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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

KRC Urges Federal Energy Regulatory Commission To Conduct Full Environmental Impact Statement On Bluegrass Natural Gas Liquids Pipeline  Posted: October 10, 2013

October 9, 2013

Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
888 First Street NE, Room 1A
Washington D.C. 20426

Re: Notice of Intent to Prepare An Environmental Assessmenty
For The Proposed Texas Gas Abandonment Project And
Request For Comments On Environmental Issues
FERC Docket No. CP13—485-000
78 Federal Register 56687 (September 13, 2013)

Dear Ms. Bose:

These comments are submitted on behalf of the Board and membership of the Kentucky Resources Council, Inc., a nonprofit, membership organization incorporated under the laws of the Commonwealth of Kentucky and dedicated to prudent use and conservation of the natural resources of the Commonwealth. For thirty years, the Council has provided legal and technical assistance without charge to individuals, community groups, conservation organizations and local governments on a wide range of environmental issues, including air, land, and water pollution, and utility and energy policy matters.

Summary of Comments

For the reasons stated below, the Kentucky Resources Council, Inc. respectfully requests that the Federal Energy Regulatory Commission (“the FERC” or “Commission”) withdraw the Notice of Intent to Prepare An Environmental Assessment for the Proposed Texas Gas Abandonment Project, and that the Commission, in conjunction with the U.S. Army Corps of Engineers, publish a joint notice announcing the scoping for an Environmental Impact Statement, covering the entire length of the “Bluegrass Pipeline” natural gas liquids pipeline project, (including both that section of pipeline that is identified in the “Texas Gas Abandonment Project” and the new section of pipeline that is proposed to be constructed from the Marcellus and Utica Shale plays in Ohio, West Virginia, and Pennsylvania).

Specific Comments

The Council appreciates this opportunity to submit comments in response to the Public Notice published in the September 13, 2013 Federal Register (78 FR 56687). By letter dated October 4, 2013, the Council has requested a thirty-day extension of the scoping period, and files these comments in the event that the extension is not granted.

The nominal proposal before the FERC is the proposal by Texas Gas Transmission LLC (Texas Gas) to “abandon in-place” 567.8 miles of 26-inch pipeline that are currently part of the Mainline System (MLS) 26-2, MLS 26-1, and BAE 26-1 pipelines, as well as numerous associated facilities in Kentucky, Tennessee, Mississippi, Arkansas, and Louisiana. Yet as the public notice reflects, the Commission is aware that the abandonment of the Texas Gas pipeline as a natural gas pipeline is part of a much larger project involving the “repurposing” of the abandoned Texas Gas Pipeline and significant new pipeline construction.

Boardwalk Pipeline Partners, the parent of Texas Gas, and the Williams Co. have entered into a joint venture under the name of Bluegrass Pipeline Partners LLC. The Bluegrass Pipeline project includes a proposal to construct some 217 miles of new 20-inch pipeline in West Virginia, Pennsylvania, and Ohio, and approximately 394 miles of 24-inch pipeline in Ohio and Kentucky, where the new pipeline is proposed to connect with the “abandoned” Texas Gas pipeline in Hardinsburg, Kentucky.

The Federal Register notice inviting comments on the scope of a proposed Environmental Assessment notes that:

"Texas Gas indicates that following transfer of the facilities, Bluegrass would perform activities that are not under the jurisdiction of the FERC. Although FERC doesn’t have the regulatory authority to modify or deny the construction of these facilities, we will disclose available information regarding the construction impacts in our EA."

78 FR 56688.

Respectfully, the FERC is obligated under the National Environmental Policy Act to do more than “disclose available information” regarding the impacts of new construction and of the repurposing of the existing pipeline. The scope of the environmental analysis required of the FERC for this project includes an obligation to assess the direct, indirect, and cumulative effects associated with the abandonment, and of both the repurposing of the existing pipeline, and of the new construction. By these comments, the FERC and the United States Army Corps of Engineers are requested to undertake a joint Environmental Impact Statement for the entire Bluegrass Pipeline Project, inasmuch as the FERC approval of this abandonment request is the linchpin of the Bluegrass Pipeline project, as is the approval by the Corps of Engineers under the Clean Water Act and the Rivers and Harbors Act for the estimated 700 stream and river crossings that the project proponent has noted will be necessary for the new segments of pipeline. The involvement of either agency in the approval of the new or repurposed portion of the pipeline would be sufficient to “federalize” the project under the Council on Environmental Quality’s regulations, the Corps of Engineers’ NEPA guidance, and applicable case law, and the degree of the involvement of both agencies in the project is clearly sufficient.

The Degree of Federal Involvement Is Sufficient To “Federalize” The Entire Pipeline Project For Purposes Of The National Environmental Policy Act

It is unclear from the Federal Register notice whether the FERC intends to evaluate the impacts of the repurposing of the existing pipeline, and the impacts of the new construction for the 20-inch and 24-inch pipelines that will connect with the “abandoned” line in Hardinsburg, Kentucky. The FERC notes in the September 13, 2013 notice that “[i]n the EA we will discuss impacts that could occur as a result of the abandonment of the proposed project under these general headings….” 78 FR 56688. KRC believes that the scope of environmental analysis must include the environmental impacts associated with the abandonment, including the effects of the disturbances associated with the abandonment that the FERC has noted at 78 FR 56688 (i.e. the disconnections, reconfiguration of compressor stations, replacement of valves and customer taps, and other activities directly related to the abandonment of the line as a jurisdictional natural gas line).

