Pipeliners Podcast host Russel Treat hosts an educational and timely episode of the podcast covering natural gas pipelines.

Part 1 of the episode focuses on the history of natural gas pipelines in the United States to understand the context of regulations. Part 2 focuses on current rulemaking and proposed changes that will affect pipeliners involved in natural gas gathering, transmission, and distribution.

You will also learn about the current focus on pipeline safety, including the five guiding principles adopted by INGAA to support the industry’s goal to achieve zero incidents.

Gas Pipeline Regulatory History & Update: Document/Resources Links

• American Gas Foundation: “Natural Gas Pipeline Safety and Reliability: An Assessment of Progress.” The study details how regulatory bodies and the natural gas industry have historically worked together to provide for the safe and reliable transportation of natural gas.
• PHMSA: Latest data on pipeline incidents and the cause of each individual incident.
• INGAA: 5 Guiding Principles for Pipeline Safety.
• Van Ness Feldman: Pipeline Safety Update: PHMSA Extends Deadlines for Complying with New Plastic Pipeline Regulations. (AGA request)
• Pipeline Safety Trust: 2019 letter to PHMSA regarding their information collection for the “Gas and Liquid Pipeline Safety Program Certification.” [Dockter Number PHMSA-2018-0109]
• Pipe Laws: 2019 dates for PHMSA’s proposed gas and gathering pipeline rule, “Safety of Gas Transmission and Gathering Pipelines.”
• ASME: American Standard Code for Gas Transmission and Distribution Pipelining systems.

Gas Pipeline Regulatory History & Update: Show Notes and Insider Terms

• PHMSA (Pipeline and Hazardous Materials Safety Administration) is responsible for providing pipeline safety oversight through regulatory rule making, NTSB recommendations, and other important functions to protect people and the environment through the safe transportation of energy and other hazardous materials.
• The Pipeline Safety Trust (PST) is a public charity promoting pipeline safety through education and advocacy by increasing access to information, and by building partnerships with residents, safety advocates, government, and industry.
• NTSB (National Transportation Safety Board) is a U.S. government agency responsible for the safe transportation through Aviation, Highway, Marine, Railroad, and Pipeline. The entity investigates incidents and accidents involving transportation and also makes recommendations for safety improvements.
• The American Gas Foundation is an independent source of information research and programs on energy and environmental issues that affect public policy, with a particular emphasis on natural gas.
• ASME (American Society of Mechanical Engineers) is an international developer of codes and standards that support the practice of mechanical engineering.
• HCAs (High-Consequence Areas) are defined by PHMSA as a potential impact zone that contains 20 or more structures intended for human occupancy or an identified site. PHMSA identifies how pipeline operators must identify, prioritize, assess, evaluate, repair, and validate the integrity of gas transmission pipelines that could, in the event of a leak or failure, affect HCAs.
• The Pipeline Safety Improvement Act (2002) called for a five-year period of research into pipeline integrity and the development of standards for pipeline operators to follow. The program also called for coordination and collaboration of participating agencies to develop and apply performance measures to evaluate the effectiveness of pipeline facility research, development, and demonstration projects.
• Integrity Management (Pipeline Integrity Management) is a systematic approach to operate and manage pipelines in a safe manner that complies with PHMSA regulations.
• The CRM Rule (Control Room Management Rule as defined by 49 CFR Parts 192 and 195) introduced by PHMSA provides regulations and guidelines for control room managers to safely operate a pipeline. PHMSA’s pipeline safety regulations prescribe safety requirements for controllers, control rooms, and SCADA systems used to remotely monitor and control pipeline operations.
• INGAA (Interstate Natural Gas Association of America) is a trade organization that advocates regulatory and legislative positions of importance to the natural gas pipeline industry in North America.
• PHMSA’s Office of Pipeline Safety (OPS) collects data on each natural gas distribution incident and reports the latest statistics to determine industry trends.
• The Gas Gathering Rule (Safety of Gas Transmission and Gathering Pipelines) was initiated in 2016 when PHMSA issued a notice seeking comments on changes to the pipeline safety regulations for gas transmission and gathering pipelines. The proposed rule has advanced through various stages to expected issuance in March 2019.
• CP (Cathodic Protection) Verification is a test to reduce the corrosion of a metal surface by making that surface the cathode of an electrochemical cell. [NACE Standard TM0497-2012]
• MAOP (maximum allowable operating pressure) was included in a bulletin issued by PHSMA informing owners and operators of gas transmission pipelines that if the pipeline pressure exceeds MAOP plus the build-up allowed for operation of pressure-limiting or control devices, the owner or operator must report the exceedance to PHMSA on or before the fifth day following the date on which the exceedance occurs. If the pipeline is subject to the regulatory authority of one of PHMSA’s State Pipeline Safety Partners, the exceedance must also be reported to the applicable state agency.
• Rupture detection is the process of quickly and reliably identifying a rupture in a pipeline and shutting down the pipeline to prevent catastrophic events.
• A Rupture Detection System (RDS) uses algorithms and patterns to provide the pipeline operator with accurate information to shut down a pipeline in the event of a rupture.

