Obama oil pipeline rules face uncertain future under Trump

By Matthew Brown and James MacPherson
Associated Press

BILLINGS, Mont. (AP) — President Barack Obama’s administration is expected to push through long-delayed safety measures for the nation’s sprawling network of oil pipelines in its final days, despite resistance from industry and concern that incoming president Donald Trump may scuttle them.

The measures are aimed at preventing increasingly frequent accidents such as a 176,000-gallon spill that fouled a North Dakota creek earlier this month.

Thousands more accidents over the past decade caused $2.5 billion in damages nationwide and dumped almost 38 million gallons of fuels.

Fights over pipelines have intensified in recent years, illustrated by the dispute over TransCanada’s Keystone XL plan and efforts by American Indians to stop the Dakota Access Pipeline from crossing beneath the Missouri River near the Standing Rock Sioux Reservation.

The U.S. Department of Transportation proposal covers roughly 200,000 miles of lines that crisscross the country and carry crude, gasoline and other hazardous liquids.

Environmental and safety advocates have criticized the agency’s commitment to tightening oversight of that network after a key safety feature — automatic valves that quickly shut down ruptured lines — was omitted from a draft rule published in 2015.

Further revisions sought by the petroleum industry could make the rule largely ineffective, said Carl Weimer with the Pipeline Safety Trust.

But keeping the proposal intact would expose it to a legal challenge or reversal by a Republican-controlled Congress and Trump, an eadvocate for fossil fuels whose administration would enforce the new safety provisions, he added.

“We already viewed it as an incremental step.” Weimer added.

If they water it down at all or extend the timelines, it’s going to be an even smaller step,” he said.

Regulators began crafting the new rule after a 2010 Michigan pipeline break released almost 1 million gallons of crude into the Kalamazoo River. It’s languished amid industry criticisms, interventions from Congress and the bureaucratic inertia of the federal regulatory process.

A recent boom in domestic drilling saw accident rates for pipelines increase by roughly a third. The number of hazardous liquid pipeline accidents in the U.S. increased from 350 in 2010 to 462 in 2015.

The Transportation Department proposal calls for tougher inspection and repair criteria, leak detection systems on more lines and other measures to cut risk. Companies also would be required to inspect lines after flooding or other extreme events, a provision adopted after a 2011 ExxonMobil pipeline break spilled 63,000 gallons of crude into Montana’s Yellowstone River.

It’s currently under review by the White House Office of Management and Budget. Final adoption is anticipated in late December, said Allie Aguilera, government affairs director of the Transportation Department’s Pipeline and Hazardous Materials Safety Administration.

Industry representatives argue it would cost companies $600 million a year and almost $5 billion over the next decade. That’s almost 30 times the government’s estimate of $22.5 million annually.

Association of Oil Pipe Lines Vice President John Stoody said the rule would force pipeline owners to immediately repair lines with microscopic cracks or traces of corrosion. Currently, the industry is allowed to monitor smaller defects and schedule repairs later.

“It has the potential to distract us away from higher-priority safety issues,” Stoody said of the more stringent repair criteria.

Advocates say the rule is particularly important for rural areas. Current regulations apply primarily to lines in “high consequence areas” with large populations or environmentally sensitive features such as drinking water supplies.

Lines outside those areas are not required to be inspected with mechanical devices known as “pipeline pigs,” which travel inside lines looking for flaws.

“This is the first time (the Department of Transportation) is saying you have to inspect them” using the devices, Weimer said.

The Bellingham, Washington-based safety trust was formed after three children were killed when a gasoline pipeline broke in 1999, leaking fuel for 1½ hours before it exploded.

The recent 176,000-gallon pipeline spill near Belfield, North Dakota occurred outside a high consequence area.

Federal investigators said Wednesday that a leak detection system on the Belle Fourche Pipeline Co. line had failed to detect any problems before a rancher discovered the spill on Dec. 5. The company was ordered by the Transportation Department to make improvements to that detection system before re-starting the line.

It’s unclear how long it had been leaking. The oil travelled 4½ miles down a tributary of the Little Missouri River, investigators said. About 76,000 gallons had been recovered as of Tuesday, according to company spokeswoman Wendy Owen.

A third-party vendor had used a pipeline pig to inspect the line in April. The results were being reviewed to make sure the ­company repaired any flaws that were found, investigators said.

The 6-inch line can carry up to 1 million gallons of crude daily. Belle Fourche is a subsidiary of True Companies of Casper, Wyoming, which has a lengthy history of accidents including a January 2015 spill into the Yellowstone River.

Belle Fourche is a member of the American Petroleum Institute, which acknowledged it has been seeking revisions to the administration’s safety proposal but declined to specify the changes it wants.

In a 65-page cost-benefit analysis, the petroleum institute chided federal officials for underestimating the costs and amount of work needed for companies to comply. The group described the rule as a “significant expansion of regulatory oversight.”

Minimal federal oversight of pipelines in rural areas has left officials in some states overwhelmed with the task of policing the industry.

Pressured by landowners, farmers and environmentalists, North Dakota will put a state rule into effect Jan. 1 to increase inspections of smaller pipelines known as gathering lines. The federal proposal requires only that companies document spills from the lines.