# U.S. DOT/PHMSA - Preliminary Environmental Assessment

- **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:** Not available
- **effective on:** Not available
- **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....
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Pipeline and Hazardous Materials Safety Administration
U.S. Department of Transportation
Preliminary Environmental Assessment
Underground Natural Gas Storage
Interim Final Rule
Interim Final Rule

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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. The IFR incorporates by reference American Petroleum Institute (API)
Recommended Practices (RP): API RP 1170, “Design and Operation of Solution-mined Salt Caverns
Used for Natural Gas Storage” (July 2015); and API RP 1171, “Functional Integrity of Natural Gas
Storage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs” (September 2015) (API,
2015a; API, 2015b).
The RPs provide consensus safety measures for the construction, maintenance, risk-management, and
integrity-management procedures for natural gas storage. By adopting the API RPs by reference, the
IFR takes an urgent first step to establishing uniform safety standards across the United States.
This report details PHMSA’s preliminary assessment of the environmental effects of the final rule, as
required by 40 CFR Part 1502, Environmental Impact Statement (EIS).
1
As described in Section 3, the IFR rule will require facility operators to implement various measures
to ensure the containment integrity of underground natural gas storage facilities. In particular, the
IFR will require that operators conduct mechanical integrity tests on wells to detect conditions that
could result in a leak. Although many operators voluntarily implement the RPs, the IFR will make
the measures mandatory for all operators. Information obtained through the mechanical integrity tests
will enable operators to make necessary repairs to prevent leaks. These repairs may include replacing
a well liner or casing, or plugging the well. Measures required by the IFR are currently conducted by
operators, or are similar in the required equipment and disturbance (e.g., workover) to activities
conducted by operators as part of current operations, and therefore PHMSA does not expect that they
will result in novel or additional environmental impacts.
Several very serious natural gas incidents have occurred at underground natural gas storage facilities.
These incidents have resulted in fatalities, injuries, extensive physical damage, adverse human health
impacts, and environmental harm. In October 2015, the release of natural gas from the Aliso Canyon
facility ultimately took 112 days to stop, required the evacuation of over 5,000 residents, and cost the
operator an estimated $763 million (Sempra Energy, 2016).2, 3 Luckily, this incident did not result in
1 In accordance with 40 CFR Part 1508, the environmental assessment (a) means a concise public document for which a federal
agency is responsible that serves to (1) briefly provide sufficient evidence and analysis for determining whether to prepare an EIS
or a Finding of No Significant Impact (FONSI), (2) aid an agency's compliance with the Act when no EIS is necessary, and (3)
facilitate preparation of a statement when one is necessary; (b) shall include brief discussions of the need for the proposal, of
alternatives as required by Section 102(2)(E), of the environmental impacts of the proposed action and alternatives, and a listing
of agencies and persons consulted.
2 Of the $763 million, Sempra Energy notes “approximately 70% is for the temporary relocation program (including cleaning
costs and certain labor costs) and approximately 20% is for efforts to control the well, stop the leak, stop or reduce emissions, and
the estimated cost of the root cause investigation. The remaining amount includes legal costs incurred to defend litigation, the
value of lost gas, the costs to mitigate the actual natural gas released and other costs. Cost estimate excludes any potential
damage awards, restitution and any civil, administrative or criminal fines and other penalties that may be imposed, as well as any
additional costs to clean homes and future legal costs necessary to defend litigation, among other potential costs, as we cannot
estimate what amounts, if any, will be incurred for such matter.” (Sempra Energy, 2016)
3 Private financial costs include a mix of remediation, repair, ex gratia payments to persons and public agencies affected by the
incident, anticipated or actual penalties, as well as litigation costs and settlements. Firms vary in the extent of their public
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Preliminary Environmental Assessment: Underground Natural Gas Storage Executive Summary
fatalities. As discussed in the Regulatory Impact Analysis and in this report, the final rule will
provide benefits through avoiding damages from natural gas releases that may be prevented through
earlier detection of conditions that could lead to a loss of containment integrity, and through
enhancing the ability of PHMSA and facility operators to evaluate risks.
To the extent that the measures taken to comply with the IFR do not involve additional
environmental impacts and instead will serve to reduce the risk of natural gas incidents, PHMSA
expects this rule to have positive environmental impacts. The information in this Environmental
Assessment report supports a Finding of No Significant Impact (FONSI) for this action.
disclosure of the details of costs incurred. In this case, it is unclear from Sempra’s disclosure whether the reported costs include
estimates of business losses from the unavailability of the Aliso Canyon facility.
