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Wash. air rule leaves gas utilities wondering how to comply; PHMSA aims new powers at preventing excavation damage

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Wash. air rule leaves gas utilities wondering how to comply; PHMSA aims new powers at preventing excavation damage

Asoon-to-be-enacted Washington law that places the onus on natural gas distributorsto cut the greenhouse gas output of their customers — or find alternatives tooffset those emissions — is driving a lawsuit by four utilities in the state that claim therule is at odds with their mandate to deliver gas to users on demand.

Washington'sClean Air Rule, which goes into effect Oct. 17, requires companies with morethan 100,000 metric tons of greenhouse gas output per year to pare emissions by1.7% annually starting next year or institute mitigation measures equal to thatamount. In the case of the utilities, the state Department of Ecology will usea formula that assigns an emissions value to the unburned gas that flowsthrough the utilities' pipes and makes the LDCs responsible for reducing thatnumber.

Becausedistributors do not produce the fuel, and their operations account for only asmall amount of emissions, the utilities contend that they are being forced toeither sell less natural gas or find difficult-to-obtain, expensive pollutionoffsets even though they are not at the root of the problem.

Excavationdamage has been a persistently prevalent cause of pipeline failures, and thefederal pipeline safety regulator is now evaluating how well states are tryingto prevent it.

TheU.S. Pipeline and Hazardous Materials Safety Administration is auditing statedamage-prevention programs as it starts to take advantage of a over state programs. Through eight audits, only threestates were found to be adequate, PHMSA Administrator Marie Therese Dominguezsaid.

Whena state gets an "inadequate" audit result, Dominguez said, PHMSAworks with it in whatever capacity necessary to improve the program. "Wewant to be able to actually help you get that done — ­not just send you aletter but actually figure out a path forward to addressing the situation, whetherthat's working with your state legislatures, working with your governors,working with nonprofit organizations that are in your state­," Dominguezsaid in Indianapolis at the National Association of Pipeline SafetyRepresentatives' annual meeting. "We want to make sure that we've got anaggressive way forward."

cleared the finalregulatory hurdle in its $6.7billion acquisition of Piedmont Natural Gas Co. Inc., and the deal will closeOct. 3.

TheNorth Carolina Utilities Commission issued an order Sept. 29 approving themerger. (Docket Nos. E-2, SUB 1095; E-7, SUB 1000; G-9 SUB 682)

Piedmontwill retain its name and operate as a business unit of Duke Energy, Duke said.Piedmont serves about 1 million natural gas customers in North Carolina, SouthCarolina and Tennessee and, like Duke, is headquartered in Charlotte, N.C.

ThePennsylvania Supreme Court on Sept. 28 struck down as unconstitutional moreportions of the state's Act 13 governing the natural gas industry andreaffirmed the right of towns and villages to use their zoning codes toregulate where the gas industry could operate.

Followingthe decision, private gas storage operators cannot exercise eminent domain forprojects and doctors cannot be forced to sign nondisclosure agreements toobtain chemical trade secret information to treat patients exposed to frackingchemicals.

Inaddition, the court made final its prohibition on the Public UtilitiesCommission's blessing of local zoning ordinances to ensure they allowed gasindustry operations and determining whether municipalities' zoning codes keepthem eligible for natural gas impact fees.

Regulatorsshould resistformalizing into law one of the latest major recommended practices for thepipeline industry, safety experts said Sept. 27.

Evenas the federal pipeline safety administrator intimated that pipeline safetymanagement systems — comprehensive business programs designed to help entitiesunderstand and mitigate risk — may have to be codified if the industry does notvoluntarily implement them, other gas transportation experts at the NationalAssociation of Pipeline Safety Representatives annual meeting highlightedreasons that near-term codification may do nothing to advance safety.

MarieTherese Dominguez's first year as administrator at the U.S. Pipeline andHazardous Materials Safety Administration was a dynamic one. Under her watch,PHMSA released an extensive andlong-awaited rule proposal governing gas transmission and gatheringlines, and after sustained congressional scrutiny of her agency, federal lawmakersreauthorized thepipeline safety program for the next few years.

PHMSAhas also undertaken an internal reorganization program, known as PHMSA 2021,aiming to streamline rulemaking, improve communication and make better use ofdata to become more proactive.

U.S.energy transmission, storage and distribution systems will need billions ofdollars of investments to keep up with supply and demand for the next 15 years— up to $55.5 billion for electric power infrastructure — but the systemsshould stand up well, RAND Corp. said in a report prepared for the U.S.Department of Energy.

Inthe same period, some regional vulnerabilities require attention from thefederal government, the study said.