This episode of the Pipeliners Podcast features Russel Treat and first-time guest Keith Coyle discussing the significance of the U.S. pipeline safety law being considered for re-authorization later this year.

You will learn about the basic structure of the Pipeline Safety Act that will be discussed for reauthorization, how the reauthorization and appropriation process works in Congress, the historical impact of pipeline incidents on legislation and regulation, why new technology should be incorporated into the latest standards, and more valuable information.

Pipeline Safety Act Reauthorization: Show Notes, Show Notes, Links, and Insider Terms

• Keith Coyle is a shareholder and attorney with the Babst Calland law firm. Mr. Coyle is a member of the firm’s Washington, D.C. office and a shareholder in the Energy and Natural Resources, Environmental and Transportation Safety groups and Pipeline and HazMat Safety practice. [Connect with Mr. Coyle on LinkedIn]
• The Pipeline Safety Act of 1968 was the first federal law authorized by the U.S. Congress to prescribe safety standards for the transportation of natural and other gas by pipeline, and for other purposes.
• The Hazardous Liquid Pipeline Safety Act of 1979 was enacted to provide adequate protection against risks to life and property posed by pipeline transportation and pipeline facilities by improving the regulatory and enforcement authority of the Secretary of Transportation.
• PHMSA (Pipeline and Hazardous Materials Safety Administration) is responsible for providing pipeline safety oversight through regulatory rulemaking, NTSB recommendations, and other important functions to protect people and the environment through the safe transportation of energy and other hazardous materials.
• FERC (Federal Energy Regulatory Commission) regulates, monitors, and investigates electricity, natural gas, hydropower, oil matters, natural gas pipelines, LNG terminals, hydroelectric dams, electric transmission, energy markets, and pricing.
• API (American Petroleum Institute) is the only national trade association representing all facets of the oil and natural gas industry, which supports 10.3 million U.S. jobs and nearly 8 percent of the U.S. economy. API’s more than 625 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms.
• AGA (American Gas Association) represents more than 200 local energy companies that deliver clean natural gas throughout the United States. There are more than 74 million residential, commercial, and industrial natural gas customers in the U.S., of which 95 percent — more than 71 million customers — receive their gas from AGA members.
• The New London, Texas Incident in March 1937 was the result of a natural gas leak in the London School. According to reports, gas had been leaking from a residue line tap and built up inside the enclosed crawlspace that ran the entire length of the building’s facade. A spark then ignited the gas, causing the building to explode, injuring or killing hundreds of students and teachers. This led to the emergence of the Texas state legislation requiring the odorization of gas distribution lines.
• The Carlsbad Incident occurred in August 2000 when a 30-inch-diameter natural gas transmission pipeline operated by El Paso Natural Gas Company ruptured adjacent to the Pecos River near Carlsbad. The released gas ignited and burned for 55 minutes, causing loss of life to nearby campers. Following the NTSB investigation, several safety recommendations were made to improve safety. [Read the full NTSB Accident Report]
• The San Bruno or PG&E Incident in September 2010 refers to a ruptured pipeline operated by the Pacific Gas & Electric Company. The rupture created a crater near San Bruno, California, caused an explosion after natural gas was released and ignited, and resulted in fires causing loss to life and property. Following the NTSB investigation, several recommendations were made to improve safety. [Read the full NTSB Accident Report]
• The Marshall Incident refers to the Enbridge Incorporated Hazardous Liquid Rupture and Release incident, which occurred on July 25, 2010, in Marshall, Michigan. [Read the full NTSB Accident Report]
• The Aliso Canyon gas leak in 2015 was the result of natural gas escaping from a well within the Aliso Canyon’s underground storage facility in the Santa Susana Mountains near Porter Ranch, Los Angeles. The facility was operated by the Southern California Gas Company, who discovered the leak after residents complained of symptoms associated with natural gas exposure. Following the incident, Congress directed PHMSA to establish new safety standards for underground gas storage facilities.
• The Merrimack Valley gas explosion in Massachusetts in September 2018 was the result of excessive pressure build-up in a natural gas pipeline owned by Columbia Gas that led to a series of explosions and fires. [Read the preliminary NTSB Accident Report]
• The Maginot Line Effect is the idea of reactively changing boundaries or regulations to fight the latest battle. The concept comes from World War II when France built fortifications to attempt to deter German invaders during the time of French Minister of War André Maginot.

