API criticizes proposed federal rule for natural gas pipeline safety

A new rule being proposed by the U.S. Department of Transportation to address natural gas pipeline safety is being criticized by the only national trade association representing the Oil & Gas Industry.

The proposal to enhance safety was issued by the Transportation Department's Pipeline and Hazardous Materials Safety Administration (PHMSA). Robin Rorick, Director of Midstream operations with American Petroleum Institute (API) said that the group agrees with the mission of improving safety.

"However, it isn't necessarily the best approach and applies a lot of cost without necessarily applying  a lot benefit," said Rorick.

The total cost of the proposed rule increases from $597 million to $33.4 billion, to achieve safety and environmental benefits, according to API.

Rorick explained the rule doesn't take into consideration existing technologies that he said can improve safety better than what the Department of Transportation is recommending.

He provided an example. "In instances where we don't necessarily have a good answer, they want us to frequently dig up portions of the pipeline to assess them," Rorick said. He added that current technologies allow for pressure and strength testing to be done inside the transmission lines without the need to dig.

"That will actually give you better data and will be less intrusive to land owners, to property owners, than coming in and digging up the pipelines to gather the information," said Rorick.

API doesn't think operating efficiently and effectively and operating safely are separate things, according to Rorick. "We believe that we can do them both then this rule," he said, adding it, "almost makes us take a step backwards."

Rorick pointed out that New Jersey, like many states in the northeast, rely heavily on natural gas and natural gas pipelines. "The energy reniassance that we're facing right now in this country has enabled us to have lower energy costs. In fact, the electricity generation has been able to not only cut their emission levels to their lowest level in 22 years, but manufacturers and consumers up in the New Jersey area have also benefited because they've had lower energy costs to boot," Rorick said.

API wants to make sure it can continue to provide that affordable energy in a safe manner, according to Rorick.

"In New Jersey alone, $19.9 billion is what the folks in New Jersey have benefited from the Oil & Gas Industry operations, and over 140,000 jobs throughout the state. We want to make sure that we can continue to do that without necessarily harming the industry, which then translates down to the consumer," Rorick said.

Comments on the draft rule were due this month, and according to Rorick it's now up to the Department of Transportation to make modifications or leave the rule as it is. A decision is due out this fall, but Rorick added he thinks that's unlikely due to the level of opposition.

More information about the rule can be found here: www.api.org and www.energyinfrastructure.org