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US pipeline safety agency finalizes overdue gas storage facility rule

U.S. pipeline safety regulators finalized eagerly anticipated regulation governing the nation's natural gas storage facilities, fulfilling an outstanding mandate four years after the accident that prompted Congress to order the rulemaking.

The Pipeline and Hazardous Materials Safety Administration, or PHMSA, on Jan. 13 sent the final Safety of Underground Natural Gas Storage Facilities rulemaking to the Federal Register for publication. The rule sets federal safety regulations at the roughly 400 facilities that stockpile U.S. gas supplies. It covers well integrity, wellbore tubing and casing in underground facilities used to store gas.

The rule is meant to address failures that contributed to the nearly four-month leak at Southern California Gas Co.'s Aliso Canyon storage facility, which released an estimated 4.62 Bcf of gas before it was plugged in February 2016. Congress ordered the rulemaking in legislation reauthorizing PHMSA's safety program, the 2016 PIPES Act.

SNL Image

Axial cracking to the casing on the Aliso Canyon natural gas storage facility well that leaked.
Sources: Blade Energy Partners; California Public Utilities Commission

"The Aliso Canyon incident was one of the largest natural gas releases in U.S. history and affected the lives of thousands of Americans living and working nearby," PHMSA Administrator Skip Elliott said in a news release. "Compliance with this rule will go a long way toward preventing an incident of that magnitude from happening again."

Final rules are typically available for public viewing several days after PHMSA transmits them to the Federal Register. The initial deadline for PHMSA to finalize the rule was June 22, 2018.

An interim final rule published in December 2016 laid out the first minimum federal standards for unregulated downhole facilities at 197 interstate storage sites and provided what it dubbed "consistent, minimum standards" for 203 other intrastate facilities. Thousands of wells used to store gas at the interstate facilities have not been subject to any federal standards for downhole facilities.

Investigators tracked the Aliso Canyon leak to a blowout caused by extensive corrosion along a well's casing. The root cause of the accident included SoCalGas' failure to review past incidents and assess risks at Aliso Canyon, according to an independent analysis by Blade Energy Partners.

PHMSA incorporated two recommended practices developed by the American Petroleum Institute into the final rule, Elliott said in the release. The first, recommended practice 1170, governs the design of the operation of salt caverns, including geomechanical assessments, monitoring and maintenance practices. Recommended practice 1171 covers the functional integrity in depleted oil and gas reservoirs and aquifers, setting standards for maintaining well integrity and inspections, assessing the need for emergency shutdown valves and the implementation of risk management programs.

The gas storage facility rule was one of several overdue regulations remaining from 2011 and 2016 PHMSA reauthorization legislation, which included a heavy slate of rulemaking mandates following a wave of major accidents. In September, PHMSA finalized three other rules, including the first part of its three-part gas transmission megarule.