Pipeline Safety Act Reauthorization: Full Episode Transcript

Russel Treat:  Welcome to the Pipeliners Podcast, episode 71, sponsored by EnerSys Corporation, provider 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. I appreciate you taking the time. To show that appreciation, we are giving away a customized YETI tumbler to one listener each episode. This week our winner is Christine Fawcett with Columbia Gulf Pipelines. Congratulations, Christine, your YETI is on its way. To learn how you can win this signature prize pack, stick around until the end of the episode.

This week our guest on the Pipeliners Podcast is Keith Coyle. Keith is a pipeline attorney with a background having worked at the Department of Transportation and with several law firms as an expert on PHMSA and rulemaking. In particular, he’s going to talk to us today about Pipeline Safety Act and how it is authorized and re-authorized.

Just a note to the listeners, this was Keith’s first time on the podcast and we had a little bit of technical difficulty, so the audio is a bit rough at the beginning. I think we got it tuned out, it gets much better as we get a few minutes into the episode. With that, let’s welcome Keith Coyle. Keith, welcome to the Pipeliners Podcast.

Keith Coyle:  Thanks for having me on, Russel. I’m looking forward to it.

Russel:  Yeah, I’m glad to have you. I think you’re going to bring an interesting and new topic to the domain of the things we’ve been talking about. I’ve asked you on to talk about the pipeline safety re-authorization. Maybe you can just give us a little background about what is the Pipeline Safety Act.

I think most people in the pipeline business know that, but it might be helpful to get that more from the mechanics of it. What is it? How does it work? What is re-authorization?

Keith:  Sure. We’ll start with a little bit of background and history. The United States Congress originally passed the Pipeline Safety Act in 1968. That law, the Natural Gas Pipeline Safety Act of 1968, provided the Department of Transportation with the authority to regulate the safety of gas pipeline facilities and oversee the safe transportation of gas.

It also authorized DoT to administer a federal grand and certification program that would allow state authorities to regulate pipeline safety within their jurisdictions. About a decade later, Congress passed another law, the Hazardous Liquid Pipeline Safety Act of 1979. That law gave DoT similar authority over hazardous liquid pipeline facilities.

When we talk about hazardous liquid pipeline facilities, we’re talking about crude oil, petroleum, and petroleum products, and some other products that are made for them by pipeline.

These two laws, The Natural Gas Pipeline Safety Act of 1968 and the Hazardous Liquid Pipeline Safety Act of 1979, they established the basic framework for federal structure of how oversight of pipeline safety is conducted in the United States.

Russel:  It’s interesting, as you’re talking about these dates, on an episode not too far back we were talking about some of the rulemaking and how things tend to focus on the pipelines before 1970 and the pipelines after 1970. I guess I didn’t put it together at the time. What you’re seeing here is that the Congress began to mandate governance for pipelines in about that timeframe. It’s interesting to me.

Keith:  That’s right, because prior to the late 1960s and early 1970s, there was no federal legislation authorizing the regulation of pipelines safety. There were no rules in place at the federal level at that time.

When we talk today about pipelines installed prior to those dates in the early 1970s, it’s significant because at that time there were no rules that operators needed to comply with, at least not at the federal level. The way that the Pipeline Safety act is currently set up, you have two main players.

At the federal level you have the Pipeline and Hazardous Materials Safety Administration, or PHMSA. That is the agency within DoT that is currently responsible for regulating pipeline safety. What PHMSA does is, PHMSA establishes nationwide federal safety standards for gas pipelines and hazardous liquid pipelines. PHMSA also exercises what I would call primary oversight over interstate pipeline facilities. In other words, PHMSA plays a very important role in setting national policy on pipeline safety and in exercising primary compliance and enforcement over interstate pipelines.

Now, the state authorities also play a really important role under the Pipeline Safety Act. States are allowed to assume responsibility for regulating what are known as intrastate pipelines within their jurisdiction.

