Paonia group asks county for more regulations of oil and gas

“This is a regulatory black hole” 

By Kristy Acuff

A Paonia-based citizens group, Citizens for a Healthy Community (CHC), presented its case to the Gunnison County Commissioners at a work session July 24. They hope to find a partner to help pressure the federal government to lift an exemption in government oil and gas pipeline regulations that releases rural “gathering pipelines” from annual inspection and monitoring requirements.

Commissioners also heard from Gunnison Energy Company president Brad Robinson, who defended the current regulations.

At issue is whether sections of natural gas pipelines known as “gathering lines” should be exempt from federal regulation as they currently are in rural areas. In high-density population areas, however, gathering lines are regulated by the Pipeline Hazardous Materials and Safety Administration (PHMSA), a federal agency.

While the county commissioners have no authority to regulate the gas lines beyond the permitting process, the citizens group asked that they issue a moratorium on new gas drill permits in the county and/or write a letter to the federal agency encouraging it to lift the exemption.

Technically, gathering lines connect flowlines to storage or transmission facilities. Gathering lines are typically operated at lower pressure and flows compared with transmission lines. Transmission lines are regulated by PHMSA. Flowlines connect the wellhead with the gathering line and are regulated by the Colorado Oil and Gas Conservation Commission (COGCC).

“Currently there is a regulatory black hole, because once these drill operations are permitted, there are no reporting or inspection requirements for gathering lines unless there is catastrophic failure that results in road closure or evacuation,” said CHC executive director Natasha Leger. “The federal agency that could regulate gathering lines chooses not to in rural areas.”

“PHMSA exempted the gathering lines in rural areas and the agency elects not to regulate them because they deemed the risk so low,” responded Robinson. “As you know, federal agencies like to regulate, so for them to elect not to means it really is not necessary.”

“So gathering lines are exempt from federal regulation, but what about Bull Mountain pipeline? Is that considered a transmission or gathering line?” asked county commissioner John Messner. Portions of the 26-mile Bull Mountain pipeline traverse Gunnison and Delta counties, carrying natural gas from the mountains near Paonia to the larger transmission pipeline.

“It’s a complicated situation,” said Robinson. “Because of the upstream pressure being lower, it is considered a gathering line. It is not regulated by the federal agency, but I can tell you that we operate it as if it were. And it is absolutely untrue that the state does not regulate these. The state said we’re going from the wellhead to the first regulated pipeline, which is covered by the feds.”

“So what I am hearing you say is that if the feds aren’t regulating the line, then the state is?” clarified Messner.

“Yes,” said Robinson.

“No,” said CHC’s program director Andrew Forkes. “The state follows the feds and says class 1 rural gathering lines are exempt from state regulations.”

At which point, Robinson handed commissioners copies of the state’s 23-page document regulating oil and gas pipelines.

The document specifies that oil and gas operators must either continually monitor the pressure of the flowline or perform a pressure test every three years and keep records of “flowline… pressure and other integrity test results, inspections, repairs and integrity management documentation.”

The document defines a flowline as, “the pipe transferring oil, gas or other fluids between a wellhead to the load point of a regulated gathering line.” The document does not specify any testing or monitoring of gathering lines.

In a later interview, Todd Hartman, public information officer for the Colorado Oil and Gas Conservation Commission (COGCC), the regulatory agency for oil and gas pipelines, said, “the Colorado Oil and Gas Conservation Commission does not regulate gathering lines. Flowlines are definitely regulated. But gathering lines fall under the jurisdiction of the Colorado Public Utilities Commission.”

The Colorado Public Utilities Commission’s (PUC) head of pipeline safety, Joe Molloy, said regulation of the gathering lines, “is very minimal. Operators have to tell us where the lines are and they have to place signage so the public can see where the lines are and they have to report any releases.” When asked if operators had to regularly perform pressure tests or inspections of gathering lines and submit those to the PUC, Molloy replied, “No. Right now there is a regulatory gap between flowlines which are regulated, and class one gathering lines which are not, except for the specifics I outlined earlier.”

“What do we, the county, require as part of our permit process? It’s been ten years since we approved Bull Mountain, and I know there was a lot of discussion about the conditions of that permit,” Messner said to Neal Starkebaum, assistant director of community and economic development.

“I reviewed that application yesterday in anticipation of this meeting,” said Starkebaum, “and one of our conditions prior to operation was a state inspection of pressure testing of the gathering lines. So we did require testing prior to operation.”

“Well, we clearly have a difference of opinion regarding the regulation of the Bull Mountain line and without our county attorney here to clarify that, we will need to table this discussion about regulation,” said commissioner Jonathan Houck.

“But beyond that, what is it exactly that you want from the county?” Houck asked the CHC representatives.

“Right now, these gathering lines are not regulated in rural areas beyond the permitting process and we ask that you support a moratorium on new oil and gas permits until the federal agency removes the exemption for rural areas,” replied Leger. “And short of that, we ask that you submit a letter to that effect, supporting us in our efforts to remove this exemption.”

The commissioners agreed to review current county oil and gas permit regulations and discuss the issue with county attorney David Baumgarten. No one agreed to support a moratorium on leases, however.