Energy companies are racing to build new energy infrastructure that could have a major influence on emissions and the Biden administration’s agenda, but there’s a catch: Regulators can’t keep up.
New liquefied natural gas export terminals and hydrogen projects — as well as thousands of miles of carbon dioxide pipelines — could be built before many federal regulations overseeing them are updated or put into place.
Some rules are decades old and safety advocates say important questions about safety remain unanswered with these technologies.
“We’re looking at completely outdated regulatory infrastructure,” said Tyson Slocum, director of Public Citizen’s energy program. “We are building out significant new types of infrastructure that were not envisioned with the regulation that we have.”
For example, LNG, carbon dioxide pipelines and hydrogen are each generally covered by existing regulations administered by the Pipeline and Hazardous Materials Safety Administration (PHMSA), which is part of the Department of Transportation, but there are no rules specifically on hydrogen pipelines. Current regulations for LNG terminals, meanwhile, were written in 1980 at the end of the Carter administration and don’t account for hazardous chemicals now used for exporting gas. PHMSA also says its standards for CO2 pipelines need updating after a pipeline ruptured in Mississippi three years ago.
But delaying new projects while the regulatory process catches up could hinder the Biden administration’s hopes for companies to deploy new technologies and create new jobs while reducing the effects of climate change. It could also cost companies billions and slow progress in cutting emissions.
Advancing CO2 pipelines, hydrogen and LNG are a top priority of the Biden White House. According to officials at PHMSA — which is in charge of pipelines and gas transportation — so is regulating them properly.
“This is something the White House and PHMSA are prioritizing,” an agency spokesperson said. “We are working across government and with stakeholders to move quickly on these critical issues.”
Experts in the three energy technologies industries say they’re not really so new, but are being talked about more because they’re being deployed more widely. Scientists, companies and regulators have been dealing with them for decades, albeit on a smaller scale, they say.
“They’ve been around a long time, and they have a pretty good safety record,” Xan Fishman, the director of energy policy and carbon management at the Bipartisan Policy Center. What’s dangerous, he said, is hindering action to rein in climate change.
“The clock is ticking on achieving net zero in time,” he said. “We have to start acting now.”
Some climate hawks, though, contend hydrogen, natural gas exports and carbon capture pipelines are the wrong response to climate change. Opponents say they’re really just ways for fossil fuel companies to respond to climate scrutiny without substantial changes to their business models. Others say all three could help cut emissions, including by displacing higher-emitting fossil fuels (Energywire, May 13, 2022).
The race between regulation and technological progress is well-known and closely watched in the regulatory world, said Cary Coglianese, a law professor at the University of Pennsylvania who heads the Penn Program on Regulation.
“It’s a standard debate over what we would call the precautionary approach,” Coglianese said. “We often have regulation follow technology after we’ve seen some of the problems.”
Under the precautionary approach, he said, the government blocks companies’ plans until proven safe, as with drug approval at the Food and Drug Administration. Under a lighter touch, regulators wait to tailor rules to the problems that develop after new technologies are deployed. It becomes a problem, though, if regulators fail to respond to problems.
“What we need is agile regulation,” Coglianese said.
PHMSA is known for taking a long time to develop regulations, and members of Congress regularly complain about the agency’s pace. It took nine years for the agency to enact regulations arising from a fatal 2010 pipeline explosion in San Bruno, Calif., for example.
Congress itself bears a big share of the blame, according to safety advocates. The laws governing PHMSA, including a particularly strict cost-benefit, make the agency’s process of writing regulations to be lengthy and burdensome, they say.
Concerns about the pace of regulation with energy technologies goes beyond PHMSA. Critics of natural gas export policy note that the Department of Energy is using 1984 regulations to guide its policies on export licenses, although the industry has undergone at least two transformations since then (Energywire, April 10, 2013). In response, DOE sent a statement saying it “is constantly evaluating market and other relevant developments.”
The pace of regulation is also under scrutiny as agencies implement the incentives in last year’s massive climate law. For example, Sean O’Leary, senior researcher at the Ohio River Valley Institute, said the IRS is working on setting different incentive rates for different types of “clean hydrogen” projects. Its decisions could shift billions of dollars one way or another.
“You can imagine how much lobbying is going on with those rates,” O’Leary said.
A gas gap?