These are going to be pipelines that aren’t subject to the jurisdiction of Federal Energy and Regulatory Commission. We’re talking about gathering lines, certain transmission lines, and distribution lines. For a state to obtain the authority to regulate these intrastate pipelines, they need to adopt PHMSA’s regulations as a minimum.

They can go beyond those regulations, but they need to adopt at least the PHMSA requirements. In exchange for doing that, PHMSA gives the states federal grant funding for up to 80 percent of the cost for their pipeline safety programs. That’s how the process works. Almost all states have pipeline safety programs, with the exception of two.

Hawaii and Alaska currently do not have state pipeline safety programs. Every other state is going to have a program at least for gas pipelines. Some also have programs for hazardous liquid pipelines.

Russel:  Let’s talk a little bit about re-authorization. You hear that tossed around, but I for one really don’t understand the details of what re-authorization is and why it’s important. Maybe you could talk to us a little bit about reauthorization.

Keith:  The U.S. Congress generally passes two kinds or categories of legislation. One kind of legislation is known as authorizing legislation. The other kind of legislation is what’s known as appropriation. Authorizing legislation is what Congress uses to authorize the various activities that the federal government conducts on a daily basis.

The various iterations of the Pipeline Safety Act that Congress has passed over the past five decades, those are examples of authorizing legislation. They’re empowering the federal government to conduct certain activities. In this case, regulating pipeline safety. The other kind of legislation that Congress passes is what’s known as an appropriation bill.

An appropriation bill is what Congress uses to actually provide the money to a federal agency or an authorized federal agency to conduct their activities. When you hear somebody talking about how Congress exercises the power of the purse, what they’re really saying is that Congress passes these appropriations bills on an annual basis that fund various parts of the federal government.

When the government shutdown occurred earlier this year, that shut down certain parts of the federal government, that was an example of Congress not passing an annual appropriations bill on time, so the programs that were authorized could not be funded. There was a lapse of funding.

That’s the main distinction between what an authorizing legislation is like the Pipeline Safety Act, versus an appropriations bill that will actually fund a program. The way that authorizing legislation typically works is, Congress will only authorize a program for a certain amount of time. The reason that Congress does that is because they want to exercise oversight over the program.

They want the program to have to come back to Congress on a regular basis to continue its life. The Pipeline Safety Act from the beginning has only been authorized for a certain number of years. The original version of the law was only authorized through 1971. They have continued to authorize the program, or reauthorize it, on these periodic time frames over time.

The current authorization of the Pipeline Safety law that we’re operating under now, that was passed in 2016 and it expires later this year in 2019.

Russel:  What happens if an authorization expires before it’s renewed?

Keith:  If an authorization expires, Congress can essentially continue the program by providing an appropriation that funds it anyways. There are certain agencies that are permanently authorized. They get authorized forever.

Congress got away from that process several decades ago, basically because they wanted to have a mechanism where they were exercising periodic oversight over these programs to make that they were taking a look at them on a regular basis. When Congress enacts authorizing legislation, it generally originates in what are known as committees of jurisdiction in the two bodies of Congress.

A little Schoolhouse Rock here, we’ll try to keep it as high level as we can. There are two bodies of Congress, the United States House of Representatives and the United States Senate. Depending on the nature of the legislation, there will be one or more committees that have jurisdiction over the authorization.

For pipeline safety, there are several committees. In the House there is two, and in the Senate, there is one that exercises jurisdiction over that authorizing legislation. What you’ll see is these various committees will help to develop the latest version of the authorizing bill. They will hold hearings on that bill. It will be introduced, they’ll have witnesses come.

Then eventually you’ll see a version of bill emerge from the House, another version emerge from the Senate. If there are differences between those two bills they need to be reconciled before they can go into law and be signed by the president.

Russel:  Schoolhouse Rock is kind of the high school civics that what we’re talking about here.

Keith:  Yeah, that’s right. I laid it out in an orderly fashion — D.C.’s usually more entertaining than that.

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Russel:  That’s a good choice of words, entertaining.

