OIL AND GAS:

Lawmakers jockey over delayed pipeline safety reform

House members of both parties yesterday staked out positions on pipeline safety reform as it became clear that action on broad legislation would slip to next year, despite the issue's potency in the wake of recent oil and gas line ruptures.

While Republicans at a House Energy and Commerce Committee hearing welcomed the delay in legislating to allow for the completion of investigations into three summertime pipeline breaks in the Midwest and California, Rep. Ed Markey (D-Mass.) blamed Senate Republicans for standing in the way of quicker passage of stricter safety standards. Action in response to the recent pipeline accidents, he said, risks running into the same obstacles that unraveled attempts to tighten offshore drilling standards on the heels of the BP PLC oil gusher.

"Unfortunately, a minority in the Senate has decided that having total gridlock" is preferable to acting on plans to prevent future rig and pipeline incidents, said Markey, chairman of the environment subcommittee. Explaining why pipeline safety would likely wait until 2011, he quipped that "calling for the honor of Mother's Day would be subject to cloture" in the upper chamber, referring to GOP filibusters.

The debate centered on the Obama administration's plan to bolster the enforcement authority of the Pipeline and Hazardous Materials Safety Administration, which has prompted lukewarm reactions from environmentalists who contend that it does not go far enough and industry groups that view its hike in penalties for violators as an overreach (Greenwire, Sept. 22).

Several Energy and Commerce Republicans warned the majority to avoid setting new pipeline standards until the causes of the latest pipeline ruptures -- two along Midwestern oil lines owned by Enbridge Energy Partners LP and a natural gas blast that left seven dead in a San Francisco suburb -- are more fully understood. That process could take a year or more, if the timetable for National Transportation Safety Board investigations is any guide.

"I hope an issue as important as PHMSA reauthorization goes through regular and proper order, rather than being jammed through during a lame-duck session," said Rep. Fred Upton (Mich.), the environment panel's senior Republican. "This committee does have a vital role to play in the legislative process, and this issue is certainly worthy of more than one hearing."

Other GOP lawmakers were more direct in calling for a lengthier debate over pipeline safety. Rep. Steve Scalise (R-La.) drew a parallel to the Gulf of Mexico oil spill, telling colleagues that "we must be careful" to avoid reacting to the recent ruptures with "bad policy" similar to the White House's moratorium on offshore drilling.

"We see this again and again with this committee -- we never let a crisis go to waste," echoed Rep. Michael Burgess (R-Texas).

The House appears likely to approve a narrower pipeline safety bill (H.R. 6008) that was originally slated for a House floor vote last night but is now expected to come up today.

Sponsored by Rep. Mark Schauer (D-Mich.), in whose district the larger of the two Enbridge oil spills occurred, the measure would increase fines for companies that fail to report a pipeline rupture to the National Response Center within one hour of its detection. The Calgary-based Enbridge did not report its Michigan incident until about two hours after its employees began oil cleanup and 19 hours after alarms began sounding on the line, according to Schauer.

Advocacy groups weigh in

Oil and natural gas industry representatives walked a fine line in echoing the GOP's recommendation against a rush to judgment in an attempt to prevent further pipeline disasters. Interstate Natural Gas Association of America President Donald Santa Jr. noted that 90 percent of his trade group's members already use the internal inspection devices known as "smart pigs" that would be required under a strong new Senate pipeline bill (E&E Daily, Sept. 23).

Association of Oil Pipe Lines President Andy Black, who also testified on behalf of the American Petroleum Institute, cited the industry's broad record of safety successes and called for a "narrowly focused" PHMSA reauthorization bill that did not set new limits. Black's groups "see no reason to greatly expand the pipeline safety program," he said.

Rick Kessler, a former chief of staff to Energy and Commerce Chairman Emeritus John Dingell (D-Mich.) who now serves as vice president for the advocacy group Pipeline Safety Trust, offered a divergent view. "Had this 12-page bill been unveiled a year ago," Kessler said of the administration's legislation, "it might have been a nice step on the road to [PHMSA] reauthorization."

But given the post-rupture timing of its release last week, Kessler added, "the only way to characterize it is too little, too late."

Agency actions coming

PHMSA chief Cynthia Quarterman signaled a willingness to act on several safety issues not directly addressed by the White House's draft legislation, telling Markey that her agency plans to release a notice of rulemaking soon that would set guidelines for pipeline leak-detection systems.

"Currently it's at the discretion of companies. ... We want to put in place a standard" for the installation of leak-detection systems, she said. Enbridge had touted the efficiency of its detection technology before its first pipeline rupture spilled upward of 800,000 gallons of crude oil into Michigan waterways.

Quarterman said PHMSA would be open to changing its policy of keeping a close hold on the response plans that pipeline operators must prepare in the event of a rupture. Those pipeline plans, similar to the BP PLC's oil spill plan that notoriously referenced walruses living in the Gulf of Mexico, "have not been made public for no particular reason," Quarterman told Markey.

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