CHAPTER 6 ENVIRONMENTAL ISSUES IN OPERATING OIL AND NATURAL GAS PIPELINES
| Jurisdiction | United States |
(Jan 1995)
ENVIRONMENTAL ISSUES IN OPERATING OIL AND NATURAL GAS PIPELINES
El Paso Natural Gas Company
El Paso, Texas
I. Introduction
Attorneys and other professionals working in or closely with the oil and natural gas pipeline transmission business often become so focused on their own tasks and agendas that they forget the primary purpose of the business is to move oil or natural gas along the pipeline. Those of us who work from an "ivory tower" construing and interpreting laws and regulations are sometimes so insulated from the physical realities of operating a pipeline that we become one more barrier for operations personnel to overcome. A legal opinion or interpretation of a rule or a law may seem absolutely clear to the one interpreting but not so clear or even workable to the operations employee charged with transporting oil or natural gas along a pipeline.
Similarly, persons charged with the task of assuring compliance with environmental laws and regulations, whether employees of the regulated industry or employees of a regulatory entity, can become so intent upon the literal interpretation of environmental regulation they forget that the general purpose of environmental regulation is to protect human health and the environment. Regulators and environmental specialists in the oil and gas pipeline industry can be so absorbed in the language of the law that they fail to remember an underlying purpose of environmental regulation is to promote environmentally sound and prudent methods of operation. Environmental regulation is meaningless if the regulated industry does not comply, whether by choice or because compliance is technologically impossible.
Balancing efficient and profitable operation of an oil or natural gas pipeline with environmental prudence and compliance is one of the most substantial challenges facing the pipeline industry. Over the last twenty years, environmental regulation of oil and gas pipelines has gone from very little regulation to an overwhelming body of state and federal law entangled in a mesh of regulations promulgated and enforced by federal, local, and state agencies. In addition, regulating agencies are often placed in competitive positions so they must spend some of their resources and efforts on defending and protecting their regulatory turf. Assuring environmental compliance while operating a profitable pipeline is a substantial and difficult task.
The purpose of this paper is to analyze some of the major federal environmental laws and regulations affecting operation of oil or natural gas pipelines. Analysis and discussion of the relevant laws and regulations is with the intention of promoting and enabling compliance without crippling pipeline operation. Hopefully, this approach will
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assist the reader in maneuvering through the maze of environmental law which is a permanent aspect of pipeline operations. A few specific areas of environmental law which are more relevant to the day-to-day operation of pipelines are the major focus of this paper. Unfortunately, the universe of environmental law as it applies to pipelines cannot be addressed in a paper of this length or in a one hour presentation. Also, since the author's experience is exclusively with natural gas pipelines, the perspective of the paper may be weighted toward issues affecting natural gas pipelines, through care was taken to avoid as much imbalance as possible.
II. Pipeline Operations and Air Pollution Control
A. Clean Air Act (CAA)
Among the more formidable environmental laws affecting operation of pipelines is the Clean Air Act (CAA). The federal Clean Air Act1 was created with four major air pollution control laws. In 1967, the Air Quality Act (codified as amendments to the Clean Air Act) established authority for federal emissions standards for stationary sources in areas designated air pollution problems. With the Clean Air Act Amendments of 1970. Congress delegated limited enforcement authority to the newly created Environmental Protection Agency (EPA) while making clear "air pollution control at its source is the primary responsibility of the States and local governments."2
Also in the 1970 amendments, State Implementation Plans were designated as the methods through which the state and local governments were to control air pollution.3 Each state must assure control of air pollution within its geographic area and is charged with writing the State Implementation Plan (SIP). The state SIP must be approved by EPA and provide for implementation, maintenance, and enforcement of the national air quality standards for the air quality control regions within the state. In effect, each SIP is designed to convert the national clean air standards into source-by-source controls enforced by state and local agencies. Pipelines typically extend through several geographical areas making air quality compliance very complicated. Air quality standards and methods for compliance will vary with the number of air quality control regions the pipeline spans.
