Posted: 08 Jul 2016

API Midstream Director, Robin Rorick, has criticized PHMSA’s Notice of Proposed Rulemaking (NPRM) on natural gas transmission and gathering lines as grossly underestimating costs of a rule that would do little to advance safety.“Natural gas pipelines are 99.999% safe,” said Rorick. “This is not by chance but achieved through an industry-wide, comprehensive approach to ensure safe operations. The new NPRM does little to enhance safety and weakens America’s energy renaissance, which has helped consumers save on energy bills and reduce emissions to near 20-year lows.

“Our industry continues to lead on creating new standards to enhance pipeline safety. Operators spend billions each year and countless man hours to evaluate, inspect, and maintain pipelines. We have a better path forward that is safer for the public and the environment. We support regulations that efficiently and, most importantly, effectively further pipeline safety, but these additional proposals are not based on sound calculations.” PHMSA estimated that it would cost US$597 million over 15 years to implement the new rules, but according to a new ICF International study, the cost would be US$33.4 billion.

The costs would fall particularly hard on small gathering companies, whose estimated annual compliance costs nearly equal estimated annual revenues from gathering fees, according to the study. Notably, ICF International found that instead of generating benefits of US$3.5 billion over 15 years (midpoint estimate), the proposal would yield only a fraction of those benefits. “PHMSA’s flawed study grossly underestimates the cost of implementing these regulations, which will provide little improvement in safety outcomes,” said Rorick. “We encourage PHMSA to reassess this proposal, conduct the appropriate data collections and studies that apply sound science, and then, re-issue proposals that successfully benefit the environment and the public.”