants them treated similarly as "jurisdictional," meaning they would have similar requirements with regard to pipeline companies filing certificates which the commission would have to approve before the companies could start construction. INGAA says auxiliary facilities shouldn't be permitted.
INGAA had started the ball rolling in 2012 because of Commission staff discussions with pipeline representatives where FERC staffers stated that companies undertaking section 2.55(a) auxiliary installations to augment existing facilities must stay within the right-of-way or facility site for the existing facilities and restrict construction activities to previously used work spaces. Industry officials thought this was a change in policy which would force them to obtain certificates when auxiliary facilities were installed outside rights-of-way. The kinds of auxiliary facilities at issue include: valves; drips; pig launchers/receivers; yard and station piping; cathodic protection equipment; gas cleaning, cooling and dehydration equipment; residual refining equipment; and water-pumping equipment.
Given that ostensible change in policy made outside any rulemaking, INGAA filed its petition in 2012. FERC issued a proposed rule in December 2012 which simply codified the position its staff had laid out. INGAA protested. FERC argued the proposed rule was only a "clarification" which "articulated existing, long-standing constraints and obligations with respect to auxiliary installations." It then took more comments before ignoring INGAA's protests again when issuing the final rule last November.
The final rule also codified for the first time the common industry practice of notifying landowners prior to coming onto their property to install, replace or maintain auxiliary or replacement facilities.
In its request for rehearing, INGAA says that in the Final Rule, the Commission "persists as well in a fiction that its new ruling does not change what had been the plain and universal understanding of that provision for approximately 60 years until the December 2012 NOPR."
In addition to unlawfully converting an entire class of exempt, non-jurisdictional auxiliary installations into jurisdictional NGA facilities, the Commission, without referencing a record of abuse, without identifying any material threat to its statutory obligations, and without providing any premise based on relevant facts, extends regulatory limitations to these installations that in the past have applied only to separate and distinct replacement activities. The Commission’s Final Rule is arbitrary and capricious. It is not the product of reasoned decision making.
Besides absolving auxiliary activities from permitting, INGAA also wants FERC to clarify that the five-day prior notification requirement would not apply to activities done for safety, DOT compliance, in response to “one-call obligations,” or environmental or unplanned maintenance reasons that are not foreseen and that require immediate attention by the company and for activities that result in ground disturbance where such disturbance would be located entirely within the fence line of an existing, aboveground facility site.
David W. Reitz, Deputy General Counsel, National Fuel Gas Supply Corp. and attorney for Empire Pipeline, points out that PHMSA’s regulations require a company discovering a pipeline anomaly requiring immediate remediation to excavate and inspect the pipeline within five days of discovery. "Because of the time required to verify or determine the names and addresses of the property owners and to deliver the notices, five-day advance landowner notification would be impractical in these circumstances," he explains. "In addition, a pipeline receiving a one-call notification often has a maximum of 48 hours to determine and mark the precise location of its facilities, which may require some excavation."
March 2014 - for the online version go HERE.
The Federal Energy Regulatory Commission (FERC) will look again at a new rule requiring certificates to be filed for right-of-way auxiliary construction and for landowners to be given a five-day heads-up before construction and maintenance work starts. That rule was published in November and went into effect Feb. 3.
The Interstate Natural Gas Association of America (INGAA) and National Fuel Gas Supply Corp. both asked for a rehearing, and FERC granted that wish on Jan. 29. The rule was issued as the result of a petition submitted in 2012 by INGAA whose requests were essentially squashed by FERC when it issued a final rule in November.
Joan Dreskin, general counsel, INGAA, says, "FERC issued a standard ‘tolling order’ in this case which allows them to act when they wish on the rehearing/clarification."
In part, the debate revolves around the difference between replacement and auxiliary facilities. FERC wants them treated similarly as "jurisdictional," meaning they would have similar requirements with regard to pipeline companies filing certificates which the commission would have to approve before the companies could start construction. INGAA says auxiliary facilities shouldn't be permitted.
INGAA had started the ball rolling in 2012 because of Commission staff discussions with pipeline representatives where FERC staffers stated that companies undertaking section 2.55(a) auxiliary installations to augment existing facilities must stay within the right-of-way or facility site for the existing facilities and restrict construction activities to previously used work spaces. Industry officials thought this was a change in policy which would force them to obtain certificates when auxiliary facilities were installed outside rights-of-way. The kinds of auxiliary facilities at issue include: valves; drips; pig launchers/receivers; yard and station piping; cathodic protection equipment; gas cleaning, cooling and dehydration equipment; residual refining equipment; and water-pumping equipment.
Given that ostensible change in policy made outside any rulemaking, INGAA filed its petition in 2012. FERC issued a proposed rule in December 2012 which simply codified the position its staff had laid out. INGAA protested. FERC argued the proposed rule was only a "clarification" which "articulated existing, long-standing constraints and obligations with respect to auxiliary installations." It then took more comments before ignoring INGAA's protests again when issuing the final rule last November.
The final rule also codified for the first time the common industry practice of notifying landowners prior to coming onto their property to install, replace or maintain auxiliary or replacement facilities.
In its request for rehearing, INGAA says that in the Final Rule, the Commission "persists as well in a fiction that its new ruling does not change what had been the plain and universal understanding of that provision for approximately 60 years until the December 2012 NOPR."
In addition to unlawfully converting an entire class of exempt, non-jurisdictional auxiliary installations into jurisdictional NGA facilities, the Commission, without referencing a record of abuse, without identifying any material threat to its statutory obligations, and without providing any premise based on relevant facts, extends regulatory limitations to these installations that in the past have applied only to separate and distinct replacement activities. The Commission’s Final Rule is arbitrary and capricious. It is not the product of reasoned decision making.
Besides absolving auxiliary activities from permitting, INGAA also wants FERC to clarify that the five-day prior notification requirement would not apply to activities done for safety, DOT compliance, in response to “one-call obligations,” or environmental or unplanned maintenance reasons that are not foreseen and that require immediate attention by the company and for activities that result in ground disturbance where such disturbance would be located entirely within the fence line of an existing, aboveground facility site.
David W. Reitz, Deputy General Counsel, National Fuel Gas Supply Corp. and attorney for Empire Pipeline, points out that PHMSA’s regulations require a company discovering a pipeline anomaly requiring immediate remediation to excavate and inspect the pipeline within five days of discovery. "Because of the time required to verify or determine the names and addresses of the property owners and to deliver the notices, five-day advance landowner notification would be impractical in these circumstances," he explains. "In addition, a pipeline receiving a one-call notification often has a maximum of 48 hours to determine and mark the precise location of its facilities, which may require some excavation."
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