Departing PHMSA Administrator has let regulated companies determine testing as LNG exports increase

PHMSA Administrator Rather than stopping leaks and explosions, Cynthia L. Quarterman (no relation) seems to spend a lot of time testifying before Congress, see for example these CSPAN videos. Maybe now that “market forces” are shifting away from fossil fuels, instead of chasing the white whale of pipelines for fracked methane to LNG export, we can get a new PHMSA Administrator who will do something about the lax safety of the pipelines we’ve got while we get on with shifting to sun, wind, and water power.

James F. Bowe, Jr. and Sara E. Peters wrote for Energy Newsletter, March 2014, Congress Probes Crude by Rail Safety Developments; Voluntary Industry-Regulator Agreement Addresses Safety Concerns,

Cynthia Quarterman, Administrator of the Pipeline and Hazardous Materials Safety Administration (PHMSA), which regulates the transport of hazardous materials regardless of mode, responded that the Order’s terminology was left vague intentionally, so that shippers can determine what testing is appropriate to their particular operations. Quarterman said PHMSA is glad to answer any questions on how to comply with the Order.

While that’s about crude oil rail transport, it seems to typify PHMSA’s attitude towards methane pipelines, as well: let the pipeline companies do whatever. As a keynote speaker at the Pipeline Safety Trust Conference 2012, she talked about pipeline safety as a “shared responsibility”. From what I have watched and read, she seems to indeed be an administrator, cozying up to the industry PHMSA is supposed to be regulating, and never questioning the alleged need for new pipelines.

Paul Quinlan wrote for Greenwire 17 September 2010, Critics Fault Oil and Gas Pipeline Regulator’s Industry Ties,

Cynthia Quarterman, chief of the Pipeline and Hazardous Materials Safety Administration, is having her work and that of her agency compared with the infamous Minerals Management Service, whose lax oversight of offshore drilling was spotlighted by the April explosion of a BP PLC-hired drilling rig in the Gulf of Mexico and a record-shattering oil spill that followed. The Gulf disaster forced the Obama administration to dismantle and reorganize MMS, which is now called the Bureau of Ocean Energy Management, Regulation and Enforcement.

Parallels between the pipeline agency and MMS cannot be denied, said Lena Moffitt, who represents the Sierra Club in Washington on oil and gas issues. “These are agencies,” she said, “that have a very cozy relationship with the industries they’re regulating.”

PHMSA is supposed to regulate safety not only of pipelines but also of LNG export terminals:

The first LNG export terminal built in the U.S. receives natural gas from production wells near Cook Inlet in southern Alaska. Natural gas is routed to the LNG plant in Kenai, Alaska, where it is liquefied and then exported, primarily to Japan. Recently, several other import terminals have sought approval to build liquefaction facilities for exporting LNG. Depending on gas supply and price differentials, these facilities will be able to import LNG when it is needed in the US and export LNG when the resulting economics dictate.

Hunton & Williams LLP on September 11, 2014, Increased LNG Export Proposals Challenge Agency Review,

Increased natural gas production from shale formations in the U.S. has led to a notable increase in applications for regulatory approvals of liquefied natural gas (LNG) exports and construction of LNG export facilities. Three LNG export terminals have been approved since 2012, and another 14 terminals are currently proposed. This surge in interest in LNG exports may burden the resources and technical expertise of the two federal agencies that oversee LNG facility siting, design, construction, and operation, the Federal Energy Regulatory Commission (FERC) and the Pipeline and Hazardous Materials Safety Administration (PHMSA) within the Department of Transportation (DOT).

FERC has exclusive authority to approve the siting, construction, expansion, and operation of on-shore and near-shore LNG facilities. 15 U.S.C. § 717b(e). PHMSA establishes and enforces its own safety-related requirements in these areas. 49 U.S.C. § 60102(a). Under FERC regulations, applicants seeking approval for LNG facility construction must identify how their design plans for the project comply with PHMSA standards at 49 C.F.R Part 193. 18 C.F.R. Part 380.12(o)(14). PHMSA provides technical assistance to FERC in reviewing applications and, once a project is approved, PHMSA inspects LNG facilities and enforces its safety standards during and after construction….

For market reasons, PHMSA review of LNG projects has historically focused almost exclusively on import terminals and related facilities. Because LNG exports require refrigeration of natural gas to a liquid state, a process considerably more complicated than the regasification process associated with LNG imports, design reviews for these facilities present a new set of technical and safety concerns. As a result, both PHMSA and FERC are reviewing the appropriate application of their technical requirements for hazard analyses and safety features at these facilities. If market forces continue to encourage the development of LNG export infrastructure, the regulatory approach to LNG facility design review will likely continue to evolve as well, and require more time to process applications.

What could these “market forces” be? LNG-export-authorizing Office of Fossil Energy head Paula Gant was more forthcoming in her Congressional testimony about those market forces (you can see for yourself):

the development of hydraulic fracturing and extended horizontal lateral drilling technologies that spurred private sector investments and industry innovation, unlocking billions of dollars in economic activity associated with shale gas.

That matches what FERC Commissioner Tony Clark told the same Congressional committee:

The large amount of natural gas in the U.S. is also creating an impetus for something that was nearly unimaginable ten or fifteen year ago, LNG export, as opposed to import terminals. This is an area of significant workload increase for the Commission.

So the “market forces” the PHMSA Administrator is talking about is fracking, for the profit of the fossil fuel industry, at the expense of local landowners, environment, and economy damaged by destructive and hazardous fracking, pipelines, and LNG export.

According to today 25 September 2014, PHMSA Administrator Quarterman to step down,

Cynthia Quarterman will step down as administrator of the Pipeline and Hazardous Materials Safety Administration, officials at the Department of Transportation agency said Wednesday. Quarterman has led PHMSA since 2009 and under her tenure the agency has…

Amy Harder, WSJ, today, , Pipeline, Hazardous Materials Safety Regulator Quarterman Resigns: Official Was Tasked With Handling U.S. Government Response to Oil-Train Crashes,

PHMSA has also faced criticism from its internal watchdog for not ensuring that states enforce safety rules on natural-gas pipelines. The Transportation Department’s inspector general reported in May that lapses at PHMSA have resulted in “undetected safety weaknesses” in state oversight programs.

Concerns about the safety of decades-old pipelines have been on the rise following a series of fatal pipeline explosions, including one in San Bruno, Calif., in September 2010 that killed eight people. More recently, a gas explosion in New York City in March left eight people dead.

Will PHMSA get a new Administrator who will do something to stop pipeline leaks and explosions? That would be especially appropriate now that even heirs of John D. Rockefeller are divesting from fossil fuels. Market forces are changing, just like they did back when John D. Rockefeller moved away from whale oil to petroleum. Now they’re moving away from fossil fuels to sun, wind, and water. Let’s get on with that sunrise instead of continuing to chase the white whale of fracked methane pipelines.


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