If you own or operate gathering lines, you may want to read this.
The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) is in the process of expanding its regulatory authority over gathering lines. PHMSA is doing this while gathering lines do not have a seat at the table. Furthermore, this proposed rule fails to account for the excessive and unnecessary costs it will pass onto gathering line operators.
In February, GPA Midstream Association sent a letter to newly confirmed Department of Transportation Secretary Elaine Chao. The focus of the letter was on PHMSA’s January Gas Pipeline Advisory Committee (GPAC) meeting in Arlington, Va.
The GPAC is a 15-member committee composed of five industry representatives, five public representatives and five government representatives. The GPAC is an advisory committee for PHMSA that evaluates and makes recommendations on proposed rules, among other items.
The GPAC January meeting was focused on PHMSA’s propose rule titled, “Pipeline Safety: Safety of Gas Transmission and Gathering Pipelines.” This proposed rule would dramatically expand PHMSA’s regulations by imposing new reporting requirements and safety standards for onshore gas gathering lines.
GPA Midstream raised two main issues: First, the proposed rule is based on flawed assumptions that fail to account for the substantial costs that it would be imposing on the midstream industry without producing any meaningful benefits. The second concern is that PHMSA needs to add a gathering representative to the GPAC before PHMSA moves forward with any new proposal for gas gathering lines.
GPA Midstream believes that PHMSA’s proposed rules for gas gathering lines are based on fundamentally flawed assumptions. The industry has a strong safety record and there is no data showing that gathering lines, particularly those located in rural areas, present the kind of risk necessary to warrant additional regulation.
Furthermore, unlike some of the provisions related to gas transmission lines, PHMSA’s proposed rules for gas gathering are not subject to statutory deadlines or required by any congressional mandates. PHMSA is nonetheless proposing changes that would extend its jurisdiction almost to the wellhead, require producers and gatherers to reclassify hundreds of thousands of miles of pipeline facilities, and subject operators to a series of new regulations and reporting requirements. These proposals do not embody the risk-based principles that have traditionally guided PHMSA in executing its mission under the Pipeline Safety Act.
GPA Midstream’s other chief concern is that the proposed regulation fails to fully account for the impact it will have on gathering lines. In comments filed in response to the proposed rule and made during PHMSA’s webinars on this rule, as well as in private conversations with PHMSA, GPA Midstream and its members have explained that PHMSA’s cost-benefit analysis does not account for costs that would be imposed. These costs will be significant to GPA Midstream’s members.
GPA Midstream has been working cooperatively with PHMSA and appreciates the hard work and effort that PHMSA staff has put into the proposed rule. However, GPA Midstream has serious concerns with the lack of gathering line representation on GPAC. The GPAC reviews PHMSA’s proposed regulatory initiatives to assure the technical feasibility, reasonableness, cost-effectiveness and practicability of each proposal. The committee also evaluates the cost-benefit analysis and risk assessment information of the proposals. The industry representatives currently on the GPAC only have experience in gas transmission and distribution.
Over half of costs that would be imposed by the proposed rule would be borne by owners and operators of gathering lines. Having no gathering line representation and essentially no gathering line stakeholders involved in GPAC discussions at the committee level is very problematic because it prevents the GPAC from fully understanding and responding to concerns that are unique to the gathering sector. Moreover, it fails to treat the gathering sector in a fair and consistent manner.
PHMSA recently postponed a second previously scheduled GPAC meeting for 60 days. We still have concerns that until the gathering line sector, which is a major stakeholder in this prosed rule, can be given a seat at the table and have proper representation, then the GPAC meetings on this proposed rule should be postponed.
Gathering line owners and operators should be very concerned and should voice their concern to PHMSA.
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