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PHMSA plans staggered release of underground gas storage rules

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PHMSA plans staggered release of underground gas storage rules

Underground natural gas storage regulations will likely berolled out in tiers, with the first phase, coming before the end of the year,focused on existing industry best practices.

The U.S. Pipeline and Hazardous Materials SafetyAdministration soon expects to adopt rules based on two American PetroleumInstitute recommendedpractices, 1170 and 1171, that deal with underground gas storage indepleted reservoirs and salt domes, PHMSA Administrator Marie Therese Dominguezsaid recently.

Industry has already signaled its for those two recommended setsof guidelines.

The PHMSA plans to expand regulations beyond the contents ofthe recommended practices, though, adding additional guidance areas such asinjection issues, aging infrastructure and emergency response plans, Dominguezsaid in Indianapolis at the National Association of Pipeline SafetyRepresentatives annual meeting. The agency has been working with the U.S. Departmentof Energy, and the two agencies met with a host of subject matter expertsearlier this year to assess what regulations are needed.

"I do think it's going to be a phased process,"Dominguez said of underground gas storage regulation. "There are a numberof issues that were identified during the course of the workshop we conductedin Colorado with the Department of Energy."  

The PHMSA has had the authority to oversee underground gasstorage, but Congress only recently mandated that the agency put out rules onthat part of the gas industry. A multimonth Aliso Canyon storage field leak in southern Californiabrought national attention to the relatively sparse and patchwork system ofrules that govern the U.S.' vast system of underground storage.

Implementing regulations will present a number of logisticalchallenges for the PHMSAand for the states that work collaboratively with the agency.

Currently, the PHMSA delegates a great deal of pipelinesafety oversight authority to state partners, mostly through state utilitycommissions that regulate gas utilities. The federal regulator will likely trydo the same with underground storage oversight, but in many states, the utilitycommissions do not have authority over storage, since it is considered a"down-hole" facility. Well-related regulation is often delegated to astate's natural resources or conservation department. This means the PHMSA mayhave to establish many new working relationships across the nation as thefederal regulator rolls out its underground storage rules.

As for the state partners, many are waiting to see what therules entail and how individual states will handle the new guidelines.

"In Ohio, we're still waiting to see what comes out,because I don't know what we're going to enforce versus what our Department ofNatural Resources is going to enforce," Pete Chace, the gas pipelinesafety program manager for the Public Utilities Commission of Ohio, said on thesidelines of the NAPSR meeting. "We have a lot of storage in Ohio. … Itcertainly will impact us, but whether it falls under the public utilitiescommission jurisdiction, we don't know yet."