81 FR 6334 - Pipeline Safety: Safe Operations of Underground Storage Facilities for Natural Gas

DEPARTMENT OF TRANSPORTATION
Pipeline and Hazardous Materials Safety Administration

Federal Register Volume 81, Issue 24 (February 5, 2016)

PHMSA is issuing this advisory bulletin to remind all owners and operators of underground storage facilities used for the storage of natural gas, as defined in 49 CFR part 192, to consider the overall integrity of the facilities to ensure the safety of the public and operating personnel and to protect the environment. Operators are reminded to review their operations to identify the potential of facility leaks and failures caused by corrosion, chemical damage, mechanical damage, or other material deficiencies in piping, tubing, casing, valves, and associated facilities and the importance of reviewing the location and operations of shut-off and isolation systems and reviewing and updating emergency plans as necessary.

[Federal Register Volume 81, Number 24 (Friday, February 5, 2016)]
[Notices]
[Pages 6334-6336]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-02228]



[[Page 6334]]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

[Docket No. PHMSA-2016-0016]


Pipeline Safety: Safe Operations of Underground Storage 
Facilities for Natural Gas

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA); 
DOT.

ACTION: Notice; issuance of advisory bulletin.

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SUMMARY: PHMSA is issuing this advisory bulletin to remind all owners 
and operators of underground storage facilities used for the storage of 
natural gas, as defined in 49 CFR part 192, to consider the overall 
integrity of the facilities to ensure the safety of the public and 
operating personnel and to protect the environment. Operators are 
reminded to review their operations to identify the potential of 
facility leaks and failures caused by corrosion, chemical damage, 
mechanical damage, or other material deficiencies in piping, tubing, 
casing, valves, and associated facilities and the importance of 
reviewing the location and operations of shut-off and isolation systems 
and reviewing and updating emergency plans as necessary.

FOR FURTHER INFORMATION CONTACT: Operators of pipelines subject to 
regulation by PHMSA should contact Mr. Kenneth Lee at 202-366-2694 or 
email to: [email protected].
    Intrastate gas pipeline and underground storage facility operators 
should contact the appropriate state pipeline safety authority. A list 
of state pipeline safety authorities is provided at: www.napsr.org.

SUPPLEMENTARY INFORMATION:

I. Background

    On October 23, 2015, Southern California Gas Company's (SoCal Gas) 
Aliso Canyon Well SS25 failed, causing a sustained and uncontrolled 
natural gas leak in an area known as Porter Ranch in Los Angeles, 
California. At the present time, the well leak is believed to be from 
the subsurface (downhole) well casing. The well was drilled in 1953 and 
was later converted to natural gas storage well in 1972. Over 4,400 
households (families) have been relocated due to the natural gas 
odorant (mercaptans) according to the Aliso Canyon Incident Command 
briefing report issued on February 1, 2016. On January 6, 2016, 
California Governor Jerry Brown issued a proclamation declaring the 
Aliso Canyon incident a state emergency. After repeated unsuccessful 
attempts to contain the leak, a relief well is being drilled to plug 
the leaking well. The Aliso Canyon underground storage field, which can 
store up to 86 billion cubic feet of natural gas, has 115 storage 
wells, and is the second largest storage facility of its kind in the 
United States. The root cause of this failure is the subject of ongoing 
investigations and assessments and the root cause analysis is being 
conducted by an independent third party expert firm. PHMSA is working 
closely with the State of California to provide technical assistance 
and to support State regulatory agencies related to their response and 
oversight activities.
    Since 2001 several accidents involving underground gas storage 
facilities have occurred and two of the more extensive accidents that 
occurred in Texas and Kansas are highlighted below. On August 19, 2004, 
the Market Hub Partners Moss Bluff storage facility located in Liberty 
County, Texas, had a well control incident and natural gas fire at 
Cavern #1. Over a period of six and one-half days, approximately 6 
billion cubic feet of natural gas in the cavern was released and 
burned. The fire eventually self-extinguished, and late on August 26, 
2004, installation of a blowout prevention valve was completed, 
effectively placing the well back under control. The Moss Bluff storage 
facility was comprised of three separated underground caverns leached 
out of a salt formation beneath the surface; a compressor station to 
help move natural gas into and out of the caverns; well head assemblies 
on each of the caverns for operational control purposes; and natural 
gas, fresh water and salt water (brine) piping and related facilities 
to facilitate transportation and/or holding of those materials A 
detailed investigation by company personnel and outside consultants 
determined the accident was caused by a separation of the 8\5/8\-inch 
well string inside the cavern; a breach of the 8-inch brine piping 
above ground; and the separation of the wellhead assembly above the 
cavern.
    On January 17 and 18, 2001, another accident occurred at the Yaggy 
underground natural gas storage field operated by Kansas Gas Service, 
where a wellbore failure which led to a series of gas explosions in 
Hutchinson, Kansas. The storage field injected natural gas at a depth 
of 600 to 900 feet underground into salt caverns. Gas leaked from the 
storage field well production casing, migrated approximately nine miles 
underground, and then traveled to the surface through old brine, or 
salt wells, in the Hutchinson, Kansas area. An explosion in downtown 
Hutchinson destroyed two businesses, damaged 26 other businesses, and 
killed two persons in a mobile home park. Approximately 143 million 
cubic feet of natural gas leaked from the storage field.
    In this Advisory Bulletin, PHMSA recommends that all operators of 
underground storage facilities used for the storage of natural gas, as 
defined in 49 CFR parts 192, have processes, procedures, mitigation 
measures, periodic assessments and reassessments, and emergency plans 
to maintain the safety and integrity of all wells and associated 
storage facilities whether operating, idled, or plugged. These 
processes and procedures should take into consideration the age, 
construction, maximum operating pressures, operating and maintenance 
history, product, corrosion, casing and tubing condition (including 
chemical and mechanical damage), cement condition and depths or 
heights, safety valves (surface and subsurface), operation of each 
well, and the amount of time elapsed since the most recent assessment.

