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Texas Railroad Commission Establishes Safety Rules for Some Pipelines

November 26, 2019
By Duggan Flanakin

The Texas Railroad Commission, the agency that regulates Texas’ oil and gas industry, rejected proposals from commission staff to impose stringent regulations on the small pipelines carrying oil and gas from wells to processing sites.

The Texas Railroad Commission (TRC), the agency that regulates Texas’ oil and gas industry, rejected proposals from commission staff to impose stringent regulations on gathering lines, which are usually small pipelines carrying oil and gas from wells to processing sites.

Staff Proposed Stringent Regulations

Texas Railroad Commission staff proposed requirements that small gathering lines must be marked and surveyed for leaks, gathering line owners must inform Texans living near lines of their proximity to the lines, the state must set a maximum pressure for the lines, and the owners must check for corrosion regularly. TRC staff proposed gathering lines larger than 12 inches in diameter would face the same regulations as long-haul transmission pipelines.

Oil and gas operators opposed the TRC staff’s proposals, saying they would provide limited safety benefits while raising costs for oil and gas operations and costing jobs. They also pointed out the TRC staff’s proposals were far more stringent than the federal rules currently under consideration.

The Texas Oil and Gas Association (TXOGA) requested any rulemaking affecting gathering lines be postponed until after new federal rules emerge from the federal Pipeline and Hazardous Materials Safety Administration (PHMSA), part of the U.S. Department of Transportation.

TXOGA testified the industry paid $14 billion in state and local taxes and state royalties in 2018 alone, helping to fund schools, roads, and first responders. TXOGA testified that by grossly exceeding expected federal requirements, the TRC staff’s proposals would result in “the misdirection of resources on low-risk pipelines” and a duplication of efforts or mismanagement once PHMSA rules are finalized.

Took the Middle Ground

TRC commissioners rejected the idea of waiting for PHMSA to act before imposing new regulations on gathering lines, but they also rejected their staff’s stringent proposals. Commissioners created a requirement for gathering line owners and managers to operate the lines in a “reasonably prudent manner,” and they opened public comment for a proposal to require gathering line operators to report accidents and cooperate with TRC investigations. Neither action is required for incidents in rural areas.

Commissioners said these proposals are intended to allow state regulators to collect more information from gathering line operators to analyze whether imposing costly, strict requirements would significantly benefit public health and safety.

‘Protect Public Safety’

TRC is not interested in creating rules that increase costs on operators but do not enhance public safety or improve environmental protection, or that run afoul of possible federal standards, says Ryan Sitton, one of the three TRC commissioners.

“The commission is very interested in promulgating rules that are consistent with long-rumored federal requirements; rules that protect public safety but are not unnecessarily overly burdensome, meaning they don’t significantly increase costs for very little return in terms of safety; and that can be easily monitored and enforced,” Sitton said. “It’s hard to understand how someone could argue that new rules, regardless of what the final rules look like, would harm the environment when there were no applicable rules to begin with.

“Operators want consistency and predictability in regulation and are not interested in having a federal set of rules that are significantly different than state rules,” Sitton said. “This is why the commission has been collaborating with PHMSA and why we are anxious for them to promulgate their gathering line rules.”

Far Safer Than Trucks

Pipeline safety regulations have been debated since the implementation of oil and gas pipelines in the United States in 1859.

By the late 1860s, quality control of pipe manufacturing had been established as steel pipe replaced wrought iron, which had replaced wood. Oil pipelines are roughly 70 times safer than trucks, according to fatality statistics from 2005 to 2009.

Although gathering lines are usually small pipelines, in recent years the industry has built larger, high-pressure pipelines that legally qualify as gathering lines.

Because most gathering lines are within the boundaries of a single state, approximately 90 percent of the nation’s gathering lines, which typically operate at lower pressures and generally traverse remote areas, are not governed by PHMSA rules. Pipeline rules created in Texas could have a significant impact on the entire U.S. oil and gas industry because more than a third of the nation’s half a million miles of gathering lines are in Texas.

Safety, Cost Control

Industry operators are relieved TRC commissioners scaled back the commission staff’s proposals, says Gary L. Stone, vice president for engineering at Five States Energy Capital and a policy advisor to The Heartland Institute, which publishes Environment & Climate News.

Even without new regulations, pipelines have better safety records by far than all other forms of transporting oil and gas raw materials and finished products, Stone says.

“It is always more efficient and safer for the environment to move petroleum products, whether oil or gas, by pipeline rather than the alternatives,” Stone said. “Trucks and rail cars are more subject to spills, accidents, and leakage than are pipelines.

“In this time of relatively low commodity prices, it is critical for operators to control costs, especially since today’s oil and gas prices are at or below the break-even costs for drilling new wells,” Stone said. “Drilling and completion costs, infrastructure costs, operating costs, and administrative costs must be managed and controlled to make a profit, and as part of this it is important gathering systems and pipelines be subject only to reasonable and cost-effective regulations.”

Duggan Flanakin (dflanakin@gmail.com) writes from Austin, Texas.