COVID-19: Response of the Oil and Gas Pipelines Sector

COVID-19: Response of the Oil and Gas Pipelines Sector

March 27, 2020
COVID-19: Response of the Oil and Gas Pipelines Sector
The spread of the novel coronavirus and the measures put in
Cybersecurity measures to protect pipeline computer
place to control it are impacting U.S. oil and natural gas
networks, such as industrial control system “air gapping,”
pipelines—a critical infrastructure sector. Pipelines are
in which critical computers are physically isolated from
essential not only in providing liquid fuel for transportation
outside networks, may complicate staffing because they
and natural gas for consumer and industrial uses, but also as
may prevent workers from remotely monitoring or
a critical source of fuel for electric power plants. (For more
controlling their systems.
discussion of critical infrastructure, see CRS Report
R45809, Critical Infrastructure: Emerging Trends and
The American Gas Association (AGA), which represents
Policy Considerations for Congress, by Brian E.
investor-owned natural gas distribution companies, states
Humphreys).
that its members “remain vigilant in monitoring the effects
of the virus to maintain operational capabilities across their
On March 11, the World Health Organization declared a
service territories.” The AGA places a specific focus on
global pandemic associated with the novel coronavirus
maintaining natural gas supply to health care and other
which causes “coronavirus disease 2019” (COVID-19).
essential service industries, ensuring “they have the energy
Due to the spread of the coronavirus in the United States,
they need to provide ... critical services.” Member
President Trump declared a national emergency on March
companies also are implementing policies to keep workers
13. The virus also has prompted emergency restrictions in
from entering homes unless necessary for safety and
some states intended to slow community transmission, such
increasing the hygiene and protection of those who do.
as limits on public movement, requirements for “social
distancing,” and the mandatory closure of certain
Essential Worker Status
businesses and places of public assembly.
A specific issue in pipeline operations involves statewide
orders, such as that issued in Louisiana on March 22, which
Response in Pipeline Operations
requires all workers to “stay at home” unless they are
Employee illness at pipeline companies may impact the
“providing essential services.” The Louisiana order does
safety and reliability of their systems. As of March 25, CRS
not name pipeline workers as “essential,” so their
is not aware of any pipeline service problems due to
availability may be unclear. Under such orders, which vary
coronavirus. Nonetheless, the pipeline sector is taking steps
by state, some subcategories of pipeline industry workers,
to prevent any such disruptions. According to the
(e.g., control room staff), potentially could be treated as
Association of Oil Pipe Lines (AOPL), which represents
essential while others may not. Ambiguity about pipeline
crude oil and refined products pipeline operators, they are
worker status under such orders could create confusion and
taking “precautions and actions to ensure our Nation’s
complicate staffing response to the coronavirus among
energy delivery system continues to operate safely.”
affected companies.
Likewise, the Interstate Natural Gas Association of
America (INGAA), which represents interstate gas pipeline
Independent of any state orders, President Trump’s
operators, states that its members “are taking the necessary
Coronavirus Guidelines for America, issued on March 16,
steps to maintain safe and reliable operations to ensure
states: “If you work in a critical infrastructure industry, as
delivery of natural gas.”
defined by the Department of Homeland Security [DHS] ...
you have a special responsibility to maintain your normal
The AOPL lists specific actions its members are taking in
work schedule.” The DHS’s Cybersecurity and
response to coronavirus. These actions include following
Infrastructure Security Agency (CISA) issued a list of
government health recommendations; updating company
“Essential Critical Infrastructure Workers” on March 19
plans to minimize health risks; continuing to inspect,
which explicitly includes petroleum and natural gas
maintain and monitor pipelines; staying in close contact
pipeline workers. Although CISA states that its list is for
with fellow operators and government agencies to exchange
guidance only and that “it is not ... a federal directive or
information on best practices, to identify problems, and
standard,” some states, such as Oklahoma, are using the list
resolve them.
as the basis for identifying essential workers in state orders.
Additional measures reportedly being implemented or
New Pipeline Construction
considered by some pipeline operators are worker health
Worker restrictions in response to the coronavirus are
screening and sequestering critical employees to avoid
affecting ongoing construction of at least one new pipeline
infection. Social distancing may not greatly affect some
project. On March 20, Energy Transfer LP announced that
workers, such as field inspectors, but could create
it was suspending most construction activities on its
challenges for workers in control rooms or on construction
Mariner East Pipeline in Pennsylvania to comply with the
teams who typically are in close proximity to one another.
governor’s order to close “all non-life-sustaining
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COVID-19: Response of the Oil and Gas Pipelines Sector
businesses.” Mariner East is being developed to transport
