{"operation":"document","citation":"090000648242be16","title":"U.S. DOT/PHMSA - Preliminary Environmental Assessment","source_type":"rulemaking","agency":"Pipeline and Hazardous Materials Safety Administration","status":"current","official":true,"published_on":null,"effective_on":null,"summary":"Pipeline and Hazardous Materials Safety Administration U.S. Department of Transportation Preliminary Environmental Assessment Underground Natural Gas Storage Interim Final Rule Interim Final Rule Preliminary Environmental Assessment: Underground Natural Gas Storage Executive Summary Executive Summary The Pipeline and Hazardous Materials Safety Administration (PHMSA) is promulgating an interim final rule (IFR) that revises the Pipeline Safety Regulations applicable to underground natural gas storage facilities....","machine_formats":{"json":"https://regulus.evalyn.ai/document/regulations-gov-attachment-090000648242be16.json","markdown":"https://regulus.evalyn.ai/document/regulations-gov-attachment-090000648242be16.md"},"app_url":"https://regulus.evalyn.ai/document/regulations-gov-attachment-090000648242be16","source_url":"https://downloads.regulations.gov/PHMSA-2016-0016-0004/attachment_1.pdf","body":"<<<PAGE 1>>>\n\nPipeline and Hazardous Materials Safety Administration\nU.S. Department of Transportation\nPreliminary Environmental Assessment\nUnderground Natural Gas Storage\nInterim Final Rule\nInterim Final Rule\n\n<<<PAGE 2>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage Executive Summary\nExecutive Summary\nThe Pipeline and Hazardous Materials Safety Administration (PHMSA) is promulgating an interim\nfinal rule (IFR) that revises the Pipeline Safety Regulations applicable to underground natural gas\nstorage facilities. The IFR incorporates by reference American Petroleum Institute (API)\nRecommended Practices (RP): API RP 1170, “Design and Operation of Solution-mined Salt Caverns\nUsed for Natural Gas Storage” (July 2015); and API RP 1171, “Functional Integrity of Natural Gas\nStorage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs” (September 2015) (API,\n2015a; API, 2015b).\nThe RPs provide consensus safety measures for the construction, maintenance, risk-management, and\nintegrity-management procedures for natural gas storage. By adopting the API RPs by reference, the\nIFR takes an urgent first step to establishing uniform safety standards across the United States.\nThis report details PHMSA’s preliminary assessment of the environmental effects of the final rule, as\nrequired by 40 CFR Part 1502, Environmental Impact Statement (EIS).\n1\nAs described in Section 3, the IFR rule will require facility operators to implement various measures\nto ensure the containment integrity of underground natural gas storage facilities. In particular, the\nIFR will require that operators conduct mechanical integrity tests on wells to detect conditions that\ncould result in a leak. Although many operators voluntarily implement the RPs, the IFR will make\nthe measures mandatory for all operators. Information obtained through the mechanical integrity tests\nwill enable operators to make necessary repairs to prevent leaks. These repairs may include replacing\na well liner or casing, or plugging the well. Measures required by the IFR are currently conducted by\noperators, or are similar in the required equipment and disturbance (e.g., workover) to activities\nconducted by operators as part of current operations, and therefore PHMSA does not expect that they\nwill result in novel or additional environmental impacts.\nSeveral very serious natural gas incidents have occurred at underground natural gas storage facilities.\nThese incidents have resulted in fatalities, injuries, extensive physical damage, adverse human health\nimpacts, and environmental harm. In October 2015, the release of natural gas from the Aliso Canyon\nfacility ultimately took 112 days to stop, required the evacuation of over 5,000 residents, and cost the\noperator an estimated $763 million (Sempra Energy, 2016).2, 3 Luckily, this incident did not result in\n1 In accordance with 40 CFR Part 1508, the environmental assessment (a) means a concise public document for which a federal\nagency is responsible that serves to (1) briefly provide sufficient evidence and analysis for determining whether to prepare an EIS\nor a Finding of No Significant Impact (FONSI), (2) aid an agency's compliance with the Act when no EIS is necessary, and (3)\nfacilitate preparation of a statement when one is necessary; (b) shall include brief discussions of the need for the proposal, of\nalternatives as required by Section 102(2)(E), of the environmental impacts of the proposed action and alternatives, and a listing\nof agencies and persons consulted.