Additionally, the FERC is obligated to evaluate all of the environmental impacts associated with those facilities that will be constructed or reconstructed in order to convert the existing natural gas pipeline to a pipeline for the transporting of natural gas liquids from Hardinsburg, Kentucky to the Louisiana gulf. The analysis should evaluate the impacts of the “Conversion Project” and the “Louisiana Extension Project” as described at 78 FR 56688.

Finally, KRC believes that the FERC analysis must include the impacts of the Northeast Connector Project, which is the new sections of pipeline to be constructed to transport NGLs from the producing areas to the Hardinsburg, Kentucky connection.

The FERC is obligated to include all of these activities in the environmental analysis mandated under the National Environmental Policy Act, both because these effects are directly related to the proposed agency action (i.e. approval of abandonment of the Texas Gas Pipeline) and because the degree of federal involvement is sufficient to “federalize” the non-federal project since none of the effects would occur but for the FERC approval of the pipeline abandonment.

The requirement for undertaking an Environmental Impact Statement arises under 42 USC 4332, which requires such analysis for every major federal action significantly affecting the quality of the human environment. The Council on Environmental Quality’s regulations define “major federal action” to include actions “with effects that may be major and which are potentially subject to Federal control and responsibility.” 40 CFR 1508.18. Such actions include “projects…entirely or partly…regulated, or approved by federal agencies[.]” 40 CFR 1508.18(a).

While there are instances in which the degree of federal control or responsibility over an action contemplated by a nonfederal entity may be so limited or mrginal as to allow the agency to limit NEPA review to those consequences flowing directly from the requested federal action, such is not the case in this instance. The extent of federal agency involvement by the FERC in the decision to allow a jurisdictional natural gas pipeline to be abandoned in order to facilitate the Bluegrass Pipeline project, is such that the environmental consequences of the entire project must be evaluated by the FERC.

The FERC’s approval of the abandonment request is pivotal to the proposal to construct new and convert existing pipeline segments for the transportation of natural gas liquids. The degree of federal participation is sufficient to make the project a “major federal action” for purposes of NEPA analysis given that the FERC approval will enable the project to be undertaken. See, for example, Scientists’ Institute for Public Information Inc. v. AEC, 481 F.2d 1079 (D.C. Cir. 1973); City of Davis v. Coleman, 521 F.2d 661 (9th Cir. 1975). As noted by the Court of Appeals for the Sixth Circuit in the case of Williamson County Community Association Inc. v. Slater, 243 F.3d 270 (6th Cir. 2001),

"There are two alternative bases for finding that a non-federal project constitutes a “major Federal action” such that NEPA requirements apply: (1) when the non-federal project restricts or limits the statutorily prescribed federal decisionmakers’ choice of reasonable alternatives; or (2) when the federal decisionmakers have authority to exercise sufficient control or responsibility over the non-federal project so as to influence the outcome of the project. If either test is satisfied, the non-federal project must be considered a major federal action."

Id. at 281.

In this instance, the FERC’s degree of control and responsibility over the project is absolute, inasmuch as a decision approving the abandonment of the pipeline will set in motion a series of activities involving both new pipeline construction and reworking of the existing pipeline and associated facilities that would not otherwise ensue. A decision disapproving the abandonment would certainly influence the outcome of the project, since as proposed, the project proponents rely on the ability to abandon and repurpose the pipeline as an integral component of the overall project.

The Effects Associated With The New Pipeline Construction And With Repurposing the “Abandoned” Pipeline Are All Within The Scope of the FERC’s Review Obligation Under NEPA

Even assuming, arguendo, that the FERC believes that the scope of the “federal action” is limited to those activities directly under the jurisdiction of the agency, the scope of analysis under the National Environmental Policy Act must include, in addition to direct effects, both indirect and cumulative effects. It is clear that the full range of effects, including the effects that will flow from a FERC decision to allow abandonment of the pipeline, must be evaluated irrespective of whether they may lie outside of the scope of the FERC’s jurisdiction.

In “scoping” those actions, alternatives, and impacts to be considered, the CEQ regulations demand that the FERC consider three types of actions, three types of alternatives, and three types of impacts. The construction of the new pipeline and the construction associated with the repurposing of the existing pipelines after abandonment are “connected actions” the impacts of which must be assessed in conjunction with the NEPA analysis of the abandonment, since those other activities cannot and will not proceed unless the abandonment request is approved, and because the abandonment request is an interdependent part of a larger proposal. 40 CFR 1508.25(a)(1)(ii), (iii). Additionally, the environmental impacts associated with the new pipeline construction for the Northeast Connector Project and with the reconstruction associated with the Conversion Project are within the scope of “effects” that must be evaluated, since they flow directly and foreseeably from the approval of the abandonment. 40 CFR 1508.8. Absent approval of the abandonment of the Texas Gas pipeline, the new construction to Hardinsburg would have no independent utility or purpose.