II. Advisory Bulletin (ADB-2016-02)

    To: Owners and Operators of Underground Pipeline and Storage 
Facilities.
    Subject: Safe Operation of Underground Storage Facilities for 
Natural Gas
    Advisory: Operators of underground storage facilities used for the 
storage of natural gas, as defined in 49 CFR part 192, should review 
their operating, maintenance, and emergency response activities to 
ensure the integrity of underground storage facilities are properly 
maintained. This bulletin is intended to inform operators about 
recommended practices and to urge operators to take all necessary 
actions, including but not limited to those set forth in this bulletin, 
to prevent and mitigate breach of integrity, leaks, or failures at 
their underground storage facilities and to ensure the safety of the 
public and operating personnel and to protect the environment.
    Operators should have comprehensive and up-to-date processes, 
procedures, mitigation measures, periodic assessments and 
reassessments, and emergency plans in place to maintain the safety and 
integrity of all underground storage wells and associated facilities 
whether operating, idled, or plugged. Operators must adhere to 
applicable State regulations for the permitting, drilling, completion, 
and operation of storage wells. In

[[Page 6335]]

developing, implementing, and updating their safety and integrity 
programs, we encourage underground gas storage facility operators to 
reference PHMSA Advisory Bulletin 97-04, dated July 10, 1997, and to 
voluntarily implement American Petroleum Institute (API) Recommended 
Practices (RP) 1170, ``Design and Operation of Solution-mined Salt 
Caverns Used for Natural Gas Storage, First Edition, July 2015,'' API 
RP 1171 ``Functional Integrity of Natural Gas Storage in Depleted 
Hydrocarbon Reservoirs and Aquifer Reservoirs, First Edition, September 
2015,'' and Interstate Oil and Gas Compact Commission (IOGCC) standards 
entitled ``Natural Gas Storage in Salt Caverns--A Guide for State 
Regulators'' (IOGCC Guide), as applicable. The IOGCC Guide provides 
safety standards for the design, construction, and operation of gas 
storage caverns. Copies of the API recommended practices can be 
obtained at http://www.api.org/Publications-Standards-and-Statistics/Publications/Government-cited-Safety-Documents. Copies of the IOGCC 
Guide can be obtained from the Interstate Oil and Gas Compact 
Commission, 900 NE 23rd Street, Oklahoma City, Oklahoma 73152-3127 
(phone: 405/525-3556; email: [email protected]). API has an 
accredited process to develop recommended practices and standards that 
involves industry, manufacturers, engineering firms, construction 
contractors, the public, academia, and government.
    In addition, operator's operating and maintenance (O&M) processes 
and procedures should be reviewed and updated at least annually, unless 
operational inspections for integrity warrant shorter review periods. 
O&M processes and procedures should include data collection and 
integration, risk assessments, monitoring, operational limits, 
mitigation measures, and record keeping for any underground storage 
facility threat that could impact public safety, operating personnel, 
or the environment due to leakage, failure, or abnormal operating 
conditions whether above ground or underground. At a minimum, operator 
actions should include, but not be limited to, the following:
    1. Operators should verify that the pressure required to inject 
intended natural gas volumes, including any maximum treating and 
stimulation pressures for the underground storage well, does not exceed 
the design pressure limits of the reservoir, wells, wellheads, piping, 
casing, tubing, or associated facilities, and document such 
verification.
    2. The operator should monitor all wells for the presence of 
annular gas or liquids by measuring and recording annular pressure, 
including between casing and tubing strings at the wellhead, and any 
known annular flow on a periodic basis.
    3. The operator should inspect the wellhead assembly and attached 
pipelines for each of the wells used in an underground storage facility 
on a periodic basis, with the frequency of the inspections defined by 
the operator's risk assessment. This inspection should include leak 
detection technology and monitoring of casing pressure changes at the 
wellhead. The operator's selection and usage of leak detection 
technology should take into consideration detection limits for natural 
gas or any liquids, response time, reproducibility, accuracy, distance 
from source, background lighting conditions, geography, and 
meteorology.
    4. The operator should conduct periodic functional tests of all 
surface and subsurface safety valve systems and wellhead pipeline 
isolation valve(s) for proper function and ability to shut-off or 
isolate the well as required for operational and emergency situations. 
Deficiencies, test failures, and equipment that do not meet functional 
specifications should be repaired or replaced promptly in order to 
assure the well's ability to control and isolate natural gas flows from 
the reservoir and well. Inoperable surface and subsurface safety valves 
on storage well(s) should be either repaired, removed or replaced, the 