\n2 Of the $763 million, Sempra Energy notes “approximately 70% is for the temporary relocation program (including cleaning\ncosts and certain labor costs) and approximately 20% is for efforts to control the well, stop the leak, stop or reduce emissions, and\nthe estimated cost of the root cause investigation. The remaining amount includes legal costs incurred to defend litigation, the\nvalue of lost gas, the costs to mitigate the actual natural gas released and other costs. Cost estimate excludes any potential\ndamage awards, restitution and any civil, administrative or criminal fines and other penalties that may be imposed, as well as any\nadditional costs to clean homes and future legal costs necessary to defend litigation, among other potential costs, as we cannot\nestimate what amounts, if any, will be incurred for such matter.” (Sempra Energy, 2016)\n3 Private financial costs include a mix of remediation, repair, ex gratia payments to persons and public agencies affected by the\nincident, anticipated or actual penalties, as well as litigation costs and settlements. Firms vary in the extent of their public\ni Interim Final Rule\n\n<<<PAGE 3>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage Executive Summary\nfatalities. As discussed in the Regulatory Impact Analysis and in this report, the final rule will\nprovide benefits through avoiding damages from natural gas releases that may be prevented through\nearlier detection of conditions that could lead to a loss of containment integrity, and through\nenhancing the ability of PHMSA and facility operators to evaluate risks.\nTo the extent that the measures taken to comply with the IFR do not involve additional\nenvironmental impacts and instead will serve to reduce the risk of natural gas incidents, PHMSA\nexpects this rule to have positive environmental impacts. The information in this Environmental\nAssessment report supports a Finding of No Significant Impact (FONSI) for this action.\ndisclosure of the details of costs incurred. In this case, it is unclear from Sempra’s disclosure whether the reported costs include\nestimates of business losses from the unavailability of the Aliso Canyon facility.\nii Interim Final Rule\n\n<<<PAGE 4>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage Table of Contents\nTable of Contents\nExecutive Summary ................................................................................................................. i\nTable of Contents ................................................................................................................... iii\nList of Exhibits ....................................................................................................................... iv\n1 Introduction .................................................................................................................... 1-1\n2 Purpose and Need for Action ........................................................................................ 2-2\n2.1 Purpose ................................................................................................................................ 2-2\n2.2 Need for Action ................................................................................................................... 2-2\n2.2.1 Underground Natural Gas Storage ........................................................................... 2-3\n2.2.2 Accident History ...................................................................................................... 2-3\n2.2.3 Aging Infrastructure................................................................................................. 2-5\n2.2.4 Gaps in the Regulation of Underground Natural Gas Storage Facilities ................. 2-5\n2.2.5 New Industry Standards ........................................................................................... 2-6\n2.3 PHMSA Strategic Objectives .............................................................................................. 2-7\n3 Interim Final Action and Alternatives Considered .................................................... 3-1\n3.1 API Recommended Practices .............................................................................................. 3-1\n3.2 Regulatory Alternatives Considered by PHMSA ................................................................ 3-3\n4 Affected Environment and Environmental Consequences ........................................ 4-1\n4.1 Physical Environment and Populations ............................................................................... 4-2\n4.2 Public Health and Safety ..................................................................................................... 4-5\n4.3 Climate Change ................................................................................................................... 4-5\n4.4 Environmental Justice ......................................................................................................... 4-6\n4.5 Socioeconomic Issues ......................................................................................................... 4-1\n5 Determination of the Degree of Environmental Impact ............................................. 5-1\n6 Persons Consulted .......................................................................................................... 6-1\n7 List of Preparers and Reviewers .................................................................................. 