Thursday, April 3, 2014

HR 4338 Introduced – Pipeline Replacement

As I noted earlier Rep. Rangel (D,NY) introduced HR 4338, the Pipeline Modernization and Consumer Protection Act. The bill is intended to address the issue of aging pipeline infrastructure and the hazards associated with leaks and failures associated with the old pipes.


Section 2(a) of the bill outlines the reasons that the legislation is necessary. It points out that current Federal regulations do not address minor leaks from interstate pipelines unless they present “an existing or probable hazard to persons or property and require immediate repair” {§2(a)(1)}. The author also notes that the cumulative value of these minor leaks is paid for by the pipeline customers.

The findings section of the bill also reports that the aging pipeline infrastructure is more prone to catastrophic failure and points to a number of recent incidents involving old distribution pipeline leaks. It goes on to note that the government regulated rate structures for these pipelines provide disincentives to replacing the failure prone pipelines until they actually fail. Some government mandated and supported pipeline replacement measures are beginning to reverse this trend and are to be encouraged.

New Pipeline Replacement Program

This bill would amend the pipeline safety rules by amending 49 USC Chapter 601 by adding a new section; §60112A, Replacement programs for high-risk natural gas pipelines. It would require gas pipeline operators to, as part of the pipeline integrity management requirements of §60109, to “accelerate the repair, rehabilitation, and replacement of gas piping or equipment” {§60112A(b)} that is leaking or presents a high risk of leaking due to age, poor construction materials, outdated construction practices or lack of maintenance.

The bill would require State regulatory authorities and each unregulated gas utility, as part of this program, to consider {§60112A(c)(1)}:

● Developing prioritized timelines to repair all leaks based on the severity of the leak;
● Adopting a cost-recovery program;
● Adopting a standard definition and methodology for calculating and reporting unaccounted-for gas;
● Adopting limits on cost recovery for lost and unaccounted-for gas; and
● Requiring the use of best available technology to detect gas leaks.

Guidelines for Identifying High-Risk Pipeline Infrastructure

Section 2(c) would require the PHMSA Administrator, within a year of the adoption of the legislation, to issue “non-binding guidelines identifying best practices under section” {§2(c)(1)} described above. The preparation of those guidelines will take into account existing efforts by various State regulatory agencies that have already attempted to address the issue. The guidelines would be required to be updated every 7 years.

Data Standardization

Section 3 of the bill would require the PHMSA Administrator to establish and publish forms that “adopt a standard definition and methodology for calculating and reporting unaccounted-for gas”
{§3(a)}. This would be required to be completed within one year of the adoption of this legislation.

Moving Forward

This looks like a fairly reasonable bill that should not bring widespread opposition. Unfortunately, since it was introduced by Rep. Rangel, it has a poor chance of being actively considered in Committee and even less of making it to the floor of the House. If the New York Democrat can convince Rep. Shuster (R,PA), the Chair of the House Transportation and Infrastructure Committee, to take up the bill, it could probably pass in both the House and Senate. 

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