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ND oil spill spotlights rule update delay

By Bloomberg News

WASHINGTON — Three years after an oil pipeline rupture in Michigan spilled 843,000 gallons of sludge, government regulators still have not produced promised rules to compel operators to detect leaks.

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A recent oil spill in North Dakota and the continued debate over construction of TransCanada’s Keystone XL Pipeline have led to renewed criticism about the government’s inaction on pipeline safety.

“It’s outrageous,” Rick Kessler, president of the Pipeline Safety Trust and a Washington lobbyist, said in an interview.

“This is glacial. It’s incredibly frustrating, and there never is a straight answer about where the bottleneck is.”

Pipeline safety, a little-noticed backwater of Washington policymaking, has grown in attention and political importance in recent years as the boom in North Dakota and Texas oil production and the hydraulic fracturing revolution for natural gas means the U.S. pipeline network is both expanding and increasingly active.

“As the U.S. produces more oil and gas, we have to remain vigilant,” said Brigham McCown, the former head of the U.S. Pipeline and Hazardous Materials Safety Administrators. “If production is going to go up, inspections will have to go up as well.”

McCown, who’s now a lawyer in Texas, and industry representatives say it’s not new rules that are needed, but attention from regulators and industry to adhere to the rules now in place.

The PHMSA said it’s still working on plans to reconfigure rules for the 185,000 miles of pipes carrying hazardous liquids that it oversees.

The number of serious pipeline incidents and the amount of gasoline or crude spilled has fallen since the late 1990s. Even so, over the past three years, there were 96 incidents that caused 41 fatalities, 200 injuries and $400 million in property damage, according to government data.

“We continue to try to make enhancements to safety, and we’re moving forward with the rulemaking,” Damon Hill, an agency spokesman, said. “It does take time and effort and a lot goes into getting this done.”

After the Michigan spill in 2010, the agency issued notice that it intended to rewrite rules for leak detection and cut-off valves. It hasn’t, and the 20,000-barrel spill at a Tesoro Corp. pipeline in North Dakota went undetected until a farmer came across it in his field last month.

“We remain focused on cleanup, repair and remediation,” Tina Barbee, a Tesoro spokeswoman, said in an email. “To date, we have reported more than 4,300 barrels recovered at the site.”

The PHMSA proposal is now awaiting approval by the office of Transportation Secretary Anthony Foxx so that it can be sent to the White House Office of Management and Budget for its review, Hill said.

“It’s sitting there somewhere in the bowels of the federal government,” said Lois Epstein, a pipeline specialist at the Wilderness Society in Alaska. “This is how government gets a bad name.”

The issue has entered the contentious debate over TransCanada’s proposal to build the Keystone pipeline from Alberta to the Gulf of Mexico. Supporters say pipelines are safer than shipping oil by train, truck or barge, and point to the July explosion of a runaway oil train in Quebec that killed 47 people. Critics point to leaks or ruptures in Michigan, Arkansas and now North Dakota to say they aren’t nearly as safe as proponents argue.