7-1\n8 References ....................................................................................................................... 8-1\niii Interim Final Rule\n\n<<<PAGE 5>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage List of Exhibits\nList of Exhibits\nExhibit 4-1: Geographical distribution of active underground natural gas storage facilities. .................... 4-3\nExhibit 4-2: Surroundings of the Aliso Canyon storage facility administrative boundary (black\nline) and injection wells (blue dots). ................................................................................... 4-4\niv Interim Final Rule\n\n<<<PAGE 6>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage 1. Introduction\n1 Introduction\nThe Pipeline and Hazardous Materials Safety Administration (PHMSA) is promulgating an interim\nfinal rule (IFR) that revises the Pipeline Safety Regulations applicable to underground natural gas\nstorage facilities. The IFR incorporates by reference American Petroleum Institute (API)\nRecommended Practices (RP): API RP 1170, “Design and Operation of Solution-mined Salt Caverns\nused for Natural Gas Storage” (July 2015); and API RP 1171, “Functional Integrity of Natural Gas\nStorage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs” (September 2015).\nThe RPs provide consensus safety measures for the construction, maintenance, risk-management, and\nintegrity-management procedures for natural gas storage. By adopting the API RPs by reference, the\nIFR takes an urgent first step to establishing uniform safety standards across the United States\nand addressing the Congressional mandate contained in the Protecting our Infrastructure of\nPipelines and Enhancing Safety Act of 2016 (or PIPES Act of 2016) for PHMSA to promulgate\nminimum safety standards for underground natural gas storage facilities.\nThis report describes PHMSA’s preliminary assessment of the environmental effects of IFR, as\nrequired by 40 CFR Part 1502, Environmental Impact Statement (EIS).\nThis report is organized as follows: Section 2 provides the purpose and need for the action while\nSection 3 summarizes the final rule and alternatives PHMSA considered. The affected environment\nand environmental effects are discussed in Section 4, concluding in Section 4.5 with a determination\nthat the information supports a Finding of No Significant Impact (FONSI) for this action. Finally,\nSections 6 through 8 provide additional information about the public’s involvement in the\ndevelopment of the action, preparers and reviewers of this preliminary Environmental Assessment\n(EA), and cited text references, respectively.\n1-1 Interim Final Rule\n\n<<<PAGE 7>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action\n2 Purpose and Need for Action\nThis statement of purpose and need explains the need for PHMSA action and reflects the goals to be\nachieved through this action.\n2.1 Purpose\nIn this IFR, PHMSA is adopting two API RPs:4 API RP 1170, “Design and Operation of Solution-\nmined Salt Caverns used for Natural Gas Storage” (July 2015); and API RP 1171, “Functional\nIntegrity of Natural Gas Storage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs”\n(September 2015). The RPs describe a range of measures that operators of underground natural gas\nstorage facilities should implement to ensure the safety of their operations, including construction,\nmaintenance, risk-management, and integrity-management procedures. The IFR makes these\nprovisions mandatory unless operators provide justification in their program or procedural manuals\nas to why compliance with a provision of the RP is not practicable and necessary for the safety of a\nparticular facility.\nPHMSA is issuing this IFR as an urgent first step5 in preventing incidents such as the 2015\nAliso Canyon natural gas leak in the future. Rapid incorporation of API RPs 1170 and 1171 into\nPHMSA’s regulations will require operators to assess the operational safety of their underground\nnatural gas storage facilities and document the implementation of identified safety solutions.\nAfter this IFR incorporating API RPs 1170 and 1171 becomes effective, PHMSA and its state\npartners will monitor and enforce operators’ implementation of the requirements. After issuance\nof this IFR, as a second phase, PHMSA will further investigate the need for more detailed\nregulatory requirements for underground natural gas storage incidental to transportation.\nPHMSA intends to hold a public meeting, and may pursue an additional rulemaking to address\nremaining safety concerns.\n2.2 Need for Action\nThe PIPES Act of 2016 (Public Law 114-183)6 requires PHMSA, not later than two years after the\ndate of enactment of the PIPES Act of 2016 (i.e., by June 22, 2018) and in consultation with the\nheads of other relevant federal agencies, to issue minimum safety standards for underground natural\ngas storage facilities. In issuing minimum safety standards for underground storage facilities,\nPHMSA must “(1) consider consensus standards for the operation, environmental protection, and\n4 PHMSA participated, along with the Federal Energy Regulatory Commission (FERC), several state regulatory agencies, and\nnumerous industry representatives, in the development of the two API RPs.