Gas Pipeline Regulatory History & Update: Full Episode Transcript

Russel Treat:  Welcome to the Pipeliners Podcast, episode 66, sponsored by EnerSys Corporation, providers of POEMS, the Pipeline Operations Excellence Management System, compliance, and operations software for the pipeline control center. Find out more about POEMS at enersyscorp.com.

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Announcer:  The Pipeliners Podcast, where professionals, Bubba geeks, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations. Now your host, Russel Treat.

Russel:  Thanks for listening to the Pipeliners Podcast. We appreciate you taking the time, and to show that appreciation, we are giving away a customized YETI tumbler to one listener each episode. This week, our winner is Josh Busby, with Energy Transfer Company. Congratulations, Josh, your YETI is on its way.

This week on the Pipeliners Podcast, two things that we’re going to cover. The first is a bit of history about pipeline regulation in the U.S., particularly as it relates to natural gas pipelines. Then, we’re going to wrap the episode up talking about what’s currently in the works.

We’ve been talking about some specific things related to impending regulation, particularly around gas gathering, over the last few weeks. I thought it might be a good idea to provide an overview of the history.

As I was doing a little research this morning and catching up my recollection, if you will, about this history, thought this really provided some excellent context for just talking about these regulatory requirements that impact gas pipeliners. Let’s start out a little bit about talking about history.

A lot of this history that I’m going to walk through, I actually got this from the American Gas Foundation. I’ll put a link up in the show notes to a report that they put together in 2015, and really provides a lot of good information about the history of pipeline regulation for gas pipelines in the U.S., particularly around gas utilities.

This is almost one of those things that would be good to ask as a question and ask the listeners to respond, but we’re not going to do that this week. That question is this, when was gas first used commercially in the United States? Think about that for a second. When would you guess?

The answer to that question is actually 1816. If you think about that, that’s only 40 years after the Revolutionary War. That’s very early in the history of our country, as we were moving from an agrarian economy, and in the cities in particular, beginning to move towards a manufacturing economy.

The Gas Light Company of Baltimore first created a system for distributing manufactured natural gas in 1816. Then in the 1820s, the first natural gas well was completed and began to deliver gas in Fredonia, New York.

I always find this interesting. I don’t think a lot of people realize that in the early days of oil and gas production in the U.S., that a lot of this originated in the Northeast. We tend to think about Texas, New Mexico, and Alaska being the places where oil and gas was developed. Certainly, it’s a big part of what happens now. It actually originated in the areas close to where the consumption was occurring.

By the 1860s, there were nearly 300 natural gas distribution companies, supplying gas to over five million customers. If you think about that, I don’t know what the population was in 1860 in the United States, but that is a very rapid growth of an industry in just 40 years.

That industry continued to expand. That also created continuing demand for natural gas. In the 1900s, we’re beginning to see advances in steel making. That paved the way for large diameter high-pressure pipelines. By the end of the [Second] World War in 1945, we had 77,000 miles of gas transmission, 27,000 miles of gathering, and 181,000 miles of distribution.

Those numbers are significantly larger in this day. Even so, you’re seeing a rapid growth of that industry. If you think about that from the first advent of steel making of pipe in the 1900s, and then 40 years later, we’ve got over 250,000 miles of pipe in North America, that is a big, big deal.