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Preliminary Environmental Assessment: Underground Natural Gas Storage Table of Contents
Table of Contents
Executive Summary ................................................................................................................. i
Table of Contents ................................................................................................................... iii
List of Exhibits ....................................................................................................................... iv
1 Introduction .................................................................................................................... 1-1
2 Purpose and Need for Action ........................................................................................ 2-2
2.1 Purpose ................................................................................................................................ 2-2
2.2 Need for Action ................................................................................................................... 2-2
2.2.1 Underground Natural Gas Storage ........................................................................... 2-3
2.2.2 Accident History ...................................................................................................... 2-3
2.2.3 Aging Infrastructure................................................................................................. 2-5
2.2.4 Gaps in the Regulation of Underground Natural Gas Storage Facilities ................. 2-5
2.2.5 New Industry Standards ........................................................................................... 2-6
2.3 PHMSA Strategic Objectives .............................................................................................. 2-7
3 Interim Final Action and Alternatives Considered .................................................... 3-1
3.1 API Recommended Practices .............................................................................................. 3-1
3.2 Regulatory Alternatives Considered by PHMSA ................................................................ 3-3
4 Affected Environment and Environmental Consequences ........................................ 4-1
4.1 Physical Environment and Populations ............................................................................... 4-2
4.2 Public Health and Safety ..................................................................................................... 4-5
4.3 Climate Change ................................................................................................................... 4-5
4.4 Environmental Justice ......................................................................................................... 4-6
4.5 Socioeconomic Issues ......................................................................................................... 4-1
5 Determination of the Degree of Environmental Impact ............................................. 5-1
6 Persons Consulted .......................................................................................................... 6-1
7 List of Preparers and Reviewers .................................................................................. 7-1
8 References ....................................................................................................................... 8-1
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Preliminary Environmental Assessment: Underground Natural Gas Storage List of Exhibits
List of Exhibits
Exhibit 4-1: Geographical distribution of active underground natural gas storage facilities. .................... 4-3
Exhibit 4-2: Surroundings of the Aliso Canyon storage facility administrative boundary (black
line) and injection wells (blue dots). ................................................................................... 4-4
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Preliminary Environmental Assessment: Underground Natural Gas Storage 1. Introduction
1 Introduction
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. The IFR incorporates by reference American Petroleum Institute (API)
Recommended Practices (RP): API RP 1170, “Design and Operation of Solution-mined Salt Caverns
used for Natural Gas Storage” (July 2015); and API RP 1171, “Functional Integrity of Natural Gas
Storage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs” (September 2015).
The RPs provide consensus safety measures for the construction, maintenance, risk-management, and
integrity-management procedures for natural gas storage. By adopting the API RPs by reference, the
IFR takes an urgent first step to establishing uniform safety standards across the United States
and addressing the Congressional mandate contained in the Protecting our Infrastructure of
Pipelines and Enhancing Safety Act of 2016 (or PIPES Act of 2016) for PHMSA to promulgate
minimum safety standards for underground natural gas storage facilities.
This report describes PHMSA’s preliminary assessment of the environmental effects of IFR, as
required by 40 CFR Part 1502, Environmental Impact Statement (EIS).
This report is organized as follows: Section 2 provides the purpose and need for the action while
Section 3 summarizes the final rule and alternatives PHMSA considered. The affected environment
and environmental effects are discussed in Section 4, concluding in Section 4.5 with a determination
that the information supports a Finding of No Significant Impact (FONSI) for this action. Finally,
Sections 6 through 8 provide additional information about the public’s involvement in the
development of the action, preparers and reviewers of this preliminary Environmental Assessment
(EA), and cited text references, respectively.
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Preliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action
2 Purpose and Need for Action
This statement of purpose and need explains the need for PHMSA action and reflects the goals to be
achieved through this action.
2.1 Purpose
In this IFR, PHMSA is adopting two API RPs:4 API RP 1170, “Design and Operation of Solution-
mined Salt Caverns used for Natural Gas Storage” (July 2015); and API RP 1171, “Functional
Integrity of Natural Gas Storage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs”
(September 2015). The RPs describe a range of measures that operators of underground natural gas
storage facilities should implement to ensure the safety of their operations, including construction,
maintenance, risk-management, and integrity-management procedures. The IFR makes these
provisions mandatory unless operators provide justification in their program or procedural manuals
as to why compliance with a provision of the RP is not practicable and necessary for the safety of a
particular facility.