\n5 These measures complement Advisory Bulletin ADB–2016–02 PHMSA issued on February 5, 2016 (81 FR 6334). The\nadvisory bulletin recommended that operators of underground natural gas storage facilities review their operating, maintenance,\nand emergency response activities to ensure that the integrity of underground natural gas storage facilities is properly maintained.\nThis bulletin informed operators about recommended practices and urged operators to take all necessary actions to prevent and\nmitigate breach of integrity, leaks, or failures at their underground natural gas storage facilities; to ensure the safety of the public\nand operating personnel; and to protect the environment.\n6 The PIPES Act of 2016 was signed into law on June 22, 2016.\n2-2 Interim Final Rule\n\n<<<PAGE 8>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action\nintegrity management of underground natural gas storage facilities; (2) consider the economic\nimpacts of the regulations on individual gas customers; (3) ensure that the regulations do not have a\nsignificant economic impact on end users; and (4) consider the recommendations of the Aliso\nCanyon natural gas leak task force established under section 31 of the PIPES Act of 2016.”\nSeveral factors discussed in this section highlight the need for action:\n Underground natural gas storage facilities are found across the United States;\n Past accidental releases of natural gas from these facilities have caused significant harm and\nenvironmental damages;\n The infrastructure has been aging;\n There are gaps in existing safety requirements applicable to these facilities; and\n New industry standards contain measures that will help enhance the safety of these facilities.\n2.2.1 Underground Natural Gas Storage\nPHMSA estimates that there were 390 active natural gas storage fields7 in the United States in 2015,\ndistributed across 31 states (EIA, 2016a; FERC, 2016; PHMSA, 2016b). These fields had an\naggregate design storage capacity8 of 9,155 billion cubic feet (BCF) and a working capacity9 of 4,756\nBCF (EIA, 2016a). PHMSA further estimated that there are a total of 16,991 injection/withdrawal\nwells and pressure control/observation wells within the 390 active fields.\n2.2.2 Accident History\nOn October 23, 2015, SoCalGas’ Aliso Canyon Well SS25 developed a natural gas leak near an area\nknown as Porter Ranch in Los Angeles, California. While investigations have not yet been\ncompleted, the leak is believed to have originated from the subsurface (downhole) well casing. Over\nthe 112-day event, the accident released up to 5.7 BCF of natural gas into the atmosphere, containing\nup to 109,000 metric tons10 of methane, a potent greenhouse gas, as well as panoply of other\npollutants (California Air Resources Board (CARB), 2016a; County of Los Angeles Public Health,\n2016). Over 5,790 households had to be relocated due to the natural gas odorant (mercaptans),\naccording to the Aliso Canyon Incident Command briefing report issued on February 1, 2016.\nAdditional reports identify other potential health effects that lasted even after the well was sealed. A\nreport by the Los Angeles County of Public Health suggests that the continued health symptoms may\nbe due to contaminants in indoor air and dust (Los Angeles County Public Health, 2016). As of\n7 PHMSA used Energy Information Administration’s (EIA’s) EIA-191, Monthly Underground Natural Gas Storage Report for\n2015 as primary data to determine the number of active fields. The definition of a field is based on the number of records for\nwhich EIA indicates the status as “Active” (EIA, 2016a). Note that other available data (FERC, 2016; PHMSA, 2016b) may\nsubdivide or group fields, resulting in different counts of natural gas storage facilities.\n8 Total natural gas storage capacity is the maximum volume of natural gas that can be stored in an underground storage facility in\naccordance with its design, which comprises the physical characteristics of the reservoir, installed equipment, and operating\nprocedures particular to the site (EIA, 2015).\n9 Working gas is the volume of gas in the reservoir above the level of base gas, and is available to the marketplace (EIA, 2015).\n10 CARB estimates that the incident resulted in a total emission of 99,650 ± 9,300 metric tons of methane (CARB, 2016a) and\nseeks mitigation of 109,000 metric tons.\n2-3 Interim Final Rule\n\n<<<PAGE 9>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action\nNovember 2, 2016, Sempra Energy, the parent company of SoCalGas, reported costs of $763 million\nto control the release, monitor air emissions, relocate residents, and cover its legal and other expenses\n(Sempra, 2016).11 These costs are those incurred by Sempra and do not include additional costs to\nsociety as a result of the release.