Keith:  There is usually some back and forth. Sometimes there will be legislation where they will skip the committee process, things like that. One of the things that’s unique about pipeline safety is it’s historically been a bipartisan effort. There really aren’t people on either side of the aisle who are opposed to safety legislation.

There are usually differences in philosophy between the parties on what sorts of regulation should be established, how the program should work, how much money is necessary. In terms of the overall concept, pipeline safety has generally tended to be bipartisan, so that’s eased some of the back and forth on the legislative process.

Russel:  Yeah, I think what I would say in the overall scheme of things that go on in Washington, pipeline safety doesn’t get as much press as, say, aircraft safety.

Keith:  I do agree with that. I also would say that it’s changed a lot in the past few years, primarily as a result of all the new development of oil and gas resources that is happening in the United States, and the installation of new pipelines, particularly in areas of the country that don’t have a long history or aren’t as comfortable with oil and gas development.

States like Pennsylvania and New York, there has been a groundswell of concern about pipeline safety in those states. You’ve seen that matriculate up into the legislative process. We’ve seen the last few years things getting a little more contentious, a more divergence of views of pipeline safety.

Russel:  When I first started in the business, nobody ever talked about pipelines or pipeline safety, and pipelines rarely got in the news. I think that’s been changing because there is a lot of construction going on, and there is a lot of work going in and replacing older lines, lines that were built in the ’50s and ’60s that need to be replaced.

It’s no different than you got a highway, that infrastructure has to be maintained. That’s actually a nice segue into the next question I wanted to ask. As the re-authorization act is going through the process, what kinds of things do you think are going to be topical in the process? What do you expect to be happening in the process? Because we’re coming up on a re-authorization here pretty quick.

Keith:  If history is any guide about what we can expect in pipeline safety re-authorization, I would say that the single greatest driver has always been incidents. If you go back and look over time at the way the Act has changed, if the Act could talk, it would talk about incidents that have happened over time and changed the provision.

There were incidents that occurred decades before Congress even passed the Pipeline Safety Act that had a significant impact on legislation that we still feel today. In 1937, there was a gas pipeline explosion in New London, Texas, that ended up causing the death of nearly 300 students and teachers.

As a result of that incident, what you saw in Texas was legislation requiring the odorization of gas distribution lines. We still odorize pipelines in the United States today all these decades later as a result of that original incident in Texas.

Russel:  A lot of people don’t know that natural gas is odorless and colorless, that what you smell when you smell natural gas is not actually natural gas, it’s mercaptan typically that’s there so that you know there is a leak. It comes directly out of that school incident in New London. They had a gas leak in a school and because the gas wasn’t odorized nobody knew.

Keith:  That’s right. That’s the first example, if you look back in history, of legislation that was directly influenced by an incident that led to a change in law. What we’ve seen with the Pipeline Safety Act is a similar story.

In 2002, for example, Congress amended the law to require the development and implementation of integrity management programs. That mandate was in direct response to an incident that had occurred a few years earlier in Carlsbad, New Mexico.

In 2012, Congress made very significant changes to the Act in response to the San Bruno gas transmission line failure that occurred a few years earlier.

Russel:  Well…

Keith:  Go ahead.

Russel:  There were several incidents actually in 2010 that led to that. San Bruno being notable and Marshall on the liquid side likewise being notable.

Keith:  Absolutely. Then in the last re-authorization in 2016, the seminal event at that time was the Aliso Canyon release in the gas storage well out in California. There was a months-long gas leak from a storage well. Congress responded to that event by directing PHMSA to establish new safety standards for underground gas storage facilities.

If you were to take a lesson from what’s happened in the past, I would basically point you to recent incidents. Either incidents that have occurred recently in the last few years, or something that may happen, God forbid, over the next few months or so, that could have an influence on the law itself.

Russel:  Probably the most recent being the over-pressure issue that occurred in Massachusetts.

Keith:  Absolutely, the Merrimack Valley incident. There have already been Congressional hearings. There was a field hearing at the end of last year to talk about that incident.

Russel:  Yeah, that’s one of the things that people don’t realize about…If you’re close to it, you see this happen, but if you’re not close it, it’s easy to not see these wheels turn. There’s very much a direct line of sight between something happening that impacts a community straight to Congress, straight to rule-making.