PHMSA is issuing this IFR as an urgent first step5 in preventing incidents such as the 2015
Aliso Canyon natural gas leak in the future. Rapid incorporation of API RPs 1170 and 1171 into
PHMSA’s regulations will require operators to assess the operational safety of their underground
natural gas storage facilities and document the implementation of identified safety solutions.
After this IFR incorporating API RPs 1170 and 1171 becomes effective, PHMSA and its state
partners will monitor and enforce operators’ implementation of the requirements. After issuance
of this IFR, as a second phase, PHMSA will further investigate the need for more detailed
regulatory requirements for underground natural gas storage incidental to transportation.
PHMSA intends to hold a public meeting, and may pursue an additional rulemaking to address
remaining safety concerns.
2.2 Need for Action
The PIPES Act of 2016 (Public Law 114-183)6 requires PHMSA, not later than two years after the
date of enactment of the PIPES Act of 2016 (i.e., by June 22, 2018) and in consultation with the
heads of other relevant federal agencies, to issue minimum safety standards for underground natural
gas storage facilities. In issuing minimum safety standards for underground storage facilities,
PHMSA must “(1) consider consensus standards for the operation, environmental protection, and
4 PHMSA participated, along with the Federal Energy Regulatory Commission (FERC), several state regulatory agencies, and
numerous industry representatives, in the development of the two API RPs.
5 These measures complement Advisory Bulletin ADB–2016–02 PHMSA issued on February 5, 2016 (81 FR 6334). The
advisory bulletin recommended that operators of underground natural gas storage facilities review their operating, maintenance,
and emergency response activities to ensure that the integrity of underground natural gas storage facilities is properly maintained.
This bulletin informed operators about recommended practices and urged operators to take all necessary actions to prevent and
mitigate breach of integrity, leaks, or failures at their underground natural gas storage facilities; to ensure the safety of the public
and operating personnel; and to protect the environment.
6 The PIPES Act of 2016 was signed into law on June 22, 2016.
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Preliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action
integrity management of underground natural gas storage facilities; (2) consider the economic
impacts of the regulations on individual gas customers; (3) ensure that the regulations do not have a
significant economic impact on end users; and (4) consider the recommendations of the Aliso
Canyon natural gas leak task force established under section 31 of the PIPES Act of 2016.”
Several factors discussed in this section highlight the need for action:
 Underground natural gas storage facilities are found across the United States;
 Past accidental releases of natural gas from these facilities have caused significant harm and
environmental damages;
 The infrastructure has been aging;
 There are gaps in existing safety requirements applicable to these facilities; and
 New industry standards contain measures that will help enhance the safety of these facilities.
2.2.1 Underground Natural Gas Storage
PHMSA estimates that there were 390 active natural gas storage fields7 in the United States in 2015,
distributed across 31 states (EIA, 2016a; FERC, 2016; PHMSA, 2016b). These fields had an
aggregate design storage capacity8 of 9,155 billion cubic feet (BCF) and a working capacity9 of 4,756
BCF (EIA, 2016a). PHMSA further estimated that there are a total of 16,991 injection/withdrawal
wells and pressure control/observation wells within the 390 active fields.
2.2.2 Accident History
On October 23, 2015, SoCalGas’ Aliso Canyon Well SS25 developed a natural gas leak near an area
known as Porter Ranch in Los Angeles, California. While investigations have not yet been
completed, the leak is believed to have originated from the subsurface (downhole) well casing. Over
the 112-day event, the accident released up to 5.7 BCF of natural gas into the atmosphere, containing
up to 109,000 metric tons10 of methane, a potent greenhouse gas, as well as panoply of other
pollutants (California Air Resources Board (CARB), 2016a; County of Los Angeles Public Health,
2016). Over 5,790 households had to be relocated due to the natural gas odorant (mercaptans),
according to the Aliso Canyon Incident Command briefing report issued on February 1, 2016.
Additional reports identify other potential health effects that lasted even after the well was sealed. A
report by the Los Angeles County of Public Health suggests that the continued health symptoms may
be due to contaminants in indoor air and dust (Los Angeles County Public Health, 2016). As of
7 PHMSA used Energy Information Administration’s (EIA’s) EIA-191, Monthly Underground Natural Gas Storage Report for
2015 as primary data to determine the number of active fields. The definition of a field is based on the number of records for
which EIA indicates the status as “Active” (EIA, 2016a). Note that other available data (FERC, 2016; PHMSA, 2016b) may
subdivide or group fields, resulting in different counts of natural gas storage facilities.
