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Congress Considers a New Obama Administration Pipeline Oversight Proposal

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Wednesday, September 15, 2010 at 5:21 pm

A natural gas pipeline exploded in San Bruno, Calif., Sept. 9. (Xinhua/ZUMApress.com)

Today, the Obama administration sent Congress draft legislation strengthening pipeline oversight. The proposal comes as pipeline safety is in the national spotlight. In July, a cracked pipe in Michigan leaked more than a million gallons of oil into a tributary of the Kalamazoo River — an event environmentalists describe as disastrous. And, just days ago, the explosion of a natural gas pipeline in California killed four and damaged dozens of homes. But, lawmakers are already raising questions about the proposal for failing to address key issues of concern identified by pipeline safety experts. Moreover, they argue that passing the pipeline legislation this year might be impossible, as there are so few days left on the legislative calendar.

[Environment1] The Department of Transportation proposal increases the maximum fine on companies responsible for pipeline breaks that result in death, injury or environmental damage from $1 million to $2.5 million. It also sets aside money for 40 additional pipeline inspectors, to be hired over the next four years. Most significantly, the proposal requires that the Pipeline and Hazardous Materials Safety Administration — PHMSA, responsible for overseeing the country’s 2.3 million miles of pipelines — review and revise its current inspection policies.

As The Washington Independent reported in a three-part series on pipeline safety, federal law requires only seven percent of natural gas pipelines and 44 percent of liquid pipelines to be inspected. These pipelines fall within so-called “high consequence areas,” near dense populations of people or vulnerable ecosystems. Under the proposed legislation, PHMSA would reassess, and determine whether more or all pipelines should receive mandatory safety inspections.

The proposal also instructs the transportation secretary to review exemptions some companies currently get from safety regulations — and tells DOT to avoid giving exemptions, or special permits, to companies with poor safety records. Special permits have become commonplace at PHMSA over the last decade. Under the Bush administration, for instance, one company was awarded an waiver to use thinner steel in a pipeline, a move environmentalists say might make it more dangerous. A TWI review showed that PHMSA has granted 16 special permits since Jan. 2009, though it has granted only one since Cynthia Quarterman, Obama’s choice to lead PHMSA, took charge in Nov. 2009.

At a House Transportation and Infrastructure Committee hearing today on the Michigan oil spill, Rep. James Oberstar (D-Minn.) said Congress has a “very limited time” to take up the administration’s proposal before the mid-term elections. As of now, the House is in session until Oct. 8. An aide at the House Democratic Cloakroom said there is no set schedule for the rest of the year beyond that date.

Oberstar said he would like to work with PHMSA, the Environmental Protection Agency and lawmakers on the committee in the coming weeks to review the proposal. He hopes  to “fashion a draft bill” before the House breaks in October that takes into account “lessons” from the BP oil spill in the Gulf, the natural gas pipeline explosion in San Bruno, Calif., last week, and the Michigan oil spill.

Republicans on the committee criticized DOT for taking so long to send its legislative proposal. “It’s stunning to me that the White House was unable to get a proposal” until now, Rep. Bill Shuster (R-Pa.) said.

Rep. Candice Miller (R-Mich.) pressed DOT Deputy Secretary John Porcari, who testified at the hearing, on the timing of the proposal. Porcari said the administration wanted to make sure to incorporate “lessons learned” from the Michigan oil spill into the proposal.

Porcari also acknowledged, during Miller’s questioning, that PHMSA, though it is authorized to employ 137 inspectors, only currently has 110. “We’re running short,” he said. The revelation is significant because pipeline safety experts say PHMSA does not have an adequate number of inspectors to oversee the nation’s pipelines. Because it lacks resources, PHMSA relies on industry’s records to ensure that pipelines are being inspected properly.

In his remarks, Porcari admitted as much, saying, “given the staff that we have, we rely on our state partners and the record keeping” of oil and gas companies for oversight.

Congress must reauthorize PHMSA’s funding every five years. The 2006 Pipeline Inspection Protection, Enforcement and Safety Act granted the agency funds through the end of the month.

Oberstar also raised questions about the thoroughness of the DOT proposal. He noted that it does not address a number of key issues, including mandating the improvement of leak protection systems. He also wants PHMSA to have more authority over oil and gas companies’ integrity-management plans, wherein they test the safety of their own lines.

Porcari said the proposal is a “good starting point,” but added that there are five issues that were not addressed in the proposal. They include whether PHMSA should retain copies of integrity-management plans (as it stands now, they do not); whether there should be new requirements about how pipeline control centers respond to spills; what threshold PHMSA should have for requiring that damage to a pipeline be fixed; whether there should be new leak protection requirements; and whether PHMSA should do more pipeline safety research.

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