House Energy Subcommittee Prepares for Pipeline Reauthorization
January 19, 2024|Garett Shrode
On Thursday, January 18, the Energy, Climate, and Grid Security Subcommittee under House Energy and Commerce conducted a hearing entitled “Fueling America’s Economy: Legislation to Improve Safety and Expand U.S. Pipeline Infrastructure.” The purpose of the hearing was to hear from regulators and industry experts to inform the reauthorization of the Pipeline and Hazardous Materials Safety Administration (PHMSA). The hearing consisted of two panels:
- Mr. Tristan Brown – Deputy Administrator, Pipeline and Hazardous Materials Safety Administration (PHMSA)
- Andrew Black – President and CEO Liquid Energy Pipeline Association (LEPA)
- Robin Rorick – Vice President of Midstream Policy, American Petroleum Institute (API)
- Dave Schryver – President and CEO, American Public Gas Association (APGA)
- Bill Caram – Executive Director, Pipeline Safety Trust
Authorization for PHMSA expired in September 2023. The Republican majority proposed the draft legislation being discussed in this hearing, the Pipeline Safety, Modernization, and Expansion Act of 2023, but it has yet to be introduced on the House floor. The Democratic Committee membership criticized the bill, calling it partisan, and noted that the bill has been unchanged since first floated in July. On average, there are more than 600 pipeline safety incidents in a year across the 3.4 million miles of oil, gas, and other hazardous liquid pipelines that fall under PHMSA regulation. Just last week, a natural gas leak in Fort Worth Texas caused an explosion that injured 21 people and destroyed two floors of a hotel. A liquid natural gas plant (also in Texas) suffered an explosion in June 2022, which PHMSA later found to be a result of inadequate processes at the plant. Nearly two-thirds of the energy consumed in the United States is transported via pipeline, and nearly one in 10 goods transported in the United States falls under PHMSA oversight. There is plenty of opportunity for things to go wrong. Having active authorizing legislation and funding is critical to pipeline and hazardous materials safety in the United States.
It is worth noting that PHMSA reauthorization is particularly challenging because jurisdiction is shared between the House Energy and Commerce Committee and the House Transportation and Infrastructure Committee. House T&I approved a bipartisan pipeline bill last month, the Promoting Innovation in Pipeline Efficiency and Safety (PIPES) Act of 2023 (H.R. 6494), but has not yet moved it to the House floor.
(Ed. Note: Pipeline jurisdiction is divided at both the federal agency and Congressional committee levels. Determining where a pipeline can be built, including all the permitting, is energy policy and thus the Federal Energy Regulatory Commission (FERC) and the Energy and Commerce. But once a pipeline goes active, the movement of fluids through it becomes transportation policy, under the USDOT Pipeline and Hazardous Materials Safety Administration and T&I. But the environmental impact of an active pipeline also has Energy and Commerce issues, and the dividing line between the two panels’ jurisdictions are opaque. The bottom line is that the two committees write separate bills and then usually have to merge them together to get the legislation through the House.)
Additionally, the Biden Administration has failed to nominate an Administrator for PHMSA, leaving the role empty for three years. PHMSA is currently being led by Deputy Administrator Brown, who testified to the challenges that PHMSA is facing as a regulator.
Subcommittee Chair Jeffrey Duncan (R-SC) was quick to criticize PHMSA and the Biden Administration for moving away from pipeline safety and towards climate activism. Duncan asserted that this bill would strengthen penalties for damaging pipeline infrastructure, incorporate permitting reforms centered on safety, modernization, and expansion, improve pipeline safety by updating PHMSAs programs to address new technologies and fuels, and put an end to ‘gas bans’ by protecting Americans’ right to choose the energy source that fits their needs.
Subcommittee Ranking Member Diana DeGette (D-CO) reminded the hearing room that there has been no real action on PHMSA reauthorization from this committee until this hearing, which to her feels like a step backwards as several sections are completely unrelated to pipeline safety. DeGette also noted that the draft bill authorizes funding levels that are 18% lower than PHMSA’s current funding, which Chair Duncan later clarifies is not technically true. While the Infrastructure Investment and Jobs Act (IIJA) invested $1 billion in natural gas distribution safety via pipelines, full funding at PHMSA is needed to meet safety goals. The Biden Administration’s draft 2024 budget included a 20% increase in PHMSA funding.
