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Power & Pipes

FERC, CFTC, and State Energy Law Developments

On April 19, 2021, eleven years since the Deepwater Horizon explosion, the US Government Accountability Office (GAO) released a report issued to Congress criticizing the Department of Interior’s Bureau of Safety and Environmental Enforcement (BSEE) for failing to adequately monitor offshore oil and gas pipelines located on the seafloor of the Gulf of Mexico.

The BSEE is the federal agency in charge of offshore oil and gas environmental enforcement and safety. GAO was asked to review BSEE’s management of offshore oil and gas pipelines by examining its processes for pipeline integrity and addressing safety and environmental risks posed by decommissioning.

The GAO found that BSEE rarely conducts or requires any underwater pipeline inspections. Rather, BSEE relies on monthly surface observations and pressure sensors to detect leaks. BSEE admits that these methods are unreliable for detecting ruptures in pipelines. (GAO Report at 6.) (“BSEE officials told us that surface observations are not generally reliable indicators of pipeline leakage, especially for leaks that are relatively minor and do not result in vast sheens. In particular, they stated that subsea currents can diffuse leaked oil and gas and move them significant distances from the pipelines from which they leaked, especially in deep water—where the majority of current production occurs—thereby making any observed sheen or bubbles difficult, if not impossible, to associate with a specific pipeline.”)

BSEE officials also recognized that its regulations are outdated and fail to provide adequate guidance on how pipeline inspections should be conducted. According to the GAO report, BSEE has recommended updates to its pipeline regulations since 2013, but has made limited progress. (Id. at 11, 24.) (“However, in the nearly 8 years since BSEE reinitiated its effort to update its pipeline regulations—and more than 13 years since it published a proposed rule—BSEE has made limited progress in doing so.”)

The GAO also found that BSEE failed to establish adequate processes and procedures to address the environmental and safety risks of leaving pipelines on the seafloor. First, BSEE does not thoroughly account for these risks during its review of decommissioning applications. (GAO Report at 12.) BSEE typically requires pipeline operators to remove the pipelines after they are retired but permits some pipelines to be decommissioned in-place. According to GAO, BSEE has allowed decommissioning-in-place for 97% of the pipelines built since the 1960s resulting in approximately 18,000 miles of abandoned, unused pipelines running along the seafloor of the Gulf of Mexico alone. (Id. at 12-13.) (“Such a high rate of approval indicates that this is not an exception but rather the norm, however.”) Unfortunately, it is not certain how many of these decommissioned pipelines still contain oil or gas. Moreover, according to GAO, older pipelines “are more susceptible to damage from corrosion; mudlines; seafloor corrosion; and snagging from fishing trawlers, which can result in leakage of oil and gas into the ocean.” (Id. at 1.)

Second, the GAO found that BSEE “does not ensure that operators meet decommissioning standards, such as cleaning and burying pipelines.” (Id. at 12). Third, BSEE “does not monitor the condition and location of pipelines following their decommissioning-in-place, which reduces its ability to mitigate any long-term risks, such as pipeline exposure or movement.” (Id.)

According to the GAO, the BSEE lacks the ability to adequately address offshore oil and gas pipeline decommissioning processes. It therefore recommends that the BSEE Director take actions “to further develop, finalize, and implement updated pipeline regulations to address long-standing limitations regarding its ability to (1) ensure the integrity of active offshore oil and gas pipelines and (2) address safety and environmental risks associated with their decommissioning.” (GAO Report at 24.)

Commemorating the 11th anniversary of the Deepwater Horizon tragedy, the Department of Interior agreed that BSEE reforms are needed “to ensure that offshore pipelines meet adequate federal safety and environmental standards. … Interior must lead in the development of workplace safety and environmental protection strategies. The lives and livelihoods of Gulf Coast workers and communities, the health of our marine wildlife and coastal habitats, and the future of our ocean and waters depend on our action.” (April 20, 2021 Department of Interior Press Release)