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."

DOE Takes Next Step on Energy Efficiency Standards for Industrial Pumps

Green Manufacturer
September/October 2013 - for the online version go HERE.

The Department of Energy (DOE) has taken the next step in establishing first-time energy efficiency standards for industrial and commercial pumps. The agency is in the process of putting together what is called a negotiated rulemaking committee composed of users, manufacturers, and environmentalists who ostensibly hammer out a standard which then flies through the rulemaking process, without any objections.

The DOE previously released a request for information in 2011 and then a framework document last February providing some direction on where it expects to go, in terms of the categories of pumps covered and the kind of metrics that could be used to set new efficiency standards. The pump manufacturers, represented by the Hydraulic Institute, are pressing for "an extended product approach" using an energy efficiency index (EEI) which would take into account the pump, motor, variable speed drive and control and feedback systems. The HI has been working with environmental groups such as the American Council for an Energy-Efficient Economy (ACEEE), the Alliance to Save Energy, and the Natural Resources Defense Council (NRDC) on consensus standards with those efforts focusing on clean water commodity-type pumps. 

However, environmentalists want to expand the types of clean water pumps to include double-suction and circulator pumps. The EU already has a Directive (547, 2012) on efficiency standards  for clean water pumps, and the DOE generally intends to follow it. Charles Llenza, project manager for the rulemaking, says, "We have sort of borrowed from their playbook a little until we get our footing with this rulemaking and  the stakeholders input in the U.S. industry."

The DOE estimates clean water pumps represents about 70 percent of sales by value and 90 percent of  pump energy use. Those pumps can be used for chemicals and other liquids, and the DOE is considering roping "chemical" pumps--to the extent any are used primarily for that end use--into the new standard. But wastewater, slurry, API 610 pumps are outside the purview of this rulemaking.

A major issue will be whether to include variable speed drives (VSDs) in the standard. Greg Towsley, Director, Regulatory and Technical Affairs, Grundfos Pumps Corporation, the Danish concern which claims to be the world's largest pump manufacturer, wants VSDs to be included.  

But Steve Rosenstock, Senior Manager, Energy Solutions, the Edison Electric Institute, which represents investor-owned utilities, says, "EEI does not support establishing standards or test procedures based on pump performance with a variable speed drive controller. Pumps are used in a variety of applications and not all are a good fit for VSD."