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After the Marshall Spill: Regulation of Oil Pipelines Sara Gosman Lecturer, University of Michigan Law School Healing Our Waters Conference September 13, 2012

Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

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Did you know there is a massive 60-year-old oil pipeline running under Lake Michigan and Lake Huron, along the Straits of Mackinac? Did you know that up to 20 million gallons of oil travels through that pipeline a day and the operators have plans to expand the capacity without making significant updates? You might also be surprised to learn that most of the oil traveling through our pipelines comes from the Alberta tar sands. This panel will explain the issues and the regulatory framework governing oil pipelines as well as provide recommendations on ways we can safeguard our lakes from spills.

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Page 1: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

After the Marshall Spill: Regulation of Oil PipelinesSara GosmanLecturer, University of Michigan Law School

Healing Our Waters ConferenceSeptember 13, 2012

Page 2: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012
Page 3: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Hazardous Liquid Pipelines in Great Lakes Region

28,834 miles of hazardous liquid pipelines

278 incidents in last 5 years

3.87 million gallons of liquids spilled in last 5 years

Source: American Association of Oil Pipelines (map), PHMSA Hazardous Liquid Flagged Incidents File - June 29, 2012 (data)

Page 4: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Great Lakes Region Incidents

State

Total Miles of Hazardous Liquid

Pipelines

Total Hazardous Liquid Pipeline

Incidents 2007-2011

Total Gallons Spilled from Hazardous Liquid Pipelines

2007-2011

Total Property Damage from

Hazardous Liquid Pipelines 2007-2011

Illinois 7,423 86 974,946 $79,763,406

Indiana 3,718 32 134,148 $17,745,556

Michigan 2,784 27 1,334,718 $743,315,319

Minnesota 5,006 39 502,152 $10,699,821

New York 1,042 10 313,068 $15,401,391

Ohio 3,416 37 145,572 $14,845,314

Pennsylvania 2,763 24 188,622 $9,368,291

Wisconsin 2,682 23 279,594 $7,141,005Great Lakes State Totals 28,834 278 3,872,820 $898,280,103

Entire U.S. ~175,000 1,743 23,770,614 $1,410,880,684*

Data Source: PHMSA Hazardous Liquid Flagged Incidents File - June 29, 2012*Significant incidents only

Page 5: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Significant Onshore Pipeline Incidents: Great Lakes Region

2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

10

20

30

40

50

60

Hazardous Liquid Gas Distribution Gas Transmission

Data Source: PHMSA Flagged Incidents Files - June 29, 2012

Page 6: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Significant Onshore Pipeline Incidents: Nationwide

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

20082009

20102011

0

20

40

60

80

100

120

140

160

180

200

Hazardous Liquid Gas Distribution Gas Transmission

Data Source: PHMSA Flagged Incidents Files - June 29, 2012

Page 7: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Average Significant Incidents Per Mile of Onshore Pipeline 2002-2011

Hazardous Liquid Gas Distribution Gas Transmission

U.S. 0.000666423991263686

2.87075177230128E-05

0.000183834588979284

Great Lakes States

0.000761894460293689

7.06824942975049E-05

0.000204673160507723

Illinois 0.000943014953522834

6.55834467380433E-05

0.000212066588908917

Michigan 0.000718390804597701

5.36509469392135E-05

0.000218507593138862

New York 0.000959692898272553

6.30371288689038E-05

0.000229252636405319

0.0001000.0003000.0005000.0007000.0009000.001100

Data Sources: PHMSA Flagged Incidents Files - June 29, 2012, Annual Reports

Page 8: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Cause of Significant Incidents: Great Lakes Region

16%

10%

10%

42%

9%

4% 8%

Significant Incident Cause BreakdownGreat Lakes Region, Hazardous Liquid Onshore,

2002-2011

CORROSIONEXCAVATION DAMAGEINCORRECT OPERATIONMAT'L/WELD/EQUIP FAILURENATURAL FORCE DAMAGEOTHER OUTSIDE FORCE DAMAGEALL OTHER CAUSES

Data Source: PHMSA Significant Incidents Files June 29, 2012

Page 9: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Summary of Data

Over the last ten years, significant incidents from hazardous liquid pipelines in the Great Lakes Region:

• Have averaged about 21 incidents annually, and stayed roughly the same;

• Have been very small per mile of pipe, but were substantially higher than significant incidents per mile for other types of pipelines; and

• Were caused most often by failures in pipeline materials and equipment.

Page 10: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Legal Framework

Routing and Siting of New Pipelines

Operation and Maintenance of Existing Pipelines

Emergency Response Planning and Spill Reporting

Page 11: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Federal and State AuthorityFederal Authority State Authority

Routing & Siting of New Pipelines

PHMSA prohibited from regulating May choose to regulate

Operation & Maintenance

of Existing Pipelines

Interstate Pipelines

Exclusive authority to set standards

May conduct oversight and inspections if

certified by PHMSA

Intrastate Pipelines Minimum standards May regulate if certified

by PHMSA

Emergency Response

Planning & Spill

Reporting

Emergency plans

Exclusive authority to set standards Likely preempted

Facility response

plansMinimum standards

May choose to regulate if standards are at least as

stringent

Spill Reporting

Nonexclusive authority May choose to require

Page 12: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Federal Regulatory Weaknesses

• No consideration of the cumulative impact of pipeline spills on the Great Lakes Basin;

• No review of the long-term risks of spills to environmentally sensitive areas when new pipelines are routed;

• No consideration of all environmentally sensitive areas in managing existing pipeline risks, only those that are of “high consequence;” and

• No specific requirements for facility response plans or adequate review by staff to ensure that plans protect environmentally sensitive areas.

Page 13: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

The Status of Great Lakes State Regulation

Routing & Siting

Interstate Oversight

Intrastate Regulation

Facility Response

PlansSpill

Reporting

Illinois Indiana Michigan Minnesota New York Ohio Pennsylvania Wisconsin

Page 14: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Recommendations• The Great Lakes Commission should facilitate

discussions among the states and provinces to improve pipeline regulation across the Great Lakes Basin.

• States should seek certification to regulate intrastate pipelines and to oversee interstate pipelines. PHMSA provides up to 80% of program funding and the rest may be covered by operator fees.

• States should set stringent standards for pipeline operators to submit response plans to the state and give the public the opportunity to comment on the plans.

• All states should require pipeline operators to report spills to the state at a low threshold.

Page 15: Oil Pipelines in the Great Lakes, Threats and Solutions-Gosman, 2012

Resources

• Office of Pipeline Safety, PHMSA• Website: http://www.phmsa.dot.gov/pipeline

• The Pipeline Safety Trust• Website: http://www.pstrust.org• Carl Weimer, Executive Director, [email protected]

• The National Wildlife Federation• Website: http://www.nwf.org/greatlakes• Beth Wallace, Community Outreach Regional Coordinator,

[email protected]