The Regulator Perspective:
Mr. Brown began his testimony by expressing his appreciation for the Subcommittee’s interest in strengthening safety, PHMSA’s foremost priority. Safety is a priority for USDOT across all transport modes, not just via pipelines. In addition to regulating pipeline and hazardous materials transport in the United States, PHMSA chairs multiple international standards making bodies that set global standards and frameworks for transporting hazardous materials across international borders, the transport of which is valued at over $1 trillion each year, he said. Most of the pipelines under PHMSA jurisdiction are over 80 years old, with a few dating back about 150 years. This aging infrastructure requires maintenance. PHMSA has also been working to meet congressional directives to improve efforts to attract and retain pipeline engineers and inspectors, including the hiring targets included in the PIPES Act of 2020 (not to be confused with the draft 2023 PIPES Act).
Mr. Brown indicated how important PHMSA is to the international community, as many look to America for their leadership in the marketplace for hazardous materials, in establishing safety rules that many countries adopt in whole, in rule of law when it comes to disputes and compliance, in research and innovation to improve safety and environmental performance, and in transparency and engagement with affected communities.
Chair Duncan asked Mr. Brown if PHMSA was straying away from its role of pipeline and hazardous materials safety. Brown disagreed that PHMSA is not solely a safety administration and that historically since its founding in 2004 (and even prior to it dating back to the Oil Pollution Act of 1990), PHMSA (and previously USDOT) has had a major environmental component in their agency’s work. Protection of the environment is in PHMSA’s mission statement and in the legislation that Congress has enacted to protect the environment, property, and public safety. Duncan also expressed concerns for the cost analysis for a new proposed rule for gas pipeline leak detection and repair. Brown assured him that the compliance cost was being considered and that the administration has a responsibility to include social costs and the estimation of fairness and equity in these considerations. Duncan sees PHMSA as compromising safety to appease environmental and social activists.
Ranking Member DeGette asked Mr. Brown to reemphasize the need for the 20 percent budget increase. Brown reaffirmed that the amount of energy that moves through the facilities PHMSA regulates has vastly increased over the last few decades creating a major complex of assets that requires more staff and funds to regulate. DeGette expressed that she thought the following sections did not belong in the draft safety bill:
- Section 3c – aquifer exemptions to class 6 wells used to sequester carbon dioxide.
- Section 9 – prohibits states and municipalities from restricting transportation and distribution of certain energy products
- Section 10 – infringes on a state’s right under the Clean Water Act to decide to issue permits for certain pipelines.
Brown indicated that he agreed, as they do not fall under PHMSA jurisdiction.
Representative Bob Latta (R-OH) asked if PHMSA was behind on the mandates of the PIPES Act of 2020. Mr. Brown said that PHMSA was tracking 36 mandates from the act, over half of which are complete, with the rest near completion. Representative Doris Matsui (D-CA) probed Brown on the increased challenges of newer pipeline fuels such as carbon dioxide and hydrogen. Matsui asked if the 18 percent cut in funding would make it more difficult to safely transport these fuels, especially as the number of pipelines is increasing. Brown indicated reduced funding would increase the time it takes PHMSA to approve pipeline applications and hinder abilities to respond to the new challenges of carbon dioxide and hydrogen pipelines.
Chair Duncan clarified that the draft bill does not cut PHMSA funding but keeps it level. It does, however, give more of PHMSA funding to the states where the inspectors and engineers are working on the ground, which comes across as a cut for PHMSA itself, but not for federal pipeline safety spending overall. Representative Tonko (R-NY) asked about the role of States in ensuring pipeline safety. Mr. Brown indicated that about 85 percent of the mileage of pipes overseen by PHMSA is inspected by state programs and inspectors. Congress has authorized PHMSA to fund up to 80 percent of those state pipeline budgets. The amount of funding PHMSA distributes to support those budgets has dropped from the 70 percent range a few years ago to 60 percent and less, which lead to safety consequences. The President’s budget proposal requests full funding to be able to provide the 80 percent in state support.