This led to the need for the creation of codes. In 1952, the American Society of Mechanical Engineers released its first edition of an American standard code, providing guidance for the American Standard Code for Gas Transmission and Distribution Pipelining systems.

This was drawing on experience for a general code for pressure piping, and was the first industry standard tailored specifically for gas transmission and distribution. This original code includes some minimum safety requirements for the materials, the piping components, the joints, fabrication, design installation, testing, and operating pressure of pipe.

This started a trend that continued to evolve. By the 1960s, you see Congress initiating legislation to charter the Department of Transportation to create regulatory guidance around interstate pipelines. That’s really the first introduction of federal pipeline regulatory requirements. Then in the 1970s, you started to see the states begin to participate in gas pipeline safety programs.

Some of this was a result of federal grants that created available reimbursement to underwrite these programs. By 1975, 45 of the 52 state jurisdictions — that’s the 50 states plus Puerto Rico, and, I believe, Guam — had submitted annual certifications to the federal authority about their regulation or interstate gas pipelines.

What you see over the period of the ’60s and ’70s is this move towards standards, and federal oversight, and program development. By the late ’90s, we started to see additional requirements for operator qualification, for public awareness, revised emergency flow valve rules for family residence.

Again, the emphasis of this original regulatory oversight was really in the high-consequence areas, the high density population areas where they wanted to more actively manage risk. In 2002, Congress passed the Pipeline Safety Improvement Act, and this directed the DOT to add integrity management to its pipeline program. In 2008, PHMSA started with the Control Room Management rule.

That’s when they issued their notice of proposed rule-making. By 2010, of the INGAA members, more than 90 percent of the mileage existing within high-consequence areas had been inspected by these new technologies. It’s a lot of change going on. Pipeline safety is one of those areas where you begin to see more regulatory oversight.

If you think about in the 1860s and early 1900s when cities were gasifying and replacing coal with natural gas for heat, there was a lot of public concern about the risk, about natural gas. Now, 100 years later plus, we pretty much just take that for granted. We go to the thermostat in the house and we turn on the heater, and we expect the house to heat up.

We go to the stove and we turn on the stove, and we expect to be able to cook. We really don’t think a whole lot, most of us, about all the infrastructure that’s required in order to locate, produce, transmit, and distribute that gas to the house in a way that’s safe and effective for the intended use. Anyway, that’s a little bit of history about pipeline safety and where we’re at.

A couple of things about more recent developments, and asking, where are we at as an industry, as it relates? In the period of 1985 to 1987, when you look at reportable safety incidents per natural gas consumption per year, we had about 5.5 reportable safety incidents per trillion cubic feet per year in that time frame. By ’99 to 2001, that number had come down to 3.4.

During the period of the late ’80s through the ’90s, we were seeing material improvements in pipeline safety. For me, this raises the question of, what are the things that actually cause us to have pipeline incidents? What are the root causes?

In the report that I’m using — I’ll link up on the show notes here to put this information together — they have a pie chart that’s showing the natural gas distribution incidents. You can think of that primarily as incidents within gas utilities that reported between 2003 and 2012. You ask the question, what were the significant causes? The largest cause was, at 33 percent, other outside force damage.

Other outside force damage would be anything other than excavation. Excavation damage was number two, at 31 percent. A combination of excavation damage and other outside force damage is 64 percent of all the incidents. Other outside force damage would be things like earthquakes, ground movement, erosion, those types of things that put material stresses on the pipe.

Following that, at 16 percent, were corrosion. Many of the initial programs that were put in place for gas pipeline integrity were more corrosion focused than force focused, well, corrosion and third party damage or excavation damage. In terms of other things that really gets the numbers down to other causes were fairly small.

You’re looking at almost over 80 percent of the damage is either corrosion, excavation, or outside force. Those are the areas that the Pipeline Safety Act and the regulatory bodies have focused on over the course of the history of regulatory rule making.

One of the things to think about if you’re looking at this at a very high level and you’re thinking about, “What are we doing over the course of decades?” As we begin to get technologies in that improve our performance in one area, we then find another area becoming that thing that we have the most concern about. This is a continuing process.

The way that the rule-making authorities look at this is, they’re looking at what are they doing through their program over the course of much longer periods of time. In 2011, INGAA, which is the Interstate Natural Gas Association of America — think of that as the big gas transmission and distribution companies — adopted five guiding principles for pipeline safety, the goal of which is zero incidents.

