We’re all going to be hearing a lot about pipeline safety today. Gov. Earl Ray Tomblin has scheduled an event out in Sissonville to ceremonially resign a pipeline safety bill that he already signed nearly a month ago.
Gov. Tomblin included this legislation among his big successes during this year’s legislative session, and his office described the bill this way in a press release:
H.B. 2505 relating to increasing civil penalties for pipeline safety Violations: This bill brings state statutes into federal compliance and increases the maximum penalty to $200,000 per violation, per day and a maximum penalty of $2 million for a series of related violations. By increasing penalties to meet federal standards, this bill ensures the Public Service Commission of West Virginia’s pipeline safety efforts will receive its full allotment of federal money.
But let’s keep in mind first of all that the bill affects only a small portion of the natural gas pipelines across West Virginia. Enforcement of safety regulations for the vast majority of pipeline mileage — for interstate transmission lines — is handled by the federal Department of Transportation’s Pipeline and Hazardous Materials Safety Administration.
During his State of the State address back in February, the governor described his administration’s efforts on this issue in this way:
Just a few months ago, many of us watched in shock when flames ripped through a community near Sissonville leaving houses leveled and a part of our highway charred when a major pipeline exploded. It was a true blessing no one was injured or killed. We have learned from that explosion and the investigation that followed, that West Virginia’s pipeline safety statutes are outdated-with weak penalties and enforcement measures. In fact, West Virginia is currently out of compliance with federal guidelines.
Tonight, I am proposing legislation to bring our State into federal compliance. I propose a maximum penalty of up to $200,000 per violation, per day. It is my hope by increasing penalties, we will meet federal standards and ensure overall public safety.
But the truth is that state officials knew long before the near-disaster in Sissonville that West Virginia’s safety fines for pipeline were not in compliance with federal requirements. As we’ve reported before, legislation failed during the 2012 session that would have fixed this problem, and similar failed bills date back to at least 2005. Federal officials have repeatedly warned the state about the problem in regular audits of the PSC’s pipeline safety program.
This image provided by the West Virginia State Police shows a fireball erupting across Interstate 77 from a gas line explosion in Sissonville, W. Va.,Tuesday Dec. 11, 2012. (AP Photo/West Virginia State Police)
West Virginia officials were so slow to act on this matter that, legislation initially introduced last year had to be updated because Congress had increased federal fine requirements again before the state caught up to the earlier federal standards, which had been in place since 2002.
And perhaps more importantly, a Congressional Research Service report issued in January warns that even the new level of fines will likely be of little help in deterring pipeline safety violations by the industry:
The threat of safety enforcement penalties is often considered one of the primary tools available to pipeline safety regulators to ensure operator compliance with safety requirements. However … even if they were raised to $2.0 million for major violations, could still account for only a limited share of the financial impact of future pipeline releases. So, it is not clear how large an effect increasing PHMSA’s authorized fines, alone, might have on operator compliance. On the other hand, the authority of PHMSA to influence pipeline operations directly—for example, through corrective action orders or shutdown orders in the event of a pipeline failure—can have a large financial impact on a pipeline operator in terms of capital expenditures or lost revenues. Indeed, some have suggested that this operational authority is the most influential component of PHMSA’s pipeline safety enforcement strategy.