Local options when thinking about new pipelines

Question of the weekThere are rumors of a new pipeline coming to my community. I’ve heard of another town with its own pipeline ordinance, but I also hear that it’s not up to the community and we really have no say. Should we pass our own ordinance and will it help?

You can pass your own ordinance, but whether it will help or not depends on where you are, what type of pipeline is proposed, and what the ordinance says.

It is true that in some circumstances communities “have no say,” but not all. There are a few circumstances over which the federal agencies have exclusive authority: FERC (Federal Energy Regulatory Commission) has exclusive authority over the routing of new interstate natural gas pipelines; and PHMSA, the federal pipeline safety agency, retains authority over rulemaking and enforcement of safety regulations governing oil and natural gas pipelines. States can seek certification from PHMSA to regulate the safety of intrastate pipelines, and once certified can write stronger regulations for those pipelines than the federal minimum regulations established by PHMSA. States can take on a stronger role in other areas as well – but that is a subject for another post. If not disallowed by the state, local communities can have an important role when it comes to land use and pipelines.

For situations where local rules are not preempted by other state or federal laws, there are a number of options for action:

When a pipeline is built, the pipeline operator typically needs to get road crossing permits and negotiate franchise agreements or easements for crossing public roads, using road rights of way or crossing parks or other land owned by the local government. Some communities do this as they need to, and others have an ordinance that governs all these types of franchise agreements or easements between the town/county and the pipeline operator. This type of ordinance typically avoids preemption issues with state or federal law, though we recommend consulting with an attorney in your area. Franchises can address things like notification to the local government, maintenance of the right-of-way, availability of information, required payments by operators, circumstances where relocation of the pipeline may be necessary (and who would pay for it), pipeline abandonment, insurance and financial guarantees, and other issues. For examples of franchise ordinances, see the Franchise page on our website.

There are also community ordinances that establish a setback or consultation area between the pipeline and certain development, homes, or businesses. There are no federal regulations that set an absolute minimum distance that a pipeline can be built from a house, so a number of communities have moved forward on their own to do this. One option is to establish a ‘consultation zone’ so the pipeline owner and property owner or developer of any new project have to talk with one another prior to going ahead with the development or the new pipeline. Another option is to pass an ordinance requiring setbacks that vary depending on what type of residential uses exist near the pipeline. We have examples of these types of ordinances as well on our website.

Setbacks are often intended to help prevent damage to the pipeline by people doing something stupid on top of it (like installing a swimming pool or fence), or to aid in evacuation by offering a bit more time for folks to get out of the area. But they are likely not wide enough to protect a person from an explosion on a high pressure pipeline (for larger diameter high pressure gas pipelines, that distance may need to be over 1,000 feet).

A local government could also choose to treat new pipelines as a conditional use and require a pipeline proponent to apply for and receive a conditional use permit before beginning construction within the jurisdiction. You can find an example of this option on our website as well (see Colorado example).

Chapter 4 of our Local Government Guide describes in more detail options that local communities have as they think about how best to prepare for the prospect of a new pipeline coming to town.

Reflections on San Bruno, PG&E and the CPUC

Question of the week: I heard the California Public Utilities Commission levied a fine of $1.6 billion dollars against PG&E for pipeline safety violations relating to the terrible San Bruno pipeline explosion in 2010. Do you think this will make a difference and improve PG&E’s safety? Is that all that will happen?

Reflections on San Bruno, PG&E and the CPUC

In case you missed it, last week, the California Public Utilities Commission (CPUC) levied a fine of $1.6 billion dollars against PG&E for violations of the state pipeline safety regulations, violations identified following the failure and explosion of one of PG&E’s natural gas transmission lines in San Bruno, California in 2010. That explosion killed 8 people and injured many more, destroyed an entire neighborhood and laid bare a multitude of shortcomings and outright failures of natural gas pipeline safety regulation in California. The City of San Bruno undertook a monumental effort on several fronts, seeking out every possible forum where PG&E might be held to account, and where regulatory change might be made so that no other community needlessly suffer from another completely preventable pipeline failure.

Whether or not one believes the utility’s and the regulator’s exclamations of intent to reform, whether or not one gives credence to the much-publicized efforts to operate more safely or to oversee more carefully, there is plenty of evidence that there remains a long way to go. The report of the National Transportation Safety Board following the explosion described a utility that didn’t know what pipes it had in the ground, and didn’t have adequate records or integrity programs. And it described a regulator that had apparently ignored those shortcomings of which it was aware, and simply hadn’t looked very hard to find others. Since the NTSB report, the media has been filled for nearly 5 years now with seemingly endless disclosures of cronyism between the regulator and the utility, the misappropriation of ratepayer funds collected in the name of safety upgrades but spent elsewhere, descriptions of yet another home destroyed and community disrupted because PG&E’s records did not accurately reflect what pipes were in the ground, and numerous reports and audits suggesting that the CPUC is not yet capable of adequately regulating.

While the fine imposed against PG&E is of record size, the company’s stock price recovered and closed higher on the day after the penalty was announced. This, in spite of the company’s 2013 protestation that a fine of that magnitude would surely force a bankruptcy or some other catastrophic result. In fact, PG&E has recently announced that it will not appeal the CPUC fine and decision.

Meanwhile, the aftermath of the failure continues in a variety of forums: Rulemaking efforts on the federal level that might respond to some of the concerns raised by the NTSB in its report on the PG&E failure have been bogged down for years. We continue to wait for a proposed rule to be released and open to comment, review by the Technical Advisory committees and perhaps one day become new regulations. State legislation has strengthened some California gas safety rules, and proposed legislation may alter the allocation of the fine levied by the CPUC to further benefit pipeline safety rather than the state’s general fund. The cronyism exposed by the dogged efforts of the City of San Bruno to obtain emails and other documents has resulted in changes in personnel in high levels both within PG&E and within the CPUC. The federal prosecutor impaneled a grand jury that last year returned criminal indictments against PG&E. The State Attorney General has opened a criminal investigation of PG&E and its relationship with the CPUC, seeking evidence of wrongdoing on the part of the CPUC, its former president, and perhaps others. These criminal proceedings are still in the very early stages. The legacy of the San Bruno tragedy will continue for some time, and we can only hope, for all our sakes, that it eventually results in significant safety improvements, regulatory capacity, and some small measure of justice.