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US pipeline safety regulator enforcement data shows focus on prevention

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US pipeline safety regulator enforcement data shows focus on prevention

The federal pipeline safety regulator's enforcement cases during 2017 shifted to focus on preventive measures, according to agency data and industry observers.

The number of enforcement cases the U.S. Pipeline and Hazardous Materials Safety Administration initiated in 2017 exceeded the average number of cases during 2009 through 2016 by about 25%. Much of that increase was in the form of warning letters, which rose 53% in 2017 over the average for 2009 through 2016, and notices of amendment, which went up 21%.

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PHMSA uses warning letters to notify pipeline operators that they may be in violation of certain rules, giving the operators a chance to fix the problems or face further enforcement action. The agency's notices of amendment indicate that an operator's plans and procedures may be inadequate and need changes. The agency did not respond to repeated requests to explain whether the shift was intentional or just the nature of cases that developed in 2017.

"We are pleased to see the apparent increased attention to regulatory violations, plan and record keeping shortcomings that PHMSA finds during inspections before they become a cause of a pipeline incident," Pipeline Safety Trust spokeswoman Rebecca Craven said in a recent email. "To the extent that PHMSA is finding more shortcomings, or is choosing to bring more enforcement actions before incidents occur, we're pleased in either event."

Paul Drucker, a partner in Barnes and Thornburg LLP's pipeline practice, sees the shift in PHMSA enforcement strategy as an indication that the agency is focusing more heavily on preventive measures in the wake of multiple high-profile pipeline releases in the past few years.

Barnes and Thornburg's own assessment of PHMSA enforcement data showed that the agency has particularly increased the number of warning letters and amendment notices it has doled out for hazardous liquids lines, compared with gas lines. Many highly publicized pipeline safety cases have involved oil releases into sensitive areas, Drucker said.

TransCanada Corp.'s Keystone pipeline released an estimated 5,000 barrels of oil in South Dakota in November 2017. Plains All American Pipeline LP experienced two major oil leaks in two months in 2014, including a release of as much as 2,500 barrels near Santa Barbara, Calif., affecting local beaches and the Pacific Ocean. An Exxon Mobil Corp. pipeline leaked in Billings, Mont., into the Yellowstone River, and an Enbridge Inc. oil line in 2010 leaked an estimated 843,444 gallons of crude in Marshall, Mich., impacting a wetland.

"To really simplify it, the idea is to address small problems before they turn into big problems," Drucker said of the types of compliance issues addressed in warning letters and notices of amendment. "The more you address compliance, integrity management planning and implementation, and other types of technical violations or noncompliance with pipeline safety or integrity ... the more you prevent [incidents]."

An increased focus on preventive actions is in keeping with a strategy PHMSA officials have highlighted in recent years. Alan Mayberry, PHMSA's associate administrator for pipeline safety, in 2016 emphasized the need to "focus on preventing the next accident," and the most recent past PHMSA administrator noted the importance of having a responsive model for addressing compliance.