8 Total natural gas storage capacity is the maximum volume of natural gas that can be stored in an underground storage facility in
accordance with its design, which comprises the physical characteristics of the reservoir, installed equipment, and operating
procedures particular to the site (EIA, 2015).
9 Working gas is the volume of gas in the reservoir above the level of base gas, and is available to the marketplace (EIA, 2015).
10 CARB estimates that the incident resulted in a total emission of 99,650 ± 9,300 metric tons of methane (CARB, 2016a) and
seeks mitigation of 109,000 metric tons.
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Preliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action
November 2, 2016, Sempra Energy, the parent company of SoCalGas, reported costs of $763 million
to control the release, monitor air emissions, relocate residents, and cover its legal and other expenses
(Sempra, 2016).11 These costs are those incurred by Sempra and do not include additional costs to
society as a result of the release.
The Aliso Canyon incident is the latest of several high-profile underground natural gas storage
incidents over the last 15 years (Hopper, 2004; British Geological Survey, 2008; Kansas Geological
Survey, 2004):12
 On August 19, 2004, the Market Hub Partners Moss Bluff storage facility located in Liberty
County, Texas, had a well control incident and natural gas fire at Cavern #1. According to
newspaper reports at the time, the incident sent a plume of burning gas “hundreds of feet into
the air” (Bardwell and Horswell, 2004) and forced the evacuations of residents within a
three-mile radius (OGJ, 2004). Over a period of 6.5 days, the incident released and burned
approximately 6 BCF of gas. Estimates of the number of people evacuated vary between
dozens and hundreds. Hopper (2004) estimated the value of the product lost at $36 million
and property damage at $20 million. Investigators attributed the incident to initial separation
and breach of a 8-5/8-inch well string inside the cavern.
 A casing failure at the Magnolia Salt Cavern facility in December 2003 caused the release of
approximately 0.35 BCF of natural gas, forced the shutdown of the facility and the
evacuation of area residents (approximately 30 people). Geologists determined that the
eruptions had sprung from an underground gas storage field seven miles away and migrated
into injection wells. Investigator attributed the incident to casing failure, specifically to a
crack in the casing of a well near the top of a cavern.
 On January 17 and 18, 2001, the Yaggy underground natural gas storage field operated by
Kansas Gas Service had a wellbore failure, which led to a series of gas explosions in
Hutchinson, Kansas. The gas leaked from the storage field well production casing and
migrated approximately nine miles underground to the Hutchinson, Kansas area. An
explosion in downtown Hutchinson destroyed two businesses, damaged 26 others, and
caused two fatalities. Approximately 250 people were evacuated. Approximately 143 million
cubic feet of natural gas leaked from the storage field. Flares took over a month to burn off
the escaped gas.13 Investigators attributed the incident to a hole in the well casing. Although
PHMA could not find response costs for this incident, other costs incurred by the responsible
party included payment of $1.7 million to the two businesses destroyed by the explosions, $5
11 Of the $763 million, Sempra Energy notes “approximately 70% is for the temporary relocation program (including cleaning
costs and certain labor costs) and approximately 20% is for efforts to control the well, stop the leak, stop or reduce emissions, and
the estimated cost of the root cause investigation. The remaining amount includes legal costs incurred to defend litigation, the
value of lost gas, the costs to mitigate the actual natural gas released and other costs. Cost estimate excludes any potential
damage awards, restitution and any civil, administrative or criminal fines and other penalties that may be imposed, as well as any
additional costs to clean homes and future legal costs necessary to defend litigation, among other potential costs, as we cannot
estimate what amounts, if any, will be incurred for such matter.” (Sempra Energy, 2016).
12 There have also been additional accidents involving underground storage facilities storing other products such as liquefied
petroleum gas.
13 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
atmosphere.
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Preliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action
million in court-awarded damages to residential plaintiffs for impacts on housing prices due
to “stigma” effects of the release, and a $180,000 fine assessed by the Kansas Department of
Health and Environment.