In all of these conversations about pipeline safety, that’s where we’re trying to drive the needle. We’re trying to drive the needle to zero incidents. That’s an incremental process. It’s the kind of thing you’re going to do over time. To some degree, that’s an aspirational goal. It’s certainly the only goal that makes sense. In their five guiding principles, they are these.

One, to inspect 100 percent of pipe within any kind of probable impact radius. By looking at the pipe, its size, the pressure it’s carrying, the BTU of the gas, and looking at a probable impact ratio, make sure that 70 percent of the population within these are inspected by 2020, and 100 percent by 2030. Really a focus not just on integrity management, but also a focus on where the risk exists.

Number two, raise standards for corrosion anomaly management and to develop industry consensus about how to apply those standards in and outside of high consequence areas. Third, demonstrate that pre regulation pipelines located in high population areas are fit for service through validation of records and confirmation of maximum allowable operating protocol.

Basically, implement a form of fitness for service protocol as newly constructed pipe or previously unregulated pipe that becomes regulated, a mechanism for orthogonally and systematically bringing into their control.

Number four, shorten pipeline isolation and response time in high-consequence areas to one hour, from incidence recognition to the start of valve closure procedures. I think we could probably do an episode just on that conversation. For anybody who’s listening, who doesn’t operate pipelines in natural gas service, one hour seems like a long time.

The challenge in a natural gas system is, most of these systems were built to keep the service on. If I have an incident during the cold season and people are relying on natural gas to heat their homes, I need to be very intentional about how I isolate and operate those valves.

Same kind of thing, many of our power plants in the United States now are operated off of natural gas. If I’m trying to isolate an issue, I need to look at what’s the impact on others, including what would be considered safe closing or safe shut down for facilities that might be impacted by shutting off gas and isolating a problem. This is actually a really complicated challenge.

Then lastly, number five was to implement recognized best practices to collaborate between stakeholders, then to increase the awareness and adoption of those best practices. Communities, regulatory authorities, first responders, operators etc., all these are people that would be stakeholders.

Those are five guiding principles. If you look at what’s going on in the regulatory rule-making right now, you can actually see those principles informing and influencing what’s happening in the rule-making process. Let’s talk about what’s going on right now in natural gas pipeline rule-making. There’s a couple of things.

First, there’s a whole new set of regulations going through the process, and related to plastic pipe. I am certainly no expert in plastic pipe and gas distribution, but what I can say that I do know about plastic pipe is, there’s more and more of it being used. It has some benefits from the standpoint of, it doesn’t have the corrosion problems.

Of course, it still has mechanical damage issues and other kinds of issues. Because corrosion is not the primary thing for managing plastic pipe, other factors are. Because much of the plastic pipe that’s being installed operates at much lower pressures, there’s a new set of guidelines, standards, and regulatory requirements that are working their way through the rule-making process.

PHMSA recently extended its deadlines for complying with the new plastic pipe regulations. This was done at the request of the American Gas Association. I’m going to send a link to a website that Van Ness Feldman has, which they provide pipeline safety updates.

They have a pretty good overview of the topics, the relevant sections of 49 CFR, and the new compliance deadlines related to all of that. There’s set of different requirements related to mechanisms for joining plastic pipe, and they extended that deadline to April 22nd, of this year. There’s a 90-day extension. There’s also two requirements that were likewise extended to April 22nd.

One was cathodic protection design for isolated metal fittings. You have this issue of where you may have fittings that are metal, but pipe that is plastic, and of course, you have the issue of transition from metal pipe to plastic pipe. There’s a requirement for devices and components to withstand loads and meet specifications. That relates to things like tees, 90s [elbows], valves, and other kinds of piping components.

Then there’s a set of requirements for developing programs for handling plastic pipe and maintaining joining equipment. Those were extended six months, to July 22nd. Lastly, use of category one fittings on pipe four inches or more in diameter, and that got extended to January 22nd, of 2020.

If somebody in the listening audience is an expert in plastic pipe and what’s going on in the gas utility around plastic pipe, and you’d be willing to come on and be a guest to talk about this subject, I’d love to have you on. It would be an opportunity for myself to get educated. We might educate some others as well.

