By R. Lee Vail and Maureen N. Harbourt

On July 15, 2011, the House of Representative, Committee on Energy and Power, Subcommittee on Energy and Commerce held hearings on a draft of the “Pipeline Infrastructure and Community Protection Act of 2011.”  Chairman Fred Upton’s initial comments focused on recent pipeline incidents: the 20,000 barrel oil spill into Talmadge Creek, Michigan in the summer of 2010, the September 2010 gas pipeline explosion that killed 8 people in San Bruno, California and the most recent spill of 1,000 barrels of oil near Billings, Montana. (1)  Chairman Upton concluded that these incidents indicate that pipeline laws must be strengthened. Included within the draft legislation are the following provisions:

  • one-hour time limit to report incidents;
  • use of automatic or remote control shutoff-valves;
  • better leak detection technology;
  • substantial increase in civil penalties for releases from pipeline;
  • enhanced inspection techniques; more miles of pipeline inspected; and
  • increased number of pipeline inspectors.
     

Cynthia Quarterman, Administrator of the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), within the Department of Transportation, appeared and offered general support for the bill. However she offered specific recommendations to various provisions to strengthen the legislation. Among the recommendations were: (2)

  • higher administrative penalties should apply in High Consequence Areas;
  • eliminate statutory exemption for gathering lines; and
  • clarity should be added that shut-off valve requirements apply to gas and hazardous pipelines.
     

Because changes in regulatory programs often occur quickly after incidents such as these recent three pipeline events, interested parties should be aware of the above issues and recommendations. Owners and operators of regulated pipelines should expect more inspection/detection requirements and the likelihood of enhanced PHSMA and state agency inspections and enforcement actions.
 

(1)   Opening Statement of Chairman Fred Upton (July 15, 2011), found at http://republicans.energycommerce.house.gov/Media/file/Hearings/Energy/071511/Upton%20.pdf (last visited July 18, 2011).

(2)  Written Statement of Cynthia Quarterman, Administrator, PHMSA (July 15, 2011) found at http://www.phmsa.dot.gov/staticfiles/PHMSA/DownloadableFiles/Testimony/House%20Energy%20and%20Commerce%20Written%20Testimony%20-%20July%2015%202011%20-%20For%20Web%20_2_.pdf (last visited July 18, 2011).