\nThe Aliso Canyon incident is the latest of several high-profile underground natural gas storage\nincidents over the last 15 years (Hopper, 2004; British Geological Survey, 2008; Kansas Geological\nSurvey, 2004):12\n On August 19, 2004, the Market Hub Partners Moss Bluff storage facility located in Liberty\nCounty, Texas, had a well control incident and natural gas fire at Cavern #1. According to\nnewspaper reports at the time, the incident sent a plume of burning gas “hundreds of feet into\nthe air” (Bardwell and Horswell, 2004) and forced the evacuations of residents within a\nthree-mile radius (OGJ, 2004). Over a period of 6.5 days, the incident released and burned\napproximately 6 BCF of gas. Estimates of the number of people evacuated vary between\ndozens and hundreds. Hopper (2004) estimated the value of the product lost at $36 million\nand property damage at $20 million. Investigators attributed the incident to initial separation\nand breach of a 8-5/8-inch well string inside the cavern.\n A casing failure at the Magnolia Salt Cavern facility in December 2003 caused the release of\napproximately 0.35 BCF of natural gas, forced the shutdown of the facility and the\nevacuation of area residents (approximately 30 people). Geologists determined that the\neruptions had sprung from an underground gas storage field seven miles away and migrated\ninto injection wells. Investigator attributed the incident to casing failure, specifically to a\ncrack in the casing of a well near the top of a cavern.\n On January 17 and 18, 2001, the Yaggy underground natural gas storage field operated by\nKansas Gas Service had a wellbore failure, which led to a series of gas explosions in\nHutchinson, Kansas. The gas leaked from the storage field well production casing and\nmigrated approximately nine miles underground to the Hutchinson, Kansas area. An\nexplosion in downtown Hutchinson destroyed two businesses, damaged 26 others, and\ncaused two fatalities. Approximately 250 people were evacuated. Approximately 143 million\ncubic feet of natural gas leaked from the storage field. Flares took over a month to burn off\nthe escaped gas.13 Investigators attributed the incident to a hole in the well casing. Although\nPHMA could not find response costs for this incident, other costs incurred by the responsible\nparty included payment of $1.7 million to the two businesses destroyed by the explosions, $5\n11 Of the $763 million, Sempra Energy notes “approximately 70% is for the temporary relocation program (including cleaning\ncosts and certain labor costs) and approximately 20% is for efforts to control the well, stop the leak, stop or reduce emissions, and\nthe estimated cost of the root cause investigation. The remaining amount includes legal costs incurred to defend litigation, the\nvalue of lost gas, the costs to mitigate the actual natural gas released and other costs. Cost estimate excludes any potential\ndamage awards, restitution and any civil, administrative or criminal fines and other penalties that may be imposed, as well as any\nadditional costs to clean homes and future legal costs necessary to defend litigation, among other potential costs, as we cannot\nestimate what amounts, if any, will be incurred for such matter.” (Sempra Energy, 2016).\n12 There have also been additional accidents involving underground storage facilities storing other products such as liquefied\npetroleum gas.\n13 Flares are commonly used as a means of disposing of waste gas, when it is safer to burn the gas than to simply vent it to the\natmosphere.\n2-4 Interim Final Rule\n\n<<<PAGE 10>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action\nmillion in court-awarded damages to residential plaintiffs for impacts on housing prices due\nto “stigma” effects of the release, and a $180,000 fine assessed by the Kansas Department of\nHealth and Environment.\nThese incidents and their aftermath have heightened public awareness about the safety of these\nfacilities and the potential for environmental damage associated with natural gas releases from\nunderground storage facilities across the nation. Although infrequent, catastrophic natural gas release\nincidents can cause significant damages due to the quantities of natural gas involved, proximity to\npopulations, and other factors. Note that in recent accidents, natural gas migrated underground for\nmiles before erupting in locations distant from the source of the leak. The difficulty of identifying the\nactual dimensions of elevated risk zones argues in favor of making an additional effort to identify\npossible sources and prevent leaks in the first place.\n2.2.3 Aging Infrastructure\nMany underground natural gas storage wells are decades old. For example, the well involved in the\nOctober 2015 Aliso Canyon accident was drilled in 1953 and was repurposed for natural gas storage\nin 1972. This age is not exceptional: according to American Gas Association (AGA) data,\napproximately 60 percent of active wells are located in fields that were activated before 1960 (AGA,\n2014). Although AGA does not provide data on the age of individual wells, it is reasonable to expect\nthat many wells are developed by the time a storage facility starts operating. The Interagency Task\nForce on Natural Gas Storage Safety (2016) highlights growing concerns regarding the age of the\nnatural gas storage infrastructure as it affects risk. Wells reflect material, technology, and design\nfactors applicable at the time they were constructed and many may not meet design criteria for new\nwells. Over time, corrosion, other environmental processes, and mechanical stresses from injection\nand withdrawal of natural gas can weaken well integrity. Wells in depleted oil fields may have been\ndesigned for lower pressure than the stress they are now subject to. Further many of these wells were\nnot designed with redundant barriers to gas migration and present riskier, single points of failure.