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Houston — The Texas attorney general Friday challenged the authority of the US Pipeline Hazardous Materials Safety Administration to enact a rule to regulate underground natural gas storage facilities.

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Attorney General Ken Paxton filed a petition for review in the 5th Circuit Court of Appeals of the rule, which PHMSA crafted in the aftermath of the massive methane release from the Aliso Canyon storage facility in California in 2015.

Paxton claims the final rule, which took effect on January 18, improperly overrides the state's authority to regulate underground storage under the Texas Railroad Commission.

"Without completing any notice or comment period, the PHMSA unilaterally and impermissibly converted the American Petroleum Institute's non-mandatory recommendation into mandatory provision," Paxton said in a statement.



"Despite state laws and programs that regulate these facilities with respect to conservation, environmental protection and protection of property rights, the PHMSA effectively stripped the states of authority over their own natural gas facilities and completely disregarded traditional state regulatory roles," he said.

According to the TRC, there are 18 salt cavern storage facilities and 13 facilities that store natural gas in depleted underground reservoirs in Texas.

Under the PHMSA final rule the commission would be required to fully adopt PHMSA's regulation of those facilities, Paxton said.

The , which was filed within 90 days of the date of publication of the final rule in the Federal Register on December 19, challenges the rule s "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law."

On December 14, PHMSA announced the issuance of interim final rule, based on recommendations of a Department of Transportation/Department of Energy joint task for on gas storage safety formed in responsible to the Aliso Canyon incident, which resulted in the release of an estimated 4.22 Bcf of gas into the atmosphere.

The rule incorporates API's recommended practices 1170 and 1171 by reference into federal pipeline safety regulations related to downhole facilities, including well integrity, wellbore tubing and casing.

PHMSA held a 60-day public comment period, which began after publication of the interim final rule in the Federal Register.

Some segments of the gas storage industry have complained that the rule would create costly and overly burdensome regulation of their operations.

Jennifer Speller, a spokeswoman with the Attorney General's Office, said the next step is to wait for PHMSA to respond to the Texas petition. The agency can chose to litigate the challenge in the 5th Circuit court or request that the case be transferred to a DC Circuit court, she said.

A PHMSA spokesman did not immediately respond to Platts' request for a comment.

--Jim Magill, jim.magill@spglobal.com
--Edited by Richard Rubin, richard.rubin@spglobal.com