These incidents and their aftermath have heightened public awareness about the safety of these
facilities and the potential for environmental damage associated with natural gas releases from
underground storage facilities across the nation. Although infrequent, catastrophic natural gas release
incidents can cause significant damages due to the quantities of natural gas involved, proximity to
populations, and other factors. Note that in recent accidents, natural gas migrated underground for
miles before erupting in locations distant from the source of the leak. The difficulty of identifying the
actual dimensions of elevated risk zones argues in favor of making an additional effort to identify
possible sources and prevent leaks in the first place.
2.2.3 Aging Infrastructure
Many underground natural gas storage wells are decades old. For example, the well involved in the
October 2015 Aliso Canyon accident was drilled in 1953 and was repurposed for natural gas storage
in 1972. This age is not exceptional: according to American Gas Association (AGA) data,
approximately 60 percent of active wells are located in fields that were activated before 1960 (AGA,
2014). Although AGA does not provide data on the age of individual wells, it is reasonable to expect
that many wells are developed by the time a storage facility starts operating. The Interagency Task
Force on Natural Gas Storage Safety (2016) highlights growing concerns regarding the age of the
natural gas storage infrastructure as it affects risk. Wells reflect material, technology, and design
factors applicable at the time they were constructed and many may not meet design criteria for new
wells. Over time, corrosion, other environmental processes, and mechanical stresses from injection
and withdrawal of natural gas can weaken well integrity. Wells in depleted oil fields may have been
designed for lower pressure than the stress they are now subject to. Further many of these wells were
not designed with redundant barriers to gas migration and present riskier, single points of failure.
2.2.4 Gaps in the Regulation of Underground Natural Gas Storage Facilities
FERC has jurisdiction over storage facilities engaged in interstate commerce of natural gas; these
facilities represent approximately 60 percent of the total storage capacity and total working capacity
in the United States. With the implementation of FERC Order 636 in 1994, interstate pipeline
companies have been required to operate their storage facilities on an open-access basis and to make
a major portion of working gas capacity (beyond what may be reserved by the pipeline operator to
maintain system integrity and for load balancing) available for lease to third parties on a
nondiscriminatory basis (EIA, 2015). FERC reviews rates for storage and storage-related services
under the authority of § 4(f) of the Natural Gas Act of 1938, but does not set safety requirements for
fields under its jurisdiction.
The U.S. Environmental Protection Agency (EPA) oversees Section 112(r) of the Clean Air Act
which aims to “prevent the accidental release [of extremely hazardous substances] and to minimize
the consequences of any such release” from stationary sources. 42 U.S.C. § 7412(r)(1). Section
112(r)(7) also authorizes EPA to publish regulations that impose accident prevention and emergency
response requirements on stationary sources that hold more than a threshold quantity of certain
regulated substances in a process. EPA’s “Risk Management Plan” regulations are codified at 40
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Preliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action
CFR 68. However, these regulations specifically exempt facilities that are subject to oversight or
regulation under 49 CFR parts 192, 193, or 195, or a state natural gas or hazardous liquid program
for which the state has in effect a certification to DOT under 49 U.S.C. section 60105.
Facilities engaged in intrastate commerce may be regulated by the oil and gas commission, the
environmental protection department, or other government agency of the state where they are
located. As of May 2016, PHMSA found that of the 16 states with intrastate underground natural gas
storage facilities (out of the total of 30 states with storage facilities), ten states had promulgated or
proposed regulations requiring operators to implement preventive measures such as mechanical
integrity testing to prevent the accidental release of natural gas from storage facilities. Existing or
proposed regulations in nine states require well mechanical integrity tests every 10 years or more
frequently.14 Not all states have adopted safety standards for underground storage facilities, and
while in many cases states that are certified to regulate their intrastate facilities can and have issued
state standards for these wells and wellbores, the absence of a minimum federal standard has led to a
gap and lack of uniformity for the interstate facilities.
Under 49 U.S.C. §§ 60101 and 60102, PHMSA sets minimum safety standards for the transportation
of natural gas, which includes underground natural gas storage facilities incidental to transportation.
While PHMSA has jurisdiction over interstate and intrastate fields, it currently does not have safety
requirements under 49 CFR Part 192 covering the wells and wellbore tubing and casing. The absence
of federal safety regulations over interstate facilities and of state regulation over much of the
intrastate facilities leaves over three quarters of natural gas storage capacity as currently unregulated,
based on working gas capacity. The gap also means that an estimated 13,682 wells out of the total
16,991 active storage wells (81 percent of wells) are currently unregulated.
