Plains All-American Pipeline has applied to withdraw its filings with the Federal Energy Regulatory Commission (FERC), meaning pipeline 901—which is currently out of operation—will be removed from federal jurisdiction and come under more stringent regulation if it reopens in the future.
This filing would cancel Plains’ Line 901 tariff, according to Tamara Young-Allen of FERC media relations. She said Plains plans to file to cancel the tariff for Line 903, which connects to 901, later on. A tariff for a pipeline outlines the terms, conditions, and rates for that pipeline’s transportation services. Both lines have been non-operational since their involvement with the Refugio oil spill on May 19, 2015, which deposited 3,400 barrels of crude oil onto the coastlines around Refugio State Beach.
When Lines 901 and 903 were running, they were classified as “interstate” pipelines and fell under FERC jurisdiction, though they never carried oil across state lines. But last year’s spill led to a corrective action against both lines, which shut them down pending repairs. Hillary Blackerby, senior field representative for Assemblyman Das Williams’ (D-Carpinteria) district office, said that because the lines stopped moving oil as a result of the corrective action, Plains is seeking to remove them from interstate designations.
Should the lines resume operation in the future, they would do so under California control and be subject to more rigorous state and local laws—which Blackerby said should have been the case from the start.
“We already believe these lines should be designated ‘intrastate,’ the reason being they don’t actually take oil across state lines,” Blackerby said. “They are contained in California.”
Young-Allen said that while she didn’t know exactly why Plains originally designated Lines 901 and 903 as interstate, any pipeline filed with FERC is treated as interstate and regulated on the federal level.
“If their oil or petroleum product was not crossing a state line, they didn’t necessarily have to do that,” Young-Allen said of the Plains’ FERC filings for Lines 901 and 903. “As long as they have a tariff on file here at FERC, they’re considered to be an interstate commerce.”
Plains is currently purging the oil that’s been sitting in Line 903 since the pipeline was shut down nine days after the Refugio spill. Once the company fulfills its obligations to the shippers who own that oil, Young-Allen said Plains intends to cancel the line’s tariff “in its entirety.”
However, Plains may then be unwilling to invest the time and energy necessary to reopen the line, which Blackerby said would be a complicated process.
“The future of those lines is kind of up to Plains,” Blackerby said. “They can’t be restarted or rebuilt until they satisfy the corrective action orders. That’s repairing, investigating anomalies, running all kinds of tests—and we don’t know if Plains is even going to want to do that.”
She said if Plains chooses to go through with the process, California law will require the pipelines to undergo annual inspections and have the “best available technology” for shut-off valves and leak detections. These stricter standards—specifically those requiring frequent inspections—would likely prevent future reoccurrence of the underlying causes behind the Refugio spill, Blackerby said.
Meanwhile, the spill’s causes are under investigation. In February, federal regulators released a preliminary report explaining why Line 901 ruptured, leading to the spillage of 142,800 gallons of crude. The report, composed by the U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration (PHMSA), and Office of Pipeline Safety, determined that external corrosion to Line 901 was most likely the culprit.
At the time of the spill, Line 901 was subject to in-line inspection surveys every three years. The PHMSA report said the line’s most recent inspection prior to the spill took place less than two weeks before the incident, on May 6. Preliminary data from the inspection indicated corrosion at the failure site, but the data’s accuracy was still being assessed when the corroded area gave in.
Federal pipelines safety regulations require cathodic protection (CP). CP prevents corrosion on a pipeline metal by connecting it to another material that corrodes more easily, diverting the corrosion from the main pipeline metal. The PHMSA report said CP measures taken to prevent corrosion on Line 901 weren’t for the appropriate type of pipe, which could have contributed to the issue.
“Historical CP records for Line 901 have been reviewed and reveal protection levels that typically are sufficient to protect non-insulated, coated steel pipe,” the report said. “Line 901 and 903, however, are insulated.”
Blackerby said these details show why federal regulations weren’t enough to protect the pipelines. California standards, she said, would do a better job. However, it’s still unclear whether Lines 901 and 903 will reopen at all, and there’s no timeline yet for when Plains will make those decisions. The Sun reached out to Plains for comment, but didn’t receive a response as of press time.
“I don’t know how much it costs to restart those lines, but I have a feeling it’s going to be a lot, after they’ve already paid a ton of money due to those spills,” Blackerby said. “So much has to happen with the investigation and with repairs, it could be a very, very long time.”
Staff Writer Brenna Swanston can be reached at bswanston@santamariasun.com.
This article appears in Mar 3-10, 2016.