• PHMSA Underground Natural Gas Storage Facilities

Weekly Compliance Digest – Underground Natural Gas Storage Facilities

February 17, 2017 By
In this edition of the Weekly Compliance Digest, we cover an interim final rule by the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) on the safety of underground natural gas storage facilities.

Pipeline Safety: Safety of Underground Natural Gas Storage Facilities

What is it?

Today is the end of the comment period for an interim final rule issued late last year by the U.S. Department of Transportation’s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA). The rule revises the Federal pipeline safety regulations to address safety issues related to downhole facilities, including well integrity, wellbore tubing, and casing. The interim final rule is part of PHMSA’s efforts to enact minimum federal safety standards for underground natural gas storage facilities and address concerns emanating from the Aliso Canyon natural gas leak incident of 2015. The Aliso Canyon incident resulted in the estimated release of 4.62 billion cubic feet of natural gas, or the greenhouse gas emission equivalent of 500,000 passenger cars driven for one year.

Who is affected?

The interim final rule affects operators of underground natural gas storage facilities. The standards included in the rule apply directly to 197 interstate facilities, and serve as the minimum federal standard for 203 intrastate facilities. These 400 facilities currently operating in the U.S. account for more than four trillion cubic feet of natural gas working capacity, and store natural gas in the following ways:

  • 326 facilities store natural gas in depleted hydrocarbon reservoirs.
  • 31 store natural gas in salt caverns.
  • 43 store natural gas in depleted aquifers.

What are the provisions?

The interim final rule incorporates the American Petroleum Institute’s recommended practices 1170 (for salt cavern facilities) and 1171 (for depleted hydrocarbon reservoirs and aquifer reservoirs) by reference into the pipeline safety regulations (49 C.F.R. Part 192). API Recommended Practices 1170 and 1171 outline standards for the design and operation of solution-mined salt caverns used for natural gas storage, and functional integrity of natural gas storage in depleted hydrocarbon reservoirs and aquifer reservoirs. The incorporation of these RPs will provide PHMSA and the states with a minimum federal standard for inspection, enforcement, and training through a federal/state partnership and certification process modeled after the current pipeline safety program.

While there are DOT safety regulations in part 192 that apply to the surface piping at these facilities, there are no regulations in part 192 covering downhole facilities—such as wells, wellbore tubing, and casing—or the operations, maintenance, integrity management, public awareness, and emergency response activities associated with these downhole facilities.

The minimum federal standards set baseline fitness for service requirements for all interstate and intrastate facilities, and allow state regulators to go above and beyond the minimum federal standards to require additional or more stringent safety safeguards at intrastate facilities. All intrastate transportation-related underground gas storage facilities would be inspected either by PHMSA or by a state entity that has chosen to expand its authority to regulate these facilities.

What is next?

The interim final rule was published in the Federal Register on December 19, 2016 and became effective on January 18, 2017. A comment period closes today February 17, 2017.

Visit Enablon Insights again next Friday for a brand new Weekly Compliance Digest!

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Oil & Gas Spotlight: Addressing 2016 EHS Challenges with Operational Data

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