Keith:  Absolutely.

Russel:  If you think about it, that’s actually our process working. It’s people who want to see something done differently, motivating their elected representatives to get something done differently. I would say that one of the reasons that safety has gotten so much better in my lifetime is because of how that process works.

Keith:  Yeah. It’s a constant back and forth, where you have things that happen at the grassroots that find their way up to Washington and have an influence on legislation. The one cautionary tale I would provide about that is that there is a risk, sometimes, of having what I would call the Maginot Line effect, where we’re constantly changing the law or changing regulation to fight the last battle.

We think that the greatest threat is whatever threat led to the last incident, whatever caused the last event. In some respects, if you focus only on the last event, sometimes you can miss the next event that’s coming, or sometimes we can end up directing too many resources to one particular problem.

In most cases, these events are a combination of different factors. It’s not usually one silver bullet thing or one failure that led to an event. It’s usually a combination of things. There’s some complexity there.

Russel:  Always. The other thing that may not be well understood is, the people that work in this business, that work in the pipeline business, my experience is, almost universally, they’re hardworking, they’re intelligent, they’re very judicious, they understand they have a fiduciary responsibility to the public, and they take all that very seriously.

When something does happen, they take that to heart. Knowing some people that in their careers have been very close to some of these incidents we’ve talked about, these are the strongest advocates for pipeline safety. They’re people in pipelining that have seen these things occur and don’t ever want to see them happen again.

Your point is well made, that we do have limited resources, and there’s a lot of ways to apply them. What we need to do is apply them in a way that we’re always getting better.

Keith:  Absolutely. On your point too, I always tell people, “The people in the industry, they breathe the same air, they drink the same water, their kids go to the same schools. They care as much about this stuff as the people in the communities being impacted. They focus every day on trying to make the system as safe as humanly possible, and they are vigilant about that.”

There is a role for legislation and regulation to make improvements over time. If you look at the overall historical data on pipeline safety, you go back and look at incident data from the ’70s and match that to the incident data that we have today, you will see a dramatic improvement in the safety of the nation’s pipeline network.

That’s the result of legislation, regulation, improvements in technology, better practices. It’s a combination of factors, but we are getting better.

Russel:  It’s also the standards bodies and the work that they’re doing through the API, the AGA and others, to improve, to help industry understand how to take technology and apply it in the most beneficial way.

Keith:  Those standard bodies, they move a lot faster than United States Congress or PHMSA. The federal ship of state moves slowly.

Russel:  I have to laugh at that, though, Keith, because I work on some of the standards writing, and it doesn’t seem like it moves fast. [laughter] That’s for sure.

Keith:  Sometimes you can get by without having the standards committees, too.

Russel:  It does move faster than the wheels of government, though. That’s for sure.

Keith:  There’s a lot of good thinking that happens in those standards committees. The original pipeline safety rules were based on an industry standard that was developed in the ’30s, ’40s, ’50s, and ’60s. There was a lot of good thinking that went into those early standards, that ended up providing the foundational principles that we still follow today.

Russel:  Yeah, and a lot of that is people that all are applying those things a little differently coming together, collaborating, and arguing. I mean that in a positive way. They’re collaborating, arguing, and coming up with something that raises the tide, lifts all the boats.

Keith:  Exactly.

Russel:  I want to ask this question. Obviously, you’re familiar with how all these wheels turn. If I were to make Keith king of the world, what would you direct Congress to do in the Pipeline Safety Act?

Keith:  If I were king for a day and I could make certain changes to the law, I’d probably do some things that were pretty boring, and do some things that were maybe a little more exciting. In the boring category, I would probably clean up the law. There are a lot of obsolete provisions, expired mandates, things that have been added to the law over time.

It’s gotten a whole lot longer, but there are a lot of provisions in there that aren’t necessary anymore. As a housekeeping thing I would start with, as a good lawyer, “Let’s get out this stuff that doesn’t need to be in there anymore.” In terms of the more exciting things, or the things that would be for the better for safety in the industry, I would do more to encourage the use of new pipeline safety technologies.