\n2.2.4 Gaps in the Regulation of Underground Natural Gas Storage Facilities\nFERC has jurisdiction over storage facilities engaged in interstate commerce of natural gas; these\nfacilities represent approximately 60 percent of the total storage capacity and total working capacity\nin the United States. With the implementation of FERC Order 636 in 1994, interstate pipeline\ncompanies have been required to operate their storage facilities on an open-access basis and to make\na major portion of working gas capacity (beyond what may be reserved by the pipeline operator to\nmaintain system integrity and for load balancing) available for lease to third parties on a\nnondiscriminatory basis (EIA, 2015). FERC reviews rates for storage and storage-related services\nunder the authority of § 4(f) of the Natural Gas Act of 1938, but does not set safety requirements for\nfields under its jurisdiction.\nThe U.S. Environmental Protection Agency (EPA) oversees Section 112(r) of the Clean Air Act\nwhich aims to “prevent the accidental release [of extremely hazardous substances] and to minimize\nthe consequences of any such release” from stationary sources. 42 U.S.C. § 7412(r)(1). Section\n112(r)(7) also authorizes EPA to publish regulations that impose accident prevention and emergency\nresponse requirements on stationary sources that hold more than a threshold quantity of certain\nregulated substances in a process. EPA’s “Risk Management Plan” regulations are codified at 40\n2-5 Interim Final Rule\n\n<<<PAGE 11>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action\nCFR 68. However, these regulations specifically exempt facilities that are subject to oversight or\nregulation under 49 CFR parts 192, 193, or 195, or a state natural gas or hazardous liquid program\nfor which the state has in effect a certification to DOT under 49 U.S.C. section 60105.\nFacilities engaged in intrastate commerce may be regulated by the oil and gas commission, the\nenvironmental protection department, or other government agency of the state where they are\nlocated. As of May 2016, PHMSA found that of the 16 states with intrastate underground natural gas\nstorage facilities (out of the total of 30 states with storage facilities), ten states had promulgated or\nproposed regulations requiring operators to implement preventive measures such as mechanical\nintegrity testing to prevent the accidental release of natural gas from storage facilities. Existing or\nproposed regulations in nine states require well mechanical integrity tests every 10 years or more\nfrequently.14 Not all states have adopted safety standards for underground storage facilities, and\nwhile in many cases states that are certified to regulate their intrastate facilities can and have issued\nstate standards for these wells and wellbores, the absence of a minimum federal standard has led to a\ngap and lack of uniformity for the interstate facilities.\nUnder 49 U.S.C. §§ 60101 and 60102, PHMSA sets minimum safety standards for the transportation\nof natural gas, which includes underground natural gas storage facilities incidental to transportation.\nWhile PHMSA has jurisdiction over interstate and intrastate fields, it currently does not have safety\nrequirements under 49 CFR Part 192 covering the wells and wellbore tubing and casing. The absence\nof federal safety regulations over interstate facilities and of state regulation over much of the\nintrastate facilities leaves over three quarters of natural gas storage capacity as currently unregulated,\nbased on working gas capacity. The gap also means that an estimated 13,682 wells out of the total\n16,991 active storage wells (81 percent of wells) are currently unregulated.\n2.2.5 New Industry Standards\nPHMSA considered regulating underground storage more than 20 years before the Aliso Canyon\nincident. In 1994, PHMSA’s precursor agency, the Research and Special Programs Administration\n(RSPA) held a public meeting (Docket PS-137; 59 FR 30567; June 14, 1994) on underground storage\nof gas and hazardous liquids. At the meeting, representatives of industry, state governments, and the\npublic presented statements on safety issues, industry practices, the status of state underground\nstorage regulations, and the need for additional federal regulations. While different views were\nexpressed on whether RSPA should begin to regulate downhole pipe and underground storage, not all\nparticipants recognized an immediate need for federal regulatory action. At that time, however, no\nwidely accepted industry consensus standards or recommended practices existed for the underground\nstorage of natural gas including the design, completion, and operations and maintenance (O&M)\npractices for injection, withdrawal, monitoring, or observation wells.