trending Market Intelligence /marketintelligence/en/news-insights/trending/7vt5i-vhnt5w6zmhm_sbkq2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

In this list

PHMSA using new powers to evaluate state efforts on pipeline excavation damage

Coronavirus Crisis Brings New 5G Use Cases Into Action

How 37 Years of Default Data Can Prepare Us for the COVID-19 Fallout

How 37 Years of Default Data Can Prepare Us for the COVID-19 Fallout

Broadband-Only Homes Surge To 25% Of US Households Ahead Of COVID-19 Crisis

PHMSA using new powers to evaluate state efforts on pipeline excavation damage

Excavation damage has been a persistently prevalent cause ofpipeline failures, and the federal pipeline safety regulator is now evaluatinghow well states are trying to prevent it.

The U.S. Pipeline and Hazardous Materials SafetyAdministration is auditing state damage-prevention programs as it starts totake advantage of a 2015 rulegiving the agency more control over state programs.Through eight audits, only three states were found to be adequate, PHMSAAdministrator Marie Therese Dominguez said.

When a state gets an "inadequate" audit result,Dominguez said, PHMSA works with it in whatever capacity necessary to improvethe program. "We want to be able to actually help you getthat done — ­not just send you a letter but actually figure out a path forwardto addressing the situation, whether that's working with your statelegislatures, working with your governors, working with nonprofit organizationsthat are in your state­," Dominguez said in Indianapolis at the NationalAssociation of Pipeline Safety Representatives' annual meeting. "We wantto make sure that we've got an aggressive way forward."

On federally tracked gas distribution lines, excavationdamage is a top threat to pipes. It caused 35% of the incidents in 2015, makingit the No. 1 threat for the year, according to PHMSA data. Looking at bothfederally tracked distribution and transmission lines, excavation damage in2015 resulted in two fatalities, 20 injuries and over $12.2 million in propertydamage, PHMSA data showed.  

Part of the problem is that, at the state level, someregulators do not have the authority to impose fines related to excavationdamage. Onceenforcement mechanisms are established, though, regulators see a markedresponse, Pete Chace, the gas pipeline safety program manager for the PublicUtilities Commission of Ohio, said on the sidelines of the meeting.

The PUCO did not have enforcement authority in effect until2016, he said, and already the state has seen a 15% increase year-over-year incalls from diggers requesting underground infrastructure locations.

SNL Image

"If you look at the tracking numbers like dig-ins perthousand locates and damages, I think there's evidence that what we're doing isactually effective and damages are trending down," said Chace, who alsoserves as NAPSR's vice chair. "It's one of the, quite frankly, areas I seewhere we're actually reducing risk and reducing incidents."

The IndianaUtility Regulatory Commission, too, has taken advantage ofrelatively new enforcement powers, said Steve Allen, the commission's directorof pipeline safety. Over the past few years, the program's advisory committeehas recommended more than $2 million of penalties related to excavation damageand has put that money toward improving damage prevention programs, Allen saidon the NAPSR meeting sidelines. In that time, damage rates have fallen, hesaid.

Chace and Allen voiced support for PHMSA's plans to auditstates and provide support for floundering programs.

Jason Montoya, the New Mexico Public Regulation Commission'sbureau chief for pipeline safety, said that, while he is in favor of morefederal involvement to limit excavation damage, he is concerned safety programsthat do not meet PHMSA expectations could be punished, even if they do not haveenforcement power. "Louisiana is a good example," hesaid. "State police have enforcement authority. If they are lacking inassessing civil penalties, the pipeline safety program will get deducted pointsand federal money will be decreased eventually." Still, he noted,"something is better than nothing" to push states to improve theirprograms.

SNL Image

Regulators could do more to improve the dynamics betweenutilities and the contractors that locate underground infrastructure, RobTullman, president and CEO of locate company USIC LLC, said at the meeting.

In many areas, utilities are incentivized to opt for thelowest-cost locatecompany, driving down revenue potential for the contractors. The tight budgetslimit the number of locators a company can hire, putting added pressure on theemployees to rush through their work and sometimes causing locators to fallbehind on their requests, Tullman said.

"There are always economic factors and pressures inhere, but … [there are] places where [locators are] not on the radar. It's nota discussion point in rate cases. It's a rounding error in [operations andmaintenance], which is kind of self-defeating," Tullman said. "Ittakes the entire ecosystem to engage in this for it to work."