2.2.5 New Industry Standards
PHMSA considered regulating underground storage more than 20 years before the Aliso Canyon
incident. In 1994, PHMSA’s precursor agency, the Research and Special Programs Administration
(RSPA) held a public meeting (Docket PS-137; 59 FR 30567; June 14, 1994) on underground storage
of gas and hazardous liquids. At the meeting, representatives of industry, state governments, and the
public presented statements on safety issues, industry practices, the status of state underground
storage regulations, and the need for additional federal regulations. While different views were
expressed on whether RSPA should begin to regulate downhole pipe and underground storage, not all
participants recognized an immediate need for federal regulatory action. At that time, however, no
widely accepted industry consensus standards or recommended practices existed for the underground
storage of natural gas including the design, completion, and operations and maintenance (O&M)
practices for injection, withdrawal, monitoring, or observation wells.
API RPs 1170 and 1171 are new industry recommended practices finalized within the past year. The
National Technology Transfer and Advancement Act of 1995 directed federal agencies to incorporate
voluntary consensus standards by reference instead of writing new regulations unless the consensus
standards would not be as effective as the new regulations. The API RPs, developed with substantial
14 The tenth state, Michigan, exempts natural gas storage wells from the periodic testing requirements applicable to other types of
injection wells.
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Preliminary Environmental Assessment: Underground Natural Gas Storage 2. Purpose and Need for Action
input from PHMSA over a period of more than four years, are suitable for incorporation by
reference. This avenue would provide an immediate and reasonable means by which PHMSA may
begin to regulate the downhole portions of underground storage of natural gas and respond to help
prevent future Aliso Canyon-type incidents in the area of underground storage.
A root-cause failure analysis of the Aliso Canyon Well SS25 failure is underway with ongoing
investigations and assessments. The California Public Utilities Commission’s initial investigations
give PHMSA reason to believe that the risk of potential harm to the public could be addressed, at
least in part, through the incorporation by reference of API RPs 1170 and 1171 into the pipeline
safety regulations.
2.3 PHMSA Strategic Objectives
PHMSA’s mission is “to protect people and the environment from the risks of hazardous materials
transportation” (PHMSA, 2012).
As described above, releases from natural gas storage facilities can affect surrounding populations,
property, and the environment, imposing societal costs in the form of adverse health effects
(e.g., dizziness, asphyxiation, irritation), injuries, fatalities, and property and environmental damage.
Accidents also place a demand on community resources, including public services from fire
departments, police, and public works personnel to manage the emergency, extinguish fires, control
traffic, assist in evacuations, and ensure continued utility and infrastructure services. Releases can
cause business interruptions and disrupt fuel supplies. Evacuations of nearby residents and the need
for permanent or temporary shelter can further strain community resources. Combined effects on
businesses, infrastructure, community services, and other economic resources can exacerbate the
effects of incident response and recovery. The IFR furthers PHMSA’s ability to meet its goals and
legal mandates, including:
 Improving public health and safety by reducing transportation-related deaths and injuries;
 Advancing environmentally sustainable policies and investments that reduce carbon and
other harmful emissions from transportation sources; and
 Advancing a transportation system to serve the Nation’s long-term social, economic, security,
and environmental needs.
Among PHMSA’s strategic plan for 2016 is a commitment to build a stronger safety culture in
PHMSA by demonstrating a collective commitment to emphasize safety over competing goals and
demands.
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Preliminary Environmental Assessment: Underground Natural Gas Storage 3. IFR and Alternatives
3 Interim Final Action and Alternatives Considered
The sections below discuss the final rule requirements and alternatives considered by PHMSA.
3.1 API Recommended Practices
The API RPs apply to both newly constructed and existing underground natural gas storage facilities.
For newly constructed facilities the API RPs have sections that address the storage integrity, design,
and construction of “new” underground natural gas storage facilities including the following
reservoir or cavern and well aspects: siting, integrity, geological characterization, and containment of
the reservoir or cavern; the design, well casing, wellhead, cementing, and environmental, safety, and
health aspects of the well; and the testing, commissioning, monitoring, and recordkeeping of the
well. Regarding the O&M activities for both new and existing wells, the API RPs have requirements
for the following activities: threat identification, risk assessments, preventive and mitigative
measures, and periodic review and reassessment; integrity demonstration, verification, monitoring,
and gas inventory assessment practices; site security and emergency preparedness and response; and
operational procedures, training, and records. Appendix A in the Regulatory Impact Analysis (RIA)
for this IFR provides a summary of the recommended practices (PHMSA, 2016b).