\nAPI RPs 1170 and 1171 are new industry recommended practices finalized within the past year. The\nNational Technology Transfer and Advancement Act of 1995 directed federal agencies to incorporate\nvoluntary consensus standards by reference instead of writing new regulations unless the consensus\nstandards would not be as effective as the new regulations. The API RPs, developed with substantial\n14 The tenth state, Michigan, exempts natural gas storage wells from the periodic testing requirements applicable to other types of\ninjection wells.\n2-6 Interim Final Rule\n\n<<<PAGE 12>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action\ninput from PHMSA over a period of more than four years, are suitable for incorporation by\nreference. This avenue would provide an immediate and reasonable means by which PHMSA may\nbegin to regulate the downhole portions of underground storage of natural gas and respond to help\nprevent future Aliso Canyon-type incidents in the area of underground storage.\nA root-cause failure analysis of the Aliso Canyon Well SS25 failure is underway with ongoing\ninvestigations and assessments. The California Public Utilities Commission’s initial investigations\ngive PHMSA reason to believe that the risk of potential harm to the public could be addressed, at\nleast in part, through the incorporation by reference of API RPs 1170 and 1171 into the pipeline\nsafety regulations.\n2.3 PHMSA Strategic Objectives\nPHMSA’s mission is “to protect people and the environment from the risks of hazardous materials\ntransportation” (PHMSA, 2012).\nAs described above, releases from natural gas storage facilities can affect surrounding populations,\nproperty, and the environment, imposing societal costs in the form of adverse health effects\n(e.g., dizziness, asphyxiation, irritation), injuries, fatalities, and property and environmental damage.\nAccidents also place a demand on community resources, including public services from fire\ndepartments, police, and public works personnel to manage the emergency, extinguish fires, control\ntraffic, assist in evacuations, and ensure continued utility and infrastructure services. Releases can\ncause business interruptions and disrupt fuel supplies. Evacuations of nearby residents and the need\nfor permanent or temporary shelter can further strain community resources. Combined effects on\nbusinesses, infrastructure, community services, and other economic resources can exacerbate the\neffects of incident response and recovery. The IFR furthers PHMSA’s ability to meet its goals and\nlegal mandates, including:\n Improving public health and safety by reducing transportation-related deaths and injuries;\n Advancing environmentally sustainable policies and investments that reduce carbon and\nother harmful emissions from transportation sources; and\n Advancing a transportation system to serve the Nation’s long-term social, economic, security,\nand environmental needs.\nAmong PHMSA’s strategic plan for 2016 is a commitment to build a stronger safety culture in\nPHMSA by demonstrating a collective commitment to emphasize safety over competing goals and\ndemands.\n2-7 Interim Final Rule\n\n<<<PAGE 13>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage 3. IFR and Alternatives\n3 Interim Final Action and Alternatives Considered\nThe sections below discuss the final rule requirements and alternatives considered by PHMSA.\n3.1 API Recommended Practices\nThe API RPs apply to both newly constructed and existing underground natural gas storage facilities.\nFor newly constructed facilities the API RPs have sections that address the storage integrity, design,\nand construction of “new” underground natural gas storage facilities including the following\nreservoir or cavern and well aspects: siting, integrity, geological characterization, and containment of\nthe reservoir or cavern; the design, well casing, wellhead, cementing, and environmental, safety, and\nhealth aspects of the well; and the testing, commissioning, monitoring, and recordkeeping of the\nwell. Regarding the O&M activities for both new and existing wells, the API RPs have requirements\nfor the following activities: threat identification, risk assessments, preventive and mitigative\nmeasures, and periodic review and reassessment; integrity demonstration, verification, monitoring,\nand gas inventory assessment practices; site security and emergency preparedness and response; and\noperational procedures, training, and records. Appendix A in the Regulatory Impact Analysis (RIA)\nfor this IFR provides a summary of the recommended practices (PHMSA, 2016b).\nNotably, RP 1171 provides guidance on well mechanical integrity evaluation of reservoirs and salt\ncaverns. Well mechanical integrity tests, whether by pressure tests or usage of well logs that detect\ncorrosion (similar to a pipeline smart pig), are critical to an operator’s ability to monitor well\nintegrity and to determine whether the maximum well operating pressure can be sustained in light of\ncorrosion or other anomalous defects or non-conservative well casing design.