With Pipeline Growth Booming, the US Agency in Charge of Safety Struggles to Keep up

by Jacob Fischler (Wisconsin Examiner) The pipeline industry added thousands of miles of natural gas, crude oil and carbon dioxide pipelines to the national network in recent years. But the federal regulatory agency responsible for ensuring that vast system’s safety failed to grow at the same pace.

Pipeline miles expand every year, and are expected to see even faster growth in the near future thanks to major federal laws.

The 2021 infrastructure law provided $1 billion for grants for new natural gas distribution lines.

And the climate, taxes and policy law Democrats passed along party lines and President Joe Biden signed last year included billions in tax incentives for carbon capture systems, including pipelines to underground storage sites in North Dakota, spurring a slew of new pipeline proposals in the Midwest.

But neither bill added money for the pipeline safety program at the Pipelines and Hazardous Materials Safety Administration, or PHMSA, a 600-employee agency within the U.S. Department of Transportation that is responsible for guaranteeing the safety of pipelines that cross state lines.

Kenneth Clarkson, a spokesman for the Pipeline Safety Trust, an advocacy group, said the agency has long lacked the funding it needs.

“PHMSA has been historically underfunded, and unfortunately that is still the case,” Clarkson wrote in an email to States Newsroom. “The agency needs more resources to keep up with the safety of our nation’s millions of miles of pipelines, especially so as more pipelines are continually being added to that total.”

PHMSA Deputy Administrator Tristan Brown told the House Transportation and Infrastructure Committee’s Railroad, Pipelines and Hazardous Materials Subcommittee at a March hearing that the agency has had to work “leaner” as its responsibilities have grown without a subsequent rise in resources.

Brown is the top PHMSA official because the agency has not had a Senate-confirmed administrator since the end of the Trump administration. Biden has not nominated anyone for the role.

“Natural gas, for example: triple what it was five years ago,” Brown said. “Carbon dioxide, hydrogen: $100 billion in incentives. We have zero people, zero full-time employees focused on that. Our ability to get things done is directly proportional to the resources that Congress gives us.”

But increasing funding authorization doesn’t necessarily translate to more federal inspectors. The most recent authorization bill, passed in 2020, required that the agency have 247 pipeline inspectors on the job in fiscal 2023, but PHMSA was 40 short of that number this year.

The need for pipeline inspectors will only become greater in coming years as the incentives for new carbon dioxide pipelines spur construction. At about 5,000 miles today, pipelines carrying carbon dioxide could grow to 100,000, Clarkson wrote.

Ethanol-producing states in the Midwest are seeing particular interest in carbon dioxide pipelines as the carbon byproduct of the region’s ethanol industry is more easily sequestered and transported to underground storage facilities primarily in North Dakota.

PHMSA has not yet written regulations for hydrogen and carbon dioxide pipelines.

With PHMSA a relatively small agency, the responsibility of ensuring the safety of the growing network of pipelines throughout the country falls largely to state agencies.

State inspectors fill a vital role in the national mission system of pipeline management, Christopher Mele, the legislative director for energy policy at the coalition group of state-level regulators the National Association of Regulatory Commissioners, said.

By law, state pipeline agencies can be reimbursed by PHMSA for up to 80% of their costs — though that cap is never reached, according to Mele. The highest reimbursement rate states have received since 2016 is 70.5%, he said.

The committee-approved bill would increase funding for state reimbursement, but would still only amount to about 72% or 73% of states’ costs, he said.

And while the reimbursement rate for states has not risen dramatically, federal requirements for inspections have expanded in recent authorization laws, Mele said.