The Industry Perspective:
The panel that followed consisted of industry experts and advocates who spoke to the safety needs and regulatory challenges the private sector faces. Andrew Black, President and CEO of the Liquid Energy Pipeline Association (LEPA) indicated that pipelines are the safest way to transport energy: pipelines delivered 180 million gallons of energy per incident, trucks delivered 55 million gallons per incident, and trains delivered 50 million gallons per incident. Pipelines continue to get safer, with total liquid pipeline incidents down 28 percent over the last five years. Black recommends that the committee consider the following for PHMSA reauthorization:
- Further cut red tape PHMSA imposed on the Pipeline Safety Enhancement Program
- Add a requirement on operators of carbon dioxide pipelines to conduct specific dispersion modeling of atmospheric conditions and topography that could impact an incident.
- Reform the Special Permit Program by preventing PHMSA from imposing unrelated conditions on applicants.
- Increase enforcement due process by providing operators the opportunity for a formal hearing on major notices of probable violation, consistent with the PHMSA hazardous material program and other DOT modal agencies.
Robin Rorick, the Vice President of Midstream Policy at the American Petroleum Institute (API) testified to the improvements in carbon dioxide emissions over the past two decades. Americans breathe cleaner air because of the innovative improvements to energy production, transport, refinement, and consumption, reducing greenhouse gas emissions and other air pollutants including nitrogen dioxide, sulfur dioxide, and particulate matter. To complement these improvements, API asks for bipartisan energy policies that support the responsible development of our nation’s oil and natural gas resources, including policies that encourage investment in critical energy infrastructure. API, like LEPA, applaud the draft bill. Rorick asserts that the bill recognizes that on top of safety, permitting reform is needed. The proposal to modernize the permitting system by making it easier for operators to expand their infrastructure by co-locating resources in existing rights of way is especially appreciated, as it minimizes impact on communities. API encourages the subcommittee to direct the Secretary of Transportation to allow pipeline operators to establish storage tank inspection frequency on risk-based engineering principles, as current regulations cite outdated practices and industry standards. Rorick expresses the importance of maintaining America’s Energy Leadership, echoing Deputy Administrator Brown’s testimony previously in the hearing.
Dave Schryver, President of the American Public Gas Association (APGA) testified on behalf of the approximately 1,000 communities across the United States that own and operate their retail gas distribution entities. Public gas systems have been investing in leak detection technology, supported by the IIJA through the Natural Gas Distribution Infrastructure Safety and Modernization Grant Program. Schryver also noted that public gas systems have no obligation to deliver profit to shareholders, making them a key factor in helping to deliver affordable energy as natural gas prices increase. According to APGA, natural gas is a more reliable and more affordable way to heat homes than electricity. Forced electrification through legislative action would likely increase energy bills and necessitate further grid upgrades.
Bill Caram, the Executive Director of the Pipeline Safety Trust, an independent national watchdog organization for the pipeline industry created in the aftermath of the 1999 Olympic Pipeline explosion in Bellingham, Washington. Caram cited multiple examples of deadly pipeline failures, and indicated that since the PIPES Act of 2020, there has been more than one pipeline incident per day, killing or hospitalizing someone every nine days on average. Safety improvements are still needed. Caram’s written testimony highlights 23 policy and statutory recommendations. Caram summarized them by saying that “Congress needs to remove the statutory handcuffs it has placed on PHMSA.” For example, it is the only agency with a statutory cost/benefit requirement, a difficult hurdle to clear for infrastructure with low probabilities of failure but devastating consequences when failures arise. Additionally, PHMSA is prohibited by statute from adopting certain standards that would apply to the existing 3.4 million miles of pipeline, such as requiring mitigation valves in high consequence areas. Ironically, it is this existing aging infrastructure that needs this lifesaving technology the most, not just newly built pipelines.
One of the key takeaways of this four-hour hearing is the need for regulatory reform. Safety must be paramount, and permitting processes should be improved. Increased funding levels for PHMSA are likely needed to accomplish both goals.
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