PHMSA’s pipeline cases drop as accidents increase

By Mike Lee | 04/08/2015 08:02 AM EDT

Last February, a leaking 30-inch natural gas pipeline sparked an explosion in Knifley, Ky., an unincorporated community a few miles east of the Green River.

The fire destroyed two houses, four cars, a carport and three other buildings. Two people were injured, although they didn’t require hospitalization. A day after the fire, federal pipeline regulators ordered Columbia Gas Transmission Co. to shut down the line. Allowing it to stay in operation "would result in likely serious harm to life, property and the environment," documents show.

A little more than a year later, the Pipeline and Hazardous Materials Safety Administration, the branch of the U.S. Transportation Department that oversees interstate pipelines, closed the case. Despite the damage and the injuries, Columbia hasn’t paid a fine.


It wasn’t an anomaly. In all of 2014, PHMSA issued fewer fines and started fewer pipeline safety investigations than in the previous four years. The decline in enforcement came even though the number of pipeline-related spills, leaks and other accidents rose from 2013 to 2014. It all happened three years after Congress passed a law doubling the fines that PHMSA can impose.

One year’s worth of cases doesn’t constitute a trend, but the drop in enforcement is a big concern to safety advocates, said Carl Weimer at the Pipeline Safety Trust.

"It looks like something has gone askew," Weimer said.

PHMSA said it, too, has noticed the increase in pipeline incidents.

"Overall, if you look at the big picture trend, the trend is going down," said Linda Daugherty, deputy associate administrator for field operators, in an interview. "If you look at it year by year, there is an uptick."

The number of enforcement cases could change — it sometimes takes months to complete an investigation after an accident happens. And the number of cash penalties may not reflect the effort PHMSA puts into inspecting pipelines, Daugherty said.

Over the last few years, PHMSA has tried to focus on doing systemwide inspections, rather than individual pipe sections. That approach could mean fewer cases over the short term, but the inspections will delve deeper and could solve problems before they lead to accidents.

Daugherty said, though, that it may take a while to see results from the change in strategy.

"I believe in it — it’s going to take some time," Daugherty said.

Interstate only

According to PHMSA’s website, there were 703 leaks and other accidents in 2014, up from 617 the year before.

Of those, 309 were classified as "significant incidents," meaning they involved a death, serious injury, significant property damage or a large liquids spill. That’s an increase from 296 significant incidents in 2013, and the most since 2005.

The number of significant incidents on gas transmission lines rose to 78 from 69 the year before — the most since 2011. The number of significant incidents on oil and liquids systems fell from 161 to 155 during the same time. That’s the second-highest number since 1997.

PHMSA imposed 25 penalties in 2014, worth a total of $2.7 million, down from 63 totaling $9.8 million the year before — the lowest number since 2008. It initiated 154 other enforcement cases — which can range from a warning letter to orders that require immediate repairs — during 2014, down from 266 the year before and lower than any year since 2003.

Cathy Landry, communications director at the Interstate Natural Gas Alliance of America, said some of the increase in incidents has happened because the industry is reporting releases and malfunctions at its compressor stations and other facilities. Those facilities are generally isolated from the public, she said.

"It’s still a significant incident, but there’s no danger to the public, no cost to the public," Landry said.

The federal agency regulates only interstate oil and gas pipelines — generally long-haul systems. The bulk of U.S. pipelines are run by local utility companies, which are regulated by the states.

So while the number of deaths more than doubled to 19 in 2014 from nine the year before, only one death occurred on a federally regulated pipeline, according to PHMSA’s data.

Toward the end of 2014, PHMSA proposed stricter safety regulations for oil and liquids lines (EnergyWire, March 16). It also works with state agencies and the pipeline industry on issues such as preventing crews or the general public from digging into pipelines.

And even without cash penalties and enforcement action, PHMSA can "pinch" companies by requiring them to make extensive repairs after an accident, Daugherty said.

That appears to be what happened after the Knifley incident. Columbia Gas determined that the pipeline had ruptured due to "earth movement" — the second such break on the line since 2012, according to local media reports. The company had to fix any land features that could cause a future problem. Columbia was in compliance with all federal regulations at the time of the accident, a spokesman said at the time of the accidents.

More attention for PHMSA

PHMSA will play an important role as the U.S. pipeline network expands to connect to new fields in North Dakota, Texas, Ohio and Pennsylvania, the Pipeline Safety Trust’s Weimer said.

"With the huge buildout of new pipelines, you’d like to think they’re putting a lot more people on the ground," he said.

And Congress is paying attention to the agency’s progress in rolling out the 2011 pipeline safety law. The statute was enacted after eight people died in a natural gas explosion in San Bruno, Calif. It doubled the maximum fines for pipeline accidents to $200,000 — $2 million for repeat violations — and directed PHMSA to carry out a string of mandates and studies. About half of those requirements have been fulfilled, according to PHMSA’s website.

U.S. Rep. Peter DeFazio (D-Ore.), ranking member on the House Transportation and Infrastructure Committee, asked in February for the Department of Transportation’s inspector general to audit PHMSA’s overall performance (EnergyWire, Feb. 4).

He said in a statement he plans to bring up the agency’s pipeline oversight in an April 14 hearing.

"PHMSA is an incredibly opaque agency with a history of trusting the industry to self-regulate," DeFazio wrote. "I am concerned about the agency’s ability to address significant safety issues in a timely manner."