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Pipeline Records Verification Compliance Questions For Operators

By Susan A. Olenchuk and James Curry, Van Ness Feldman, P.C. | September 2012, Vol. 239 No. 9

The 1970 federal regulations exempted certain lines already in existence from some safety requirements, including the requirement that MAOP be established using a post-construction hydrostatic pressure test. Under the resulting “grandfather clause” exemption, operators of certain pre-1970 pipe are permitted to establish MAOP based on highest actual operating pressure to which the line was subjected during the five years preceding July 1, 1970.

The NTSB’s investigation raised uneasy questions about the accuracy of records for other pre-1970 pipe and whether MAOP and operating conditions for such pipe are safe. To address this concern, the NTSB’s report on San Bruno recommended that PHMSA remove the grandfather clause from its regulations and require that all gas transmission lines constructed before 1970 be subjected to a hydrostatic pressure test that incorporates a spike test. The NTSB also recommended that operators be permitted to consider the risk of pipeline manufacturing and construction defects as stable only if the pipeline were subject to a post-construction hydrostatic test of at least 1.25 times MAOP. While PHMSA is not required to implement the NTSB’s safety recommendations, PHMSA must respond to them.

2011 Amendments
Congress also addressed concerns about inaccurate pipeline records and how these may affect pipeline operations and the determination of MAOP. Section 23 of the Pipeline Safety, Regulatory Certainty and Job Creation Act (“2011 Act”), requires, among other things, that PHMSA direct owners or operators of intrastate and interstate gas transmission lines to verify (pursuant to elements determined by PHMSA) that records for certain gas transmission pipe confirm the established MAOP and accurately reflect the physical and operational characteristics of the pipeline.

Gas pipeline operators must perform the required records verification for all transmission pipe in Class 3 and Class 4 locations and in what are determined to be high consequence areas (HCA) in Class 1 and Class 2 locations under the pipeline’s integrity management program. Unlike the NTSB’s safety recommendations which focused on pre-1970 pipe regardless of proximity to populated areas, Section 23’s records verification provision applies to all transmission lines located near populated areas.

Under section 23 of the 2011 Act, if records for an affected pipeline segment are insufficient to confirm the established MAOP, the pipeline operator must report to PHMSA and provide documentation on the segment. For these lines, PHMSA must (1) require that the owner or operator reconfirm MAOP as expeditiously and economically feasible; and (2) determine appropriate interim actions for the pipeline owner or operator to take until MAOP is confirmed. In addition, the 2011 Act requires that PHMSA issue regulations for conducting material strength tests of previously untested gas transmission lines located in HCAs and operating above 30% SMYS.

Congress established aggressive timeframes for satisfying these requirements. PHMSA must require that pipelines conduct records verification by July 3, 2012 and pipelines must submit documentation on lines with insufficient information no later than July 3, 2013. PHMSA must issue regulations on material strength testing by July 3, 2013.