I did a recent episode on the Gas Gathering Rule that’s working its way through. I won’t spend a whole lot of time talking about that. I’ll just emphasize that the Gas Pipeline Advisory Committee is going to be meeting in June. They are pushing to get that completed, I think, this year. That’s quite likely to happen.

The other noteworthy news item in this topic is, PHMSA recently sent a letter, this was on March 6, from the leadership on the Senate Committee on Science and Transportation and Commerce. They sent this letter to the DOT secretary and the PHMSA administrator to push for completion of final rules around gas transmission pipeline safety, all of which was required under the 2011 Pipeline Safety Act.

There were other industry stakeholders who submitted a similar letter to the secretary of the DOT in February. That would be people like the Pipeline Safety Trust. I’m going to just give a high-level overview of where the pending final rules are in the process. We’ll provide you some links in the website where if you want to go and look this up.

In terms of pending final rules, there are some emergency order procedures that are expected in March or April, based on DOT or PHMSA dates. For the gas transmission rule and MAOP re-certification, you’re looking at July of 2019, based, again, on DOT and PHMSA’s published dates.

In terms of safety of gas transmission pipelines repair, integrity management, cathodic protections and other related amendments, it’s estimated for December of 2019. Safety of gas gathering pipelines, the gas gathering rule, as it’s commonly referred to, is looking at December of 2019.

Safety of onshore hazardous liquid lines, looking at May of 2019. Underground natural gas storage facilities, looking at July of 2019. All of those are fairly substantial. Most of the people that work in those businesses, particularly the guys operating natural gas storage facilities, they’ve been seeing this come down the road for a while. The final rule is expected July. That’s pretty soon.

There’s a couple of other pending notices of proposed rule-making — one around class location requirements. There is interest in defining — right now, we have various classes, one through four. There’s this idea of high-consequence areas. When you’re in a high consequence area, here’s the additional requirements you have.

The idea that it’s coming down the pike in this rule about medium consequence areas, so not as high population density as high consequence, but not rule. That’s early in the process. There’s both a gas pipeline and liquid pipeline regulatory reform process that’s moving through.

That’s going to look at what of the regulatory requirements are no longer needed or required, or no longer providing value, or need to be updated. There’s a notice regarding repair criteria for hazardous liquid lines, valve installation, and minimum rupture detection requirements for gas lines.

I think this issue around minimum rupture detection standards for natural gas is going to be big. At present, there’s not a leak detection requirement for natural gas lines. Rupture is something different than leak. Just think of it as complete loss of mechanical integrity, versus I’m bleeding some gas through a small hole.

Again, an oversimplification, but certainly there’s technology out there that will allow for rupture detection in gas systems. It’ll be pretty interesting to keep an eye on that, I think. There is a pending advance notice related to coastal and environmentally sensitive areas. That’s a heads up. The things that are imminent are the gas gathering rule, the underground gas storage rule, and related items.

I hope this is helpful to those of you that work in the pipeline business, and particularly those of you that might not be close to rule-making, that you would understand what’s going on and how these things are coming through the process. If you work in our business, these rule-makings — when they occur — they will affect you. There’ll be new technology, new policy, new procedures. New boxes to check off might be another way to say that.

As always, we’ll provide you some resource links in the show notes. You can go the pipelinepodcastnetwork.com website, look for Episode 66, then just scroll to that page, and you will see links that will provide you some resources if you want to do some research or learn more about these subjects.

With that, I hope you enjoyed this week’s episode of the Pipeliners Podcast and our conversation about the history and current state of regulatory rule-making in natural gas pipelining.

Just a reminder before you go, you should register to win our customized Pipeliners Podcast YETI tumbler. Simply visit pipelinepodcastnetwork.com/win to enter yourself in the drawing.

If you would like to support the Pipeliners Podcast, you could leave a review on Apple Podcast, Google Play, or whatever smart device podcast application you use. You can find instructions at pipelinepodcastnetwork.com.

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Russel:  If you have ideas, questions or topics you would be interested in, please let us know on the Contact Us page at pipelinepodcastnetwork.com, or reach out to me directly on LinkedIn.

Thanks for listening. I’ll talk to you next week.

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Transcription by CastingWords