CES Feature Article

On Jan. 3, President Barack Obama signed into law the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011. This act, sponsored as H.R. 2845 by Representative Bill Shuster (R-Pa.), brings significant changes to the nation's pipeline safety law, imposing a variety of new design, construction, testing, operation, maintenance and emergency response requirements for the nation's 2.3 million miles of pipelines for natural gas, petroleum and hazardous liquids.

The Department of Transportation (DOT)'s Pipeline and Hazardous Materials Safety Administration (PHMSA)'s administrative penalty authority was doubled to as high as $200,000 per violation per day, up to a cap of $2 million for a related series of violations such as a failure to accurately mark the location.

Also, PHMSA is given expanded authority to investigate accidents related to pipeline safety and may now seek penalties against any person who obstructs such an investigation.

The new law eliminates exemptions and strengthens the requirements that states must impose, as a condition to receiving grant funding, measures to ensure that all underground excavation entities, including government entities, participate in one-call programs to notify pipeline operators of planned excavation activities that could cause safety threats.

Current law required the DOT to evaluate the feasibility of automatic or remote-controlled shut-off valves by 1998. The new law calls for new PHMSA regulations (if appropriate) within two years, requiring the use, where feasible, of automatic or remote-controlled shut-off valves for newly constructed or entirely replaced transmission pipeline facilities. Within two years, the law also requires formal PHMSA evaluation of the feasibility of excess flow valves for multifamily and small commercial facilities, based on recommendations from the National Transportation Safety Board.

The new law requires all operators of gas transmission pipelines to verify the maximum allowable operating pressure (MAOP) of their pipeline system components and report MAOP exceedances that result in the use of a pressure relief device within five days of the event. Further, PHMSA must issue regulations that will require testing of previously untested natural gas transmission pipelines operating in high consequence areas (HCAs) at pressures greater than 30 percent of specific minimum yield strength.

Current law requires PHMSA to monitor the rate of industry progress in replacing and maintaining segments of their pipeline systems made of cast iron. Cast iron is more vulnerable to corrosion and integrity loss. The new law strengthens this survey and tracking program and combines it with new information gathering authority for PHMSA.

The new law calls for PHMSA regulations requiring notification of PHMSA and the National Response Center no more than one hour after confirmed discovery of pipeline accidents or incidents, followed by descriptions of the incident and its effects within no more than 48 hours. Current regulations require that an incident is reported and revised descriptions are provided at "the earliest practicable moment following discovery," but do not set an outer limit on when such reports must be made.

Practical effects of the pipeline safety, regulatory certainty and job creation act of 2011

Aside from the significant changes the new law will make on pipeline safety compliance, there are several practical effects of this legislation for pipeline owners and operators. It is expected that capital expenditures for new pipeline projects may be substantially higher as a result of the regulations that will be put in place pursuant to these amendments. Expenditures on existing infrastructure could be affected as well, as several categories of pipeline may become subjected to new or strengthened regulations.

Considering the changing landscape of pipeline safety laws and the potential risks inherent in any such change, owners and operators must take increasing care in developing new pipeline projects or replacing existing facilities.

For a full copy of this 21-page article, visit www.pillsburylaw.com.

Mobile Energy Solutions: helping you manage natural gas supply interruptions

Pipeline integrity testing projects are on the rise due to increased regulation and an overall aging of natural gas infrastructure that requires ongoing maintenance. These challenges can often cause supply interruptions. Such interruptions may affect your company's ability to operate. Your commitments must be kept. What's the solution to supply interruptions?

CenterPoint Energy Services' Mobile Energy Solutions (MES) offers portable, temporary natural gas supplies in the form of compressed natural gas (CNG) or liquefied natural gas (LNG) for emergency or short-term outage events.

Depending on the volume of gas required, MES uses tankers, large trucks or small farm taps to provide gas around-the-clock.

Our certified technicians and gas delivery and transport technology have been tested and proven in real-life conditions when the pressure to perform is on.

To learn more, contact your CES account executive or visit CenterPointEnergy.com/MobileEnergySolutions.