\nAPI RP 1170 and 1171 set general performance objectives but do not specify a mechanical integrity\ntest procedure or testing intervals. API RP 1170 and 1171 require operators to evaluate the integrity\nof each well through the review of well design, completion, wellhead and downhole inspections, well\npressure monitoring and testing, and gas sampling. API RP 1171 gives a minimum test pressure of\nnew and modified well casings. API RP 1171 states that an operator should monitor for tubular\n(casing and tubing) corrosion and evaluate corrosion impact on well integrity and operating pressure,\nbut does not define an inspection interval. API RP 1170 states that an operator shall have an integrity\nmonitoring program that includes identification of components to be monitored, monitoring methods,\ncavern volume and inventory verification, analysis of data from inspections and reporting, and\nperiodic review of the program for effectiveness with no defined inspection interval. Sections 6 and 9\nof API RP 1171 include a method for a mechanical integrity test for a new well or modified casing.\nIn this instance, operators are required to test 1.1 times the maximum allowable operating pressure\nfor 30-minutes and verify that the pressure drop does not exceed 10 percent of initial pressure.\nBy adopting the API RPs, PHMSA is making the practices contained therein (i.e., practices that the\nRPs say “shall” be implemented or that the operator “may consider”) mandatory for all natural gas\noperators, unless an operator provides justification in its program or procedural manual as to why\ncompliance with a recommended practice for a particular well or facility is not practicable and not\nnecessary for safety. This would involve a documented, technical review that is signed by technical\nreviewer and senior company management. PHMSA or its state partner would review such\njustifications during compliance inspections and utilize our range of enforcement tools as necessary\n3-1 Interim Final Rule\n\n<<<PAGE 14>>>\n\nPreliminary Environmental Assessment: Underground Natural Gas Storage 3. IFR and Alternatives\nto ensure variances are not utilized inappropriately. In addition, PHMSA is able to issue bulletins or\notherwise notify operators advising them of variances that have frequently been deemed\nobjectionable and should be avoided under most circumstances. This approach has worked well in\npipeline regulation involving incorporation by reference\nAfter the IFR becomes effective, PHMSA and its state partners will monitor and enforce operators’\nimplementation of the requirements. This will include reviewing the integrity test interval established\nby the operator and the methodology for establishing the interval for a particular well to ensure that it\nis supported by sound technical analysis.\nThe IFR also specifies new reporting requirements for underground storage facilities by adding\nrequirements for an annual report under 49 CFR §191.17, incident reports for unintentional releases\nof natural gas under §191.15, and safety-related conditions reports under §191.23. Additionally,\noperators not currently registered with PHMSA will need to obtain an operator identification number\nunder §191.22.\nThe IFR specifies timelines for facilities to comply with the API RPs, relative to the effective date of\nthe rule. Thus, the IFR requires that facilities meet “the operations, maintenance, integrity\ndemonstration and verification, monitoring, threat and hazard identification, assessment, remediation,\nsite security, emergency response and preparedness, and recordkeeping requirements and\nrecommendations” of API RPs 1170 and 1171 no later than 12 months from the effective date of the\nrule. This 12-month deadline includes establishment of a testing program to assess the mechanical\nintegrity of the wells and other components of the storage system. The compliance schedule does not\nrequire integrity tests to be completed before the 12-month deadline, however. PHMSA expects that\nwells will be tested over the next several years (5 to 10 years) according to risk-based priorities.\nSection 8.5 in API RP 1171 describes the six principal components to the risk assessment process:\na) identification of potential threats and hazards to a storage facility; b) evaluation of likelihood of\nevents and consequences related to the events; c) determination of risk ranking to develop preventive\nand mitigating measures to monitor and/or reduce risk; d) documentation of risk evaluation and\ndecision basis for preventive and mitigative (P&M) measures; e) provision for data feedback and\nvalidation; and f) regular, periodic risk assessment reviews to update information and evaluate risk\nmanagement effectiveness.\nThis environmental assessment considers effects relative to a baseline that includes the practices\ncurrently implemented by operators to comply with state regulations where applicable, operator\nintegrity manage","truncated":true,"body_characters":77131}