PIPELINES

Fear of 'environmental left' kills key Dem priority

The oil and gas industry's fear of environmental group lawsuits and settlements with the administration, which critics derisively call "sue and settle," helped kill a provision of pipeline safety legislation aimed at giving people affected by spills and leaks the means to file civil cases.

Six months after the 9th U.S. Circuit Court of Appeals upheld a California district court's dismissal of litigation against federal regulators over the 2010 San Bruno disaster, Democrats on Capitol Hill saw emerging legislation to reauthorize the Pipeline and Hazardous Materials Safety Administration as the perfect vehicle to give citizens a greater voice in the courts.

In the reauthorization bill's first draft, the House Energy and Commerce Committee included language authored by Palo Alto Democratic Rep. Anna Eshoo to clarify that individuals or local governments could go to court to try to force PHMSA into cracking down on companies.

When Republicans later yanked the provision, Eshoo asked why.

"There is always a fear about the environmental left using every means to stop fossil fuels, so my guess is, we don't want to give them multiple bites of the apple to just stop the flow where there's been tragedies, especially with natural gas," said Rep. John Shimkus (R-Ill.).

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"The public doesn't really understand how much product goes, how many thousands of miles of pipeline there are in this country," Shimkus added.

Shimkus, who holds the Environment and the Economy Subcommittee gavel, was not part of the six weeks of negotiations that shaped the Energy and Power Subcommittee draft of compromise legislation that advanced toward the House floor this week (E&E Daily, April 27).

But the Illinois Republican, who has been eyeing the top spot on the full committee, summed up the concerns of GOP lawmakers and oil industry lobbyists. He said the provision could become another arrow in the quiver of environmental groups to file a legal challenge in connection with PHMSA's review of a proposed new pipeline or to challenge existing infrastructure.

"That is probably the answer: We fear intervention by the liberal left and the environmental community to shut down the flow of crude oil through pipelines," Shimkus said.

Yesterday, Eshoo told E&E Daily that Shimkus' remarks were "totally inappropriate."

"This is about citizens who have been or could be affected by the lack of enforcement of the very agency that they rely on for safety," she said. "I think it's very important for each one of us to place ourselves in the shoes of people who have had something go very wrong in their lives because the laws were not enforced."

After the natural gas pipeline explosion that occurred Sept. 10, 2010, just north of her district, Eshoo has become an outspoken critic of the regulatory agency.

Citizens "cannot do these things for themselves," Eshoo said. "They depend on the most basic protections from the government: public health and public safety."

'Top priority'

On Valentine's Day in 2012, the city and county of San Francisco filed a lawsuit alleging that PHMSA had "abjectly failed" to enforce federal safety standards for more than a decade before the Pacific Gas and Electric Co. pipeline explosion that killed eight people, injured 66 and leveled 38 homes (Greenwire, Feb. 15).

"One of the most troubling findings to emerge in the 18 months since the San Bruno tragedy is that regulators were either asleep at the switch or far too cozy with the industry they're supposed to regulate," San Francisco City Attorney Dennis Herrera said at the time.

The lawsuit asked for a court order requiring stronger enforcement, pointing to violations of the Natural Gas Pipeline Safety Act of 1968 and the Administrative Procedure Act.

However, the courts found that the law did not authorize "mandamus-type" citizen suits against PHMSA.

In the decision, judges looked at the legislative history of the Pipeline Safety Act, noting a Senate bill report that stated the citizen suit provision of the bill "would not supplant the [Transportation] Secretary's efforts for enforcement and compliance" but was "designed to assist the Department in its enforcement and compliance activities."

Congress' first legislative response to the tragedy -- the Pipeline Safety, Regulatory Certainty and Job Creation Act of 2011 -- failed to address the dispute. Still, some critics claim the law always contemplated mandamus lawsuits.

This time around, including the language was "the top priority for the safety community," said Energy and Commerce Committee ranking member Frank Pallone (D-N.J.).

"At our hearing last year, we all voiced frustration at PHMSA's inaction on a number of fronts, which is why it is still important for the public -- and industry -- to have the ability to access the courts to ensure PHMSA is keeping our pipeline system safe and secure," Pallone said at a March 16 markup of the bill.

Pallone declined to comment yesterday, when asked why lawmakers dropped the provision from the final bill.

'Not an environmental question'

Three industry witnesses and a state regulator representing the National Association of Regulatory Utility Commissioners came out strongly against the provision during a hearing the day after the draft bill's unveiling (E&E Daily, March 2).

"Private mandamus, civil actions to compel agencies to perform certain duties have earned the moniker 'sue and settle' because of their abuse at agencies such as [U.S.] EPA," said Association of Oil Pipe Lines CEO Andrew Black.

Black said, "Sue-and-settle circumvents public participation, dilutes congressional oversight, bypasses standard administration view and analysis, and it limits agency transparency."

Ron Bradley, a PECO Energy Co. executive testifying on behalf of the American Gas Association, said the provision could shift oversight of the industry "away from regulators with decades of experience and expertise and into courts who lack this knowledge and perspective."

Donald Santa, president of the Interstate Natural Gas Association of America, testified that a sue-and-settle situation could "rapidly deteriorate into a regime of 'regulation by litigation.'"

Environmental groups and the Obama administration have said there is no such thing as a sue-and-settle conspiracy, in which agencies welcome litigation as a way of expanding their crackdown on industry.

Subcommittee Chairman Ed Whitfield (R-Ky.) seemed convinced. "I'm going to try to not include this," he said.

Rep. Joe Barton (R-Texas), an outspoken critic of attempts to curtail the pipeline industry's power, told E&E Daily that the language would have provided "an open-ended opportunity for some of the environmental groups to gin up those kind of lawsuits."

Eshoo objected.

"This is not an environmental question; this is about what PHMSA is required to do," the congresswoman said.

Since San Bruno, Eshoo has become outspoken on pipeline issues. For instance, she warned her colleagues about the dangers of moving forward with oil sands crude pipelines, such as Keystone XL, without proper regulations in place.

Eshoo said she may look for an opportunity to offer the language as an amendment as leaders of the Energy and Commerce Committee and the Transportation and Infrastructure Committee merge their bills to offer one piece of pipeline safety legislation for a vote on the House floor.

But she's not optimistic.

"Around here, we know that what we offer is routinely rejected," Eshoo said yesterday. "What was instructive to me was he couldn't explain why this is being cast aside."

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