While LNG, carbon dioxide pipelines and hydrogen are generally covered by existing PHMSA regulations, Public Citizen’s Slocum said, the role of each is set to expand to a level not anticipated by the people who wrote the regulations.
That can create problems that are technology specific, critics say. Carbon dioxide pipelines that carry gaseous CO2 at lower pressures are not covered by existing rules. And current regulations don’t require operators to notify regulators if they’re blending hydrogen into existing gas pipelines.
When current regulations for LNG terminals were written more than 40 years ago, LNG was mostly kept as backup fuel at power plants. During the George W. Bush administration, fears of a natural gas shortage spurred plans for large facilities around the Gulf Coast to import the fuel. In the wake of the shale boom, terminals are now exporting LNG supercooled to minus 260 degrees Fahrenheit on ships the size of aircraft carriers (Energywire, June 28, 2022).
The Biden administration has revived PHMSA’s process for updating the LNG regulations, and the release of a draft is currently scheduled for September. But that schedule often slips and is itself the beginning of what is usually a multiyear process.
Eight U.S. export terminals are in operation, including a terminal closed after an explosion last summer. Ten more have been approved by the Federal Energy Regulatory Commission. The next LNG terminal, Golden Pass LNG — developed by Exxon Mobil Corp. and QatarEnergy — is scheduled to open in 2024.
The terminals are massive industrial facilities with giant tanks full of supercooled methane. The main physical danger at an LNG site is a leak forming a cloud of low-lying natural gas that drifts until it hits an ignition source and bursts into flame. Experts worry that since so much gas is stored at each terminal, damage could spread from one part of the facility to another and spiral out of control.
Current LNG regulations fail to account for some conditions at export terminals, such as the large volume of refrigerant chemicals that present different hazards than methane. Those refrigerants are used to supercool the gas to minus 260 F and present more explosion risks than simply allowing imported methane to rise to ambient temperatures at an import terminal.
Charlie Riedl of the Center for Liquefied Natural Gas doesn’t see the age of the LNG rules as a cause for concern, and says the facilities have been operating safely. Riedl said there’s not that much difference between regulating LNG stored at gas power plants and the regulating of the large terminals along the Gulf Coast.
“LNG is LNG,” he said. But he welcomes PHMSA’s work to update the regulations, noting that Congress instructed the agency to take a “risk-based” approach, which he said is similar to the concept called “process safety management” (PSM) often used at chemical plants. The PSM approach, he said, will allow companies and regulators to adapt safety practices without needing to rewrite rules.
“It allows for regulations to adapt to technology,” Riedl said. “We’ve been pushing flexibility rather than proscription.”
Coglianese said that approach could speed the implementation of regulations.
Pipelines that carry captured CO2 are an integral part of efforts by ethanol, fossil fuel and other smokestack industries to adapt their operations as pressure grows for a net-zero economy. Experts have said as many as 65,000 miles of such pipelines will be needed for the country to reach net zero by 2050 (Greenwire, May 30, 2022). The 2021 infrastructure law included billions in funding for carbon capture demonstration and pilot projects.
Most immediately, the drive to capture carbon from ethanol plants and store it permanently underground is driving three large-scale projects in the Midwest. Summit Carbon Solutions LLC, Wolf Carbon Solutions US LLC and Navigator CO2 Ventures LLC all have proposed thousands of miles to carry the greenhouse gas to injection sites.
It doesn’t appear that federal regulations will fully be in place to oversee those lines when they start construction.
Summit, which has said the Midwest Carbon Express would be the largest carbon capture system in the world, also said it is hoping to begin construction in 2024 on its Iowa-centered project, which includes 2,000 miles of pipeline.
Regulators at PHMSA aren’t expecting to have a first draft, or “notice of proposed rulemaking,” of potential carbon dioxide pipeline rules until October 2024. In the meantime, though, agency officials say they’re working to provide new guidance and “lessons learned” that can be provided to companies more quickly.
Environmentalists and conservative farmers have mounted a resistance to the Midwest projects, protesting the likely use of eminent domain to condemn land for construction and raising safety concerns.
Opponents point to a 2020 rupture of a carbon dioxide pipeline in Satartia, Miss., that sent 45 people to the hospital. That line carried CO2, mixed with hydrogen sulfide. The rupture produced a plume of CO2 that crested a hill and reached the town. People in and around Satartia reported smelling the rotten-egg odor of hydrogen sulfide, then feeling dizzy or even passing out.
