Is Federal Legislation to Monitor Underground Gas Storage Facilities on the Horizon?

The regulatory and legal aftermath of the Aliso Canyon methane spill has been taking shape in the weeks since the leak was finally stemmed. The federal government has announced its intention to propose safety standards for gas storage facilities in response to this environmental disaster, but the scope of these rules remains uncertain.

The Pipeline and Hazardous Materials Safety Administration (PHSMA), which is part of the U.S. Department of Transportation, has historically encouraged storage facility operators to voluntarily comply with industry guidelines without federal oversight. PHSMA is not responsible for the inspection or regulation of gas storage facilities. Instead, it defers to state regulators to maintain the safety of these units. Until now, federal regulation has extended only to above ground equipment, such as pipelines, but not to the underground storage facilities that are increasingly subject to deterioration.

These industry-sponsored rules, however, are regarded by many as inherently deficient and ineffective. The guidelines do not mandate the implementation of systems to shut off the flow of gas in the event of an emergency. In addition, there are no standards for installing mechanisms to isolate the methane from the environment. Many experts agree that industry standards alone would have been insufficient to curtail the Aliso Canyon disaster.

Significantly, the absence of an independent, comprehensive regulatory scheme may have contributed to the Aliso Canyon disaster. For nearly a year prior to the Aliso Canyon leak, Southern California Gas Co. warned state regulators that aging and corroding wells at the Aliso Canyon facility presented a significant safety and health concern, but no action was taken.

The Obama administration recently announced its plan to develop regulations to prevent devastating leaks from underground storage facilities. A group of experts will submit reports about the events surrounding Aliso Canyon to federal regulators. The Obama Administration’s initiative, which is supported by California’s two senators, will both examine the implementation of safety standards and consider whether certain regions require more facilities.

Contact Shane Coons at 949-333-0900 or visit his website at www.ShaneCoonsLaw.com to find out more about his practice.

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Is Federal Legislation to Monitor Underground Gas Storage Facilities on the Horizon?

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