Notably, RP 1171 provides guidance on well mechanical integrity evaluation of reservoirs and salt
caverns. Well mechanical integrity tests, whether by pressure tests or usage of well logs that detect
corrosion (similar to a pipeline smart pig), are critical to an operator’s ability to monitor well
integrity and to determine whether the maximum well operating pressure can be sustained in light of
corrosion or other anomalous defects or non-conservative well casing design.
API RP 1170 and 1171 set general performance objectives but do not specify a mechanical integrity
test procedure or testing intervals. API RP 1170 and 1171 require operators to evaluate the integrity
of each well through the review of well design, completion, wellhead and downhole inspections, well
pressure monitoring and testing, and gas sampling. API RP 1171 gives a minimum test pressure of
new and modified well casings. API RP 1171 states that an operator should monitor for tubular
(casing and tubing) corrosion and evaluate corrosion impact on well integrity and operating pressure,
but does not define an inspection interval. API RP 1170 states that an operator shall have an integrity
monitoring program that includes identification of components to be monitored, monitoring methods,
cavern volume and inventory verification, analysis of data from inspections and reporting, and
periodic review of the program for effectiveness with no defined inspection interval. Sections 6 and 9
of API RP 1171 include a method for a mechanical integrity test for a new well or modified casing.
In this instance, operators are required to test 1.1 times the maximum allowable operating pressure
for 30-minutes and verify that the pressure drop does not exceed 10 percent of initial pressure.
By adopting the API RPs, PHMSA is making the practices contained therein (i.e., practices that the
RPs say “shall” be implemented or that the operator “may consider”) mandatory for all natural gas
operators, unless an operator provides justification in its program or procedural manual as to why
compliance with a recommended practice for a particular well or facility is not practicable and not
necessary for safety. This would involve a documented, technical review that is signed by technical
reviewer and senior company management. PHMSA or its state partner would review such
justifications during compliance inspections and utilize our range of enforcement tools as necessary
3-1 Interim Final Rule

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Preliminary Environmental Assessment: Underground Natural Gas Storage 3. IFR and Alternatives
to ensure variances are not utilized inappropriately. In addition, PHMSA is able to issue bulletins or
otherwise notify operators advising them of variances that have frequently been deemed
objectionable and should be avoided under most circumstances. This approach has worked well in
pipeline regulation involving incorporation by reference
After the IFR becomes effective, PHMSA and its state partners will monitor and enforce operators’
implementation of the requirements. This will include reviewing the integrity test interval established
by the operator and the methodology for establishing the interval for a particular well to ensure that it
is supported by sound technical analysis.
The IFR also specifies new reporting requirements for underground storage facilities by adding
requirements for an annual report under 49 CFR §191.17, incident reports for unintentional releases
of natural gas under §191.15, and safety-related conditions reports under §191.23. Additionally,
operators not currently registered with PHMSA will need to obtain an operator identification number
under §191.22.
The IFR specifies timelines for facilities to comply with the API RPs, relative to the effective date of
the rule. Thus, the IFR requires that facilities meet “the operations, maintenance, integrity
demonstration and verification, monitoring, threat and hazard identification, assessment, remediation,
site security, emergency response and preparedness, and recordkeeping requirements and
recommendations” of API RPs 1170 and 1171 no later than 12 months from the effective date of the
rule. This 12-month deadline includes establishment of a testing program to assess the mechanical
integrity of the wells and other components of the storage system. The compliance schedule does not
require integrity tests to be completed before the 12-month deadline, however. PHMSA expects that
wells will be tested over the next several years (5 to 10 years) according to risk-based priorities.
Section 8.5 in API RP 1171 describes the six principal components to the risk assessment process:
a) identification of potential threats and hazards to a storage facility; b) evaluation of likelihood of
events and consequences related to the events; c) determination of risk ranking to develop preventive
and mitigating measures to monitor and/or reduce risk; d) documentation of risk evaluation and
decision basis for preventive and mitigative (P&M) measures; e) provision for data feedback and
validation; and f) regular, periodic risk assessment reviews to update information and evaluate risk
management effectiveness.
This environmental assessment considers effects relative to a baseline that includes the practices
currently implemented by operators to comply with state regulations where applicable, operator
integrity manage
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