Federal Agency Recommends Updated Regulations for Pipeline Monitoring, Decommissioning, and Abandonment

Liskow & Lewis

On April 19, the United States Government Accountability Office (“GAO”) released a report (the “Report”) in response to a request from the House of Representatives Committee on Natural Resources regarding the oversight and decommissioning of pipelines in federal waters, which are mainly located within the Gulf of Mexico.  The Report concluded that the Bureau of Safety and Environmental Enforcement (“BSEE”) lacks a robust oversight process (1) for ensuring the integrity of active offshore oil and gas pipelines and (2) to address the environmental risks posed by decommissioning and abandoning pipelines on the seafloor.  The GAO recommended that BSEE take actions to further develop, finalize, and implement updated pipeline regulations to address limitations in its ability to (1) ensure active pipeline integrity and (2) address safety and environmental risks associated with pipeline decommissioning and abandonment.

BSEE currently requires pipeline inspections to ensure the integrity of active pipelines.  The specific inspection requirements are set by region.  The Gulf of Mexico Region requires operators to conduct monthly inspections via vessel, helicopter, or other means.  The Report found that these types of surface inspections are generally unreliable because currents can diffuse relatively small pipeline leaks making them undetectable from the surface.  The Report recommends that BSEE develop and implement rules to enhance pipeline integrity inspections by requiring subsurface monitoring and implementing advanced monitoring technologies for aging pipelines.

The Report also found that BSEE does not thoroughly account for environmental risks when authorizing decommissioning, does not ensure that operators properly clean and bury pipelines prior to abandonment, and does not monitor the location or condition of pipelines subsequent to abandonment.  While the Report cites to a 2004 BSEE-sponsored study concluding that pipeline abandonment on the sea floor is less impactful to the environment than removal, the Report noted that the 2004 study assumed that decommissioned pipelines would be properly purged and cleaned prior to abandonment and noted that BSEE’s verification of these activities may be lacking.  Additionally, the Report identified BSEE’s lack of monitoring pipelines after their abandonment – specifically, their potential hazards to marine navigation caused by movement on the sea floor – and unsuccessful attempts to require an operator to remove an abandoned pipeline after decommissioning.  The Report recommends enhanced study of environmental impacts during the decommissioning process and additional oversight of the abandonment process.  The Report also noted that the financial cost of removing all existing pipelines in federal waters is currently $21.5 billion and identified a lack of funding for removal.  The Report conspicuously omitted a proposal to address the potential shortage.

The Report concluded by recommending actions to develop, finalize, and implement updated BSEE pipeline regulations to address limits in pipeline monitoring and environmental risks from abandoned pipelines.  These recommendations will only affect pipelines under federal jurisdiction; yet, the Louisiana Department of Natural Resources likely will adopt some, if not all, of these same requirements for pipelines under Louisiana waters.  However, the regulatory effect of new, potential rules from Louisiana Department of Natural Resources for existing pipelines may be tempered by the state’s ability to compel removal of pipelines from state-owned lands.  See La. Op. Att’y Gen. 20-0111 (11/24/20) (discussing the Louisiana Office of State Lands’ authority to demand removal of pipelines).

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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