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Underground gas storage operators will have 1 year to follow new federal rules

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Underground gas storage operators will have 1 year to follow new federal rules

Gas storage operators will have a year to implement a federal regulator's first set of rules governing underground storage fields, spurred by the multimonth leak at the Aliso Canyon facility in California.

The interim final regulation, issued Dec. 14 by the U.S. Pipeline and Hazardous Materials Safety Administration, incorporates by reference two of the American Petroleum Institute's recommended standard practices. The standards explain how operators should manage underground storage facilities' integrity with regular and site-appropriate monitoring, maintenance and remediation practices. These guidelines, called recommended practices 1170 and 1171, deal with gas storage in salt caverns and depleted reservoirs, respectively.

For the first time, PHMSA also will be requiring operators to submit annual reports, incident reports, reports on anything that compromises a facility's integrity or reliability, and data for a national registry.

Storage operators will have 12 months from the rule's effective date to meet all the operating, maintenance, integrity demonstration and verification, monitoring, threat and hazard identification, assessment, remediation, site security, emergency response and preparedness, and record-keeping components of the API recommended practices, PHSMA said.

The Interstate Natural Gas Association of America, whose members operate many of the storage facilities in the country, welcomed PHMSA's oversight for storage safety but said the timeline would be hard to meet. "We are concerned that a rushed 12-month implementation of the entirety of the recommended practices would impose a substantial burden on operators and could undermine the effectiveness of these risk-based integrity management programs," Donald Santa, INGAA's president and CEO, said in a Dec. 14 statement.

PHMSA acknowledged that 1170 and 1171 were written as recommendations, not as enforceable standards, so the agency said it will allow operators to deviate from certain provisions if they are not applicable to a specific field.

Getting the regulation on the books now as an interim rule was more important than to work through the enforceability of each provision, the administration said. The interim nature of the rule means the rule can go into effect without the traditional comment period. The rule will take effect 30 days after it is published in the Federal Register, but the public can still offer input over the 60 days after the regulation is published.

"PHMSA has determined that the underground storage of natural gas is an immediate safety and environmental threat," the interim final rule said. "The rapid incorporation of API [recommended practices] 1170 and 1171 ... provides PHMSA with an immediate tool to begin inspection and enforcement for interstate underground storage facilities and provides the foundation for states to begin adopting the minimum federal standards for intrastate underground storage facilities for prevention and response to future incidents."

SNL Image

SoCalGas' Aliso Canyon storage field remains offline until state regulators deem it safe.

Source: The Associated Press

The massive leak at Southern California Gas Co.'s Aliso Canyon underground natural gas storage field near Los Angeles exposed the need for stricter standards. The leak, discovered in late October 2015 and not plugged until mid-February, spewed an estimated 4.62 Bcf of gas, PHMSA noted.

The agency has long had the authority to regulate underground gas storage but has never put out any basic standards for the facilities. State regulators have authority over only intrastate fields but cannot exercise control over storage fields that cross state borders, which means nearly half of the roughly 400 underground gas facilities were under no official oversight.

After the Aliso Canyon leak, PHMSA and the U.S. Department of Energy formed a task force on gas storage safety, and Congress mandated that PHMSA write rules governing gas storage. PHMSA intends to work on additional guidance for the fields.

"This [interim final rule] addresses aging infrastructure and is the first step in a multiphase process to enhance the safety of underground natural gas storage," PHMSA Administrator Marie Therese Dominguez said in a Dec. 14 statement. "These minimum federal standards will help to prevent incidents like the one at Aliso Canyon from happening in other communities around the country."