well temporarily plugged, or alternative equivalent safety measures 
implemented.
    5. When evaluating the need for subsurface safety valves on new, 
removed, or replaced tubing strings or production casing, operators 
should perform risk assessments in a manner that reviews at a minimum 
the API RP 1171 criteria. Where subsurface safety valves are not 
installed on wells, risk assessments should be used to inform decisions 
on integrity inspection frequencies and reassessment intervals, and 
mitigation criteria and procedures for the well production casing and 
tubing should be evaluated and implemented as necessary.
    6. Operators should conduct ongoing assessments for the 
verification and demonstration of the mechanical integrity of each well 
and related piping and equipment used in the underground storage 
facility. The relevant factors to consider in verifying and 
demonstrating well integrity should include as a minimum: Well service 
life history; design; construction; maximum operating pressures 
(injection, withdrawal, maximum treating and stimulation); product, 
corrosion, casing and tubing condition; cement condition and depths or 
heights; safety valves (surface and subsurface); operation of each 
well; and the time interval since the most recent assessment and past 
assessment findings.
    7. Operators should have a corrosion monitoring and integrity 
evaluation program that includes the following:
    (i) Evaluation of casing and tubular integrity and identification 
of defects caused by corrosion or other chemical or mechanical damage;
    (ii) Corrosion potential of wellbore-produced fluids and solids, 
including the impact of operating pressure on the corrosion potential 
of wellbore fluids and analysis of partial pressures;
    (iii) Corrosion potential of annular and any packer fluid;
    (iv) Corrosion potential of current flows associated with cathodic 
protection systems;
    (v) Corrosion potential of all formation fluids, including fluids 
in formations above the storage zone;
    (vi) Corrosion potential of un-cemented casing annuli, including 
static liquid levels;
    (vii) Corrosion potential of pipelines and other production 
facilities attendant to the underground storage facility including the 
corrosion potential of adverse-current flows associated with their 
cathodic protection systems; and
    (viii) Periodic usage of the appropriate well log evaluations (such 
as corrosion, cement bond, temperature, noise, caliper and other 
appropriate assessment logs for integrity evaluations of the production 
casing and tubing strings) to determine well integrity, mitigation 
measures, and reassessment intervals to maintain the pressure rating 
and flow isolation characteristics of the well for all downhole pipe, 
cement, and any other isolation equipment.
    8. Procedures for the evaluation of well and attendant storage 
facilities should include analysis of facility flow erosion, hydrate 
potential, individual facility component capacity and fluid disposal 
capability at intended gas flow rates and pressures, and analysis of 
the specific impacts that the intended operating pressure range could 
have on the corrosive potential of fluids in the system.
    9. Identification of potential threats and hazards associated with 
operation of the underground storage facility should include the 
following:
    (i) Evaluation of risk (likelihood of events and consequences 
related to the events);

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    (ii) Determination of a risk ranking to develop and implement 
preventive and mitigative measures;
    (iii) Documentation of risk evaluation and decision basis for 
preventive and mitigative measures implemented;
    (iv) Provision for data feedback and validation; and
    (v) Regular, periodic risk assessment reviews to update 
information, and evaluate risk management effectiveness.
    10. For ongoing verification and demonstration of the integrity of 
the underground storage reservoir or cavern, operators should use 
appropriate monitoring techniques such as the monitoring of pressure 
and periodic pressure surveys, inventory (injection & withdrawal of all 
products), product levels, cavern subsidence, and the findings from 
adjacent production and water wells, and observation wells used to 
monitor underground storage including any integrity changes.
    11. Emergency procedures should identify the types of emergencies 
for which the operator should notify public emergency response 
officials, personnel training, periodic communication with local 
emergency response officials, identification of the local area 
impacted, notices to the public, and identification of any third-party 
service providers or technical experts needed in the event of an 
emergency. Emergency procedures should be reviewed, conducted, and 
updated at least annually.
    12. Records of the processes, procedures, assessments, 
reassessments, and mitigation measures required should be maintained 
for the life of the storage well.

    Issued in Washington, DC, on February 2, 2016, under authority 
delegated in 49 CFR 1.97.
Alan K. Mayberry,
Deputy Associate Administrator for Policy and Programs.
[FR Doc. 2016-02228 Filed 2-4-16; 8:45 am]
 BILLING CODE 4910-60-P