Congress again sought to strengthen air quality control with the Clean Air Act Amendments of 1977 establishing the nonattainment program which restricts construction of new sources in regions with poor air quality known as nonattainment areas.4 The 1977 amendments also established the standards for the prevention of significant deterioration (PSD).5 With enactment of the Clean Air Act Amendments of 1990, the effort to control air pollution took on a new dimension. Until 1990, all air pollution control legislation had
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been simply adding new programs and standards to existing programs. The 1990 amendments restructured the Clean Air Act whereby all programs are brought within the Title V permitting program. Title V operating permits are the mechanisms with which the EPA is now charged with controlling emission of air pollutants.
B. Implications of the Clean Air Act Amendments of 1990 on Pipeline Operations
The Clean Air Act Amendments of 1990 are the most extensive changes made to air pollution control law. The Clean Air Act now consists of six subchapters more commonly referred to as Titles I through VI. Title I contains the general purpose and the framework for the law. Title II is specific to mobile sources of air pollution. Title III contains general provisions including administration of the law, citizen suits, and judicial review. Title IV is known as the Acid Rain Titles and establishes emission limits for sulfur dioxide and nitrous oxide, commonly emitted from electric power plants consuming fossil fuels. Title V provides the methods for issuing permits to construct and operate sources of air pollutant emissions. Title VI mandates the phase-out of production and consumption of chlorofluorocarbon (CFC), halon, carbon tetrachloride, methyl chloroform, and hydrochlorofluorocarbon (HCFC)
Air pollution control laws affect several areas of pipeline operation but the most significant aspect involves construction and operation of compressor units or pump stations along the pipelines. If compressor units were constructed prior to 1970 and were not "reconstructed" or "modified" sufficiently to activate requirements under the Clean Air Act, the units were probably "grandfathered" under the existing air quality standards, which meant no permitting requirements applied to the older, unmodified units. The purpose of the Title V permitting requirements of the 1990 Amendments is to control emissions from all significant sources—new or existing.
1. Title V—Permits Under the Clean Air Act Amendments of 1990
The Title V permitting requirements under the 1990 amendments are designed to bring all "major sources" of air pollutants within the regulatory scheme. A "major source" is defined as either a stationary source in an attainment area "that emits or has the potential to emit ... 10 tons per year or more of any hazardous air pollutant or 25 tons per year or more of any combination of hazardous air pollutants 6 or any stationary source in an attainment area "which directly emits, or has the potential to emit, one hundred tons per year or more of any air pollutant."7 Therefore, facilities along a pipeline which may not have been regulated previously now potentially fall within the air pollution control regulatory scheme. The pipeline company is responsible for submitting Title V applications, monitoring, and reporting air emissions from all major sources.
Obviously, the distinction between hazardous air pollutants and any regulated air pollutant is significant because of the threshold limits for emissions. Regulated air
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pollutants—not hazardous air pollutants—include carbon monoxide (CO) and nitrous oxide (NOx), two of the most common air pollutants emitted from compressor units along pipelines. Prior to the Title V requirements, if a compressor unit operated in an attainment area, operating permits were likely not required, depending on the date of construction and modifications.
Implementation of the statute with respect to sources in attainment areas could mean a required permit for a compressor unit with reciprocating engine as small as one thousand horsepower and for turbine engines as small as four thousand horsepower. If the sources are located in nonattainment areas, the sizes of the engines which emit regulated air pollutants at threshold limits become smaller as the allowable emissions decrease. Significant to operation of a pipeline is that the new Title V permitting process requires much closer scrutiny of current operations and planned construction. Even relocation of skid-mounted compressors could be violations of a permit if the compressors were not designated as mobile units.
Moreover, the Title V definition of "major source" includes "stationary sources located within a contiguous area and under common...
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