Critics have called for a moratorium on CO2 pipelines until revised federal regulations are completed. But that could be a long way off, and project developers don’t want to wait that long.
The Biden administration launched an effort last year to write new rules for the safety of CO2 pipelines, citing the Mississippi incident. Currently, there are roughly 5,150 miles of existing CO2 pipelines in the United States. Most, including the Mississippi pipeline that ruptured, ship carbon that will be injected underground to force crude to the surface through a process known as enhanced oil recovery.
Shipping carbon dioxide can create unique challenges. The pipelines operate at much higher pressures than natural gas transmission lines. A safety expert said last year that CO2 lines are more susceptible to ductile fractures that essentially “unzip” the steel and open great lengths of the pipeline.
Bill Caram, executive director of the Pipeline Safety Trust, an advocacy group, said most of the existing carbon dioxide pipelines run through remote areas, but that is likely to change as the technology grows.
“When you look at the scope it will take to make a difference on climate change, these pipelines will be much closer to people,” Caram said.
Carbon dioxide also is a colorless, odorless asphyxiant. Heavier than air, the fear is that it could form a cloud that would move along the ground, displace oxygen and envelop people who wouldn’t even realize the danger.
Carbon capture supporters say the fears are overblown and the safety record of the pipelines is good. CO2 has been shipped and used for years to force oil from underground under pressure. Matt Fry, senior policy manager for carbon management at the Great Plains Institute, a group dedicated to climate change mitigation, said it’s always good to revise and update regulations, but he also said carbon pipelines are safe.
“I feel like we’ve been capturing and transporting carbon dioxide over 50 years now,” Fry said. “I feel like the safety regulations are sufficient. I think we’ve proven that.”
Fry, who said he’s worked in carbon management for 20 years, said regulators might have more time to catch up than it appears.
“These projects don’t have permits in place,” he said. “Their timeline is probably not realistic.”
With hydrogen, natural gas companies are looking to blend the fuel into existing gas lines and other infrastructure as a way to lower their carbon footprint. But experts haven’t reached a consensus on how to do so safely.
Hydrogen is not toxic and, when released, rises quickly away from the ground. But it can ignite more easily than natural gas and its flame is nearly invisible. It can also make steel brittle in pipelines, which can lead to leaks and ruptures.
The opportunities and dangers were highlighted recently when the Department of Energy’s National Renewable Energy Laboratory (NREL) released a technical report on blending hydrogen into the natural gas system.
“The concept of blending hydrogen into natural gas pipelines is not new and has been around for decades, but there remain large knowledge gaps,” Mark Chung, NREL’s hydrogen systems analysis lead, said in a news release.
The gas industry is already moving forward on its plans. One major gas utility — Southern California Gas Co. — is already pushing for construction of a hydrogen-only pipeline. The Angeles Link, as it’s known, would produce “green” hydrogen using wind and solar power in rural California and ship it into the Los Angeles Basin (Energywire, Dec. 19, 2022).
But a recent report released by the advocacy group Pipeline Safety Trust said, among other findings, that hydrogen should never be put into most existing gas pipelines (Energywire, Jan. 18). The American Gas Association sent Pipeline Safety Trust a rebuttal, vouching for the safety of hydrogen and noting that it is already being used in some pipelines.
PHMSA currently is overseeing the roughly 1,500 miles of hydrogen pipelines in the country under the general rules for gas pipelines. Safety advocates say they don’t account for important differences in shipping hydrogen, along with transportation by truck and other methods.
PHMSA hasn’t taken any formal steps to change regulations specifically for hydrogen. Agency officials note they are funding 10 research projects into hydrogen safety, from leak detection to integrity management. It is also funding research on CO2 pipelines.
The research on safety is scant comfort for Caram of Pipeline Safety Trust. In fact, he said it shows that basic questions about hydrogen remain unanswered even as utilities make plans to incorporate it into the fuel supply that serves homes and businesses throughout the country.
“If they really believe everything is fine, that there’s no new questions and they’re ready to go, they wouldn’t need to spend all this money on research” Caram said.
And the usefulness of the hydrogen research could be limited if rules were completed before the research is done. He noted that PHMSA has strict prohibitions on regulating pipelines already in the ground and facilities already built.
“We get all this research on the best way to prevent ruptures, and PHMSA will be prohibited from requiring any of that for pipelines already in the ground,” Caram said.