special permits, stays of enforcement or similar measures
natural gas from southwestern Pennsylvania to Delaware.
granted by State authorities.”
The company subsequently has been granted waivers to
resume certain activities to secure and stabilize its
Response in FERC Pipeline Regulation
construction sites and ensure the safety of already
The Federal Energy Regulatory Commission (FERC) has
constructed segments. An environmental group in Nebraska
siting and rate authority under the Natural Gas Act over
is petitioning for suspension of pre-construction work on
interstate natural gas pipelines, as well as regulatory
the Keystone XL Pipeline on the grounds that workers from
authority over the bulk power system. On March 12, the
out of state may spread the coronavirus into local
Senate confirmed James Danly to fill one of two vacant
communities. Any future business or worker restrictions in
seats on the five-person commission. Having four members
other states could potentially affect other ongoing pipeline
may help to ensure a quorum for votes in the near term on
construction projects.
FERC matters, should a commissioner become affected by
COVID-19. These decisions may involve pipeline permits,
Reduced travel, business closures, and other economic
appeals of permit decisions, judicial orders, and pipeline
impacts related to the coronavirus outbreak are suppressing
rates. The President has not named a candidate to fill the
near-term oil and natural gas demand. Lower oil prices also
remaining vacancy on the commission.
may lead to lower domestic oil production, which could
lower requirements for pipeline takeaway capacity. This
On March 19, FERC announced measures in response to
reduced demand is causing major pipeline developers to
the coronavirus emergency “to ensure that Americans have
significantly scale back near term capital investments in
access to reliable energy.” Measures potentially affecting
new pipeline infrastructure. According to the trade press,
pipelines include extension of time on deadlines for certain
some pipeline companies have reported cuts in 2020 capital
required filings; expeditious action on other requests for
budgets on the order of 30% to 40%. The downturn is
extensions or waivers of commission orders; postponement
having less of an impact on existing pipeline development
of enforcement-related site audits and investigative
projects, however, as many have been financed based upon
testimony; and case-by-case postponement of
long-term, bilateral contracts.
administrative law hearings as their dates approach.
Response of Pipeline Safety Agencies
In a concurrent release, the FERC Chairman stated that,
The federal pipeline safety program is administered by the
while the commission expects regulated entities to comply
Department of Transportation’s Pipeline and Hazardous
with its requirements, its staff and the Office of
Materials Safety Administration (PHMSA), working with
Enforcement would work with companies “to provide
state pipeline safety regulators. Together, the federal and
informal guidance and advice that reasonably balances what
state agencies regulate the safety of the nation’s hazardous
is happening on the ground with applicable compliance
liquid (e.g., crude oil) and natural gas pipelines.
requirements.” However, certain proceedings have statutory
deadlines to which the Commission must adhere. Notably,
Recognizing that “the resources of its state partners may be
rehearing of FERC orders under the Natural Gas Act must
limited” due to coronavirus, PHMSA issued guidance on
be filed within 30 days of the order. The Commission has
March 19 to state pipeline safety agencies. The guidance
no discretion to extend this deadline. Commissioner
advises states to identify and prioritize critical work;
Richard Glick has stated that this deadline could pose
monitor the need for special permits, waivers, and stays of
challenges to “parties who are otherwise dealing with the
enforcement; follow health guidelines to minimize
pandemic.”
coronavirus exposure; and, in the event of travel
restrictions, determine whether to expedite current work,
On March 27, FERC joined with the National Association
conduct it remotely, or postpone it. PHMSA’s guidance
of Regulatory Utility Commissioners, whose members
also outlines its own plans to conduct state program-related
regulate intrastate natural gas pipelines and distribution
functions remotely and to reschedule in-person activities.
companies, stating that the two entities have been “in close
communication and consultation” on their actions and
On March 20, PHMSA issued a “Notice of Stay of
responses to the coronavirus emergency. As the first step in
Enforcement and Notice of Enforcement Discretion” to
their partnership, the statement urges “all state authorities to
pipeline, underground natural gas storage, and liquefied
designate utility workers as essential to the nation’s critical
natural gas (LNG) operators potentially impacted by the
infrastructure.”
coronavirus. In its notice, PHMSA recognizes that staffing
limitations “may necessitate actions by personnel that may
Paul W. Parfomak, Specialist in Energy and Infrastructure
not fully meet federal operator qualification (OQ), control
Policy
room management (CRM), and employment drug testing
requirements.” PHMSA also states that it “will exercise
IF11476
discretion in its overall enforcement of other parts of the
pipeline safety regulations,” and “will not object to waivers,

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COVID-19: Response of the Oil and Gas Pipelines Sector

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