PHMSA publishes final rule: Safety of Underground Natural Gas Storage Facilities

On February 12^th, PHMSA published a final rule to amend its minimum safety standards for underground natural gas storage facilities (UNGSFs). On December 19, 2016, PHMSA issued another final rule establishing regulations in response to the 2015 Aliso Canyon incident and the subsequent mandate in section 12 of the PIPES Act of 2016. The rule incorporated by reference two API Recommended Practices (RPs):

• API RP 1170, ‘‘Design and Operation of Solution-mined Salt Caverns Used for Natural Gas Storage’’ (First Edition, July 2015); and
• API RP 1171, ‘‘Functional Integrity of Natural Gas Storage in Depleted Hydrocarbon Reservoirs and Aquifer Reservoirs’’ (First Edition, September 2015).

Six key take-aways from this final rule:

1. PHMSA adopts the RPs without modification to the nonmandatory terms. In the final rule, PHMSA adopted the RPs by modifying the nonmandatory provisions (i.e., statements containing ‘‘should’’ and other nonmandatory terms) as mandatory requirements (i.e., ‘‘shall’’). PHMSA provided that operators could deviate from the modified statements by providing a justification in their procedure manuals as to why the provision was ‘‘not practicable and not necessary for safety’’ at their specific facility. The final rule no longer requires operators to provide written justifications as to why they would not have performed a ‘‘should’’ provision.
2. The final rule formalizes requirements and deadlines for operators to develop and implement their integrity management (IM) programs and to conduct their baseline risk assessments for UNGSFs. PHMSA is relaxing the timeline for completing initial assessments of the reservoirs, caverns, and wells.
3. The final rule includes a requirement for solution-mined salt caverns to follow the same risk management practices as depleted hydrocarbon reservoirs and aquifers that apply to the physical characteristics and operations of the facility (i.e., follow section 8 of API RP 1171). Section 8 of API RP 1171 provides more prescriptive practices than API RP 1170 for how an operator must develop, implement, and document a program to manage risks that could affect the functional integrity of the storage operation.
4. PHMSA is narrowing the scope of reportable events and changes at facilities. PHMSA is limiting notification of changes to a facility 60 days prior to the following events: (1) All plugging or abandonment activities (regardless of costs), and (2) construction or maintenance that requires a workover rig and costs $200,000 or more. PHMSA is also applying an emergency exemption to the 60-day notification requirements, which PHMSA overlooked in the IFR.
5. The final rule is revising the definition of an ‘‘underground natural gas storage facility’’ to exclude other components of a gas pipeline or gas pipeline facility covered elsewhere in part 192, and eliminate any potential overlap.
6. PHMSA is changing the name of the reporting portal to the ‘‘National Registry of Operators’’ (formerly the ‘‘National Registry of Pipeline and LNG Operators’’). Additionally, PHMSA is revising the name of the online portal’s web address from ‘‘http://opsweb.phmsa.dot.gov’’ to https://portal.phmsa.dot.gov. These changes are throughout parts 191, 192, and 195.

The effective date of the rule is March 13, 2020. For a copy of the final rule and/or to learn more about how RCP’s incredible group of UGS subject matter experts can assist UGSF operators with their integrity and risk management programs, contact Jessica Foley or click here.