There are so many technological advances that happen in this field every day. Things are changing. Inline inspection tools are getting better. Our operators are using drone technology to monitor pipelines. We have great technology that’s emerging with the use of satellites. Some of those technologies, you can’t use those new technologies under the current regulations.

A good example of that, new pipe materials. We have a lot of people who are developing new composite and other materials for pipe, that in certain applications stand up much better over time than steel or some of the plastics that are currently approved for use in the regulations. They way that the rules are written, you can’t use some of that new material in regulated systems.

You have to come to the regulator and get what’s known as a special permit. That takes time. It’s a one-off, and only applies to one operator. If Congress could do some things to allow for the use of pilot programs or alternative technologies, ways to introduce these things into the framework in a way that’s faster, because you do see tremendous improvements on the use of some of these new technologies.

Another thing that would be helpful is industry standards. There are more than 60 industry standards that are currently incorporated by reference to the federal rules. A lot of those industry standards are updated over time. It’s a lot of good work, as we just talked about, that goes into that.

PHMSA doesn’t necessarily keep up to date with incorporating the latest versions of those standards to its regulations. We end up with a situation where we’re using additions of standards from the late ’80s, the early 2000s, to conduct activities, when there are modern additions of those standards. Sometimes it’s unreliable.

Russel:  The regulatory guidance is a standard that’s 15 or 20 years old. We’re two versions beyond that, and the regulatory guidance has never been updated.

Keith:  If we’re going to send a message to industry, it’s that we want to be using the latest and best version of these standards. That’s how the rest of the world operates. We’re not ordering pressure vessels from the 1990s edition of the Boiler and Pressure Vessel Code. We’re using the latest edition because that represents the most modern thinking on how those things should be built.

Russel:  Being close to that in a couple specific instances, one of the challenges given the way our system works is that, you can’t write a standard, and have that be a rulemaking process. Likewise, you can’t do a rulemaking process and have that be a standard writing process. They’re separate. The need for that separation causes some need to administrate the law.

What you’re saying is very well founded, but I also know enough about it to understand a little bit about the problem of it, or the challenge.

Keith:  Definitely, you can’t contract out or delegate safety authority or rulemaking authority to a non-governmental entity like an industry standards body. What you can do is make sure that you’re taking the knowledge that is reflected in this latest addition to those standards, and getting it into your rules as fast as is responsible for the industry today. There’s a dance there. It takes time, but we can do better.

Russel:  Of course. Keith, that’s probably a good place to wrap up this conversation. I’ve certainly learned some things. One of the things that I do at the end of a lot of the episodes, is I try to come out with three key takeaways. There’s a couple here that are important.

One is that there’s direct line of sight between incidents and law. There’s reasons for that, because local communities want to see things change. They don’t want to have those incidents happen again. That’d be number one.

Number two is that the lawmaking process can be slow and ponderous, and can leave a legacy of things that need to be addressed.

Number three is that even so, the system works, because we are getting better. We’re getting better not just in specific things, but overall across the industry, we’re getting better. At least one reason is because of this process.

Keith:  Yeah, and the last point is the one that sometimes, a lot of people lose sight of. From all of the things that happened, for all of the developments over time, if you sit back and look at where the United States was in 1970, and you look at where the United States is today for this history, you will see tremendous improvements in the safety of the systems overall.

We’re doing a better job today than we did years ago and I think that trend is going to continue.

Russel:  Yeah, I think that’s very well stated, that that trend is going to continue. Keith, thanks so much for coming on, such a pleasure to have you. Let’s have you back and we’ll continue to do high school civics on the Pipeliners Podcast.

Keith:  That sounds great, Russel. Thanks for your time.

Russel:  I hope you enjoyed this week’s episode of the Pipeliners Podcast and our conversation with Keith Coyle about Pipeline Safety Act re-authorization. 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 podcast, please leave us a review on Apple Podcasts, Google Play, or whatever smart device podcast app you happen to use. You can find instructions at pipelinepodcastnetwork.com.

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Russel:  If you have ideas, questions, or topics you’d be interested in, please let me 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