Sunday, May 31, 2015

S 1208 Introduced – Pipeline Replacement

Earlier this month Sen Markey (D,MA) introduced S 1208, the Pipeline Modernization and Consumer Protection Act. The bill would add a new section to 49 USC Chapter 601 that would attempt to encourage the replacement of aging gas pipelines.

Section 2 of this bill starts out by explicating a list of ‘congressional findings’ outlining the risks of an aging gas pipeline distribution system. Section 2(b) then goes on to add §60112A to the gas pipeline safety section of 49 USC outlining actions to be taken by gas pipeline operators and State regulators to correct the problem.

New USC Section

First it requires that each gas utility or gas distribution facility, in accordance with their pipeline integrity management program under 49 USC 60109, to accelerate the replacement of leaking pipelines or pipelines that are at high risk of leaking due to {new §60112A(b)(2)}:

∙ Inferior materials;
∙ Poor construction practices;
∙ Lack of maintenance; or
∙ Age.

Then the bill addresses a requirement for State regulatory authorities and unregulated gas utilities to “consider [emphasis added] developing prioritized timelines to repair all leaks based on the severity of the leak, including non-hazardous leaks, or replace identified leaking or high-risk piping or equipment, including leaks identified as part of an integrity management plan” {new §60112A(c)(1)(A)}. It goes on to again require those agencies to ‘consider’ adopting a cost-recovery program that includes {new §60112A(c)(1)(B)}:

∙ Replacement plans with targets and benchmarks for leaking or high-risk infrastructure replacement;
∙ Consideration of the economic, safety, and environmental benefits of reduced gas leakage, including consideration of reduced operation and maintenance costs and reduced costs attributable to lost or unaccounted-for natural gas; and
∙ Reporting on the reductions in lost or unaccounted-for gas as a result of pipeline replacements;

To better track the ‘unaccounted-for gas’ that is apparently (according to the findings) the result of minor ‘less hazardous leaks’ the bill again requires State regulators and unregulated gas utilities to ‘consider’ {new §60112A(c)(1)(C)}:

∙ 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 use of best available technology to detect gas leaks.

Unaccounted-for Gas Guidelines

Section 2(c) of the bill would then require the PHMSA Administrator, within 1 year, to publish a set of non-binding guidelines for implementing the pipeline identification, replacement and cost recovery program described above. The Administrator would consult with State regulators, the Department of Energy, the EPA, FERC and other ‘appropriate Federal agencies’ in developing the guidelines. It also requires the guidelines to be updated every seven years.

Moving Forward

Since this bill does not actually require anyone to do anything (other than PHMSA to develop non-binding guidelines) there will probably not be any major opposition to this bill. The question then becomes whether or not Markey and his two cosponsors have the pull to get this bill considered in the Senate Commerce, Science and Transportation Committee. Markey is a relatively high-ranking Democrat on the Committee and one of the cosponsors {Sen. Schatz, (D,HA)} is also a member of the Committee. There is an outside chance that that might be enough to get the bill considered.

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