American Oil and Gas Reporter - July 2016 - 34

Federal Legislation

Pipeline Safety Bill Is Signed Into Law
WASHINGTON-Congress passed and
President Obama signed in June, pipeline
safety legislation that generally has received industry kudos.
Also during June, the U.S. House of
Representatives passed a bill intended to
block implementation of a new National
Ambient Air Quality Standard for ozone,
and concurrent resolutions opposing the
crude oil tax proposed by President Obama and a carbon tax.
S 2276, the Protecting our Infrastructure of Pipelines and Enhancing Safety
(PIPES) Act of 2016, passed the House on
June 8 and the Senate on June 13, and was
signed by President Obama on June 22, according to reports.
It grants the Pipeline and Hazardous
Materials Safety Administration $720 million and reauthorizes the agency through
fiscal 2019, and requires it to prioritize
completing 21 of the 42 mandates remaining from its last congressional reauthorization in 2011, according to an analysis from
attorneys Babst Calland. The bill also
provides PHMSA significant new authority to issue industrywide emergency orders,
and requires the agency to develop standards for underground gas storage and to
update its regulations for liquefied natural
gas facilities, Babst Calland says.
"The bill will enhance safety, improve
transparency of PHMSA's rule-making
process, shorten inspection reporting time,
and improve workforce management,"
praises American Petroleum Institute Executive Vice President Louis Finkel.
A Washington-based publication, The
Hill, quotes the Interstate Natural Gas Association of America as saying the PIPES
Act meets all the goals the association set
when Congress began considering PHMSA reauthorization, and the GPA Midstream Association released a statement
congratulating Congress. "We were
pleased to work closely with committee
leadership and staff in crafting a reauthorization bill that furthers our member
companies' commitments to safety," says
GPA Midstream Vice President of Government Affairs Matthew Hite.
The Independent Petroleum Association of America says it welcomes passage
of the PIPES Act, adding: "While PHMSA reauthorization is important, ongoing
rule makings will have more significance
for independent producers."
Safety Measures
While the Babst Calland report says the
mandate for PHMSA to develop stan34 THE AMERICAN OIL & GAS REPORTER

dards for underground gas storage largely
grew out of the leak discovered last year at
the Aliso Canyon storage facility in Orange
County, Ca., other reports mention that
Kansas Senators Pat Roberts and Jerry
Moran-both Republicans-had been pushing since 2010 to reform gas storage laws.
Kansas press accounts say Roberts
and Moran became concerned after a
court ruled in 2009 that only the federal
government could regulate storage fields
used in interstate transportation of natural gas. The Kansas Corporation Commission began inspecting underground gas
storage facilities after a leak in 2001 resulted in explosions that killed two people and destroyed several businesses in
Hutchinson, Ks.
In addition to ordering PHMSA to set
standards for gas storage facilities, those
reports point out, the PIPES Act also authorizes states to set their own, stricter standards and to inspect storage facilities
again.
According to Babst Calland, the PIPES
Act requires PHMSA to develop underground storage standards within two years
and authorizes the agency to collect user
fees from facility operators. "In developing standards, PHMSA must consider
industry consensus standards, economic
impacts, and recommendations made by
the Aliso Canyon natural gas leak task
force established under Section 31 of the
act," Babst Calland reports, adding that
PHMSA has begun a rule making "in
which the agency has stated its plans to issue an interim rule that will, among other measures, incorporate by reference
API standards RP 1171 and 1170."
Babst Calland says Section 16 of the
PIPES Act provides PHMSA authority to
issue emergency orders to impose industrywide operational restrictions, prohibitions or safety measures if an unsafe
condition or practice results in an imminent hazard, which the act defines as a
"condition . . . that presents a substantial
likelihood (of) death, serious illness, severe potential injury, or a substantial endangerment to health, property or the
environment."
Section 27 of the act, Babst Calland
continues, calls for updating safety standards for permanent, small-scale LNG
pipeline facilities. Babst Calland says
PHMSA is reviewing whether to incorporate by reference a more recent version of
National Fire Protection Act (standard)
59A for producing, storing and handling
LNG. Babst Calland explains that current

regulations incorporate the 2001 edition of
NFPA 59A, and "stakeholders have expressed concern that the 2001 standards do
not reflect the engineering advancements
in today's versions."
According to other published reports,
the PIPES Act also:
* Authorizes states to participate in interstate pipeline inspections;
* Requires a study to address hiring
challenges and training needs at the federal regulatory level;
* Requires the Government Accountability Office to study innovations in
pipeline materials and corrosion-protection
technology; and
* Authorizes federal regulators to explore creating a database to clarify pipeline
safety oversight efforts at the federal and
state levels.
Ozone NAAQS
IPAA reports that on June 8, the House
of Representatives passed on a 234-177
vote, HR 4775, the Ozone Standards Implementation Act, which delays implementation of the 70 parts-per-billion NAAQS
for ozone announced last October by the
Environmental Protection Agency.
A summary posted by the House Energy and Commerce Committee notes that
while EPA set the ozone NAAQS at 75 ppb
in 2008, it did not publish implementing
regulations until March 2015. Following
that with the 70 ppb standard five months
later, the summary says, left states facing
the prospect of implementing the two standards simultaneously.
HR 4775 phases implementation of the
two standards by extending to 2025 the implementation date for final designations under the 70 ppb standard, the Energy Committee says. In addition, committee says
the bill:
* Extends mandatory review for the
ozone NAAQS from every five to 10 years
while allowing EPA discretion to revise
standards earlier;
* Authorizes EPA to consider technological feasibility as a second consideration when revising the NAAQS; and
* Ensures that prior to revising the
ozone NAAQS, EPA obtains advice from
its scientific advisory committee regarding potential adverse effects.
Published reports mention that Republicans Shelley Moore Capito of West Virginia and Jeff Flake of Arizona have introduced similar legislation in the Senate.
Both API and the American Fuel &
Petrochemical Manufacturers praise HR
American Oil and Gas Reporter - July 2016

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