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PHMSA hoping to issue natural gas storage rules by year-end

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PHMSA hoping to issue natural gas storage rules by year-end

The federal pipeline safety regulator is working to releaserules governing underground natural gas storage within the next six months.

Spurred into action by a multi-month leak at the in California, the U.S. Pipeline and Hazardous Materials Safety Administrationplans to produce a rulemaking setting minimum safety standards for undergroundstorage facilities on an "aggressive" timetable, PHMSA AdministratorMarie Therese Dominguez said May 3.

PHMSA Administrator Marie Therese Dominguez speaks at the Center for Strategic and International Studies in Washington, D.C.

Source: S&P Global Market Intelligence

The rulemaking is expected to incorporate U.S. Department ofEnergy research, along with data analysis from multiple national laboratoriesto establish standards that raise the bar on safety and are applicable acrossdiverse geographies, Dominguez told attendees at a Center for Strategic andInternational Studies event in Washington, D.C. PHMSA and the DOE in Aprilannounced a joint task forceto assess underground gas storage safety.

In recent congressional hearings on the reauthorization ofthe federal Pipeline Safety Act, legislators and other stakeholders, includingDominguez, have endorsed the idea of giving PHMSA . The authoritywould allow PHMSA to take action on safety concerns more rapidly than atraditional rulemaking process. Emergency order power has been included inmultiple versions of federal Pipeline Safety Act reauthorization introduced inrecent months.

The value of emergency order authority often came up in thecontext of quickly implementing gas storage safety standards or requirements,but Dominguez said PHMSA is not looking to use that authority to setunderground storage regulations. PHMSA is "not waiting for [the]legislation" and is instead moving forward as expeditiously as possiblethrough existing channels, she noted.

PHMSA has been heavily criticized for its protractedrulemaking process, but Dominguez said that she sees the underground storageregulations coming together more quickly, in part because the industry hasalready rallied behind American Petroleum Institute recommended practices inthis area, laying the groundwork for federal action.

Beyond focusing on pressing issues at hand, Dominguez saidthat since she took on the administrator position in summer 2015, she haschampioned an agency-wide re-evaluation of processes and priorities. As aresult, PHMSA is pursuing a multiyear refocusing to make the agency morepredictive and proactive.

PHMSA Administrator Marie Therese Dominguez takes questions.

Source: S&P Global Market Intelligence

State regulators conduct a significant proportion of thenation's pipeline inspections, but information sharing between the federal andstate regulators — and even among the state regulators — is limited, she said.Combining these sets of data would give a "much better picture" ofrisk trends, according to Dominguez.

"As you start to line up maintenance data, etc., you'reidentifying: 'Where's that next risk factor coming from?' … You're identifyingemerging risk [and] addressing it, so that you're not in a position of waitingfor an accident or an incident to start to look at trends," Dominguezsaid.

The multiyear program, dubbed PHMSA 2021, is intended tohelp the agency better leverage data and research to develop a more proactiveregulatory agenda, especially as the agency's obligations expand along with thegrowing energy sector.

"We anticipate that the scope and complexity of oursafety mission will continue to outpace our ability to add resources,"Dominguez said, noting that it will be increasingly important to make efficientuse of existing resources.

PHMSA is also working to adopt a version of so-calledsafety management systems— comprehensive business programs designed to help entities understand andmitigate risks. The API last year release a voluntary recommended practice — RP1173 — centered on safetymanagement systems, and Dominguez said that the federal regulatorwould do well to subscribe to a related philosophy.

"The structure of SMS provides organizations greaterinsight into their operational environment. It requires leaders to championsafety and allows employees at all levels to raise safety concerns,"Dominguez said. "For PHMSA this means investing in our predictive andanalytical capabilities, improving integrity verification procedures and advancingperformance-based standards. For industry, this means creating a culture thatallows for non-punitive reporting as well as developing and adopting a platformto share and analyze data in a no-fault environment."