Rural loophole curbing Pennsylvania pipeline inspections

Pennsylvania regulators are taking steps to begin safety checks of some natural gas pipelines in the Marcellus Shale regions - hiring inspectors and drafting new rules that will bring the state in line with the rest of the nation.

But a dispute continues over whether the state oversight goes far enough. The new safety-inspection and construction regulations still will not apply in the most rural areas of shale country, the hotbed for new pipeline projects, with up to 25,000 miles being built or on the drawing boards.

In Washington, U.S. officials are pushing to close that rural loophole, but the gas and pipeline industries are fighting hard to keep it in place, arguing that the hazards are remote and the cost would far outweigh any benefits.

In Pennsylvania's shale regions, some people say their safety doesn't seem to count.

"I guess they feel if it is in a rural area, it's not that much of a problem," said Nancy Liebert, an environmental activist in Eagles Mere, a picturesque 125-person town in Sullivan County.

"The whole thing is going so fast," she said. "We as a state and a country don't have the regulations in place to really do it right."

As The Inquirer reported in December in a four-part series, the industry is building "gathering" pipelines in rural areas with virtually no safety oversight. (Gathering lines typically link wells with interstate pipelines.)

The regulatory gap persists even though the new lines are large, high-pressure pipes - every bit as powerful, and as potentially dangerous, as more-regulated natural gas transmission lines that cross state borders. Even now, Pennsylvania regulators still don't know where these lines are located.

Unlike other gas-producing states, Pennsylvania had never taken on the task of enforcing federal laws for those types of pipelines in more-populated areas. That changed in December, when Gov. Corbett signed a law that gave the job to the Public Utility Commission.

The pipeline companies will pay for the increased enforcement, in fees assessed by mile of pipe. The agency is now working to hire seven inspectors and two more supervisors to handle the increased workload. But they won't be starting the work anytime soon.

There's a waiting list at the nation's only training academy for pipeline inspectors, a federal facility in Oklahoma City. But U.S. officials say they will allow Pennsylvania's trainees to go first.

For now, the PUC will have its small crew of inspectors - who already have responsibility for all gas pipelines in the state operated by utilities - begin to pick up some checks on the new shale-field pipes.

"We have to start with baby steps with these inspections," said Jennifer Kocher, a PUC spokeswoman. "They [inspectors] are spread thin, yes, but we're confident we can meet the needs."

On Thursday, the PUC is set to vote on a new set of enforcement rules, including a proposal to create a registry of all new shale pipelines. It won't be a detailed map, but simply a list of all companies and their pipeline mileage.

"We have to get an idea of who these companies are and how many miles of lines we're talking about," Kocher said.

Even that modest idea has generated some concern from the drilling industry. Operators want to make sure they have to report only the new shale pipelines, not the untold miles of smaller pipelines that connect the state's 350,000 older oil and gas wells, drilled before the Marcellus boom. In preliminary comments, PUC staff agreed that the new rules would apply only to the newer shale lines.

Pennsylvania last week did put one safety measure in place for rural pipelines. The legislature expanded the One Call program designed to prevent excavation accidents so that it applies to all pipelines throughout the state - not just the ones running to the 5,000 shale-gas wells.

Under One Call, people call 811 before digging. Pennsylvania One Call System Inc., a nonprofit, maintains a database of pipelines, then notifies firms to alert them to mark the path of their pipeline.

"Every contractor and every homeowner who digs a hole needs to know what they're getting themselves into," said Bill Kiger, president and executive director of Pennsylvania One Call.

"I don't care if it's the middle of a forest or whatever, every contractor hired to do a job deserves safety and peace of mind that they know what's below."

Kiger was instrumental in slipping the One Call expansion into the natural gas "impact fee" legislation that passed the General Assembly on Wednesday. Corbett is expected to sign the measure.

Under the current One Call system, participation has been voluntary for most of the shale lines. Kiger estimated that as many as half of all drilling firms had yet to sign up.

The measure was endorsed by the Marcellus Shale Coalition, the main trade group for the gas industry, but long opposed by smaller, traditional gas operators.

Kevin Moody, the vice president and general counsel of the Pennsylvania Independent Oil and Gas Association, said his members were worried about the cost of responding to One Call alerts, as well as the expense of tracking down details about the older, legacy lines from pre-Marcellus days - many long inactive.

With the exception of the One Call rules, though, the majority of Pennsylvania's new shale pipelines will remain outside safety regulations. Because the pipelines are built in rural areas, the federal safety rules - covering everything from steel quality to welding standards - don't apply.

The new state law only granted the PUC authority to enforce federal rules. That means state inspectors can't look at pipes in the most rural areas.

Top officials at the U.S. Pipelines and Hazardous Materials Safety Administration (PHMSA), the main pipeline-safety agency, have been saying it is time to regulate those lines. They note that the Class 1 exemption means that the rules don't apply to 93 percent of gathering lines nationwide.

Because the gathering lines being installed in the shale region, unlike the older gathering lines, are much bigger and operate at high pressures, they are potentially much more dangerous if an accident occurs.

But in filings with the federal agency, six industry trade groups lined up against any immediate increase of regulation.

Among them were the American Petroleum Institute, the Gas Processors Association, the Independent Petroleum Association of America, and trade groups from key gas-producing states in Oklahoma and Texas.

Activists and experts, including the national association for state regulators, urged the agency to move forward. And 21 Pennsylvanians wrote in to back more oversight, all from counties that are hotbeds of drilling - Luzerne, Lycoming, Sullivan, Susquehanna, and Wyoming.

Liebert, the Sullivan County activist, was among them.

In their filings, the industry representatives noted that after the agency proposed toughening regulation last summer, Congress passed a new pipeline-safety law that called for PHMSA to study the issue and report back by January 2014. The industry said federal officials should do nothing until then.

One industry lobbyist said the new gathering lines, built to state-of-the-art standards, are far safer than older lines.

"They ought to be focusing on the stuff they've had problems with, systems that have been in the ground for 23, 30, 50 years," said W. Jonathan Airey, a lawyer for the American Petroleum Institute.

However, the National Association of Pipeline Safety Representatives, the group for state pipeline regulators, said the rural loophole makes no sense.

Now, the group wrote, the rules assume that "minimal standards" are acceptable in rural areas "because there is less risk to the public and, therefore, less resources are needed to inspect these pipelines."

"This is not good public policy," it said.

The statement was signed by Paul Metro, chairman of the pipeline regulators' group. Metro is also the chief pipeline regulator for the PUC.

A leader in drumming up comment from Pennsylvanians was Ralph Kisberg, an anti-drilling activist from Williamsport, in Lycoming County. With 60 pipeline projects on the drawing boards in his county alone, Kisberg said his region couldn't wait two years for more regulation.

While most pipeline firms set out to do a good job, Kisberg said, the sheer pace of construction and the competition for skilled workers can lead to poor or unsafe work.

"Without any oversight, it's a big crapshoot," he said. "That's the point."

at www.philly.com/deepdrill.