What Does It Mean To 'Consider' Pipeline Risk Factors?

August 29, 2017
Zachary Koslap

The increasing usage of hydraulic fracturing for oil and natural gas extraction has opened more parts of the country to exploration and drilling. As more unconventional wells are located in areas lacking the infrastructure to bring the oil and natural gas to market, constructors and operators of pipelines are racing in to fill the need.

Advancements in horizontal directional drilling have allowed pipeline drillers to minimize aboveground disturbance, no longer having to zig and zag open trenches to avoid populated areas, navigable waterways or environmentally sensitive areas. Accordingly, more miles of pipeline are located underneath “high consequence areas,” exposing pipeline operators to more public scrutiny and a suite of more burdensome regulatory requirements.

The recent ruling in ExxonMobil Pipeline Company v. U.S. Department of Transportation underscores the importance of compliance with the Pipeline Hazardous Materials Safety Administration’s (PHMSA) pipeline and safety regulations prior to a pipeline release in high consequence areas. On Aug. 14th, 2017, the Court of Appeals of the Fifth Circuit vacated, in part, a final order issued by PHMSA to ExxonMobil, which found that ExxonMobil failed to properly consider the susceptibility of certain portions of its Pegasus Pipeline to seam failure, and assessed a civil penalty of $2.6 million.

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