KRC believes that both the Council on Environmental Quality regulations and applicable case law require that the full range of impacts associated with the entire Bluegrass Pipeline Project be assessed, and the range of alternatives and mitigation explored in the environmental document (40 CFR 1508.10). KRC believes that the most appropriate and efficient manner in which to assure that the totality of those effects are adequately analyzed and mitigated, is for the FERC to coordinate with the U.S. Army Corps of Engineers in undertaking a comprehensive Environmental Impact Statement.

The Effects To Be Evaluated Should Include Potential Consequences Of Pipeline Leakage Or Rupture On Land, Air, and Water Resources, And Should Evaluate Specific Concerns With Construction of New Pipeline In Karst Terrane

As noted above, the scope of the environmental document for the proposed Texas Gas Abandonment Project should discuss the impacts associated with the abandonment process, as well as the repurposing and new pipeline construction. Among the specific considerations that deserve particular attention are these:

1. A significant portion of the new pipeline construction in the Commonwealth of Kentucky would traverse mature karst terrane. The unstable and vulnerable nature of the geology both complicates the process of constructing the pipeline to withstand changes in the geology, and heightens the degree of risk and consequence associated with a catastrophic release or leak from the pipeline.

Attached as an appendix to these comments is a report commissioned by the Council from Dr. Ralph Ewers, describing the particular challenges posed by karst terrane. In evaluating the effects of the new pipeline construction, and alternative routes for and alternatives to the proposed pipeline, and in determining how the project might mitigate the risks posed, KRC asks that the Ewers report be considered, and that the environmental study include the recommendations contained in his report.

2. The environmental document must evaluate the risks posed to land and water resources, and in particular groundwater resources, from the construction and operation of a natural gas liquids pipeline. Contrary to the assumption of the Bureau of Land Management’s Overland Pipeline EIS Risk Assessment, not all natural gas liquids released from a pipeline leak or rupture volatilize. As is evident from the natural gas liquid pipeline leak that occurred in Parachute, Colorado between December and early January, 2013, nearly 20% of the natural gas liquids that were released entered the soil and contaminated land and water resources.

According to the Williams company, this is what happened at the Parachute Gas Plant in Colorado:

"Based on analysis of meter data, we concluded that a failed pressure gauge was the source of the hydrocarbon fluids we found in March near our Parachute Gas Plant in Colorado. The leak was stopped on January 3, 2013, at 12:33 a.m. The gauge was part of a valve set on a 4-inch natural gas liquids pipeline that belongs to Williams Partners. Our evaluation of data from two flow meters on the 4-inch natural gas liquids pipeline showed that the pressure-gauge leak started on December 20, 2012. Based on our analysis that employed Environmental Protection Agency methodology regarding the evaporative properties of natural gas liquids, we estimated that about 80 percent of the leaked volumes vaporized before entering the soil. By the time the leak was stopped on January 3, 2013, the company estimates up to 241 barrels of natural gas liquids entered the soil at the valve location.”

A news article reported that millions of gallons of groundwater were expected to need treatment, and that thousands of cubic yards of contaminated soil would be removed.

The possibility of and the effects of releases from both the new and repurposed pipeline must be evaluated, including an assessment of the impacts on air, land, water, public health, and public safety associated with both catastrophic and non-catastrophic releases. Natural gas liquids pose a different set of environmental risks than natural gas, and those new risks must be evaluated for both new and existing segments of the pipeline project.

3. The limitations of detection and monitoring capability must be evaluated, in terms of alternatives for routing the proposed pipeline, alternatives to the use of a pipeline for transporting the NGLs, and in identifying mitigation measures that should be incorporated into the project. The rupture of a 22-foot section of the Exxon Mobil Pegasus oil pipeline in March, 2013, occurring a month after a “smart pig” had been used to detect cracks and other problems, highlights the limitations of monitoring technology in identifying problems with the integrity of pipelines. According to the Wall Street Journal article “Oil-Pipeline Cracks Evading Robotic ‘Smart Pigs,’” a former Exxon pipeline engineer who now works as a consultant, was reported to have stated that using smart pigs to find seam cracks is “as close to scientific as a roulette wheel.” Given the limitations in detecting potential future problems, routing, inspection, installation of automatic shut-off values, and other mitigation should be evaluated.

Thank you in advance for your consideration of these comments. If the comment period is extended by an additional thirty days, as requested, KRC will supplement these comments. KRC will be sending a separate letter to the U.S. Army Corps of Engineers outlining why the Council believes that a full Environmental Impact Statement is required by the COE regulations and guidance, and will submit a copy for the FERC docket at that time.

Tom FitzGerald

Cc: Lt. General Thomas P. Bostick,
Commanding General and Chief of Engineers

James M. Townsend, Chief, Regulatory Branch
U.S. Army Corps of Engineers, Louisville District

Jeffrey Wiese, Director, Pipeline and Hazardous
Materials Safety Administration

Stan Meiburg. Acting Regional Administrator, US
Environmental Protection Agency Region 4

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