Restoring Pipeline Service Following an Incident -- Everyone Has a Role

On August 1, 2019, an incident occurred on Enbridge’s Texas Eastern Transmission’s (TETCO) Line 15, which may have impacted two additional lines, Line 10 and Line 25, that are in close proximity to Line 15. TETCO, therefore, declared a force majeure on all three lines and has announced that service will not be restored in the area where the incident occurred until at least August 24. The declaration of a force majeure allows a pipeline to modify flows that have already been scheduled and also limits the pipeline’s liability for related interruptions.

On August 8, 2019, TETCO received a corrective action order (CAO) from the Pipeline and Hazardous Materials Safety Administration (PHMSA). TETCO has stated it will be undertaking rigorous inspections on Lines 10 and 25 and that the critical path to return Lines 10 and 25 back to service is the completion of the construction activities associated with pipeline replacement and the regulatory approval needed to return to full service. TETCO expects to complete the construction activities required to return Line 25 back to service between August 24 and August 26. The Line 10 construction activities required to return it to service, are not expected to be completed until late August or the first week of September.

Today we look at the roles -- from operator to various government agencies -- played following an incident such as this one and how that may impact the timeline for restoration of service for the pipeline involved and other nearby pipelines that may have been impacted.

Incidents Are Rare

As the Interstate Natural Gas Association of America (INGAA) emphasizes on its website:

Pipelines are an extremely safe way to transport energy across the country. In fact, the Department of Transportation calls pipelines the safest mode of energy transportation. Accidents are rare, and INGAA’s members are committed to making them even rarer.

The PHMSA data supporting that statement can be seen in the charts below, which show the total public impact of all incidents since 2005 involving gas transmission lines in three key areas -- fatalities, injuries and cost.

The spike in 2010 is caused primarily by one incident that occurred on Pacific Gas and Electric’s intrastate transmission line in San Bruno, California, which was not part of the interstate pipeline system.

Pipeline Operator

The pipeline operator plays the central role following an incident on its pipeline. First, it is required to report the incident to various authorities, including the local emergency responders, the National Response Center, FERC and PHMSA. Second, the operator must respond and make the physical situation as safe as possible for the emergency responders to allow them to respond to non-pipeline emergencies, such as induced fires and injuries to people, both employees and the public. While the physical situation is being addressed, the operator must begin communicating with its customers concerning the commercial impact.

For instance, in this case, within hours after the incident, TETCO posted a notice stating that the north to south capacity through the impacted segment on all three lines was being reduced to 0 Dth/d, which meant that nominations scheduled for that gas day would be curtailed in accordance with its tariff. Following these actions, the operator must then undertake its own analysis of the root cause of the incident, while also cooperating with any regulatory investigators, and begin the work of restoring service following the declaration of any related force majeure.

FERC

FERC’s role following an incident is limited because it is not the safety regulator. The operator is required to notify FERC of the incident and of any force majeure that may result in commercial impact. FERC does not participate in the analysis of the underlying cause or in the actions taken to restore the pipeline to service. That role falls to PHMSA or its delegate at the state level.

PHMSA

Federal law charges PHMSA with the responsibility and authority to order the operator to take necessary corrective action, including suspending or restricting the use of the facility, requiring physical inspection, testing, repair, replacement, or other appropriate action, whenever PHMSA determines that the operation of the facility is or would be hazardous to life, property, or the environment. PHMSA exercises this authority by the issuance of a CAO, as it did on August 8, when it issued its order to TETCO.

The issuance of these CAOs is not a common occurrence. As seen below, in a typical year for the period between 2002 and 2018, there would only be seven such orders issued. These numbers are for all types of pipelines regulated by PHMSA and not just interstate natural gas lines.

National Transportation Safety Board (NTSB)

The final major party that may be involved in an incident is the NTSB. The NTSB chooses the incidents in which it will assume the role of the primary investigator. Of the 145 CAOs issued by PHMSA since 2002, the NTSB has only assumed the primary investigator role in ten of those incidents, including the TETCO incident.

The NTSB is charged with conducting independent investigations of all civil aviation accidents in the United States and major accidents in the other modes of transportation, which includes pipelines. A key fact to understand about the NTSB is that it has no regulatory or enforcement powers. Its role is purely investigatory, to include recommending changes to actions of the operators and the regulators. In fact, after it finalizes its investigation of an incident, the NTSB will often make recommendations to the regulator, like PHMSA, with suggested changes to regulations to improve the safety of the regulated industry. But such recommendations do not have to be adopted immediately by the safety regulator, or, for that matter, ever. In this regard, PHMSA’s website lists 26 open NTSB recommendations regarding pipelines from prior investigations dating back to 2011.

How Restoration Timing is Impacted by These Parties

When NTSB assumes the role of primary investigator for a pipeline incident, it will eventually issue a report that details its findings on the root cause of the incident and provides recommendations to the operator and the regulator, PHMSA. However, this final report is not typically completed until 12 to 18 months after the incident. That means that the usual process for oversight by PHMSA needs to continue on a parallel track. Consequently, PHMSA and the operator need to come to their own conclusion as to the immediate cause of the incident and what that may mean for the restart of the impacted pipeline and other pipelines in the vicinity. PHMSA has identified the following circumstances as the primary causes that result in pipeline incidents:

External Corrosion
Internal Corrosion
Stress Corrosion Cracking (SCC)
Selective Seam Corrosion (SSC)
Excavation Damage
Natural Force Damage
Other Outside Force Damage
Material/Weld Failure
Equipment Failure
Incorrect Operation

The determination of the cause for the failure is the key factor that will impact the timeline for the restart of the impacted pipeline because it will influence the scope of the investigation and the nature of remedial work that will be required on the pipeline. For instance, if it is determined that excavation damage was the primary cause, restoration is usually fairly quick because the extent of the problem will generally be perceived as limited and the remedy typically includes replacing just the damaged area. Conversely, if the primary cause is determined to be a manufacturing defect of the pipeline, all pipe manufactured in the same run of pipe by that manufacturer may need to be identified and inspected for similar issues before PHMSA will allow the pipeline to be fully restored to service.

The TETCO CAO follows a very familiar pattern for such orders, which can be summarized as follows:

Shutdown of the segment of the pipeline on which the incident occurred (impacted segment);
Pressure limitation of 80% of actual operating pressure at the time of the incident for the remainder of the pipeline that included the failed segment;
Provision of all records for the pipeline directly impacted to assist PHMSA’s root cause analysis;
Physical examination of the impacted segment;
Preparation of a plan to restart the impacted segment and return the remainder of the pipeline to full operating pressure above the 80% reduced pressure limitation; and
Preparation of a remediation plan for the entire pipeline containing the impacted segment.

When there are other pipelines located in close proximity to the impacted segment, such as lines 10 and 25, PHMSA will also typically require evidence that those pipelines were not physically impacted by the incident, and will want a plan to restore service in the portion of those pipelines that could have been damaged by the incident. The communications required to satisfy the conditions of a CAO are usually conducted through direct communications between PHMSA and the operator. So, those interested in the commercial impact of the incident must usually rely on the operator for updates. Since the incident, TETCO has provided six updates on the status of its investigation and restoration plans, and provides the operational status of the lines in its daily summary of pipeline conditions.

If you would like to discuss any specific aspects of the CAO for the TETCO incident, please contact us so that we can set up a call to discuss.

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